Prof. Hiteshwari Jadeja
Collective bargaining: meaning
Collective bargaining is defined as a free and
voluntary forum that facilitates negotiation
between employers and employees’ unions on
issues affecting the interest and rights of both
parties so that an amicable settlement is reached in
good faith.
Features of collective bargaining
Joint process
 Interactive mode
 Continuous process
 Adversarial strategy
 Union-based initiative
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Importance of CB
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It helps increase the economic strength of both the
parties at the same time protecting their interests.
It helps establish uniform conditions of employment
with a view to avoid occurrence of industrial
disputes.
It helps resolve disputes when they occur.
It lays down rules and norms for dealing with
labour.
It helps usher in democratic principles into the
industrial world.
Evolution of Collective
Bargaining
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CB rose and grew with the trade union movement.
Roots of CB lie in Great Britain where it developed in
response to the conditions created by the Industrial
Revolution.
Along with trade unions, the idea of bargaining
collectively gained strength in the early part of the 18th
Century.
Initially, the negotiations were carried out at plant
level.
By early 1900, industry and national level agreements
became quite common.
The idea spread across to France, Germany, and USA.
And today, through the process of CB, organizations
have learnt to cope with industrial conflict.
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The Indian Scenario:
◦ In India, trade unions gained prominence much later –
only after 1900.
◦ In 1918, Gandhiji - as the leader of the Ahmedabad
textile workers – advocated the resolution of conflict
through CB agreements.
◦ But the idea gathered interest only after the Second
World War.
 The Government of that time took steps like setting up of
machinery for negotiations, conciliation and arbitration.
◦ The trade union movement and also CB agreements
became popular after Indian independence.
 Moving from agreements at the plant level, such agreements
spread to industries such as chemicals, petroleum, tea, coal, oil
and aluminum.
 In ports and docks, banking and insurance, collective
agreements were arrived at, right at the national level.
Types of bargaining
The types of bargaining are
 Distributive bargaining
 Integrative bargaining
 Centralized bargaining
 Decentralized bargaining
Distributive bargaining
A bargaining process is described as distributive
bargaining when the parties to the bargaining process
have conflicting needs, interests and goals.
 In distributive bargaining, the employers and
employees normally adopt opposing positions.
 In this kind of bargaining, one party’s gain is another
party’s loss as their needs are mutually exclusive.
 Economic issues like wages revisions, benefits,
bonuses, leaves and workloads become the major
agenda of distributive bargaining.
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Integrative bargaining
When there is a convergence of interests, needs and
goals among the parties to the bargaining, the
bargaining process is usually described as integrative
bargaining.
 In this type of bargaining, the employers and the
employees have the same attitude towards the issues
discussed in the bargaining and are equally concerned
about its outcome.
 Agreements regarding employee health and safety at
the end of the bargaining process usually benefit both
the parties.
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Centralized bargaining
When collective bargaining is conducted at
higher levels like the national level or industry
levels in a centralized manner, it is called
centralized bargaining.
 This may be sectoral or central wage bargaining.
 The chief merit of centralized bargaining is that
the centralized wage agreements ensure equal
pay increase for equal jobs, irrespective of all
other factors.
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Decentralized bargaining
In case of decentralized collective bargaining, the
bargaining is conducted at the enterprise level or
even at the individual level.
 In decentralized bargaining, an organization can
develop a tailor-made wage package which best
suits the interests of both the employer and the
employees.
 Decentralized bargaining provides an opportunity
to the employees to participate in the decisionmaking process.
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The Collective Bargaining
Process
COLLECTIVE BARGAINING IN
INDIA
Causes of limited success of CB in India:
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Problems with Unions
Problems from Government
Political Interference
Legal Problems
Management Attitude
-Problems with unions:
 CB mainly depends on the strength of unions.
 Weak trade unions cannot initiate strong arguments during
negotiations.
 Not many strong unions in India.
 Indian unions are bogged down by the problems of: multiplicity,
inter and intra-union rivalry, weak financial position and nonrecognition.
 So, unanimous decision is unlikely to be presented at the negotiating
table.
-Problems from Government:
 The Government has not been making any strong efforts for
the development of CB.
 Imposition of many restrictions regarding strikes and lockouts
has removed the `edge` of the CB process.
◦ Political interference:
 Interference of political leaders in all aspects of union
matters has increased over the years.
 Almost all unions are associating themselves with some
political party or the other.
◦ Legal problems:
 Now that adjudication is easily accessible, the CB process
is losing its importance.
◦ Management attitude:
 In India, managements have a negative attitude towards
unions.
 They do not appreciate their workers joining unions.
Conditions for Success of collective
bargaining
An effective collective bargaining requires
 Strong unions and an effective leadership
 The organization’s recognition of unions
 Top management support
 Positive external environment
 Openness and flexibility
 Fair labour practices
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