Importance of Collective Bargaining
Collective bargaining offers the following advantages.
1. It is a pragmatic and democratic method of regulating the terms and conditions of employment. The parties directly concerned with employment (employers and workers) who best know the problems participate in collective bargaining. It Is a voluntary process without any third party Intervention.
2. As a vehicle of industrial peace, collective bargaining has no equal. It is the most important and significant aspect of labour-management relations, and extends the democratic principles from the political to the industrial field.
3. It provides solution to the problems of sickness in industry, and ensures old age pension benefits and other fringe benefits.
4. Collective bargaining results in better understanding between employers and employees. The employer gains a better Insight Into the problems and aspirations of workers. Similarly, workers become better aware of the economic and technical problems of the Industry.
5. Collective bargaining provides a flexible means of adjusting wages and conditions of employment to changes In economic, social, technological and political environment. Both the parties can meet whenever necessary and can adapt the terms and conditions of their agreement to the changing environment.
6. Collective bargaining helps In establishing a code that defines the rights and obligations of each party. Basic standards arc fixed and management cannot take arbitrary actions to exploit workers. Some sort of “industrial Jurisprudence” is created.
7. Collective bargaining facilitates better implementation of decisions due to the direct involvement of both the parties. Parties know that the decisions are their own and nobody has imposed them.
Subject-Matter of Collective Bargaining
The subject-matter of collective bargaining is very wide and it covers a variety of issues affecting employment relationships between the workers and the management. According to Ghosh and Nath, the issues covered in the collective bargaining are recognition of union, wages and allowances, hours of work, leave and festival holidays, bonus and profit sharing schemes, seniority, rationalisation and the issues relating to the fixation of workloads and standard labour force, programmes of planning and development influencing work-force, issues relating to retrenchment and lay-off, victimisation for trade union activities, provident fund, gratuity and other retirement benefit schemes, incentive systems, housing and transport facilities, issues relating to discipline and shop rules, grievance procedure, working conditions and issues related to safety and accident prevention, occupational diseases and protective clothing, employee benefits such as canteens, rest rooms, medical and health services, and creches, administration of welfare funds, co-operative thrift and credit societies and educational, recreational and training schemes.11
The Indian Institute of Personnel Management, suggested the following subject-matter of collective bargaining:
♦ Purpose of agreement, its scope, and the definition of important terms;
♦ Rights and responsibilities of the management and of the trade union;
♦ Wages, bonus, production norms, leave, retirement benefits, and terms and conditions of service;
♦ Grievance redressal procedure;
♦ Methods and machinery for the settlement of possible future disputes; and
♦ Termination clause.
Functions of Collective Bargaining
Over the past few decades, collective bargaining has come to be accepted as a process of decision-making and a mechanism for balancing the power between the employers and the employees on a case-by-case basis. In the process, collective bargaining performs three important functions, as identified by Arthur D. Butler.13 These are:
1. Technique of long-run social change.
2. Peace treaty between two parties in continual conflict.
3. Establish a system of industrial jurisprudence.
1. Process of Social Change
Collective bargaining is a technique of long-run social change, bringing about rearrange¬ments in the power hierarchy of competing groups. It is, in its broader aspects, not confined solely to the economic relations between employers and employees. Perlman says: “ It is a technique whereby an inferior social class or group exerts a never-slackening pressure for a bigger share in the social sovereignty as well as more welfare, security and liberty for individual members. Collective bargaining manifests itself equally in politics, legislation, court litigation, government administration, religion, education and propaganda.” Collective bargaining is not an abstract class struggle but is rather pragmatic and concrete. The inferior class’s aim is to acquire a large measure of economic and political control over crucial decisions in the areas of its most immediate interest and to be recognised in other areas of decision-making. Thus, when viewed as a process of social change, collective bargaining emcompasses more than the direct clash between employers and unions. It refers to the rise in the political and social power achieved by workers and their organisations. With gradual rise in social and political power, workers gain greater recognition and ability to assert against employers. The contribution of collective bargaining towards the process of social change brings to light two important implications:
♦ Collective bargaining is not an abstract class struggle, but is rather pragmatic and concrete. The inferior class does not attempt to abolish the old ruling class, but merely to become equal with it. It aims to acquire a large measure of economic and political control over crucial decisions in the areas of its most immediate interest, and to be recognised in other areas of decision-making.
♦ The process of change initiated by collective bargaining also functions as a source of stability in changing environment. Wage earners have enhanced their social and economic position and at the same time, management has retained a large measure of power dignity. These gains were not registered in one great revolutionary change, but rather step by step, with each clash between opposing parties settled with a new compromise somewhat different from previous settlement. Thus, collective bargaining accomplishes long-run stability on the basis of day by day adjustments in relations between management and labour .
(2) Peace Treaty or Temporary Truce
Collective bargaining is a sort of peace treaty between two parties in continual conflict. However, the settlement between the two parties is a compromise. The extent to which each side is willing to accept less than its original bargaining demands depends, in part, on how strong it is vis-a-vis its opponent. “The compromise is a temporary truce with neither side being completely satisfied with the results. Each would like to modify it at the earliest opportunity. Since the contract is almost always of a short duration, each begins immediately to prepare a new list of demands, induding previously unsatisfied demands-, and to build up its bargaining strength in anticipation of the next power skirmish.” But in a majority of cases, collective bargaining agreements are signed before either opponent- fires a shot.
(3) Industrial Jurisprudence
Collective bargaining creates a system of “industrial jurisprudence.” It is “a method of introducing civil rights into industry, that is, of requiring that management be conducted by rules rather than by arbitrary decisions.” It establishes rules which define and restrict the traditional authority exercised by employers over their employees, placing a part of the authority under the joint control of union and management.
— It is a rule-making or legislative process, in the sense that it formulates the terms and conditions under which labour and management will co-operate and work together over a certain stated period.
— It is an executive process, for both management (foremen and supervisory officials) and trade union officials share the responsibility of enforcing the rules.
— It is a judicial process, for in every collective agreement there is a clause/provision regarding the interpretation of the agreement. Through the grievance procedure, any difference dispute concerning the application of the agreement to particular cases is settled. Where the agreement does not specifically cover the dispute, it may be settled according to the unwritten shop practices, the decisions in these cases ac as precedents in a manager similar to the common laws and interpretation of legislation by the court.