Collective Bargaining

Definition: Collective Bargaining can be defined as the form of negotiation amidst employer and the representatives of workers/employees, i.e. trade union, which establishes the terms and conditions of employment.

Its purpose is to ascertain the working conditions, as well as to regulate the relations of employer and workers.

Simply put, Collective bargaining is a bipartite process, wherein employers and a group of employees are the two parties involved for joint decision making on various matters.

Further, in order to be an effective collective bargaining, good faith must be present while carrying out the discussion.

What is the Collective Bargaining Agreement?

Collective Bargaining may lead to the Collective Bargaining Agreement (CBA), which contains the policies acceptable to both i.e. the company’s management and workers. It states the terms and conditions of employment and relation amidst the two parties. Further, CBA is legally binding in nature.

Importance of Collective Bargaining

The importance of collective bargaining is given as under:

  • It improves wages and working conditions, as well as it promotes equality.
  • It provides a stage to both the parties, i.e. management and workers to stand on the same level at the negotiation table.
  • It is influential in ensuring the adaptability of the companies and economies during the economic crisis.
  • It helps in developing trust and mutual respect between employers, workers and their organizations.
  • It increases stability and productivity in labour relations.
  • It benefits both the parties, as the workers get fair remuneration for the work performed, without impairing the capacity of the employers to work profitably.
  • It facilitates the adaptability of the enterprise to a short term rise or falls in demand.
  • It facilitates instant implementation of the decisions, made during the bargaining process.
  • It results in an increased worker’s commitment and enables information sharing.
  • It also eliminates income inequality.
  • It demonstrates the relative strength of the opposing parties.

Collective Bargaining takes place between employer and workers, to negotiate the new contracts, as well as to renegotiate the existing ones.

Objectives of Collective Bargaining

Collective Bargaining is an effective way through which the employer and the trade union can set fair wages and working conditions. It helps in improving the quality of labour relations. The objectives of collective bargaining are:

  • To settle the disputes and conflicts amidst the parties.
  • To strengthen and maintain cordial and harmonious relations amidst management and workers.
  • To protect the interest of both the parties involved in the discussion.
  • To arrive at a decision or settlement which is mutually beneficial.
  • To encourage industrial democracy.

Collective Bargaining Process

The collective bargaining process gives a voice to the wage earners, so that they collectively bargain with the company, for their rights. The steps are given as under:

  1. If any of the two parties desire negotiation in an agreement, it has to issue a notice to the other party along with a statement of proposal. Thereafter, the other party has to revert back to the notice within 10 days from the receipt of the notice.
  2. In case of any difference arising due to such notice and reply, any of the two parties may request for a conference, which shall start within 10 days from the date of request.
  3. On non-settlement of the dispute, the National Conciliation and Mediation Board may intervene, on the request of any or both the party or on its own and call the parties to conciliation meeting.
  4. At the time of conciliation proceedings organized by the Board, no party is allowed to do any act which may disrupt the settlement.
  5. The Board will make efforts to settle disputes in a peaceful manner.

The issues which are in general, resolved by way of collective bargaining include: wages, hours of work, working conditions, paid leaves, holidays, overtime pay, sick leave, shift length, occupational health and safety, and worker’s discipline and termination. It aims at reaching an agreement, which governs the employment terms.

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