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Collective bargaining is a process of negotiating between management and workers represented by their representatives for determining mutually agreed terms and conditions of work which protect the interest of both workers and the management. Collective bargaining has been defined by the Supreme Court as “the technique by which dispute as to conditions of employment is resolved amicably by agreement rather than coercion”.

Definition by Different Authors:

• Michael J. Jucius defines collective bargaining as a process by which employers on the one hand and representatives of the employees on the other, attempt to arrive at agreements covering the conditions under which employees will contribute and be compensated for their services.
• Dale Yoder defines collective bargaining as a situation in which the essential conditions of employment are determined by a bargaining process undertaken by representatives of a group of workers on the one hand and one or more employers on the other.
• Edwin B. Flippo defines collective bargaining as a process in which the representatives of labour organization (Trade Union) and the representatives of business organization (Management) meet and attempt to negotiate a contract or agreement which specifies the nature of the employer-employee union relationship.”
• Encyclopaedia of Social Services defines collective bargaining as a process of discussion and negotiation between two parties one or both of whom is a group of persons acting in concert. The resulting bargain is an understanding as to terms and conditions under which a continuing service is to be performed.
• J.H. Richardson defines collective bargaining takes place when a number of work people enter into a negotiation as a bargaining unit with an employer or group of employers with the object of reaching an agreement on the conditions of the employment of the work people.
• S.H. Slitcher defines collective bargaining as the beginning of industrial jurisprudence. It is a method of enforcing citizenship right in industry i.e. management should abide by certain ruler rather than taking an arbitrary decision.
• Archibald Cox defines collective bargaining as the resolution of industrial problems between the representatives of employers and the freely designated representatives of employees acting collectively with a minimum of government direction.

ILO Convention No. 154 defines collective bargaining as referring to: “all negotiations which take place between an employer, a group of employers or one or more employers’ organizations, on the one hand, and one or more workers’ organizations, on the other, for:

(a) determining working conditions and terms of employment; and/or

(b) regulating relations between employers and workers; and/or

(c) regulating relations between employers or their organizations and a workers’ organization or workers’ organizations.” (Article 2)

In Ram Prasad Viswakarma v. Industrial Tribunal, (1961) I LLJ 504 case, the Court observed that “It is well known how before the days of ‘collective bargaining, labour was at a great disadvantage in obtaining reasonable terms for contracts of service from its employer. As trade unions developed in the country and Collective bargaining became the rule, the employers found it necessary and convenient to deal with the representatives of workmen, instead of individual workmen, not only for the making or modification of contracts but in the matter of taking disciplinary action against one or more workmen and as regards of other disputes.”

In Karnal Leather Karamchari Sanghatan (Regd.) v. Liberty Footwear Company (Regd.) and Ors, AIR 1990 SC 247 case, the Court laid down that the Industrial Disputes Act, 1947 seeks to achieve social justice on the basis of collective bargaining. The voluntary arbitration is a part of the infrastructure of the dispensation of justice in the industrial adjudication. The arbitrator thus falls within the rainbow of statutory tribunals. When a dispute is referred to arbitration, it is, therefore, necessary that the workers must be made aware of the dispute as well as the arbitrator whose award ultimately would bind them. They must know what is referred to arbitration, who is their arbitrator and what is in store for them. They must have an opportunity to share their views with each other and if necessary to place the same before the arbitrator. This is the need for collective bargaining and there cannot be collective bargaining without involving the workers. The Union only helps the workers in resolving their disputes with management but ultimately it would be for the workers to take a decision and suggest remedies. It seems to us, therefore, that the arbitration agreement must be published before the arbitrator considers the merits of the dispute. Non-compliance of this requirement would be fatal to the arbitral award.

In Bharat Iron Works v. Bhagubhai Balubhai Patel, (1976) Lab 1 C: 4[SC] case, the Court observed that “Collective bargaining, being the order of the day in the democratic, social welfare State, legitimate trade union activities, which must shun all kinds of physical threats, coercion or violence, must march with a spirit of tolerance, understanding and grace in dealings on the part of the employer. Such activities can flow in the healthy channel only on mutual cooperation between the employer and the employees and cannot be considered as irksome by the management in the best interests of its business. Dialogue with representatives of a union helps striking a delicate balance in adjustments and settlement of various contentious claims and issues.”

In Amalgamated Coffee Estates Ltd. v. Workmen, 1965 II LLJ 110 SC case, the Supreme Court held that the process of negotiated settlements is at the heart of the solution of the collective disputes. Unlike a settlement in the course of conciliation proceedings, a bipartite settlement with a majority union is equally binding if it is held to be fair and reasonable.

What does Collective Bargain Involve?

It is a process of discussion and negotiation between employer and workers regarding terms of employment and working conditions. Workers are generally represented by trade unions with respect to expressing their grievance concerning service conditions and wages before the employer and the management. It is perceived as a process both by employers and employees and important machinery to settle differences on the work-related issues. The need for collective bargaining in India arose, particularly after World War II.

Modernization, the need for quality, and increased productivity are important for competing in the international market. Modernization may cause the introduction of modern automatic machinery and may require high skilled labours. Thus modernization results in the displacement, laying off, and retrenchment of workers. Such condition results in hostility between the workers and the management.  In such a case, management and workers must come together and use the concept of collective bargaining. Collective agreements provide the climate for the smooth working of the business.

Need for Collective Bargaining:

Modernization, the need for quality, and increased productivity are important for competing in the international market. Modernization may cause the introduction of modern automatic machinery and may require high skilled labours. Thus, modernization results in the displacement, laying off, and retrenchment of workers. Such condition results in hostility between the workers and the management.  In such a case, management and workers must come together and use the concept of collective bargaining. Collective agreements provide the climate for the smooth working of the business.

An individual worker under financial constraint cannot bargain with the cash-rich employer. In such a situation, the individual may be tempted to accept undesirable conditions including low remuneration. Here there is a fear of loss of a job in the minds of the worker. This fear may be due to the ignorance, illiteracy and industry-specific skill factors. Sometimes employers are in a position to control the bulk demands for the labours, and they may through combined action, force the workers to accept low wages. Collective bargaining allows workers to band together into larger groups like trade unions, create a louder voice that can help provide the benefits for the workers and employers.

Objectives of Collective Bargaining:

• To foster and maintain cordial relations between the employer/management and employees.
• To protect the interests of the workers and employer through collective action and by preventing unilateral actions from being taken by either party.
• To keep outside the government interventions
• To promote industrial democracy.

Characteristics of Collective Bargaining:

• It is a group or collective action as opposed to individual action. It is initiated through the representatives of the employees (trade union members).
• It is two-way give and take process because its outcome is mutually beneficial. The negotiation arrived at is acceptable to both parties: the employer and the employees. Hence it creates a stable relationship.
• It is a voluntary bipartite and continuous process without any third-party intervention.
• It is a flexible and dynamic process wherein no party adopts a rigid attitude. It changes as per the conditions prevailing at the time of negotiations.
• It ensures industrial democracy in the workplace. Both the employer and the employees who best know their problems, participate in the negotiation process.
• It is a practical way of solving issues between the employer and the employee.
• It involves balancing of strength and power.
• The decision taken by collective bargaining can be implemented speedily.

Subject Matter of Collective Bargaining:

• Rights and responsibilities of the management and of the trade union.
• Wages, bonus and other allowances including profit sharing.
• Hours of work, rest intervals.
• Production norms
• Leave and other facilities
• terms and conditions of service.
• retirement benefits
• Grievance redressal system.
• The procedure of joint consultation
• The procedure of settling disputes.
• Purpose, scope and duration of the agreement
• Differences in interpretation of the agreement
• the definition of important terms.
• Annual holidays and pays
• Termination, discharge, suspension and dismissal clauses.
• Prohibition of strikes and lockouts in the period of the agreement.

Prerequisites of Collective Bargaining:

• Right to organize and right to collective bargain: The success of collective bargaining depends upon the extent to which, the workers enjoy the right to organize and bargain. 
• Presence of strong independent trade union: If the trade union is weak, employers can say that it does not represent the workers and will refuse to negotiate with it.
• Recognition of trade union:There may be many unions of workers but only one of them having the majority is recognized by the employer.
• Keeping aside prejudice: Both parties involved in collective bargaining must not have any prejudice about each other. 
• The attitude of employers and trade unions: Collective bargaining is impossible between the parties which are rigid, non-compromising and close-minded. 
• A give and take policy: The attitude to give and take should be followed by both the parties.
• A favourable political environment: When the government encourages collective bargaining as the best method of regulating conditions of employment, then it guarantees the success of collective bargaining. 
• Unfair labour practices: Unfair Labour Practices will restrict the development of collective bargaining.
• Written agreements: The agreement must be observed by those to whom they apply. 
• A suitable framework: The machinery for effective collective bargaining has been laid down either by the legislation of the country or by mutual agreement.

Steps Involved in Collective Bargaining:

• Identification of issue and initiation
• Preparation of negotiations
• Negotiation 
• Implementation of agreement

Advantages of Collective Bargaining:

• Collective bargaining gives workers a larger voice: An individual worker under financial constraint cannot bargain with the cash-rich employer. Collective bargaining allows workers to band together into larger groups like trade unions, create a louder voice that can help provide the benefits for the workers and employers.
• It can improve a worker’s quality of life: The collective bargaining agreements negotiated in good faith often support higher wages for each worker including additional benefits, such as healthcare access or retirement benefits.
• It encourages cooperation: In collective bargaining there is give and take approach. There must be a balance, where everyone gets something they need, but not necessarily everything they want, through a perspective of sincerity or honesty of intention. 
• It creates relationships: There is a need for open lines of communication to be continually available for both sides to prosper in negotiations. This creates open lines of communication between all offices and parties involved, which can create beneficial community relationships over time.
• It creates enforcement consistency: Everyone involved has legal standing should an issue at work come up in violation of the agreed-upon terms. 
• It creates a binding result: If one side or the other is not performing to the stipulations that have been set forth in the contract, then they can be held responsible to them by the injured party. 
• It can be modified: After the date of agreement ends, the agreement can be eventually changed.
• It prevents employees from going on strikes: Collective bargaining will result to an agreement. And normally, this will also be agreed upon if the negotiations are beneficial for both parties.

Disadvantages of Collective Bargaining:

• Collective bargaining may require everyone to be bound by the contract: New and non-unionised workers must agree with the terms and conditions of the current contract to be employed.
• It is not always a process of fair representation: Some non-union workers might find their employment in jeopardy at the cost of unionized workers under some contracts, depending on local laws and regulations.
• It highlights personal differences: The agreement must be approved by workers by majority. Thus, there are some workers whose aspirations are not fulfilled.
• It is not always a process of fair representation: There is a possibility that a minority can consume a majority of the available resources, which creates the possibility of the union eventually imploding.
• It is used as a political tool: Political parties enter trade unions as collective bargaining is often associated with fundraising.

Conclusion:

Collective bargaining is a process of negotiating between management and workers represented by their representatives for determining mutually agreed terms and conditions of work which protect the interest of both workers and the management. The top advantages and disadvantages of collective bargaining is to balance improve wages and working conditions with increased productivity and labour security for the employer. All parties typically give a little to get a little in the final contract, compromising to create something which is mutually beneficial to everyone. The benefits often depend on the skills of the negotiators involved and the size of a group represented, which means some agreements are less beneficial than others.

Related Topics:

• Types and Pre-Requisites of Collective Bargaining
• Process of Collective Bargaining
• Disadvantages and Advantages of Collective Bargaining

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