ILO DISTANCE LEARNING COLLETIVE BARGAINING 1 A ...

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________A. Introduction to Collective Bargaining (2 week)

This introductory session will include the definition and meaning of collective bargaining, its purpose and importance, factors that contribute to collective bargaining, and ways by which terms and conditions of employment are decided. Discussion on the history of collective bargaining in the United States, Europe, and Asia will also be included.

INTRODUCTION:

Collective bargaining is a process whereby organized labor and management negotiate the terms and the conditions of employment. Let us explore some definitions from different sources:

“Collective bargaining is a method by which trade unions protect and improve the condition of their member’s working lives.”

According to Flanders “Collective Bargaining as a means of joint regulation”

Collective Bargaining and ILO: According to ILO, (convention no: 87) “Collective Bargaining is a fundamental right. The right to Collective Bargaining forms an integral part of the ILO declaration on fundamental principles (1998).”

OECD (Organization for Economic Co-operation and Development), WTO (World Trade Organization) and the United Nations advocates Collective Bargaining in similar tones. Collective Bargaining is a part of “Core Labor Standards, Social clause and Global Compact respectively” This means that Collective Bargaining should be considered as a Fundamental Right.

The process by which the mutual agreement incorporated between the management and the Worker’s Union is known as the collective bargaining agreement. By its very nature, collective bargaining is a dynamic process in the sense that Collective bargaining today is much different from what it used to be before the advent of the modern labor laws. Today collective bargaining has assumed a complex nature, conducted in the most formal environment, associating the services of a large number of experts, legal practitioners, consultants and specialized personnel. Today it is regarded as a social process, because it occurs in a social setting.

1

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________The collective bargaining process simultaneously triggers of the following:

1) Employee’s right.2) Employer’s duty.

In majority of the cases collective bargaining process deals with issues like:

1) Rate of wages, pay.2) Hours of employment, working conditions3) Employment policies4) Productivity settlement

The objectives of the collective bargaining are given as:

1) Settle the conflicts related to working conditions and wages.

2) To protect the interest of the workers through collective action.

3) To resolve the difference between the workers and management through voluntary negotiations and to arrive at a consensus.

4) To avoid third party intervention in matters relating to employment.

PRACTICALLY SPEAKING ANY ISSUE THAT HAS RELEVANCE TO MANAGEMENT AND WORKERS BECOME THE SUBJECT MATTER OF BARGAINING.

For the purpose of the act to bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and terms and conditions of employment, or the negotiation of an agreement, or any question arising there under, the execution of a written contract incorporating any agreement read if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.

“A MUTUAL OBLIGATION ON THE EMPLOYER AND EMPLOYEE TO BARGAIN IN GOOD FAITH TOWARDS THE SETTLEMENT OF COLLLECTIVE BARGAINING”

2

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________

What is Good Faith?

“Good faith” – has emerged from the legal terminology “Fair legal practices” which means that there must be faith and trust between the management and the workers.

Good faith bargaining is the cornerstone of effective labor management relations. It means that both parties communicate and negotiate, that they match proposals with counter proposals, and that both make every reasonable effort to arrive at an agreement. It does not mean that one party compels another to agree to a proposal. Nor does it require that either party make any specific concessions (although as a practical matter, some may be necessary).

When is bargaining not in good faith? An Example:

Example: In a company A, 185 negotiation meetings took place but no resolutions came out. We can draw a hypothesis that there was no good faith from both the parties and negotiations were going on without any sense of reaching to an agreement. The political negotiations between India and Pakistan, over the issues of Kashmir go on similar note. Here past experience plays an important role.

Symptoms of Collective Bargaining without good faith:

1. Surface bargaining: Going through the process of bargaining without any real intention of completing a formal agreement.2. Unwillingness to give concessions and compromise at any point of time.3. Inadequate proposals and demands: There may be a deliberate attempt by the parties to give proposals and demands in such a way that no settlement would take place. For example: Demanding a productivity improvement without suggesting any improvement in systems and methods.

4. Dilatory tactics: The law requires that the parties meet at reasonable times and intervals. Obviously, refusal to meet with the union does not satisfy the positive duty imposed on the employer and vice versa. It is observed that there is a deliberate attempt by the parties not to call a meeting without giving any reasonable ground. For example: “the matter is under consideration”; “Director is not available”; “we need more time” etc. The basic objective of giving such statements is to avoid meetings. It is also been experienced that there

3

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________is a tendency as well as tactics to delay the meetings so that workers would bring more pressure on the Union.

5. Imposing conditions: May include attempts to impose conditions for any further negotiations. For example: The employee’s unions of all the nationalized banks in India refused the computerization fearing that it would result job losses. But they agreed to this at one condition that the management designs a better Voluntary pay package to the employees. Similarly management may put a condition that wage rise would be considered only if it is linked with productivity. In short imposing condition on the opposite party indicates lack of faith and trust.

6. Bypassing the representative: (Negotiate with Yellow Unions) There is a possibility that management may negotiate with a puppetry unions created by management. They are not the true representatives of the workers. There are some flaws in the legislations in some countries that the management may not negotiate with the majority union. The second flaw is not having a compulsory democratic method of electing the union representatives. This helps either party to bypass the real representatives and fulfill their mean objectives. For example: in one of the automobile company management refused to negotiate with the Union which had ninety percent membership of the workers. On the other hand they negotiated with a minority union and signed a settlement with them and imposed the same on other workers.

8. Committing unfair labor practices during negotiations: Such practices may reflect poorly upon the good faith of the guilty party. Example: Either party may approach Political parties, pressure groups during the negotiation process. Some times it may happen that the management would suspend some employees during the bargaining process and would only retain them only if the demands of the management are met.

9. Withholding Information: An employer must supply the union with information, upon request to enable it to understand and intelligently discuss the issues raised in bargaining. Example: Data such as Annual financial reports, production, inventory reports, investments done by the company etc.

10. Ignoring bargaining items: In such cases a party may ignore to bargain on the demand clauses and instead may propose on some other issues which were not a part of the bargaining agenda. For

4

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________example: The prime bargaining issue might be of wage hike and may consciously be diverted to issues like transport, canteen, housing loan etc.

In plain language, this means that both management and Unions are required by law to negotiate wage, hours, and terms and conditions of employment in good faith. In short the attitude of both the parties plays a very important to yield positive results.

FEATURES OF COLLECTIVE BARGAINING:

1) COLLECTIVE: It’s collective in two ways:

A) All the workers collectively bargain for their collective interest. Because they do not have individual capacity.

B) Workers and the management jointly arrive at an amicable solution through negotiations. The Union is expected to bring out the common consensus on collective issues rather than individual issues.

Note: On the contrary if we observe Information Technology based (IT) companies, the bargain is individualistic. Because, it is knowledge based industry and the individual holds capacity to bargain for his own benefit.

2) Bargaining Power: In collective bargaining the bargaining strength of both the parties across the table is equal. Ideally it is industrial democracy at work. It will only be democratic only if both the parties are equipped with knowledge and skill. The strength of the union also depends on the demand and supply of working force. Similarly how much capital is invested upon one worker also determines the ratio of bargaining power. For example: A pilot’s union would have more bargaining power than the union of road transport. Because the capital and stake invested on the pilot is much higher than the drivers.

3) FLEXIBLE: In collective bargaining both the parties should have to flexible mental set up to arrive amicably at a common consensus.

4)VOLUNTARY: Both the parties come in front of each other voluntary in order to arrive at a voluntary agreement, which is mutually acceptable to both the parties.

5

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________5) CONTINUOUS: Collective bargaining not only commences with negotiation and ends in argument, but it’s a continuous process that includes implementation of the agreement and also further negotiations.

6) DYNAMIC: It’s a dynamic process because it involves the following:

A process of agreement which itself contains various concepts which may change and alter time to time.

The implementation process is also on going. The mental makeup of the parties keeps on changing. Various strategies used by both the parties keeps on changing

based on the demand of the situation. We all are a part of the global economy and the product,

consumer’s taste; market place etc keeps on changing. This has tremendous effect on companies. The same has impact on the bargaining as well.

7) POWER RELATIONSHIP: Both the parties want to extract the maximum from each other. But to reach a consensus both the parties have to retreat from their positions in order to reach a common consensus. In such an attempt both the parties try to reach on a common ground without any serious dilution of their power. Example: If the job of the worker is not skilled and he is being easily replaceable, he would have lesser bargaining power. Because, there is a huge mass of unemployed youth waiting to be replaced.

8) REPRESENTATION: The Collective Bargaining process must be represented by those who have the capacity to take decisions.

9) BIPARTITE PROCESS: The employees and the employers negotiate the issue directly across the table. And there is no third party intervention like pressure groups, legal consultants.

6


B. Prerequisites of Collective Bargaining (3 week)

The second session on the prerequisites of collective bargaining will include a thorough discussion on the bargaining bodies at the national, industrial, and enterprise/unit levels, on the recognition and registration of trade unions, and the criteria for recognition of trade unions for the collective bargaining process, barriers and enabling conditions for collective bargaining.

PRERREQUISITES FOR THE COLLLECTIVE BARGAINING:

For a successful collective bargaining process there are certain prerequisites to be followed. In other words there are certain conditions to be fulfilled which are briefly discussed below:

1) RIGHT TO ORGANISE AND RIGH TO COLLECTIVE BARGAIN: The extent to which, the workers enjoy the right to organize and bargain is the key success factors to which collective bargaining works in any country. There are two prerequisites for the successful implementation of this condition, first is the effective enjoyment of the freedom of association in accordance with the principles set out in the “Freedom of association and the protection of right to organize convention”, and the second is the “workers and the employers organization should be free and sufficiently strong but also relatively equal in strength with the management.2) STRONG AND STABLE TRADE UNIONS: The impact of unionization has a strong influence on the growth and development of collective bargaining in a country. The rate of unionization varies from country to country. The strong and stable trade unions lead to the success of collective bargaining. Whereas the fragmentation of the unions, inter union and intra union rivalries hinders the progress of the collective bargaining process. This also leads to the host of other problems both for the employer as well as the state, in addition to the above said. Example: A union in the plant level may have conflict with the central union, ultimately affecting the collective bargaining process.

7

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________3) RECOGNITION OF TRADE UNIONS: The collective bargaining can take place only if the employers recognize trade unions or the workers association for that purpose. The refusal of employer to recognize the trade union or the complications that might arise in achieving recognition greatly complicates the process of collective bargaining. Recognition of union is achieved in two ways: it can be made compulsory under the law or some systems must be developed by which the unions can be recognized. For example: There are some countries where there is no legal provision regarding the recognition of trade unions and hence such unions have to struggle for getting the same. 4) ATITUDE OF EMPLOYERS AND TRADE UNIONS: The attitude of the parties involved is also a crucial factor in the success of the bargaining. If the parties are rigid, non-compromising and close minded it will be impossible for collective bargaining to function. In that case the common consensus is hard to be reached upon. On the contrary, if, the parties have a compromising and flexible attitude, then only the possibilities of an agreement can take place.5) A SUITABLE FRAMEWORK: A set of established procedures and a governing body is required for the smooth and effective functioning of the collective bargaining procedures. In case of developing countries the lack of a suitable frame work is so acute that, the collective bargaining procedure may come to a standstill. These statutory bodies are established in many of the developing countries where they may vary in regards of composition, terms of reference and level of operations. The machineries for the effective work out of the process of collective bargaining have been laid down either by the legislation of the country or by mutual agreement. Therefore setting up of the well organized negotiating bodies for the purpose of collective bargaining is of immense importance.

Forms of Collective Bargaining:The forms of collective bargaining across South-East Asia are as diverse as the cultures across its nations. Collective bargaining in each of the South – East Asian countries has been a result of an arduous struggle by the people of the nation to protect & preserve their rights, and hence each form of collective bargaining has a different flavor of its own. The forms of collective bargaining are categorized on the basis of its basic philosophy & the basic objective of bargaining, some work with the basic philosophy of creating a win-win situation on one hand, to the win-loose situation on the other. Basic objective of bargaining

8

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________varies from self interest to giving back to the management. Based on this, broadly, we can categorize five forms of collective bargaining:

• Conjunctive / Distributive Bargaining: Distributive bargaining is the most common type of bargaining & involves zero-sum negotiations, in other words, one side wins and the other loses. Both parties try to maximize their respective gains. They try to settle economic issues such as wages, benefits, bonus, etc. For Example, Unions negotiate for maximum wages & the management wants to yield as little as possible – while getting things done through workers. Union workers may try to convince the management that they will go on strike if they don’t get the wages or working conditions they desire. Management, in turn, may be willing to try to ride the strike out; especially if they have cross trained other workers or have external replacements to fill in for those on strike. In distributive bargaining, unions and management have initial offers or demands, target points (e.g.: desired wage level), resistance points (e.g.: unacceptable wage levels) & settlement ranges (e.g.: acceptable wage level). Another name for this type of bargaining is conjunctive bargaining.

• Cooperative /Integrative Bargaining: Integrative bargaining is similar to problem solving sessions in which both sides are trying to reach a mutually beneficial alternative, i.e. a win-win situation. Both the employer & the union try to resolve the conflict to the benefit of both parties. Both sides share information about their interests and concerns and they create a list of possible solutions to best meet everyone’s needs. For Example, when companies are hit by recession, they cannot offer the kind of wages and benefits demanded by workers. At the same time they cannot survive without the latter’s support. Both parties realize the importance of surviving in such difficult times and are willing to negotiate the terms of employment in a flexible way. Labor may accept a cut in wages in return for job security and higher wages when things improve. Management, on the other hand, agrees to modernize and bring in new technology and invest in marketing efforts in a phased manner. In India, companies like TELCO resorted to integrative bargaining during the recession in the automobile sector. Another name for

9


this type of bargaining is ‘interest-based-bargaining’ and some people term it as ‘cooperative bargaining’. The objective for both parties is to find the common ground between them, to build relationship and to eliminate the adversarial elements of traditional bargaining.

• Productivity Bargaining: The concept of productivity bargain involves a good understanding of the following concepts. Based on these concepts both the parties must develop a productivity linked scheme.

Difference between productivity & work intensity

How to conduct work study

ILO guidelines for work study – Personal needs allowance, Fatigue allowance, hazardous allowance, etc.

Other Methods like MOST (Maynard Operational Sequence Techniques)

Systems improvement and method improvement

Required Skills and Knowledge for productivity settlement

• Composite Bargaining: Workers believed that productivity bargaining agreements increased their workloads. Rationalization, introduction of new technology, tight productivity norms have added to this burden and made the life of a worker somewhat uneasy. As an answer to such problems, labor has come in favor of composite bargaining. In this method, labor bargains for wages as usual, but goes a step further

10


demanding equity in matters relating to work norms, employment levels, manning standards, environmental hazards, sub-contracting clauses etc. This works in the favor of the workers, for e.g., when unions negotiate manning standards they ensure the workload of workers don’t exceed. Workers are no longer interested in monetary aspects to the exclusion of work related matters. However, there is no doubt that wages, bonus and other monetary benefits continue to occupy center stage in the bargaining sessions, but there is a definite shift towards composite bargaining. Without such a proactive stand workers may not be able to withstand the forces of liberalization, automation and outsourcing. Through composite bargaining, unions are able to prevent the dilution of their powers and ensure justice to workers by putting certain limits to the freedom of employers. And for employers, this is lesser evil than strikes and lockouts. This situation may not continue for long though, with the compulsions of the free market, reduction in labor or wages.

• Concessionary Bargaining: Quite opposite to the other forms of bargaining, where the unions demanded from the employers, in concessionary bargaining, the objective is to giving back to management some of what it has gained in previous bargaining. Why should labor be willing to give back what it has worked so hard to obtain? Usually such a move is prompted by labor leaders who recognize the need to assist employers in reducing operating cost in order to prevent layoffs and plant closings. Thus, it is often economic adversity that motivates concessionary bargaining. A good example is the agreement between General Motors & the International Union of Electric Workers that granted GM around-the-clock operations, wages and benefits concessions for the new hires, and a two-week mass vacation. The concessions were made to save over 3,000 jobs at a plant in Ohio. In some cases, despite a financial crisis, the union may not be willing to concede. This may be because the union doesn’t view management’s arguments as credible. Thus, the degree of trust and credibility between the

11


management and the union may influence the extent to which concessionary bargaining occurs.

Think about it: Does cultural diversity and socio economic status have a

connection to the choice of collective bargaining form?

How do organizations and unions decide which collective bargaining form should be adopted?

Systems of Collective Bargaining:There are varied systems for collective bargaining across South-East Asia; it varies from informal oral agreements to a very formal & detailed agreement. Broadly, there are three different systems of collective bargaining;

• Single Plant Bargaining (Unit Level): Bargaining between management and a single trade union at its specific plant or business unit is single plant bargaining. The out come of the bargaining would not be applicable to other plants of the same company. This type of collective bargaining prevails in the United States of America & India.

• Multiple Plants Bargaining (Plant Level): Bargaining within a single company/establishment, having several plants, and the workers employed in all of these plants. Here the result of the negotiation would affect all the plants even if they are at geographical distances.

A collective agreement at plant level or unit level is reached only for the plant or unit for which it has been drafted, and its scope and extent are limited only to that particular unit or undertaking. The agreement generally provides for certain common norms of conduct with a view to regulate labor management relations and eliminating hatred and misunderstanding, It contains provisions for a quick and easy solutions to those issues which require immediate and direct negotiation

12

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________between the two parties and lay down a framework for their future conduct if and when controversial issues arise.

• Multiple Employers Bargaining (Industry Level): Bargaining between all the trade unions of workers in the same industry through their federal organizations, and the employer’s federation. This is possible both at the local and regional levels and is generally resorted to in the textile industry. Germany follows this systems where National Trade Unions negotiation, with the employer’s association, on behalf of all the workers in a particular industry. The best example of industry level bargaining is the textile industry in Bombay and Ahmedabad in India. This agreement extends to all the textiles in the regions and all are obligated to uphold it.

• National Level Bargaining: This kind of bargaining is done irrespective of any plant, industry. Because they all have a common concern.

Think about it! What are the merits and demerits of each level of

bargaining?

What are the possible factors that may effect in choosing a particular level of bargaining?

Issues of Collective Bargaining:What are the issues that could be bargained across the table?

13


Practically speaking, any issue that has relevance to management and workers becomes the subject matter of bargaining. However, in certain specific cases both management and the union are reluctant to yield ground. Traditionally, management is not willing to negotiate work methods’, arguing that it is management’s exclusive right to decide how the work is to be done. Likewise, unions don’t want negotiations on production norms and disciplinary matters, because any agreement in this regard would put limits on their freedom. However over the years, the nature and content of collective bargaining has changed quite dramatically. Traditionally, wages and working conditions have been the primary focus areas of collective bargaining. However, in recent times, the process of collective bargaining has extended to almost any area that comes under employer-employee relations, covering a large territory.

But broadly these issues can be categorized into two parts:

1. Issues of right

2. Issues of Interest

Issues of Right: It is a participative right of both the parties. For example: Wage fixation and productivity norm setting are the rights of workers.

Issues of Interest: These issues do not have participative rights and may only be granted as a sign of goodwill. Example: Providing Transport facilities to the work place is not binding on the management. It is provided only for the convenience of the workers and the benefit of the company.

14

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Some of the examples of issues of collective bargaining are mentioned below.

• Wages and Working conditions

• Work norms

• Incentive payments

• Job Security

• Changes in technology

• Work tools, techniques and practices

• Staff transfers and promotions

• Grievances

• Disciplinary matters

• Health and safety

• Insurance and benefits

• Union recognition

• Union activities / responsibilities

• Management rights etc.

The major issues dealt with in collective bargaining are broadly categorized as below:

• Wage Related issues – These include topics like how basic wage rates are determined, cost –of-living adjustments, wage differentials, overtime rates, wage adjustments etc.

• Supplementary economic benefits – These include issues as pension plans, paid vacations, paid holidays, health insurance plans, dismissal plans, supplementary unemployment benefits etc.

15


• Institutional Issues – These consists of rights & duties of employers, employees & unions, including union security, check off procedures, quality of work-life program etc.

• Administrative Issues – These include issues such as seniority, employee discipline and discharge procedure, employee health & safety, technological changes, work rules, job security and training, attendance, leave etc.

Think about it! Which of these categories is worker-interest oriented?

Which of these categories is union-interest oriented?

Think of some more issues and categorize them into issues of interest and issues of right.

C. Analysis of Knowledge, Data, and Information (3rd & 4th

week)

During this session, participants will look at micro and macro-economic concepts, selected wage theories, labour market surveys, factors affecting wages, the nature of business, compensation and wage surveys, job analysis and evaluation, corporate policy analysis, analysis of financial

16


statements, including the balance sheet, and negotiation and influencing techniques.

CONTENT:

Chapter IIDeveloping Competencies for Collective Bargaining:We will deal with the following points:

• What is competence?• Why competence is required?

In order to conduct effective collective bargaining process both the parties must develop some competencies. We will later discuss why such competencies are required. Let us find out what do we mean by competencies:

Competency: Behavioral characteristicsCompetencies or competence consists of: Knowledge/skills and abilities

Definition of the terms: Knowledge: Information, intelligence, implying truth, proof and conviction, clear and reasonable perception of the fact etc.Skills: The art of completing an act by knowing all the technicalities.Ability: Having the power and capacity of doing something without the help of technology. So competence can be defined as ability to do certain task with standards which they are expected to do. Similarly when we engage ourselves in the process of collective bargaining we are expected to achieve certain competencies.

Why should we develop these competencies?• These competencies help us to do the ground work and acquaint

us with the current realities.

• Our bargaining capabilities become sharper as it is based on fact and data.

17


• Without appropriate competencies we may beat around the bush and may not have any positive outcome.

• We can not undermine the fact that this is a knowledge based world where information and data plays an important role.

A small Case Study: How Competencies Help:An automobile company was facing increasing demand from the domestic market as it had few rivals in the market. Because the new open market was yet to be opened its doors. The company was fast loosing its market share due to its inability to meet the demands of the consumers. Hence the company developed a policy to increase the working time from prescribed 420 minutes to 460 minutes. This means an additional work load on the workers.Management made a simple calculation that by increasing 40 minutes of working time it will achieve 25% more productivity. But union conducted some research work and kept one proposal to the management that it can achieve 27% increase in productivity within the stipulated time frame of 420 minutes. The proposal consisted of the following dimension:

System Improvement

Method improvement

Line Balancing

But the management out rightly rejected the offer as they did not want to take the responsibility of improving any methods. Instead they pass on the buck to the laborers.The case was referred to the Labor Department. The labor Department was convinced with the arguments of the Labor Unions as it was based on facts and tremendous knowledge on work study. Later it was proved that management was working against the progress of the company.Learning: This could happen only because the Union had the necessary competencies to conduct work study as well as the analytical abilities.

Think about it!!!!! Had there been no competencies among the trade union

leaders what probable situation would have arisen??

18


Formulate a real or a hypothetical situation from your experiences in the company where developing competencies helped the union and the workers.

These are some of the competencies we must develop for the collective bargaining.

Dimensions of compensation systems: In lay man’s language compensation system means the wages and salaries (Monetary) or (In kind) paid by an organization to its employees for the services they render to the organization.

Monetary: Wages and salaries paid in the form of money.In Kind: Goods and services made and available to the employee fully or partially.

The compensation system has various dimensions or components, some of which are briefly described below:

Pay for work and performance: It includes money that is provided in the short term (annually, quarterly, monthly, weekly, daily, and hourly, bonus, allowances etc). The payment depends on the person’s ability to achieve certain standards such as quality, quantity, loyalty, innovation at work etc.Pay for time not worked: When an employee spent some considerable period of time in the organization he enjoys more offs, paid holidays, vacations for various personal reasons. This enhances the quality the quality of life but increases the labor cost significantly. Because, the organization is paying the worker for the hours he has not actually worked.Loss-of -Job Income Continuation: Every one needs job security that it continues till they retire. Although now a days the focus is changing from job security to economic security. A variety of components such as insurance, unemployment insurance, social security benefits help the workers to sustain even if they loose their jobs or are laid off.Disability income continuation: A worker may not be able to attend his duties because of health or accidental problems. But the day to day expenses would always continue. Social security, workers compensation, sick or medical leave support the worker in such conditions.

19

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Deferred income continuation: This can be termed as retirement benefits that an employee enjoys. Most of the workers don’t have savings to continue the same lifestyle that they used to enjoy during their work. So, various schemes such as Provident fund, social security, various tax benefits, senior citizen benefits, stock purchase etc come to rescue.Spouse income continuation: When an employee becomes permanently disable or diesCertain schemes provide benefits to the family members. For example: Life insurance plans, pension plans, social security plans. Some organization provides jobs to the nearest competent family member if such condition arises.

Health, Accident and Liability protection: When an employee suffers form health problems some organization takes the onus of proving medical goods and services. They have various tie-up schemes in a large scale with insurance companies and hospitals.Income Equivalent Payments: These are generally called as “perks”. There may be cases when the perks even exceed the normal wages and salaries. Perks may be taxable where as some may not be. Some examples of perks: providing goods in a rate less that the market place, company credit cards, subsidized food services, child care etc.

Non Compensation Systems: These rewards are very difficult to measure as they are qualitative, may be infinitive and situational based. For example:

• Physiological, Intellectual, and emotional well being of the employee

• Enhance Dignity and satisfaction form work.• Promote Social relationships with co workers• Allocate sufficient resources.• Grants sufficient Autonomy and freedom.• Less control and monitoring etc.• Offer supportive leadership.

Determining the Rates of Pay:

The compensation programs gets influenced and affected by various factors. The correlation between one and the other factors determine the pay. Some of these are discussed briefly below:

20

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Kinds and levels of required skills: The higher the complication, creativity and skills required more the payment is. An entertainer, artist’s payment is higher than others. A pilot’s job involves technicality and high pressure. Hence the compensation is higher than most of the other jobs.Most of us do very mundane and monotonous jobs. Hence knowledge and skill is not the only criteria for determining pay rates. Working condition, seniority and efforts also plays an important role.

Kind of Business: Payment is also determined by following:• Private sector versus Government sector.• Profit motive or non profit motive• Nature of the product or services: Information Technology,

Manufacturing, Retail, Hotel and Restaurants, Mining and Heavy Industry, Banking, Insurance etc.

Union and Non Union Status: Workers under strong union has more collective bargaining power than those not associated with unions. Similarly unorganized workers or contract labors are prone to low wages and exploitation in Asian countries.Labor intensive versus Capital Intensive: Labor intensive industries employ large number of less skilled work force. So the labor cost has a greater influence on the profits of the company. Where as in Capital intensive industries uses new and sophisticated technology which minimizes labor cost. But however the employees have high skill sets and demands higher rates of pay.Size of Business: A large organization provides a high scale of payment then a small scale industry. As their business is already expanded they have a higher capacity to sustain and pay. Larger organizations also have strong unions and can bargain for higher pay. This phenomenon is not prevalent in small and slow growing organizations. But their can be some exceptions as well.Philosophy of Management: The philosophical plinth influences the rates of pay of the organization. Some organization only pays minimum standard of wages to abide by the statutory compliances and prevalent market conditions. But in some organizations are committed to pay higher then the prevalent market rates to attract best people with right skill sets.Geographic location: In a huge country like India not all the geographical locations are equally industrialized. Industrialized places have more job opportunities and a high cost of living. It finally impacts the rate of pay employees working in those geographical locations. States where there are only few industries, the density of population is also less. So, basic necessities are available at a lower cost which leads to lower payment rates.

21

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Supply and Demand of Labor: Short supply of skillful workers always attract higher rate of pay. In Specific locations where demand of workers in a particular sector increases due to sudden boom in business, the bargaining power of the worker’s increase tremendously. In adverse situations it would be quite the opposite. For example in newly developed Asian metro cities there is a high demand of construction workers and engineers.

Employment Stability: Every employee looks for job security as switching new jobs can be quite tiresome with ever increasing liabilities. Premium salaries, facilities may not work when it come to security of job. During the recession in 2001 and 2002 many Asian living in US lost their jobs. Employees who feel that permanency of a job is more important they fat pay cheques they pick us jobs with less pays. When economic condition worsens job security becomes an utmost demand.Gender Difference: Traditionally women workers are paid less then their male counterparts. It is believed that women are only suitable for some traditional service oriented jobs. But the gap has been lessening as more and more women folk are taking up high end job now days.Employment tenure and performance: People who have spent considerable time in an organization their rate of pay increases with time. Senior employees are more effective problem solvers, reliable, more responsible and predictable in terms of behaviors.Person with high performance rate gets high payments. Even though the basic job description remains the same they are given additional responsibilities. This increases the value of the job. So, person becomes entitled to higher pay.

Legislation and Compensation:

If we go by the general belief that Legislation is only concerned with punishing the guilty and bringing justice, it would be difficult to relate how legislation is closely related to compensation structure. There is no doubt that law is to control and monitor human behavior. But there is evidence that in the earlier times law used to regulate payment, working hours etc. But in the later part of nineteenth century as industrialization developed rapidly, government intervention started taking place in organizations. For example government deals with these subjects:

• Minimum wage determination• Hours of work• Standard rates for critical jobs

22


• Overtime rates• Bonus rates• Compensation rates for health and accidental cases• Retirement plans• Tax benefits• Antidiscrimination in wages based on caste, creed, race and

gender

Legislation influences all aspects of organization life right from registration of the company to its employment practices. Government assesses the current situation and makes various amendments from time to time. In different countries these legislations might be different, but the prime motive behind it is the same. It wants to bring equality and social justice.

Legislations and Its Broad Categories:

The legislations can be divided in some broad categories:• Industrial Relations• Wage and Hour Legislations• Fair Labor Practices and Standards• Health and Safety Legislations• Compensation legislations in case Disabilities and Death• Social Security Acts• Minimum Wage Determination Acts etc.

Job analysis and Job Description, Job Evaluation:

Before going into the details of what Job Description and Job Evaluation means, let us see the relevance of these concepts to compensation systems.

Job analysis and Job Description contains the following: Job Contents Working conditions Knowledge, Skill sets required Qualification Performance level requirements Reporting relationships

How Job Analysis and Job Description help in designing a Compensation system:

23

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________The above mentioned points enable us to design a sound compensation system. Because, by using the above criteria we can differentiate one job from the other. After differentiating one job from the other we can move on to make a fair and just compensation system. These concepts are also used in recruitment, training need analysis, transfer, manpower planning etc.What is Job Analysis: Job Analysis is the process of collecting, analyzing and setting out information about the content of the job. This systematically collected data is used for writing the job descriptions. In short Job Analysis is concerned with what the job holder is expected to do in the work place.Job Analysis produces the following information about a job:

• Overall Purpose: Why the job exist, job summery, what the incumbent (Job Holder) is primarily supposed to do.

• Content: The tasks and activities to be performed to bring the desired output.

• KRA s: Key Results areas which means the outcome for which he is accountable.

• Performance criteria: How the performance of the incumbent would be assessed in terms of quality and quantity.

• Responsibilities: Scope of the job, autonomy given, difficulty and complexity of the job etc.

• Environmental factors: It is related to the working condition: Physical, mental, health, safety, shifts, mobility, equipments used etc.

Step by Step Data Collection: • Document: Collect document such as Organization hierarchy

charts, job contract document, training manuals where information about the job is given.

• Ask managers, supervisors, job experts about the overall purpose, and responsibilities about the job.

• Ask the job holder the similar questions.• Conduct long interviews with a help of a standard check list with

the incumbent, his superiors and subordinates.• Distribute questionnaire to the incumbent, managers,

supervisors, job experts.• Observe the job holder while he is at work and maintain a log

sheet.• Finally triangulate the data from all the sources: Interview,

questionnaire and observations. • Consider only those data which is filtered through the

triangulation process.

24

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Job description: Job Description is derived from Job Analysis. It provides basic and clear information about the assignment a person is supposed to perform, where he fits in the organization structure.

Job Descriptions are used for the following purposes: • Recruitment process• Performance management• Training and development• Compensation and benefits

A Job Description generally follows the below mentioned pattern:

• Job Title,• Grade• Reporting relationships: Reporting to and others reporting to

him.• Overall purpose of the job: Provide a broad picture about the job.• Principal tasks to be performed• Working conditions.

Job Evaluation: Job evaluation is a systematic process for defining the relative worth of a job within an organization. Job Evaluation enables to prepare a blueprint of grading in jobs. These grades are later used make pay decisions. The philosophy behind the concept is to achieve equal pay for work of equal worth across the organization.

Information Demand at Enterprise Level:

One should believe that cooperation is must but conflict is also an expression of some un-addressed lacunae in the rationale of our system. Therefore an enlightened, compassionate and realistic attitude must go hand in hand with specific systemic innovations. One should also believe that win-win situations are possible with the help of objective assessment and creative breakthroughs. For such assessment union may require following information of last 3 years so that we can prepare our charter of demands based on rationality.

1. Sales/turn over,2. Capital employed/capital size,3. Employment size,

25


4. Value Added= Income – Non Factor Expenditure. (Here non-factor expenditure means expenditure other than employee cost, depreciation and interest).

5. Material intensity/input intensity sales = -------------- value added

6. Capital intensity/capital output ratio capital =-------------------- value added 7. Value added per manday 8. Return to capital per manday 9. Rate of profit Share of Capital = ------------------------ Capital employed

10. Employee cost (Bargainable/unionized) per man day 11. Prize mark up i.e., value added per unit, 12. Trend of output prices and input prices. 13. Capacity utilization of the plant and machinery, 14. Market share of the firm, 15. Ratio of financial result/ratio of operational results, 16. Ratio of debt/ratio of equity, 17. Percentage of non-operational income, 18. Break even point of sales and output, 19. Balance Sheet & Profit & Loss Account of Last 3 Years of the Company. 20. Productivity Data for each workstation including all elements.

It is possible that all above mentioned information may not be available but union should try to get information as much as possible. Unions are free to get some additional information other than above list as per the requirement.

In addition to above the overall analysis must be ready:

26

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________The Economic and Financial Analysis- a few simple steps:Introduction: For any collective Bargaining processes the analysis of the overall economy, industry and the specific firm is required. The basic objective behind this exercise is to take a rational decision.

The 3-Phase Fundamental Analysis

PHASE I: Economic Analysis To Assess the General Economic situation both within the

country and internationally

Explanation: As we know that on any collective bargaining process there is an impact of global economy as well as national economy. For example: The impact of rise in oil prices resulted in inflation. There are various economic factors like inflation, economic growth, balance of payments, conversion rates vis-à-vis local currency and dollars, demand and supply, purchasing power, labor market etc. should be considered while preparing for the collective bargaining. In short one has to consider the overall global and national economy for the collective bargaining process.

Collective Bargain

Economic analysis

Industrial

Specific Firm

International

National

27


Various Tools used:

Economic Indicators such as: Economic Growth:

Monsoon & Agriculture

Industrial Production

Inflation

Interest Rates

Foreign Exchange Reserves

Balance of Trade

Budgetary Deficit

Public & Foreign Debt

Domestic Savings & Capital-Output Ratio

Employment

Tax Rates

Infrastructure

Government Policy

Political Situation

International Developments

Exercise: Collect the information on the above mentioned economic indicators of your respective countries and share with all the participants.

PHASE II: Industry Analysis

28


Life Cycle of an Industry- Pioneering Stage, Expansion Stage, Stagnation Stage and Declining Stage.

Explanation:

What are the strengths of the Industry?

What are the weaknesses?

What are the vulnerabilities of the Industry?

What are the opportunities available to it?

What are the threats it faces?

Stage IIExpansion

Stage IIIStagnation

Stage IVDeclining

Stage IPioneering

29


Phase III: General Analysis of the Company • Economics of a Firm• Balance Sheet Analysis• Corporate Analysis• Financial Analysis• Productivity Analysis- Capital, Labor, Material etc

Company Performance Analysis: The following tool can be used while analyzing the Company Performance. This is a model of Economics of a firm.

Arvind Shrouti,Option Positive

Production

O/P Price

I/P Price Return to Capital

Return to Labor

Employment

Work Intensity

Productivity

Capital Share

Labor Share

Deployment

Turnover

Value Addition

MODEL OF ECONOMICS OF A FIRM

Capital Employed

Production- Total Production OP price-output price/selling price of the product Turn Over=Production X OP price IP price- input price i.e. prices of all inputs Input Cost-raw material, power, admin cost etc. In short all the

cost other than employee cost, depreciation and interest Value Addition- Turnover- input cost

30


Capital Share- Share of Capital in Value Addition in terms of money

Labour Share- Share of Employees in Value Addition in terms of money

Capital Employed- Total Capital Employed by the Company. Return to Capital- Ratio of Capital Share & Capital Employed Work Intensity- The Ratio of Employment & Deployment Productivity- The ratio of Deployment & Total Output

With the help of above analysis we can analyze the capacity to pay of the Company/ Industry. We will conduct the exercise during the course with the help of Balance Sheet of your Company. For understanding the Pay trends on region cum industry basis can be assessed base on Compensation Survey and therefore let us try to understand the same.

The Exercise is in the following pages:

31


The Exercise:

YEAR - 2008 In million In million

CAPITAL EMPLOYED

A OWN CAPITAL

Share Capital 61.84

Reserves & Surplus 28.28

Total 90.12

B BORROWED CAPITAL

Secured Loans 3.11

Unsecured Loans 62.50

Total 65.61

C TOTAL CAPITAL EMPLOYED 155.73

Finance Costs 7.87

Interest Rate (%) 12.00

32


2


VALUE ADDITION

A INCOME

Sales excluding Excise Duty 237.19

Other Income 5.84

Increase/Decrease in Stock 4.61

Total 247.64

B EXPENDITURE

Manufacturing Expenses 161.18

(Other than Employee Cost)

Purchase of Trading Product 35.27

Excise Duty 2.81

Total 199.26

C VALUE ADDITION

TOTAL INCOME 247.64

33


TOTAL EXPENDITURE 199.26

VALUE ADDITION 48.38


SHARING OF V. ADDITION

A Capital Share 34.74

B Employees Share 13.64

Total 48.38

C Share of Capital (%) 71.81 %

D Share of Employees (%) 28.19 %

Total 100.00 %

E Total Capital Employed 155.73

Share of Capital 34.74

Return on Capital (%) 22.31 %

34


4 YEAR - 2008 In million In million

SHARING OF V. ADDITION

A Share of Bargainables 3.67

B Share of Non-Bargainables 9.97

Total 13.64

C Share of Bargainables (%) 26.92 %

D Share of Non-Bargainables (%) 73.08 %

Total 100.00 %

E Total Value Addition 48.38

Share of Bargainables in V.A. 7.59 %

Share of Non-Bargainables in V.A. 20.60 %

Total 28.19

One can analyze the balance sheet as mentioned above and covert all the information in the following manner for various years. Here we can see the various emerging trends.

35


2003 2004 2005 2006 2007 2008

Own Capital 59.29 59.29 59.11 90.12 90.12 90.12

Barrowed Capital133.3

6177.7

3 198.99216.2

5 107.98 65.61

Total Capital Employed192.6

5237.0

2 258.10306.3

7 198.10155.7

3

Interest Paid 16.92 26.52 26.69 27.37 18.76 7.87

Interest Rate 12.69 14.92 13.41 12.66 17.37 12.00

Income267.6

5285.4

2 242.06230.9

0 229.04247.6

4

Expenditure239.6

6247.3

9 211.37209.7

3 206.41199.2

6

Value Addition 27.99 38.03 30.69 21.17 22.63 48.38

Capital Share 14.82 21.33 13.25 5.20 10.04 34.74

Employees Share 13.17 16.7 17.44 15.97 12.59 13.64

Return on Capital (%) 7.69 9.00 5.13 1.70 5.07 22.31

Share of Bargainable 6.47 7.15 7.77 3.00 3.22 3.67

Share of Non Bargainable 6.7 9.55 9.67 12.97 9.37 9.97Share of Bargainable in V.A. ( %) 23.12 18.80 25.32 14.17 14.23 7.59Share of Non Bargainable in V.A. (%) 23.94 25.11 31.51 61.27 41.41 20.61

Share of Barg. In Total Empl cost (%) 49 43 45 19 26 27Share of N.Barg. In Total Epl. Cost (%) 51 57 55 81 74 73

36


Surveying Market Pay and Compensation Practices:

Survey and its importance: Survey is the systematic method of collecting data and information on any topic. Now the question is how does survey helps in building the previously mentioned competencies. When we collect data systematically from various industries, regions; their pay structures, we have an accurate understanding of the present market condition. Based on this accurate and objective data we can determine a fair and just compensation structure for an organization. Wage survey helps the unions to understand wages and service condition in their respective region as well as the industry.

Why to conduct a Compensation Survey:

Understanding pay trends across the industries: Workers may have a tendency to compare and measure their rewards by comparing it to co workers, friends, relatives and people in other industries. So it is very important to keep a close tab on how the other industry pay scales are for similar jobs and thereby promoting more productivity.

Justifications of the demands made by the Unions: Wage survey helps the unions to justify their demands based on region cum industry. Also issue of equity can be taken care of by using wage survey data.

Developing adequate and acceptable pay structure: The survey can also help to develop a pay structure which is fair, neutral, and acceptable by both management and workers. The survey must take into consideration the following points:

• Review the rates of pay of those competing in the labor market.• Review how the other organizations are paying for lateral

transfers and promotions.• Develop and design innovative pay structures.

Recognize Pay trends: The survey also helps to keep a track how compensation is getting effected by various factors in the past. At the same time it would help to predict the future trends that might occur in the coming years. So the organization and the workers would be well equipped to fight such situations.

37

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Legal Aspects: There may be situations when one party may have to accuse or defend themselves in the court of law against unfair, discriminate pay practices. In such cases a well constructed survey would help as a legitimate approach.

Problems of Gathering and Analyzing Pay Survey Data:

Hazy Job Analysis: In many organizations jobs are ambiguously and poorly defined. The supervisor may not be aware of what the subordinates are doing. The job description and what actually the worker is doing may not at all be connected.

Collecting the Data, a tiresome process: If the assignment is given to less competent people who are not serious about the objective it may ruin the entire purpose. The survey question may not gather the required data, if not based on well defined and clear subjects. Besides, collecting data is time consuming affair and the organization may not take it seriously.

Ensuring Proper Sample Size: Identifying the competitors in the market may, itself be a problem. One organization may compete in the labor market while the other may compete with its products. So, improper sample size may ruin the entire project.

Importance: Pay surveys must be in congruence with the policies of the organization. The cost involving in the survey must be understood and accepted by the organization. Or else it will merely be reduced to a ritual.

The Survey must not be biased: If the survey conducting authority has some hidden agenda in their minds, then the data would be manipulated to fit the agenda. For example: The hidden agenda might be used to show that the employees are extremely low paid and justify certain predefined increment.

Analysis of the Data: It is said that there are three kinds of lies: Lies, damned lies and Statistical lies. The analysis and inference making process is used to show a real picture. But when it is not done efficiently, the result may be quite the opposite.

Missing Aspects: While the survey collects important numerical data, it misses out another important aspect such as emotional well being, job satisfaction, job security, social needs, and interpersonal relationships etc. of the employees. These factors are also important in determining the motivational levels of the employees.

38


Using Third Party Surveys Vs own Survey: Many organizations outsource the surveys to professional outside parties to save cost. But the result might vary based on the competencies of those parties.

Preparing to conduct a survey:

• Support from the Union and the Workers: Provide money, man hours and hearty willingness.

• Make a self Assessment: Find out if skillful, competent and other resources available.

• Classification of Jobs: Find out representative and bench mark jobs from the organization hierarchy

• Pay Structure: If the organization has multiple pay structures at different units and subsidiaries, then which specific structure to choose.

• Identifying the labor market: The organization may have competing labor market at different levels, local, regional, national and international levels. Prior to the survey one must find out the proper labor market.

• Identifying the competing organization: Similarly, the organizations competing must also be identified prior to conduct the survey.

• Selection and co-operation of the Respondents: Do the respondent belong to representation jobs? Will they entertain personal visits, telephonic inquiries? These are some of the questions that must be taken care of. The respondent must be promised to provide with a report once the survey is over. This would definitely help in earning co-operation.

• Kinds of data to be collected: Data related to pay policy, demographic data, kind of compensation components etc must be considered based on the requirement and objective of the survey.

Various Kinds of Survey Methods: Below is a very brief introduction of various kinds of survey methods employed for a survey:

Job Matching: This is one of the most commonly used survey methods. The survey supplies data in relation to a benchmark job and the respondent has to identify similar jobs. Bench mark jobs are those highly visible jobs which are very common across the organizations and employ more people.

39

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________The survey would provide data such as Job Title, Responsibilities involved. The respondent would then identify such jobs in the organization and would then provide information such as rates of pay, pay range and number of employees in the job.

Class Matching: It is nothing but a groping of comparable jobs across the organization. Jobs which involve similar skill sets, complexity, working conditions are classified into one group. For example: Highly skilled, semi skilled, unskilled, clerical etc.

Occupational Survey Method: The method includes certain basic occupational groups of jobs such as: fitter, welder, clerk, elecrician etc. Then within the Occupational group there would be further classification. For example: In Human Resources there are Recruitments, Training and development, Employee Engagements etc.

Broad Classification Method: In this method pay data is collected for relatively homogeneous professions. For example: Broad classification of Managers from different fields such as: Top Management, Middle management, Lower management etc.

Designing the Survey, Analyze the Data and Making the Presentation:A survey generally includes the following components:

The proposal: It is an official document explaining the survey, purpose of the survey, the manner in which the survey would be conducted, assurance of confidentiality etc.

The Survey: It would include the clear, well researched questionnaire so that the respondent has to spend less time pondering on it. It should provide various options and ranges so that the respondent has to spend less time on it.The Survey must also include an extensive study of the companies Policies, Employee Benefit schemes, An Extensive job Analysis and Job Evaluating etc.Permission to Include the name of the Companies: The add value and authenticity the survey must mention the name of the companies where the survey was conducted. A prior written permission is required to avoid any legal issues.

Keep a record of the Survey Data for future reference and provide on request.

40

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________The Analysis of Data: The statistical analysis method would include the following:

The Sample Design:

The sample design must be developed as per the requirement and objectives:

Statistical Techniques Used:

• Mean, Median, Mode• Frequency distribution • Scatter Diagram• Regression Analysis etc.

Compensation Survey Report: The final step is to prepare a report. The report would include right from Acknowledgement, objective setting, methods used to the final findings of the survey.

Presentation: The finding of the report must be presented in a comprehensive way with the help of various diagrams such as:

• Bar Diagram• Pie Charts• Scatter Diagrams• Various curves

Basically the presentation must be crisp, to the point and draw attention of the audience so that they probe further.

Think about it!!!!!!

Discuss and prepare a case highlighting the following two questions:A) What probable situation may occur when competencies are not

developed during the collective bargaining process?B) Apply some of the competencies discussed, relating to a real life

Collective Bargaining case from your organization?C) Prepare a small proposal for your union on compensation survey.

41


D. Process of Collective Bargaining ( 5th & 6th week)

Preparing charter of demands, general practices, issues to be included, right to participate in decision making processes, strategies applied by managements, union responses, negotiation process, collective agreement (duration, nature, and implementation), merits and demerits of collective bargaining.

PROCEDURE OF COLLECTIVE BARGAINING

Developing a Bargaining Relationship

One of the very important facets which need to be considered before studying the process of collective bargaining is “Understanding and developing of a good Bargaining relationship”. This step consists of three activities mainly;

(1) To decide who or which union is to be recognized as the representative of the workers for bargaining purposes

(2) To decide what should be the level of bargaining(3) To decide what should be the scope and coverage of issues

under collective bargaining.

(1) Recognition of the bargaining agent. In those organizations where there is a single trade union, that union is generally granted recognition to represent the workers. But where there is more than one union , any of these criteria may be used for identifying the representative union , namely:

(a)Selection of the union by a secret ballot

42


(b) Selection through verification of membership by some government agency if required.

(c) Bargaining with a joint committee of all major unions.

(d) Bargaining with a negotiation committee in which different unions would be represented in proportion to their verified membership

(e)Bargaining with a negotiation committee which consists of elected representative of every department of the organization selected by secret ballot, irrespective of their union affiliations.

The secret ballot system is widely used in countries like United States, West Germany, etc. In India some trade unions have supported this method but some have opposed it. If the secret ballot or verification conducted by an independent statutory authority indicates that any particular union has got an absolute majority of eligible employees, it should be given recognition as the Sole Bargaining Agent, and the other unions may be given the right to represent their member’s grievances.

2. Levels of bargaining. Collective bargaining is possible at all levels, such as

• At the level of the enterprise, • It may be at the level of the industry in a particular region.• At the level of the entire industry in the country, that is, at the

national level.From the point of view of an individual establishment, enterprise-level bargaining is generally useful in the sense that the settlement is tailored to the conditions of that organization. In most of the South East Asian countries, the enterprise level Bargaining is predominant.2. Scope and coverage of collective bargaining. Though in many organizations bargaining is struck only by specific issues like wage increase, bonus, or seniority, promotion, etc., yet it is considered advantageous, both for the management and the trade unions, to cover as many issues of interests to both parties as possible. Now a days the orientation of collective bargaining is changing from conflict to co-operation and there by building an atmosphere of trust, progress and social welfare. For example: union must strive for larger scope and coverage like wages and service conditions for contract labor, temporary, part time employees, trainees etc.

43


The Collective Bargaining Process Variation:

The negotiation process has been visualized in different ways. Collective bargaining procedure can be compared with the poker game in which the highest points go to those who combine deception, bluff and luck and have the ability to come up with a strong hand whenever they are challenged by there counterpart. They further think that the process of negotiation is similar to an exercise in politics where the relative strength of the parties stems from decisiveness and that it resembles with a debate. They are also of the view that both the parties on the bargaining table become entirely flexible and willing to be persuaded only when all the facts have been presented.

However with the increasing maturity of collective bargaining, there has been enlargement of the rational process. In addition several other factors also influence the negotiation process. Among these factors some are mentioned below:

• Objectives of the parties.

• Kind of experience, knowledge the parties have.

• The Industrial legislation of the concerned country.

• The personalities and training of the negotiators.

• The history of the labor relations in the enterprise.

• The size of the bargaining unit and

• The economic environment.

Although several negotiators may attempt to bluff or outsmart the opposite group, others seldom think of using these tactics. While some bargainers may attempt to dictate the contract on a unilateral ground, others visualize that this process is eventually self defeating. While some negotiators may come together with excessive unrealistic proposals, others may have quite realistic ones. In some negotiations , there may be in each side implicit faith in the counterpart while in others there may prevail a climate of mutual distrust, suspicion and even hatred, in view of the past adverse labor relations. Moreover if the objective is to obtain solution to there mutual problems, the parties are likely to conduct the negotiation on the ground of rationality and fairness. However if the objective is to “put management in its place” or to “weaken or to even destroy the union”, the process of negotiation

44

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________may take quite different forms. Thus several factors operate causing variations in the conduct of collective bargaining negotiations.“Militant unions vs. irrational management”, “Rational unions vs. oppressive management”, “Progressive union and progressive management”-There can be many permutations and combinations and results of the bargaining process would vary depending on these.

Notwithstanding the variations in collective bargaining process, in recent days it is characterized by rational discussions based on facts. In modern collective bargaining process the low level of behavioral patterns such as emotional out burst, tricks, distortion of facts, misrepresentations and deceit are largely avoided. The labor and management representatives have realized that these elements cause unhealthy labor relations and increase the possibility of industrial conflict. Implicitly, one of the goals of collective bargaining is to promote a rational and harmonious relationship in the organization. Accordingly, the negotiators should have qualities of patience, trustworthiness, friendliness, integrity and fairness. Each party should share the attitude of self assessment and consider that the other party may not necessarily be wrong all the time. If such an open attitude is developed in both the parties, the negotiation process is likely to become successful.

There are generally four broad stages in the negotiation process

(1)preparation for negotiation(2)negotiation stage(3)signing the agreement(4)follow up action

PREPARATION FOR NEGOTIATION Prior to the actual bargaining sessions, enough care should be taken by both the parties to have a thorough preparation for the negotiations. This has become a pre – requisite to collective bargaining in view of several reasons. Consultation with the lower level members of their respective organizations can help both the parties to obtain valuable information and evolve specific bargaining table approaches. The consultation process also increases the morale of the two organizations. Again the technical assistance of legal and public relations experts can also be utilized gainfully in the collective bargaining process. Finally care should be taken to preplan with mutual consent the meeting places, ground rules relating to transcripts of the sessions , publicity releases, the payment system of union representatives and allied issues.

45


(a) Negotiations may commence at the instance of either party – the workers or the management

While some management bide their time till trade unions put forward their proposals, others resort to what is known as positive bargaining by submitting their own proposals for consideration by the workers representatives. If the parties already have an existing contract, it specifically mentions that either party proposing changes in the existing agreement should notify the other party. The nature and extent of such changes must be notifies usually 30 to 90 days prior to the termination of the contract.

(b) Union team

Careful selection of a Union bargaining team may make a significant contribution to the successful outcome of a particular series of negotiations. The negotiators must have sufficient training to participate and must have an understanding of the total business operation. The most popular and apparently effective bargaining body consists of the following persons:

(1) Persons with extensive knowledge and experience an industrial relations/personnel management function;

(2)Representative from the finance area; and(3) Members with analytical capabilities.(4)People with good communication and convincing skills.

If the negotiating body consists of such people from various fields, the combined effort yields sufficient information and expertise. It is not essential for the number of representatives of the employers’ side and the workers’ side to be equal as decisions is not taken by a process of voting by the majority. However, it is advisable to keep the team strong and balanced. As far as possible, a committee should be kept small, for large numbers on both sides become unwieldy. In such cases they may concentrate on a discussion of individual grievances or problems than on the real agenda/issues. The chief negotiator evolves a strategy of action and of the tactics to be adopted during the negotiations. It is necessary that the roles to be played by each member of the team are properly pre- assigned and each member knows when to take over the discussions. It is good to have proper meetings amongst the team members on the agenda and other points which can be anticipated. The process is called as internal negotiations

46

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________and it is advisable to have internal negotiations before and during the collective bargaining process.

(c) The Agenda

There is a need to develop proper and clear agenda so that meaningful discussion can be held. It is further required that proper framework should get evolved for fruitful discussions. This helps in adequate preparation for the various items to be discussed. It saves time as issues are identifies at the outset and preliminary discussions are already done. Both the employers and the employees should devote a great deal of Time to the preparation for the negotiation. The necessary data may have to be collected, from various sources like inside, outside the organization. An area survey of what other organizations are doing for similar issues can provide us with important benchmarks. This kind of surveys can be done with the help of experts in the field of industrial relations.

As a part of home work, the demands of the management should be analyzed and classified into three categories:

• Demands which possibly be met;

• Demands which may be rejected;

• And demands which call for hard bargaining.

An appraisal of the cost of implementing the proposals if they are accepted maybe worked out. The union team should carefully formulate their charter of demands; thoroughly study the implications of the unions demands; and think of the arguments and the counter arguments during the bargaining.

THE NEGOTIATION

Methodology for bargaining – by objectives

Methodology for bargaining is very important in negotiating process. It will help the negotiator to develop those personal and managerial

47

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________(administrative) qualities of preparedness, knowledge, ability, sensitivity, timing, analytical abilities, composure and patience. These qualities develop as a result of observation, experience involvement and conscious individual effort and experience.

As a bargaining methodology it is desirable to list all the bargaining items, whether introduced by the employer or the employee that the parties will consider during the course of the collective bargaining negotiations. These bargaining items could be separated into two parts –

• The cost or financial items

• The other for non cost or non financial items.

After listing the items priority rating can be determined for these items based on its value or importance relative to all other items on the agenda. The range of the objectives could be decided, which could be like

Realistic: The realistic goal is what both the parties fully expect that it is achievable, logical and based on facts.

Optimistic: The optimistic goal for particular item would be what the negotiator thinks can be achieved. But the negotiation process might have to go through various odds and conditions may not be favorable.

Pessimistic objectives. The pessimistic goal would be a possible outcome if everything did not go as well as expected, but definitely within the acceptance range of the party.

The above mentioned negotiation range is perceived by both the parties and adequate efforts are made accordingly.

All these objectives are a strictly confidential part of the negotiators blue print of goals and should be treated as such and never revealed to the opposing bargaining representative.

This methodology provides a systematic framework for approaching collective bargaining negotiations. Some advantages to collective bargaining negotiations result from the use of the methodology by objectives.

48

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________ADVANTAGES

(1)It gives the negotiating team a real sense of direction and tangible goals (objectives) by which team members may measure their progress during negotiations.(2) It provides a more meaningful basis for data preparation, because positions and goals are specifically identified.(3)The team has a ready reference, easy to scan blue print that provides a confidential guide to strategy and tactics for all cost and non - cost bargaining items, individually and/or collectively.(4)The identification of not just one goal but a range of possible settlement goals on each bargaining item requires by its very nature a more detailed and careful analysis.(5)It provides a better means of evaluating past negotiations as a useful experience base from which to launch a more effective plan for the next round of negotiations.(6)It provides the parties individually with a safe and effective mechanism for delegating authority their bargaining teams.

(a) Opening the negotiationGive all the participants including yourself three or four minutes to settle down; to gather papers together and wait for any potential latecomers. Before doing this, the management must at the outset, make sure that the union leaders, with whom the negotiation is going to take place, are really the representatives of the workers. Having exchanged the appropriate social greetings the management may ask the trade union side to present their case. Normally management representatives act as the chairman of proceedings. Once their leading spokesman has begun the initial statement of his position, we are unlikely to interrupt him even if we feel certain that he has made an error on a factual point. Management representatives may listen carefully and observe the reactions of the other members of the trade union side; in particular the little nods of agreement or supports, on those points about which they feel strongly agreeable.

In this opening phase of the negotiations, management must expect the speeches to be long and prepared with emotional language. The union spokesman has to convince his own members present and those on the shop floor that he did his best. Unions often take an aggressive initial stand and it is a poor strategy on the part of the management team to be equally aggressive or impatient. Before reply to the management, the union must have time and inopportunity to explore the differences and unanimity of opinion. While giving the first reply to the management, union may be borne the following points in mind:

49


(1)The number of points which can be communicated should be kept to a minimum. It is better to repeat and assert the same point using different language than to try to cover too much ground. Use plain language and avoid the use of jargons.

(2)Do not get bogged down in prolonged discussion of one or two of the items raised by the trade union side. Deal with all the points if necessary those items must be grouped together.

(3)Address your remarks to the main spokesman. Loud shouting and bad temper are not substitutes for a good case well presented.

(4)Identify the areas of agreement because this gives the impression that progress is being made. Have you left yourself with enough room in which to bargain subsequently?

(5)Will the first statement be made solely by the chief spokesman or could it be made by certain other members of your team? Are there some more members who can contribute as well?

(6)Even if the management team feels that there is no hope of reaching an agreement, managements case may be presented in a broad outline. Management may remember that their contact with the trade union is a continuing one. One should not worry about too much of carry over of these negotiations for the next sessions. This would give adequate time to analyze the situation.

(b) The Middle Period

The transition from the first to the second phase of the negotiations is often blurred. Speeches will tend to become much shorter and less formal. These will sound more natural. Contributions may be made by others and thus gradually number of participants will increase.

The management’s negotiator may encounter a problem of maintaining unanimity in public within his own bargaining team. A member of the bargaining team who frequently allows public expression of differences in the conference room may soon be displaced. It is essential that a real team spirit is maintained throughout the negotiations.

The middle period may contain one or more adjournments made at the request of either party. These can be used to:

(1)allow the other party to evaluate either new offer or new information;

(2)consult with or report back their group;(3)Settle things down; and(4)Prevent negotiating fatigue.

Management need not be afraid to suggest or ask for an adjournment, it is not a sign of weakness. Be careful not to be seen to abuse the adjournment. The skilled use of this time is one of the most important

50

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________hallmarks of an experienced negotiator. During the middle period of the negotiations both sides, and in particular management may decide to release new information, if relevant. At this time one can take the calculated risk of assessing the way this information will be received and handled by the opponent. The use of information is a tactic and its adoption requires both skill and experience.

(c) Concluding the NegotiationThe experience negotiator keeps on bargaining as long as the other party continues to do so in good faith and there appears to be a chance of a settlement. But management should not concede everything just to do a settlement. There is always a reasonable point beyond which the management representatives do not bargain and this point must be recognized. For example: Conceding a point in favor of the opposite party should never be done in the manner of succumbing. Once it becomes clear that a certain point has to be conceded, the giving party must see – and mention – that the concession is being made on an explicit appreciation of such and such valid points made out by the opposite party. This way the concession granted does not remain a one- way traffic, it also earns goodwill and quite possibly, a reciprocal concession from the opposite party.

Concluding the negotiation involves a decision making crisis. This is the point at which personal anxiety about the nature of settlement may show itself. A wide range of factors may interfere. Even if the management case is very strong and this is accepted by the trade union side, concession will be still made partly because of the face to face situation and partly because the relationship within the organization between management and the trade union is a continuing one. Anxiety may be caused because a failure to reach a mutually acceptable settlement involves recognizing the realities of power and conflict which in part lay hidden during the negotiations.

The greatest danger when concluding negotiations is that the outcome is never clearly stated. Industrial relations is full of examples of meetings where each side is left with different impressions of the result. Often the proceedings are informal. Records of discussions are not generally left, but the matters on which agreement is reached are carefully noted.

Reaching an agreement may be comparatively simple. The acid test is the successful implementation and maintenance of that agreement. Another aspect to be considered is the communication of the outcome of negotiations. How much and how should it be communicated. Further how widely this should be circulated taking into consideration the problems of timing and comprehension which are likely to be encountered.

51


This, in brief, is a sequence of interaction between two parties which takes place on countless occasions throughout industry and which is an essential component of industrial relations. For union and management the following procedures should be adopted during negotiations: (1) Be friendly in negotiation(2) Be willing to listen(3) Give every one an opportunity to state his position and point of view. In this, you will uncover the person who is really insistent about a particular problem or grievance, and know how to deal with him. If facts disclose that there is a need for doing more than just solving the immediate problem, go as far as justified in the circumstances.(4) Define each issue clearly and unambiguously, and discuss it in the light of all the available facts.

Management and union strategiesManagement strategies

Prior to the bargaining session, management negotiators prepare by developing the strategies and proposals they will use. Three major areas of preparation have been identified:

Determination of the general size of the economic package that the company anticipates offering during the negotiations.

Preparation of statistical displays and supportive data that the company will use during negotiations.

Preparation of a bargaining book for the use of company negotiators, a compilation of information on issues that will be discussed, giving an analysis of the effect of each clause, its use in other companies, and other facts.

The relative cost of pay increases, benefits, and other provisions should be determined prior to negotiations. Other costs should also be considered. For instance, what is the cost to management, in terms of its ability to do its job, of union demands for changes in grievance and discipline procedures or transfer and promotion provisions? The goal is to be as well prepared as possible by considering the implications and ramifications of the issues that will be discussed and by being able to present a strong argument for the position management takes.

Union strategiesLike management, unions need to prepare for negotiations by

collecting information. More and better information gives the union the

52

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________ability to be more convincing in negotiations. Since collective bargaining is the major means by which the union can convince its members that it is effective and valuable, this is a critical activity. Union should collect information in at least three areas:

The financial situation of its company and its ability to pay; The attitude of management towards various issues, as reflected

in past negotiations of inferred from negotiations in similar companies; and

The attitudes and desires of the employees

The first two areas give the union an idea of what demands the management is likely to accept. The third area is important but is sometimes overlooked. The union should be aware of the preferences of the membership. For instance, is a pension preferred over increased vacation or holiday benefits? The preferences will vary with the characteristics of the workers. Younger workers are more likely to prefer more holidays, shorter work weeks, and limited overtime, whereas older workers are more interested in pension plans, benefits and overtime. The union can determine these preferences by using a questionnaire to survey its members.

SIGNING THE AGREEMENTCOLLECTIVE AGREEMENTS: A CLASSIFICATIONCollective agreements are commonly classified under two headings – ‘procedural’ and ‘substantive’.

(a) Procedure agreements Procedure agreements spell out the steps by which the

industrial relations processes are carried out. Procedure agreements are collective agreements which relate

to:(1)Machinery for consultation, negotiation or arbitration on

terms and conditions of employment or for any other matters which arise between trade unions and employers.

(2)Negotiating rights(3)Facilities for trade union officials ;and(4)Disciplinary matters and individual workers’ grievances.

(b) Substantive agreementsThese contain the ‘substance’ of any agreement on terms and conditions of the employment. They cover payments of all kinds, i.e. wage rates, shift allowances, incentive payments also holidays and fringe benefits such as pensions and sick pay and various other allowances.

(c) Mixed procedural/ substantive agreements

53


The distinction between ‘procedural’ and ‘substantive’ agreements while useful, does not always apply in practice. It is possible to have both ’substantive’ and ‘procedural’ elements in the same agreement. There is, however, a tendency for procedural agreements to have a separate and long term existence and consequently they are not subject to a great deal of alteration. On the other hand, substantive agreements are altered from time to time to take account of on-going negotiations.

DRAFTING THE AGREEMENT

(A) After completion of negotiations between the parties, the next step in the process is drafting of an agreement. More often than not, drafting of the agreement presents many problems. The importance of drafting of agreement cannot be underestimated as it involves integrating by means of written words the agreement that has been reached during the course of negotiations. The negotiations can be frustrated by perfunctory drafting of the agreement either by not expressing the intent and understanding of the parties or by omissions, which may give rise to disputes and litigation. Regardless of which party drafts the agreement, the problem remains the same. It is, therefore, desirable that after conclusion of the negotiation, the task of drafting the agreement is done mutually so that any possible legal pitfalls may be avoided.

(B) Awareness of common grievances in agreement: experience has proved that a collective bargaining agreement cannot be constructed in such a precise language as to obviate the possibility of more than one interpretation of many of its provisions. Moreover, there are many problems that arise or changes occur which cannot be anticipated or adequately covered in a written agreement. Thus, the causes for grievances arise out of dynamic nature of industrial life, misunderstandings, alleged violation of agreement terms, clash of personalities and circumstances that surround the intricate working of employer- employee relationship.

The grievances that arise vis- a- vis the collective bargaining agreement can be broadly classified under two heads:

(a) Those arising under the agreement(1)Over interpretation(2)Over conflict between clauses(3)Over application to specific cases.

54


(b) Those arising outside the agreement(1) Because the agreement is silent on the issue(2) Because the issue is too unusual to be covered by an

agreement(3) Because of defective supervision and agreement

administration.

(c) General principles of drafting the agreement While drafting of the agreement, the following general

principles are to be kept in mind: (1) The agreements opening clause defines the formal

relationship between the company and the trade unions. (2) Having negotiated a formal agreement, the first

clause comprises a ‘statement of intent’ from both parties. The company recognizes the right of the trade unions to represent its employees and negotiate on their behalf, while the union in turn acknowledges certain rights to the company, to be exercised by its management.

(3) It is usual for some form of general statement to be made which formally stresses the interdependence and the common interest which exists between the parties. Such clauses outline that the parties have some common long term objectives, the most important being to ensure the continuing efficiency and prosperity of the company for the benefit of the employees, shareholders and customers. Such clauses might read: the parties to this agreement attach the greatest importance to the need for mutual co-operation in brining about improvements in efficiency in order to ensure the future prosperity of ‘the company’s factories and its employees therein’.

(4) Status quo – provisions anticipate changes which must continually affect an organization, whether they arise directly from management action, financial necessity or government intervention. Although management is generally responsible for the ultimate policy- making decisions, it is recognized that unilateral decisions are more likely to induce conflict, while consultation and meaningful discussions with employees may reduce the risk of disruption and ease the implementation of change.Many procedure agreements include a statement that existing arrangements (status quo), which regulate the relationship between management and unions, will continue until a new agreement is reached.

(5) The provisions embodied in the agreement should be clear and definite and should explicitly cover the subject matter in accordance with the intent of the agreement. In other words, there should be no vagueness or ambiguity – latent or patent – in the wordings of the agreement.

55


(6) The language of the agreement should be simple and comprehensible by the workmen covered by it. Verbosity and artistry in language should be avoided.

(7) The various provisions contained in the agreement should be so constructed as to cover clearly the complete intentions of the parties so that the third party should be able to comprehend their meaning without any difficulty.

(8) irrespective of whether the agreement is drafted by the management or the union, it is necessary that the draft agreement and, in particular, the language of all the clauses proposed to be incorporated therein should be clear from legal ambiguity before it is finalized for signature by the parties.

(d)Duration of the agreement

The term or duration forms an important provision of the collective agreement. The agreement may also specify the means of its renewal. Whether provided in specific terms or not, it remains applicable until it is replaced by the new modified terms.

There is no hard and fast rule regarding duration of the collective agreement. It may vary from one year to five years. Usually, a term of four years is considered to be neither too long nor too short.

(e) Relationships of the clauses of the agreement In considering the meaning to be given to the various provisions

of the collective bargaining agreement, it must be remembered that each provision is a definite part of the whole pattern of the employer – employee relationship thereby established. The meaning of each provision may be colored or affected by other provisions of the agreement and no clause thereof can be considered as standing alone.

IMPLEMENTATION AND ADMINISTRATION OF THE AGREEMENTSMethods of implementationIn some countries the implementation and supervision of collective agreements depend on the good faith of the parties, and their provisions cannot be enforced by action at law. This is the position , for example in the United Kingdom, where it is assumed that the working condition agreed upon collectively by the employers and trade unions will be observed by the individual employees and the workers, who will conclude individual contracts in accordance with the terms of the process. It should be remembered that when a trade union and an employer’s organization agree, for example,

56


that a certain wage shall be paid for a certain job, neither the unions nor the employer’s organization is actually employing workers on that job. The actual contract of employment is concluded between individual employers and individual workers. Under the British system, there is usually no legal impediment to their concluding contracts providing for lower standards of remuneration than those fixed in the collective bargaining; an action cannot be considered by the courts merely because its terms are less favorable than the terms of such an agreement. Only if the individual contract is violated can it be enforced by the legal process. The essential remedy for failure to observe the terms of a collective agreement by an employer belonging to an organization which is a party to the agreement is pressure by this organization and trade union concerned. In the last resort the union could use its economic power by calling a strike at the plant to secure enforcement.

In a great many other countries where the effects of collective agreements are regulated by special legislation, the provisions of collective agreements are automatically applicable to the employment relationships of all individuals covered by them. In these cases observance of a collective agreement may therefore be secured through action for damages in the courts wherever there has been a breach of the contract. Such actions can be brought either by an organization in the event of violation by another organization which is a party to the agreement, or by one of its members, to secure damages either for itself or for a member. Where this system exist the law often prohibits, during the validity of an agreement, strikes or lockouts intended either to enforce or to modify its terms.

Interpretation of agreementsOnce collective bargaining has resulted in an agreement, the

provisions of the latter are regarded as part of each contract of employment, whether written or implied, between an employer who is a party to the agreement and each worker in his employ in the occupations represented by the trade union or unions.

Many agreements contain clauses specifying the procedure to be adopted if disputes arise over the interpretation. These may provide that the dispute shall be submitted to a joint meeting of the representatives of the parties. Often, too, there are clauses providing that there shall be no strike or lock out over the question of interpretation until the procedure established for reaching agreement on interpretation has been followed without success. In other countries disputes over the interpretation of the collective agreements are settled by special labor courts. Such disputes are as a rule more easily settled than those which occur in the negotiations of new agreements,

57

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________when much more important issues are at stake; and they are of a different character.

Administration of the agreement In the administration of the agreement, both parties, viz, the management and the union, have to play their respective roles. It would be a mistake to assume that the sole responsibility of the agreement administration rests with the employer. There can be denial of the fact, however, that agreement administration requires a major and more active role on the part of the management than on the part of the union.

The agreement embodies a number of issues which are of complex nature. Such complex issues cannot be left for self administration. Experience has shown that during negotiations many problems escape attention of the parties inadvertently; the reason being that collective bargaining cannot be as perfect as mathematical calculations. Moreover, many novel situations arise or develop which could not possibly have been conceived at the time of entering into the agreement. These problems within the framework of the agreement and without letting its balance tilt too much in favor of either party. This is definitely not an easy task.

With a view to making administration of the agreement smooth and easy, it should be the duties of both the parties to educate the line managers and the rank and file of workers on the meaning and interpretation of each clause of the agreement. There is a need for extensive and effective communication in this behalf. Various methods such as, house – magazines, bulletins, meetings and conferences are considered to be important media to interpret the agreement. Since detailed commentaries are usually avoided in the text of the agreement, the administration thereof is the proper time when detailed commentaries tend to serve a useful purpose. Proper care need, however, be exercised to ensure that no conflict arises while giving interpretations and making commentaries on agreement clauses by the parties concerned.

As already stated elsewhere, the process of negotiations does not end with the fruition of the agreement but is continued thereafter. The administration of negotiated agreement is a vital link in the chain of this process. A number of day to day problems crop up which have no direct bearing on the agreement. Such problems may require even longer time to negotiate than did the collective bargaining agreement itself. Generally speaking, the management is not inclined to enter into negotiations on these problems. The employer considers that conclusion of the agreement is the be-all-and-end-all of labor problems during its tenure. This attitude is not correct in the situation of

58

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________collective bargaining. It must be borne in mind that the agreement is negotiated with the basic objective of providing satisfactory cooperation of both the parties as a continuous process at all stages of negotiations and the same objective should pervade the administration of the agreement.

The handling of grievances is a part of agreement administration. The administration of the agreement enjoins upon the parties that the grievances are handled promptly and satisfactorily so that these are not allowed to accumulate and later emerge in the shape of a major dispute. If the grievances defy satisfactory solution or settlement the deficiency lies in the agreement administration rather than in the agreement itself. Except minor grievances of transitory character, it is necessary to put all grievances on record so that their examination is conducted in a proper and systematic manner. Such recording also helps in the preparation of further negotiations between the parties.

Due t dynamic character of labor management relationship, occasions may arise necessitating adjustments and modifications in the agreement by mutual consent. While such actions form an integral part of agreement administration, the authorities on the subject have strongly advocated that such adjustments and modifications should not be effected without prior consultation with shop stewards and line managers in whose area the problem originated. Their participation is deemed absolutely necessary as they are not only directly involved but also have to carry out the compromises to workable implementation. Any attempt to ignore this important link is fraught with difficulties, is tantamount give rise to avoidable resentment and violates an important principle of agreement administration.

COLLECTIVE BARGAINING CONTRACT ADMINISTRATION – GRIEVANCE MACHINERY

Collective bargaining introduced a process of joint determination of the rules under which the employer – employee relationship would be governed. At the same time it is to be borne in mind that an operative type of industrial democracy between employers and employees depends not only upon jointly determined rules governing the relationship, but equally so upon a process by which differences over the interpretation of the terms may be jointly settled. Without the right to grieve, the concept of industrial democracy would have been only partially realized. The grievance machinery under a collective bargaining agreement” is at the heart of the system of industrial self government”.

59


As such negotiating the terms of the collective bargaining agreement establishes a constitution to guide the parties in their joint relations in the work place but, is not enough to fully establish industrial democracy. To be really meaningful, the terms needed to be supplemented with a mechanism by which questions or problems arising in the day to day application of labor agreement may be jointly and peacefully resolved.

After a labor agreement has been negotiated and the parties have signified their commitment to its provisions for a specified contract period of one, two, three, or more years, the process of giving meaning to the agreement begins. Management and the bargaining – unit representative continue, in effect, to bargain collectively on a day-to-day basis for the length of the contract period. Such bargaining does not involve negotiation of new terms or a new labor agreement, nor it is directed – although by agreement of the parties it can be – at altering the terms already negotiated in the contract. The administration of the agreement on a day-to-day is an interpretative process whereby the labor contract is applied, given meaning, and in effect transformed into a ‘living organism’. The grievance procedure is the formal mechanism through which this transition is effected.

The grievance procedure provides management and the union with an institutional mechanism by which to dispose of complaints and charges of contract violation in an orderly and equitable manner. It provides a peaceful means of resolving misunderstandings, permits enforcement of the contract, and minimizes the use of strikes and lock outs. Grievance procedure is crucial in vitalizing the agreement through the daily process of contract administration.

Last step of formal grievance procedure is grievance arbitration. This involves a third party and is a judicial rather than a legislative step. Grievance arbitration is a part of the contract administration process. Grievance arbitration is a final appeal step in the grievance procedure through the voluntary agreement of the parties. This voluntary agreement becomes a part of the language of the negotiated agreement and therefore a contractual obligation of the parties for the term of the agreement. This use is in contrast to compulsory arbitration, which is imposed upon the parties rather than resulting from their voluntary agreement.

The use of a quasi- judicial process such as grievance arbitration indicates recognition by the parties that more is to be gained by a judicial solution to problems of contract interpretation than by resorting to such overt actions as lock outs and strikes. In adopting

60

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________grievance- arbitration clause in their contracts, the parties are agreeing under the Contract this process will be followed in lieu of the right to lock –out or to strike.

Check points for effective grievance handlingAs with negotiations, the variety of situations that arises in the

handling of grievances precludes a formal approach. Each grievance, while similar in some aspects to others grievances, also has its own peculiar characteristics, either as to the details of the problem giving rise to it or as to the personalities involved in it. As a substitute for formulas for effective grievance handling, below is given a list of what might be called grievance procedure guidelines. This list is a composite of the sound kinds of do’s and don’ts that are found essential to successful grievance handling.

For management Establish clear-cut policies, understood by all supervisors

and employees. Authority to handle grievances should be given to the

supervisor, and the limits of such authority made clear. A responsible management representative should provide

time for the grievant to tell his/her full story in private and without interruption. Give him/her your full attention. End on a friendly note.

Show your concern for the grievant problem by following through promptly on an action required by a settlement.

No grievances should be considered too trivial for your attention.

For the union Exercise a firm but fair hand in screening grievances for

appeal. A poor grievance results in a lost grievance, a dissatisfied union member, and a loss of valuable time.

Take care to distinguish between gripes and grievances. Don’t let grievances become political issues or let union

politics influence your work.

For both parties Be sure information on the grievances is complete and

accurate. Know your labor agreement; check it often. Remember that

it may take on a different meaning when applied to different grievance situations.

61


Settlement at the lowest step in the grievance procedure pays off in time, expense and emotions.

Keep the grievant fully informed of the course of a grievance.

Control your emotions Delay can be costly as well as disruptive. Process

grievances with promptness and dispatch. Facts! Facts! Facts! Do not base your case on hearsay. Do

not allow verbal statements and hearsay testimony to substitute for written proof and first hand testimony.

Accept settlement graciously. Tomorrow you must go back to living with each other.

Keep adequate written records to ensure consistency and effectiveness.

Saving face is important to the grievant, the employer and the union. It can mean the difference between an amicable and a hostile settlement.

Always use recognized channels Remember the grievance procedure is intended to resolve,

not create conflict.

Negotiation strategiesIn collective bargaining, negotiation process holds a very significant position for decision making. In the current scenario, all decisions with respect to industrial relations are taken by collective bargaining. It is also expected to increase in the future. With this increasing importance it is very necessary to develop good negotiating skills. Much of the behavior which is to be observed at the negotiating table can be explained in terms of strategies and tactics which the parties adopt in an attempt to secure their goals in distributive bargaining. (a)Target and resistance – to take the example of wage claim, both parties are likely to have what can be termed as ‘target’ and ‘resistance’ points. This shows that both the parties would know, what they would like to achieve and what they would be prepared to settle for. The trade union will want to convince the management that its resistance point is higher than it actually is and the management will try to convince the trade union at the same time that the opposite is true. (b) Commitment – The commitment which each party is able to demonstrate is the key to determining the outcome. This is the reason for rational argument being out of the negotiation process most of the time. Instead, the most successful negotiator is often the one who can keep going and who seems totally impervious to the argument. This is the reason of the negotiation going endlessly repeated. Each position keeps trying to probe the position of the other.

62

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________Thus by probing the other position they keep on checking and validating the commitment which the other party has demonstrated. (c) Adjournments – It is extremely difficult to adjust ones’ position in negotiations without loss of face and this explains to explain the importance of adjournments. Not only do adjournments allow informal contact but they also enable the parties to adjust their position without loss of face. (d) Patient hearing – the management should always give a patient hearing to whatever the trade union has to say, even if there is a threat, whether of strike or any other form of withdrawal of work, they should not react as if they have received an ultimatum. In India, particularly, trade unions often take an aggressive initial stand and it is a poor strategy on the part of the management team to be equally aggressive or impatient. (e) Guard against revealing position - A tactic on the part of the union , which is not seriously thinking of concluding a negotiation with the management but to take the dispute to conciliation, is to induce the management to state how far it would 4go and then break off the negotiation. The next step would be to make the concessions announced by the management as the starting point for further negotiation before the conciliation officer. This is not bargaining in good faith. Sometimes union may initially ask, to generally discuss each demand, so as to asses the managements mind how far it can give concessions and then create a breaking point. The management representatives should be on their guard against such tactics and should not reveal their position, when they suspect such a move. (f) Informal Discussions – It has been noticed that sometimes informal discussions, before the actual negotiation meeting, between the management team leaders and the union representatives helps in reaching an agreement. Sometimes a mediator’s role is useful which is voluntarily accepted by the parties. This helps in bringing the parties together. (h) Integrative bargaining – situations often arise in which the goals of the parties are not in fundamental conflict with one another. The ‘share of cake’ analogy is useful: it is not simply the question about arguing about the share of the cake of a given size but of increasing the size of the cake. Integrative bargaining is the term used to describe the activity in this process. A reduction in overtime working or abolition of any other restrictive practices along with wage settlement is examples for the same. At the same time it gives the management more opportunities to introduce more strategies. (i) Continuous relationship – it should be always remembered by the negotiating parties that negotiation is an on going process and thus you develop a continuous relationship. Thus the words like

63

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________‘defeat’ or ‘victory’ are never found in the language of the negotiators. One party might have an upper hand today but tomorrow the condition may be different. The negotiators should always believe a relationship of trust. The relationship between negotiators also affects their standing in the eyes of other members of their party.

How to deal with the intricacies of Collective Bargaining:In the previous chapters we have discussed the theoretical frame work of collective bargaining. Now we shall deal with how to deal with the practical issues and operation of Collective Bargaining. The chapter would include the following:

NOTE: The below given examples are not exclusive how to write a charter of demand. This can be used as a sample though. But different countries might have different formats depending on the cultural background and other various factors.

Below is an Example of a letter demanding information from the Management?

To, 15th Sept, 2008 General Manager (HR)XYZ Ltd (Whom you want to address)

Sub: Information Demand

Dear Sir,

64


(Presenting a background)

The country’s economy is in the process of far reaching changes. Liberalization of Trade and Globalization has brought around fundamental changes in the business environment. The need for improving the competitive position, not only on national level but also on Global level is of paramount importance. The union recognizes these changes and the imperatives for the improvement in the productivity with total quality in order to survive and grow.

XYZ Employees Union is the only organization representing workmen in this Company. We believe that we will evolve and grow along with this Company. We have always contributed & shall contribute our mite to the aims & objectives of the Company. We are fully aware that our growth aspirations are inseparably joined with this organization. You must appreciate that without employee’s cooperation and commitment, such good performance was not possible and they are also one of the major contributors in this achievement.

We as a Union decided to adopt a new approach & believe in constructive approach to various psychosocial informal processes, which are at work. Gossip can be turned into introspection, fantasy can be turned into innovation, cribbing can be turned into corrective feed back, envy can be turned into healthy competition, interference can be turned into role restructuring and so on.

We believe that cooperation is must but conflict is also an expression of some un-addressed lacunae in the rationale of our system. Therefore an enlightened, compassionate and realistic attitude must go hand in hand with specific systemic innovations. We also believe that win-win situations are possible with the help of objective assessment and creative breakthroughs. For such assessment we require following information of last 3 years so that we can prepare our charter of demands based on rationality.

(THE CONTENT)

6. Sales/turn over,7. Capital employed/capital size,8. Employment size,

65


9. Value Added= Income – Non Factor Expenditure. (Here non-factor expenditure means expenditure other than employee cost, depreciation and interest).

10. Material intensity/input intensity sales = -------------- value added

6. Capital intensity/capital output ratio capital =-------------------- value added 7. Value added per manday 8. Return to capital per manday 9. Rate of profit Share of Capital = ------------------------ Capital employed

10. Employee cost (Bargainable/unionized) per man day 11. Prize mark up i.e., value added per unit, 12. Trend of output prices and input prices. 13. Capacity utilization of the plant and machinery, 14. Market share of the firm, 15. Ratio of financial result/ratio of operational results, 16. Ratio of debt/ratio of equity, 17. Percentage of non-operational income, 18. Break even point of sales and output, 19. Balance Sheet & Profit & Loss Account of Last 3 Years of the Company. 20. Productivity Data for each workstation including all elements.(CONCLUSION)

We hope you will furnish the above information at your earliest. We also place on record our commitment for your and everyone's appreciation that we shall always uphold company's interests uppermost in all matters. We take this opportunity to convey our resolve to serve company interests at all times. We hope you will respond to this letter & start a new era in the field of Industrial relations. Thanking you,

Yours Sincerely

66


XYZ Employees Union

(President) (Gen. Secretary)

Below is an Example of a notice of termination of the previous charter of Demands.

To Mr. XYG HR Manager,XYG Co. Ltd.

Sub: Notice for Termination of the existing settlement

Dear Sir,

Please take notice that we hereby terminate the existing settlement, in accordance with section *** of the ***** (Which ever act is applicable in the respective countries). Our existing settlement is getting expired on xxxxxxx and new settlement is due from xxxxx.

Yours truly,

67

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________XYZ Employees Union

(President) (G. Secretary)


Sub: Negotiation Committee

Dear Sir,

On behalf of XYZ Employees Union, we are nominating the following office bearers as a Negotiation Committee for the proposed settlement.

1. Mr. XYZ ,President2. Mr. XYZ, General Secretary3. Mr. XYZ, Vice President4. Mr. XYZ, Joint Secretary5. Mr. XYZ, Treasurer6. Mr. XYZ, Member7. Mr. XYZ, Member

Please communicate your negotiation team at your earliest.

Thanking you,

Yours Sincerely

XYZ Employees Union

68

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________ (President) (G. Secretary)


Sub: Charter of Demands-2007

Dear Sir,

Please refer our letter regarding termination of the existing settlement. Our existing wage settlement is getting expired on XYZ date, 2007 and proposed settlement is due from XYZ date.

Please find enclosed herewith our Charter of Demands. The union on behalf of their members requests you to start the negotiations as early as possible for the amicable settlement. Thanking you, with regards.

Yours truly,

69


XYG Employees Union

(President) (G. Secretary)

CHARTER OF DEMANDS-2008

The country’s economy is in the process of far reaching changes.

Liberalization of Trade and Globalization has brought around

fundamental changes in the business environment. The need for

improving the competitive position, not only on national level but also

on Global level is of paramount importance. The Union recognizes

these changes and the imperatives for the improvement in the

productivity with total quality in order to survive and grow. We expect

that the negotiation process should be completed before XYZ date

1. Duration of the Settlement: This settlement should be for

three years with effect from XYZ date and should continue to be in

force thereafter unless terminated by either party as per the

provisions of XYZ Act.

2. Coverage: This settlement should cover all workmen employed

in XYZ Company and also those workmen who will join the Company

after signing this settlement.

70

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________3. Negotiation Meetings: Minimum two meetings should be

held in every week to settle the issues amicably at earliest. We also

demand that the minutes of the said meetings should be recorded and

finalized with union consent.

4. Fixed or Unlinked Rise: To compensate the erosion of the real

earning of the workers and improved productivity in the period of

existing settlement and to improve the existing standard of

living, all workmen should get Rs. 5000/- as Unlinked Rise. This

rise shall not be linked to productivity or any other factor. The

distribution of the said fixed rise will be as follows:

a. 60% Basic

b. 40% Allowances

5. Wage Scale

As mentioned above 60% of Rs. 5000 i.e. Rs. 3000 should be added in

existing Basic Pay and appropriate fitment should be made in new

structure.

6. Yearly Increment: We hereby demand that the existing

increment should be finalized in consultation with the Union. The

minimum and maximum increment for the daily rated workmen

should be Rs. 5 and maximum Rs. 10/.

7. Variable Dearness Allowance:

With effect from XYZ date for every point of increase or decrease

beyond 100 CPI the variable dearness allowance should be paid at the

71

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________rate Rs. 2 per point per day. The Variable D.A. (Special Allowance) as

per the existing settlement should be considered as Fixed Dearness

Allowance.

Example: If the CPI for the Month of “X” for XYZ country is 140. Then

the calculations should be as follows:

= (140-100) X Rs. 2

= 40 X 2

= Rs. 80 per day per workman

8. Productivity Improvement Linked Scheme: We hereby

demand Productivity Improvement linked scheme. In order to

meet ever-growing demands, local & international markets and

increasing expectations from the stakeholders of the Company,

productivity of the Company has to be increased to meet the

challenges of global competition. Therefore, In addition to above

mentioned fixed rise, as a compensation for additional

productivity due to system improvements & method

improvements and cooperation to more flexible work practices

we demand this rise. The scheme shall be discussed during the

process of negotiation after getting all relevant data. We hereby

propose the following principles for the Scheme.

a. The Work Study should be conducted based on ILO norms.

b. Time standards of various manual work elements should be

established so that by the very description of manual

elements so that standard equivalent time can be ascribed

to it.

c. While reporting or monitoring performance of the

workmen, the work done by him should be recorded in

72


terms of standard equivalent minutes value of that work

(and not actual time taken/made available).

d. In work element not only cyclic but extra cyclic work

(preparatory, setting, filling up, or any other indirect

activities necessary for accomplishment of work) should be

accounted for.

e. The conversion table of elements and standard equivalent

minutes must be made available in terms of official copies

& preparation, additions and deletions in such table must

be participatory (express written consent by the union).

f. Management must maintain a record of this account

mutually signed.

g. In every cycle, minimum 30 second pause per operation

should be allowed. This pause should be in addition to

official rest as it is recommended by I.L.O. As per the

I.L.O., if there is a pause less than 30 seconds, it should not

be considered as rest.

9. Company Performance Sharing Benefit:

This benefit shall be applicable to all workmen covered by proposed

settlement. This benefit shall be based on value addition of the

company every month. This benefit should be paid at the rate of 3%

of the Value Addition per quarter. This benefit shall be disbursed

equally to all workmen for that quarter. The modality of this allowance

is given below.

Value Addition shall be calculated based on following

formula:

Value Addition = Income – Non-factor expenditure

73


Here factor expenditure means all employees cost, interest,

depreciation, corporate tax, etc. and therefore shall not be considered

while calculating Value Addition. In other words all manufacturing &

other expenses excluding personnel cost, interest, depreciation and

corporate taxes shall be considered as non-factor expenditure.

This rise will be fluctuating rise based on the over all performance of

the Company and indicator of the performance shall be value addition

of the company.

Illustration of the Company Performance Sharing Benefit:

Calculations for the month "X"-

Value Addition for the Quarter “X” = Rs. 100/-

Therefore the share of the covered employees shall be @ 3% = Rs.3

for that quarter and shall be distributed equally to all covered

workmen.

The quarterly calculations of the value addition shall be scrutinized

and finalized by the team of management representatives & worker

representatives. All this information should be available to the said

team well in advance.

This allowance is proposed in order to motivate workers for better

performance and increase prosperity through systems & methods

improvement. The prosperity due to better performance should be

shared with workers, not fully but to some extent, so that they are

bound to feel themselves as a part of the Company. This is a

74

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________constructive approach adopted by the committee based on the

principle of contributive justice. This will improve harmony & peace in

the Company. This will also imply further rise in Capacity to Pay. Thus

this demand is to the advantage of both the parties and ensures

productivity, as well as justice. Such redesign of employee

compensation introduces direct stake of workmen in the overall

performance of the Company and also induces motivation not only to

perform better but also become vigilant & cooperative in inter-

functional integration of the work organization.

Note: Union reserve their right to revise said demand after

getting Balance Sheet and Profit & Loss Account.

10. Bonus/Ex-Gratia: All workmen should be paid Bonus/Ex-Gratia

Payment @ 20% of Basic + D.A. without any ceiling.

11. Canteen: We hereby demand that Canteen Facility should be

introduced. Breakfast, Lunch, Dinner and Tea should be arranged in

the canteen. This facility should be subsidized i.e. 75% Company and

25% workmen.

12. Mediclaim : We hereby demand that Company should introduced

Mediclaim policy. This Policy should be of Rs. 2,00,000/- for the family.

Here family means Husband, wife, 2 children, father and mother (Total

6 members).

13. Service Award: Service Award should be paid as follows:

Sr.

No.

On Completion of

Continuous Years of

Service

Service Award in Rs.

1 5 3000

75


2 10 50003 15 10000

14. Death Relief Fund: In the event of death of any

workmen/employee on the rolls of the Company while in service, the

entire employee’s including management staff/workmen’s 1 day Gross

wage/salary should be deducted and equal amount should be added

to by the Company. Such total amount should be paid to the legal

nominee of the deceased workmen/employee within one month from

the incident. In addition to this said amount all other legal dues should

be paid to the nominee. We also demand that one eligible family

member of such deceased workmen/employee should be given

employment in the Company.

15. Leave: The Leave structure should change as follows:

a) PL: Earned Leave should be given as per following Table:

Sr. No Slab (Days) Leave

Entitlement1 240 to 245 20 Days2 246 to 250 21 Days3 251 to 255 22 Days4 256 to 260 23 Days5 261 to 265 24 Days6 266 to 270 26 Days7 271 to 275 28 Days8 276 to 280 30 Days

* For Accumulation of the EL the existing limit should be

revised and made 90 days.

b) SL: Sick Leave should be given 8 days per annum.

Accumulation of Sick Leave for 52 days.

76

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________c) CL: Each workman should be entitled to get 8 Casual

leaves in every calendar year.

d) Accident Leave: In case of accident in the premises or

outside of the Company, he should be given special leave as per the

Doctor’s advice. And the said leave should be considered as attended

days for the purpose of EL.

e) Paid Holidays: Paid Holidays should be given @ 8 days

per annum. The holidays should be discussed & finalized with the

Union Representatives.

16. Uniform: Each workman should be given 2 set of uniform (Shirt

& Pant). The colour & quality of uniform should be discussed with the

Union committee representatives. We also demand that 2 pair of

shoes should be given every year.

16. Loans:

a) Housing Loan: Housing Loan should be given Rs. @

1,00,000/- (without interest) and should be recovered in 50 equal

installments.

b) Educational Loan: For Higher Education, Loan @

Rs. 1,00,000/- should be given. This loan should be given after S.S.C.

This loan should be interest free and repayable in 50 equal

installments.

c) Education Advance: Every workman should be

entitled to get Interest free Education Advance @ Rs. 1000/- per child

per annum subject to maximum two children. The said amount will be

repayable in 10 equal installments.

d) Festival/emergency Advance: Interests free

Festival/emergency Advance @ Rs. 5000/- should be given once in a

year and should be recovered in 10 equal installments.

77


17. Training: We hereby demand the right and highlight the

individual responsibility to competence development to enable every

worker to contribute to industrial development, increased

competitiveness, a high standard of living and a well- functioning

democracy. Changes in work organization, continuous technological

developments and new materials and production processes have

created a need for continuous training and retraining. Although

training cannot solve all the problems but it is also clear that industry

cannot remain competitive without a highly-skilled work force. Union

recognizes this and feels that there is an urgent need for action. An

individual right to training has to be a right for all employees of a

company. We believe that training and life-long learning need to be

an individual right, guaranteed to the complete work force and not

only to a selected group. Therefore we hereby propose that:

A MINIMUM NUMBER OF 5 DAYS OF TRAINING FOR ALL

EMPLOYEES: The aim to ensure the right to training for all

employees can be reached by different means, but an important step

could be to guarantee all employees a minimum of 5 days vocational

training per year. Company should together make an annual plan for

vocational training/education based on the employee’s needs for

training and the goal of the company. The plan should be approved by

the Union. The plan must include timing, elements of quality and a

minimum number of days for the scheduled training. The scheduled

training must be appropriate for the needs of the work and the

employability of the worker. An overall company plan on training

should also be provided.

78

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________VOCATIONAL TRAINING MUST BE COST-FREE FOR THE

EMPLOYEE: When the employee receives vocational training this has

to be provided cost-free and access to this training should be provided

during normal working hours. Vocational training outside normal

working hours can only be accepted with discussion with the Union

which also sets out the framework for this training, including possible

compensation for time. There should not be any adverse impact on

wages including incentive due to training.

CERTIFICATION FOR QUALIFICATION:

After participating in training/education programs, employees should

receive documents that confirm their training and their qualification,

whether this qualification is achieved through training and/or

experience.

18. Shift Timing & Shift Allowance: Shift Timing & Shift Allowance

should be as follows:

Shift Shift Time Shift

Allowance 1st Shift 6.30 a.m. to 3 p.m. Nil2nd Shift 3 p.m. to 11.30 p.m. Rs.20/-3rd Shift 11.30 p.m. to 6.30 a.m. Rs. 30/-

19. Union Office & Time Off: We hereby demand that Company

should provide well furnished office for the Union inside the Company

Premises. We also demand that the office bearers of the Union should

be given time off for the union work. A special leave should be

granted to Union Committee members/office bearers for attending

Training Programs and also conveyance allowance should be paid for

the same.

79

ILO DISTANCE LEARNING COLLETIVE BARGAINING________________________________________________________________________20. Annual Picnic & Annual Day Gathering: Company should

organize a picnic and Annual Day Gathering once in a year. The

modalities shall be discussed during the process of negotiations.

21. Other Demands:

a. Health Check up (Once in a year) for all workmen.

b. All workmen should be given Tetanus injection once in

every year.

c. Skill Pay: Those workmen who are entitled to get skill Pay

should be paid @ Rs. 800/-

22. Existing Rights, Facilities and Service Conditions: All

existing rights, facilities and service conditions, not mentioned in

Charter of Demands should continue.

Note: Union reserves their rights to add, deletes, and modify the said demand in the view of facts and issues revealed in the course of negotiations or otherwise.

80


81


82

ILO DISTANCE LEARNING COLLETIVE BARGAINING 1 A ...

Documents