Collective Bargaining. The tactics or strategies in collective bargaining

Transcription

1 Learning Objectives Understand Collective Bargaining The meaning, concept & types of collective bargaining The various theories on collective bargaining The tactics or strategies in collective bargaining

2 Structure 8.1 Introduction 8.2 Meaning & Concept of Collective Bargaining 8.3 Functions of Collective Bargaining 8.4 Structure of Collective Bargaining 8.5 Nature of Collective Bargaining 8.6 Content of Collective Bargaining

3 Structure 8.7 Types of Collective Bargaining 8.8 Bargaining Theories 8.9 Elements of Collective Bargaining 8.10 Collective Bargaining Process 8.11 Conditions for Success of Collective Bargaining 8.12 Summary

4 Introduction Collective Bargaining Collective bargaining is a process of joint decision making & basically represents a democratic way of life in Industry, It establishes a culture of bi-partism & joint consultation and a flexible method of adjustment to economic technical changes in Industry. It helps in establishing industrial peace without disrupting either the existing arrangements or the production activities.

5 Meaning & Concept of Collective Bargaining Collective bargaining has been defined as a process of discussion & negotiation between two parties, one or both of whom is a group of persons acting in concert. The resulting bargain is an understanding as to the terms & conditions under which a continuing service is to be performed. More specifically, collective bargaining is a procedure by which employers and a group of employees agree upon the conditions of work.

6 Meaning & Concept of Collective Bargaining It is argued that collective bargaining is primarily political rather than an economic process. It is a power relationship between a trade union and management. The agreement arrived at is a compromise settlement of power conflicts. It is joint administration synonymous with joint management. Marxists view collective bargaining as a class struggle between capital & labour in capitalist societies.

7 Meaning & Concept of Collective Bargaining There are three concepts of collective bargaining with different emphasis & stress. The marketing concept views collective bargaining as the means by which labour is bought & sold in the market place. Collective bargaining is an exchange & economic relationship. The concept focuses on substantive content of collective agreement like pay, hours of work, bonus or fringe benefits.

8 Meaning & Concept of Collective Bargaining The government concept views collective bargaining as a constitutional system or rule making process, which determines relation between management & trade union representatives. Here collective bargaining is seen as political & power relationship. The industrial or managerial concept of collective bargaining views the institution as participative decision making between employees & employers on matters in which they have vital interest.

9 Functions of Collective Bargaining 1] establishing rules of the work place 2] determining the form of compensation 3] standardizing compensation 4] determining priorities on each side 5] redesigning the machinery of bargaining. It is claimed that collective bargaining serves two interests of employers i] by establishing wages that are more or less standard, major cost of labour is taken out of competition; ii] collective bargaining contributes to management control

10 Structure of Collective Bargaining Regularized patterns of union management interaction constitute the structure of Collective bargaining. This structure has bargaining levels, units, forms and scope. Bargaining can be on national, district, company, plant or sub-plant basis. Bargaining units are workmen for whom the exercise is conducted. It could cover all or only manual, office or a particular craft like only fitters.

11 Structure of Collective Bargaining Bargaining forms are formal, where agreements are Written; or informal where they are oral & informal. Bargaining scope concerns with the number of subjects that are covered in a particular negotiation. Categories or elements of bargaining exist when the there is a national multi employer bargaining [ common in Europe] or second, where there is a single employer / enterprise level bargaining { in US & Japan].

12 Nature of Collective Bargaining Collective Bargaining can exist & function if 1} employees identify a common purpose and organize & act in concert; 2} management is prepared to recognize their organization which restricts their ability to deal with employees individually. Thus are there are five principal characteristics in bargaining i] group relationships, ii] continuous & evolutionary, iii] interacts with socio economic climate, iv] it is mostly private, v] varies from setting to setting.

13 Content of Collective Bargaining Collective Bargaining is among other things a rule making or norm creating process of a bilateral kind. These rules can be procedural to include negotiation of contracts, modification, renewal, or termination. Facilities for union workers to conduct union activities. or substantive. to include economic or market relationship, government relationships & work place relationships.

14 Types of Collective Bargaining Conjunctive or distributive bargaining has the function of resolving pure conflicts of interest. It serves to allocate fixed sums of resources & hence often has win lose quality. The relationship here is forced one as labour s gain in increased wage results in owner s loss in higher costs. Integrative bargaining is concerned with solution of problems confronting both parties. It serves to optimize potential for joint gains & often has win win quality. Productivity bargaining is an example.

15 Bargaining Theories Collective Bargaining Walton & McKersie Theory The theory views collective bargaining as interaction of four processes 1] distributive bargaining applying to situation where union & management goals are in conflict { wages bargaining} 2] Integrative bargaining on the other hand applies to common goals of the two parties, where both stand to benefit [productivity bargaining]

16 Bargaining Theories Walton & McKersie Theory Collective Bargaining 3] attitudinal structuring is the means by which bargaining parties cultivate friendliness, trust, respect & cooperation. 4] intra organizational bargaining where focus is on interaction between the union & management. These four sub-processes interact to shape the final outcome of bargaining as well as long term relationship between two parties.

17 Bargaining Theories Bargaining Range Theory Collective Bargaining This theory propounded by Prof Pigou explains the process by which the two parties fix the upper level [ wage demanded by labour] and lower level [ wage offered by owners]. Then there are several rounds of negotiation by which labour reduces the demand & owners hike the offer. Each party has its limit up to which it will concede. The exact point of settlement depends upon negotiation skills & comparative strengths of the two parties.

18 Bargaining Theories Chamberlain Model Collective Bargaining Chamberlain Model focuses upon the determinants of bargaining power & the ways changes in these determinants lead to settlement in the majority of the collective bargaining situations. Bargaining power is ability to secure your opponent s agreement to your terms. Willingness of a party to agree or disagree with opponent s terms depends upon its perceived cost of agreeing & disagreeing.

19 Bargaining Theories Chamberlain Model Collective Bargaining If management finds that its cost of agreeing is more than the cost of disagreeing, it will be unwilling to agree. Union s willingness is also determined by the same comparison. This model has a number of implications : a] at least one party must perceive cost of disagreement to be more than the cost agreement, b] one s bargaining power is relative in that it depends upon the size of wages one is asking [ or offering].

20 Bargaining Theories Chamberlain Model Collective Bargaining c] misjudgment of the maximum offer of the employers [minimum demand of the union] or the commitment of the parties to irrevocable positions can result in strike, even though the range for mutually acceptable settlement exists. d] the compromise offers [ demands ] and the approach of the bargaining deadline, both tend to move the parties towards agreement.

21 Bargaining Theories Chamberlain Model Collective Bargaining e] the model allows for coercive tactics, which increase your opponents cost of disagreeing and for persuasive tactics which reduce your opponent s cost of disagreeing. f] the economic environment, the state of micro or macro economy and industry structure can affect the bargaining power of the two parties..

22 Bargaining Theories Hicks Bargaining Model Collective Bargaining Hicks model focuses on the length & cost of work stoppages. He proposed that unions & managements balance the costs and benefits of work stoppages when making concessions at the bargaining table. The central idea is that there is a functional relation between the wage that one or other party will accept & the length of the strike that would be necessary to establish that wage.

23 Bargaining Theories Hicks Bargaining Model Collective Bargaining There is a particular wage that the employer would prefer if union is not in the picture. Employer will consider more wage than that he wanted initially to offer, to avoid a strike and up to a point his concessions will rise with the length of the strike he anticipates. A primary difference between the Hicks model and the bargaining range theory is that Hicks model pinpoints a precise wage settlement while the range theory does not.

24 Elements of Collective Bargaining 1. Issues for consideration initially union recognition and union security come up for consideration. Thereafter issues that come up are wages, fringe benefits, working conditions, personnel matters such as promotion, transfer, discharge & dismissal. 2. The procedure for consideration : the bargaining machinery & procedure for consideration of various issues differ in relation to whether two parties conduct bargaining themselves or involve third party like government.

25 Elements of Collective Bargaining 3 Collective agreements and their implementation : The bargaining agreement may be described in a number of ways. It is a compromise between the self interest of the two parties that they have agreed upon as guide on to their relationships on certain matters for specified period of time.

26 Elements of Collective Bargaining 3 Collective agreements and their implementation : The pattern of the agreement depends upon a] the scope of legislation of the country; b] the level at which the agreement is negotiated and industry to which it is to apply, and c] the government policy towards labour & industrial relations & propensity of the parties to bargain with each other.

27 Elements of Collective Bargaining 3 Collective agreements and their implementation : In India there are three types agreements a] the voluntary agreement which are the result of direct negotiations between the parties, & parties rely on themselves for their implementation b] settlements, which are collective agreements backed by the intervention of government agencies and c] consent awards, agreements reached when the matters in dispute are under reference to industrial tribunals / courts.

28 Collective Bargaining Process The bargaining process includes preparation of initial demands, negotiations and settlement. Preparation allows each bargaining team to determine bargaining objectives defend its proposals anticipate the opponents demands & moves Preparation for negotiations is a comprehensive ongoing job for both the management & the union.

29 Collective Bargaining Process Among the more important steps to pre-negotiation preparations are Coordinating among persons gathering & analyzing data relevant to bargaining matters Selection of chief negotiator & his team Review of previous negotiations & results Gathering data on internal operations & policies of comparable firms through surveys

30 Collective Bargaining Process Formulate proposals & priorities Select suitable site for negotiations Organize collected data into a ready reference book. Notify the opponent the intent to bargain by serving required notice. One of the most difficult aspects of the collective bargaining process is to determine bargaining units. There should be a community of interest among the employees to be represented.

31 Collective Bargaining Process The first step is establishing a relationship for ongoing negotiations & formulation of agreements covering conditions in the work place. It is an anxiety producing process as at every step conflict can erupt which can escalate to litigation and in worst case, to violence.

32 Collective Bargaining Process The second step relates to the scope of bargaining i.e. matters on which to bargain. Certain category of items are mandatory, they have to be included. Second category has subjects that are considered illegal or prohibited,they are avoided. The last category contains items that are permitted but not required. Either side can agree or refuse to discuss such a matter.

33 Collective Bargaining Process The third step is careful structuring. Personnel department takes the lead in deciding timing, location and length of bargaining sessions. An agenda has to be prepared of items to be agreed. It should be decided whether the items are to be agreed independently and signed or overall agreement is to be signed on settlement of all the items on the agenda.

34 Collective Bargaining Process An absence of good faith that will negate the spirit of bargaining is indicated by 1. Unwillingness to make counter proposals 2. Continuous change of positions in bargaining 3. Use of delaying tactics 4.Withdrawal of concessions after they are granted 5. Unilateral actions over topics of bargaining 6.Refusal to furnish data for negotiations

35 Collective Bargaining Process Process of collective bargaining can be improved by steps like 1. Begin with proposals and not demand 2. Avoid taking public positions in advance of negotiation 3. Avoid taking strike votes during negotiations 4.Provide required authority to negotiators to bargain 5. Avoid unnecessary delays 6.Insist on offering facts and arguments

36 Collective Bargaining Process Process of collective bargaining can be improved by 7. Offer multi choice by offering many proposals 8. Be prepared to compromise 9. Be prepared to get results gradually 10. Preserve good manners & keep discussion focused on relevant issues 11. Be prepared to stand for a long strike or lockout in order to force settlement justified by facts & arguments.

37 Conditions for Success of Collective Bargaining 1. The union participating in the collective bargaining process must strong, democratic & enlightened. 2. Provide voluntary recognition to the trade union. This step has positive benefit of improved industrial relations, production & productivity 3. There should be willingness to give & take by both the parties and interest on each side to reach an agreement.

38 Conditions for Success of Collective Bargaining 4. Both refrain from unfair trade practice as it ruins atmosphere of collective bargaining, sours industrial relations & renders negotiations more difficult. 5. Collective bargaining is required to settle differences between the two parties. However, it is essential that these parties meet to discuss matters where there is common interest & agreement. 6. Intelligent understanding of the needs, aspirations, objectives, problems of each other makes it easier to find solution.

39 Conditions for Success of Collective Bargaining 7. Both sides of the bargaining table need to be mature. The leaders should possess knowledge, skills, intelligence, resourcefulness honesty & technical know how. 8. The increasingly technical complexity of the collective bargaining agenda requires expert professional advice, experience & skill on the part of negotiators 9. For proper negotiations it is necessary to know the persons empowered to act for the company & union.

40 Summary The term collective bargaining was originally used by economists Webbs, who identified & differentiated three major categories of trade union activity. mutual insurance, collective bargaining and legal enactment. The content of collective bargaining is divided into two substantive rules & procedural rules.

41 Summary The process of collective bargaining may vary in respect of form, scope and depth. It is concerned with regulating both economic & managerial relationships, It is voluntary, bipartite process ; its character is determined by the management s & employees perception of the nature of their mutual inter dependence.

42 Summary The bargaining structure is dynamic & varies between different industries & organizations; however, the emphasis of collective bargaining has shifted away from multi-employer, industry level bargaining to the organizational level in order to respond more effectively to variations in organizational situations & needs.

43 The End! In the next session we cover chapter nine on Productivity Bargaining. ZÉÉw _âv~4