Cb Process 1

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Collective Bargaining



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Meaning

± Collective bargaining is a process of joint

decision making and represents a democraticway of life in the industry

± Bi partite in nature flexible method to adjust the

economical and technological changes in an

industry

± Allows the two sides to get together and talk

about problems, needs, goals and to settle

differences



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Meaning

± It is subjected to external influences such as

economic and socio-political change, technologicaland demographic change



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Definition

³ A method of determining the terms and conditions of

employment and regulating the employment

relationship between representatives of

management and employees with the intention to

reach an agreement which may be applied to agroup of workers´.



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Collective Bargaining

The role of conflict in bargaining:

± Bargaining would not occur if there was no conflict ± Parties have different needs, goals, interests,

attitudes, values and perceptions

± These goals are pursued at the costs of the other

party ± If parties have sufficient power then they use

collective bargaining as a way forward



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Sources of conflict

± Scarcity of resources: availability of money ± Incompatibility of goals, needs and interests

± Different attitudes to work

± Ambiguity in responsibilities and roles

± Poor organisational structure

± Poor communication



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Sources of conflict

± Most important over: wages and salaries

± Management has to see to shareholder profits andworkers want more money

± Productivity needs may force the firm to operateflexible work practices and the unions might resist

this ± Companies might want to dismiss inefficient workers

and the union would resist this, demanding jobsecurity



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Sources of conflict

± Employees might demand shorter working hours,

longer vacation leave and more time off for training ± Employees might insist on stricter health and safety

controls which would be expensive for the company

± Employers demand loyalty to the firm whereas

employees see it as the individual right to change

jobs when the opportunity arises



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Features

It is a collective process

Establishes regular and and stable relationshipbetween the parties involved

It is a flexible and dynamic process

It is a method of partnership of workers in management

It is a give and take approach It is an attempt in achieving and maintaining discipline

in industry



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Subject matter of CollectiveBargaining

± The subject matter of CB is very wide

Rights and responsibilities of themanagement and of the trade union

Wages , bonus , production norms ,leaveretirement benefits and terms and conditionsof service

Grievance redressal procedureMethods and machinery for the settlement of

possible future disputes

Termination clause



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Bargaining Power

Power regulated the bargaining process:

± If one party has more power it will override theinterest of the other party

± Historically management has had more power

± Its only in the 1980s onwards that this power hasbeen challenged by unions



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Bargaining power

Power:

± Management's sources of power is their ownershipand/or control over the firm

± Workers power comes from their ability to withhold

labour collectively - strikes

± On an individual level workers hold very little power and its only in trade unions that they have power



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Bargaining Relationship

Establishing a bargaining relationship:

± Employment contract, whereby employer andemployee agree on wages and conditions of

employment

± Unions then demand recognition from management.

This formalizes management union relationship

± A bargaining relationship is established when

management and union formally agree to enter into

negotiations



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Bargaining styles

Distributive or Conjunctive bargaining

Integrative or cooperative bargaining Productivity Bargaining

Composite Bargaining



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Bargaining styles:

± Distributive bargaining: this is the mostcommon type

± Management and unions are in opposing positions

and gain for one is a loss for another

± Antagonism dominates the bargaining items ± These would be around wages and conditions of

employment



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Bargaining styles:

In distributive bargaining power is used as part of thestrategy and tactics on both side

Each party strives towards an outcome that isfavourable to its own side

Both parties are thus assessing strengths andweaknesses on both sides

Both parties are looking to how much they can pushthe other party

Each party assesses its ability to withstand beingpushed



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Bargaining styles:

Integrative Bargaining

± This is when both parties want a successfuloutcome and there is a genuine desire to solve aproblem

± For Eg : Decisions taken when the the entire industry isin threat Like Global Recession

± In integrative bargaining items are seen asproblems that need resolving

± Integrative bargaining strives for a win ±win situation

± Conflict is minimized



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Bargaining Styles

Productivity Bargaining± In this method, workers¶ wages and benefits are linked

to productivity.

± Initially, a standard productivity index is finalizedthrough negotiations.

± This index is not fixed at an exceptionally high level.

± Workers crossing the standard productivity norms will

get substantial benefits.± This method of bargaining helps in making the

workers realize the importance of raising productivityfor organizational survival and growth.



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Bargaining Styles

Composite Bargaining± Workers tend to argue that productivity bargaining

increases their workload. As a result, workers tend tofavour composite bargaining

± In this method, labour bargains for wages as usual.

± In addition, they also bargain for such issues that, if permitted Eg. Workers demand further equity in matters

relating to work norms, employment levels,manning standards, environmental hazards, sub-contracting clauses, etc.



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Bargaining Styles

± We see that workers are no longer solely interested inthe monetary aspects to the exclusion of work related

matters.

± Through composite bargaining, unions are able toprevent the dilution of their powers and ensure justiceto workers by putting certain limits on the freedom of employers.

± For the employer, this is the lesser evil whencompared to strikes and lockouts.



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CBA of Volkswgaen & I G Metall

Volkswagen and IG Metall agreed collective bargaining milestones

for the six traditional plants during their negotiations

The central element is a standard working time of up to 34 hours a

week without more pay.

A new, attractive profit sharing model for the workforce was

developed.

Production volumes for each of the plants have been determined

Safeguarding capacity utilization and thus jobs.

The envisaged term of the agreement is January 1, 2007 until the

end of 2011.



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Emerging Issues in CB

Performance based Bargaining

Women's issues

Job security

Productivity

Quality of Work life



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Collective Bargaining Outcomes:

± The outcome of a collective bargaining process is

an agreement

± There is usually an agreement to bargain regularly

over wages and other conditions of employment

± Agreement can stipulate a time factor to the

agreement, for e.g. wage increase for one year only

or for a number of years



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Outcomes

All agreement are enforceable by law.

All parties are bound to the terms andconditions set out in the agreement.

While parties cannot withdraw from and

agreement, clauses can be inserted to allow for

conditional withdrawal.



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The Milestones in IndustrialHarmony : TISCO

1934: Profit sharing given for the first time in India.

December 9, 1938: Labour Association registered in the name of Tata

Workers' Union. 1942: Tata Steel employees through representation of leaders of Tata

Workers' Union join Quit India movement.

January 8, 1956: Comprehensive Agreement between Tata Steel and

the Tata Workers' Union broke new ground in collective bargaining

and workers' participation in management. 1959: A new Agreement is signed between TWU and Tata Steel to

implement a new wage structure.

Agreements continue to strengthen bonds of industrial harmony in

1965 ,1970,1975,1999,2001

Cb Process 1

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