Human Resources/INDUSTRIAL RELATIONS
“Collective bargaining should move from a ‘Win- lose Strategy’ to a ‘win-win Strategy’ ” - Explain how this can be feasible. Also analyse the patterns and problems of collective bargaining in India and suggest suitable measures to overcome it.
Good relations between the employer and employees are essential for the success of industry. In order to maintain good relations, it is necessary that industrial disputes are settled quickly and amicably. One of the efficient methods of resolving industrial disputes and deciding the employment conditions is Collective Bargaining. Industrial disputes essentially refer to differences or conflicts between employers and employees.
Collective Bargaining is a process in which the management and employee representatives meet and negotiate the terms and conditions of employment for mutual benefit. Collective bargaining involves discussion and negotiation between two groups as to the terms and conditions of employment. It is termed Collective because both the employer’s negotiators and the employees act as a group rather than individuals. It is known as Bargaining because the method of reaching an agreement involves proposals and counter-proposals, offers and counter offers. There should be no outsiders involved in the process of collective bargaining.
According to Walton and McKersie the process of Collective Bargaining consists of four types of activities:
1) Distributive Bargaining: It involves haggling over the distribution of surplus. Various activities involved in this activity are wages, salaries, bonus and other financial issues. In this activity, both the parties face a win/lose situation.
2) Integrative Bargaining: Also known as Interest-Based Bargaining, issues which are not damaging to either party are discussed. It is a negotiation strategy in which both the parties collaborate to find a win-win solution to their problems. This strategy focuses on developing mutually beneficial agreements based on the interests of the disputants. Issues brought up may be better job evaluation procedures, better performance appraisal methods or training programmes etc.
3) Attitudinal structuring: Attitudinal structuring refers to efforts by negotiators to shape their opponents' perceptions about the nature of the issues to be negotiated. By cultivating an atmosphere of friendliness, mutual respect, trust, and cooperation, negotiators can encourage their opponents to view issues largely in integrative terms and participate in joint problem solving. This activity involves shaping and reshaping some perceptions like trust/distrust, friendliness/hostility, co-operative/non-cooperative between the labour and management. When there is a backlog of bitterness between both the parties, attitudinal structuring is required to maintain smooth and harmonious industrial relations.
4) Intra-Organisational Bargaining: It is a type of manoeuvring to achieve consensus among the workers and management. Even within the union there may be differences between different groups as may be the case with the management. Intra-organisational consensus is required for the smooth acceptance of the outcome of Collective Bargaining.
Objectives of Collective Bargaining:
1. To maintain cordial relations between the employer and employees.
2. To protect the interests of the workers through collective action and by preventing unilateral actions from being taken by the employer.
3. To ensure the participation of trade unions in industry.
4. To avoid the need for government intervention as collective bargaining is a voluntary collective process.
5. To promote Industrial democracy.
Characteristics of Collective Bargaining:
1. It is a group or collective action as opposed to individual action. It is initiated through the representatives of the employees.
2. It is a flexible and dynamic process where-in no party adopts a rigid attitude.
3. It is a continuous process, which provides a mechanism for continuous negotiations and discussions between management and the trade unions.
4. It is a voluntary process without any third-party intervention. Both workers and management voluntarily participate in the negotiations, discuss and arrive at a solution. That is why it is known as a bipartite process where workers’ representatives and management get an opportunity for clear, face-to-face communication.
5. It ensures industrial democracy at the workplace; it is a self-run government in action.
6. It is a two-way process. It is a mutual give and take rather than a take home all method of arriving at a solution to a dispute.
Process of Collective Bargaining
Preparation for Negotiation
Identifying issues for Bargaining
Ratification of Agreement
Implementation of Agreement
1. Preparation for Negotiation: Preparation for negotiation in Collective Bargaining is as important as the negotiation process itself. Upto 83% of the outcomes are influenced by pre-negotiation process. Such preparation is required for both management as well as the union representatives. From the management’s point of view, pre-negotiation preparation is required as:
Management should decide when and how to open the negotiations/dialogue.
Management must choose the representatives to negotiate at the negotiation table.
Draft for likely decisions should be prepared in advance so that the final agreement draft can be prepared as soon as the negotiation process is over.
From the employees’ side also, preparation is required for the following reasons:
The union should collect the information related to the financial position of the company and their ability to pay the employees.
The union must also be aware of the various practices followed by other companies in the same region or industry.
The union must assess the attitudes and expectations of the employees over concerned issues so that the outcome of negotiations does not face any resistance from them.
2. Identifying issues for Bargaining: The second step in bargaining process is the determination of issues which will be taken up for negotiations. The different types of issues are:
Wage-related issues: Include wage or salary revision, allowance for meeting increased cost of living like Dearness Allowance (D.A), financial perks, incentives etc.
Supplementary economic benefits: These include pension plans, gratuity plans, accident compensation, health insurance plans, paid holidays etc.
Administrative issues: Include seniority, grievance procedures, employee health and safety measures, job security and job changes.
The wage and benefits issues are the ones which receive the greatest amount of attention on the bargaining table.
3. Negotiation: When the first two steps are completed, both parties engage in actual negotiation process at a time and place fixed for the purpose. There a re two types of negotiations:
• Boulwarism: In this method, the management themselves takes the initiative to find out through comprehensive research and surveys the needs of the employees. Based on the analysis of the findings, the company designs its own package based on the issues to be bargained. Thereafter, a change is incorporated only when new facts are presented by the employees or their unions.
• Continuous Bargaining: Involves parties to explore particular bargaining problems in joint meetings over a long period of time, some throughout the life of each agreement. The basic logic behind this method is that all persistent issues can be addressed through continuous negotiation over a period of time. The success of negotiations depends on the skills and abilities of the negotiators.
4. Initial negotiated agreement: When two parties arrive at a mutually acceptable agreement either in the initial stage or through overcoming negotiation breakdown, the agreement is recorded with a provision that the agreement will be formalized after the ratification by the respective organizations.
5. Ratification of agreement: Ratification of negotiated agreement is required because the representatives of both the parties may not have ultimate authority to decide various issues referred to for collective bargaining. The ratification of agreement may be done by the appropriate manager authorized for the purpose in the case of management, or trade executives in the case of the employees. Ratification is also required by the Industrial Disputes Act. It is important that the agreement must be clear and precise. Any ambiguity leads to future complications or other such problems.
6. Implementation of agreement: Signing the agreement is not the end of collective bargaining, rather it is the beginning of the process when the agreement is finalized, it becomes operational from the date indicated in the agreement. The agreement must be implemented according to the letter and spirit of the provisions made by the agreement agreed to by both parties. The HR manager plays a crucial role in the day-to-day administration implementation of the agreem
5. Define Bargaining Agent. Union or individual certified through a secret ballot process to be the exclusive representative of all the employees in a bargaining unit or group; also called bargaining representative
• Bargaining Techniques
• There is no formula for effective negotiations, but there are many broad issues about which the unionbargaining committee should be in agreement with respect to meetings with the management committee.Control of the agendaControl of the agenda is an exercise of power. In bargaining sessions with the employers representatives, theunion must not concede control of the agenda to the employer. Control of bargaining sessions may be eitherexplicit or implicit, and the union committee should take care not to lose such control either way. One concretemethod for maintaining control of the agenda is to make sure that the union speaks through a single, primaryspokesperson. Focusing union power through a single point transmits the appearance of control and power.Ground rules
• One method for assuring some level of control over the agenda of bargaining is to make sure that the parties arein agreement over procedural matters that can affect the substance of bargaining. It is common for bargainingground rules to be negotiated prior to the substance of the collective bargaining agreement, either in preliminarymeetings with the employer or at the earliest bargaining sessions. Some of the matters that should be addressedas part of the procedural ground rules include: Time, place and frequency of bargaining sessions. Methods of communications between sessions, particularly when the next session is not scheduled. Release time and payment of wages for members of the union bargaining committee. Methods for maintaining an official record of the sessions, if a joint record is to be kept. An agreement that all agreements are contingent upon acceptance of the entire package. Clarification of the authority of the bargaining committee. Procedures for the exchange of proposals. Restrictions on or procedures concerning external communication about the progress of negotiations. Order of negotiations, including the negotiation of non-economic and economic provisions.
• DocumentationNo matter what procedures exist for maintaining an official record of the negotiations with the employer, theunion must have its own mechanisms for the recording of all substantive discussions occurring in bargainingsessions. All committee members, with the possible exception of the chief spokesperson, should take notesduring bargaining sessions. One member should be given the primary responsibility for maintaining the unionrecord. One of the values of a caucus is to gain the benefit from multiple records. No matter how effective theofficial recorder is, there will be confusion in the process of negotiations. If other members have taken notes,those members will be in a position to help assure that the official record for the union is complete and accurate.The committee should periodically review the notes to assure that no significant errors or omissions have creptinto the record.ArgumentationNot everything that takes place in discussions with the employers committee is necessarily rational, but theunion should have solid arguments prepared to explain and justify its position on every issue introduced innegotiations. Techniques of argumentation and logic are useful in negotiations for three distinct purposes. Oneis the ability to explain the proposals to the management committee. The second is to justify the need for theproposed language. The third is to persuade the employers representatives of the merits of the unions position.Explanation, justification and persuasion are different concepts. The explanation of any proposal should be a rational and objective discussion of the problems giving rise to the unions proposals. Any proposal put on thetable by the union was placed there for a reason. The union committee should be prepared to define the problemthat gave rise to the proposal and the solution for that problem put forward by the union. The justification ofthat proposal goes one step further. Even if the company understands the issue and the solution addressed by theunions proposal, it is important for the union to justify the need for its proposed change in the status quo.Finally, the union must be prepared to persuade the company that the solution put forward by the union is asuperior solution to the identified problem than any other proposed change put forward.CaucusAn important tactic in the collective bargaining process is the effective use of a caucus, or opportunity for theunion to withdraw temporarily from direct negotiations with the employer. A caucus can and should be used ina number of different situations to make sure that negotiations are progressing in an appropriate manner. Someof the major reasons for the union to call a caucus during negotiations are discussed in this section.
One of the most important reasons to call a caucus is to resolve real or apparent conflict within the unionbargaining committee. If there are disagreements about issues or tactics within the committee, thosedisagreements should be resolved away from the bargaining table. Whenever it appears that committeemembers are advocating conflicting positions, the union committee should call for a caucus. Internal conflictshould be resolved away from the bargaining table, not in the presence of management.A caucus can also be used as a means of regaining control of the bargaining agenda and controlling the pace ofnegotiations. If emotions get out of hand, a break in the tension may be necessary. If sessions become toochaotic it may be wise to interrupt the flow. A caucus may also be used to increase the pace of negotiations. If asession moves off course into discussions unrelated to the substance of negotiations, a break in the process maybe a useful mechanism for refocusing attention.61. Discuss various Wages Differentials.Types of Wage DifferentialsEven a cursory glance at any aspect of the wage structure as mentioned earlier with bring to notice abewildering diversity in wage rates, not in the wages for different jobs but also in the wages for thesame job. These differentials can be grouped to facilitate comprehension under the following heads :(i) occuptional/skill wage differentials(ii) industrial wage differentials,(iii) area or geographical wage differentials,(iv) interplant/intra-plant wage differentials,(v) sex wage differentials,(vi) Race/caste/religion wage differentials,(vii) Union/non-union wage differentials,(viii) Age/seniority wage differentials.These are some the types of wage differentials and one could expand the list by adding many more.However, one should be cautious enough in any discussion on wage differentials to take note of theoverlapping nature of some of these differentials.
Give the issues in Collective Bargaining.COLLECTIVE BARGAINING ISSUESLabor unions were formed to help workers achieve common goals in the areas of wages, hours, workingconditions, and job security. These issues still are the focus of the collective bargaining process, though somenew concepts have become the subjects of negotiations. Table 1 lists the issues most often negotiated inunion contracts.THE SETTLEMENT PROCESSUnion contracts are usually bargained to remain in effect for two to three years but may cover longer or shorterperiods of time. The process of negotiating a union contract, however, may take an extended period of time.Once the management and union members of the negotiating team come to agreement on the terms of thecontract, the union members must accept or reject the agreement by a majority vote. If the agreement isaccepted, the contract is ratified and becomes a legally binding agreement remaining in effect for the specifiedperiod of time.If the union membership rejects the terms of the agreement, the negotiating teams from labor andmanagement return to the bargaining table and continue to negotiate. This cycle can be repeated severaltimes. If no agreement can be reached between the two teams, negotiations are said to have "broken down,"and several options become available.Mediation is usually the first alternative when negotiations are at a stalemate. The two parties agree voluntarilyto have an impartial third party listen to the proposals of both sides. It is the mediators job to get the two sidesto agree to a settlement. Once the mediator understands where each side stands, he or she makesrecommendations for settling their differences. The mediator merely makes suggestions, gives advice, andtries to get labor and management to compromise on a solution. Agreement is still voluntary at this point. The
mediator has no power to force either of the parties to settle the contract, though often labor and managementdo come to agreement by using mediation.If mediation fails to bring about a settlement, the next step can be arbitration, which can be either compulsoryor voluntary. Compulsory arbitration is not often used in labor-management negotiations in the United States.Occasionally, however, the federal government requires union and management to submit to compulsoryarbitration. In voluntary arbitration, both sides agree to use the arbitration process and agree that it will bebinding. As in mediation, an impartial third party serves in the arbitration process. The arbitrator acts as ajudge, listening to both sides and then making a decision on the terms of the settlement, which becomeslegally binding on labor and management. Ninety percent of all union contracts use arbitration if the union andmanagement cant come to agreement
.SOURCES OF POWERIf the collective bargaining process is not working as a way to settle the differences between labor andmanagement, both sides have weapons they can use to bolster their positions. One of the most effective uniontactics is the strike or walkout. While on strike, employees do not report to work and, of course, are not paid.Strikes usually shut down operations, thus pressuring management to give in to the unions demands. Someemployees, even though allowed to belong to unions, are not allowed to strike. Federal employees fall into thiscategory. The law also prohibits some state and municipal employees from striking.During a strike, workers often picket at the entrance to their place of employment. This involves marching,carrying signs, and talking to the media about their demands. The right to picket is protected by as long as it does not involve violence or intimidation. Problems sometimes arise during strikesand picketing when management hires replacement workers, called scabs or strikebreakers, whoCollective Bargaining IssuesWages Hours Working Conditions Job SecurityRegular Compensation Regular Work Hours Rest Periods SeniorityOvertime Compensation Overtime Work Hours Grievance Procedures EvaluationIncentives Vacations Union Membership PromotionInsurance Holidays Dues Collection LayoffsPensions Recallsneed to cross the picket line in order to do the jobs of the striking workers.The boycott is another union strategy to put pressure on management to give in to the unions demands.During a primary boycott, not only union members but also members of the general public are encouraged torefuse to conduct business with the firm in dispute with the union.Though it is rarely done, management may use the lockout as a tactic to obtain its bargaining objectives. In thissituation, management closes down the business, thus keeping union members from working. This putspressure on the union to settle the contract so employees can get back to their jobs and receive their wages.Management sometimes uses the injunction as a strategy to put pressure on the union to give in to itsdemands. An injunction is a court order prohibiting something from being done, such as picketing, or requiringsomething to be done, such as workers being ordered to return to work.GRIEVANCE PROCEDURESOnce a collective bargaining agreement is settled and a union contract is signed, it is binding on both the unionand management.