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Collective Bargaining

Collective bargaining is a method where negotiation and compromise are resulted in agreements, joint determination and regulation. In other words, the nature of collective bargaining is a process where the interaction talks place between employers and labour collective where liberal collectivist are favoured. Within Human Resource system a process through which an employee and their representative persuade and take part in decision making and collective bargaining is one the most frequently used mechanism.

The purpose of determining terms and conditions of employment and or regulating relations between them for workers organisation and employers or employer’s organisation are all negotiated and this is defined by the International Labour Office Convictions. The relationship between the parties to terms and conditions of employment and regulations are limited to subject matter by International Labour Office Convention. Collective bargaining is the dominant employee participation process which is arguable.

There are two types of rules where collective bargaining which tends to reach an agreement. First is substantive rule, here the terms and conditions are determined for employment, for example the pay scale or the annual holidays or the basic working hours in a week. This rule also includes which work to give according to grade of staff and called as Demarcation rule. Second is Procedural rule, here the method and procedures are determined, for example an example an issue discussion at particular in national level or company level. Normal negotiation cannot resolve any disagreements or disputes and to refer disputes at plant level to regional or national level arrangements possibly is there and this rule determines the arbitration arrangements for example probably a rule that disputes should refer to ACAS ( the Advisory Conciliation and Arbitration services).

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Over the past years, the evolution of collective bargaining was in different stages. Collective bargaining was established for skilled labour at the local level. The joint negotiations were encouraged at the industry level due to the influence of corporate system and this lead to the establishment of collective bargaining. “John Goodman (1984) has defined collective bargaining as a Process through which representatives of employers and of employee organizations act as the joint creators of the substantive and procedural rules regulating employment. In addition they frequently accept the main responsibility for interpreting, applying and enforcing the rules”

There are various types of functions in collective bargaining. First, market or economic function. In this function the price of the labour are decided by the employer and the employee will work as per the terms and conditions. Second decision-making function. In this function the collective bargaining allow the employees the opportunity to participate in taking decision about the policies of the organization. Third, governmental function. In this function the collective bargaining establishes the rule that governs the employment relationship. It is also called as the political process. It is like a constitution where both the parties have the power to ‘veto’ to control the actions of each other.

The agreement is made between the employer and the employee with the two types of the rules. Those are substantive rules and procedural rules. Substantive rules are the rule that regulates the terms and conditions of employment. Procedural rules are rules under which the negotiation over the terms and conditions are made. These rules help in improving and maintaining the employment relationship between the employer and the employee. There are also some strategies like avoiding problems, using kind words, compromising used for maintaining the employment relationship.

Ref: John Leopold, 2002, Human Resources in Organizations’, Financial Times/ Prentice Hall, England.

There are two approaches of collective bargaining which plays an important role in maintaining the employment relationship. First approach, distributive bargaining. In this type one party enjoys the benefit, profits, and gains with the expenses of the other party. Here the opposite parties can use the power to achieve their tasks. So, it becomes a problem when one side refuses to accept the compromise or the benefits given to them. The second approach, integrative bargaining. It seeks in mutual gains in areas of the common interest with the problem solving approach. For the success of integrative bargaining both the parties should share the information between each other and they should trust each other. So, compromise and problem solving plays an important role in maintaining employment relationship.

Collective bargaining is useful in many ways in the organization. It helps in the downward communication where the communication takes place from the managers to employees. It takes place in formal written reports such as employee reports, house journals etc. It helps in the upward problem solving where the greater opportunities are given to the employee to contribute to the discussions relating to their work. It also helps in task participation and team working where the employees are expected to extend their tasks at their work. It also helps in financial involvement where the success of the enterprise is linked to the individual rewards.

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There are also some strategies used in the collective bargaining and they are by ignoring the conflict, many problems can be avoided. By using kind and soft words, the problem or the conflict can be smoothened. By compromising also many problems can be solved. So, these are some of the ways through which the employment relationship can be controlled through collective bargaining.

The controlling of the employment relation can be done by introducing the new rules in the enterprise such as like giving standard rate of pay for the employees who will benefit them. Employment relationship can also be controlled by modifying the goals such as to avoid the conflict between the employer and the employee.

The person on behalf of the management and a person on behalf of the trade union conduct the meeting at different level to negotiate the problem. Those levels are national or industry wide level and company level or local level. The negotiations which are conducted at national level are known as centralized bargaining and the negotiations which are conducted at the company level are known as decentralized bargaining. Centralized bargaining is found in most of the large public sector companies and multi site private companies, with the help of this approach the company lay down nationally applicable rule of conduct for the employee relations and also payment conditions. Decentralized bargaining helps in improving the local requirements, demands and terms and conditions.

Collective bargaining plays an important role in solving the conflicts or the problem that is arising. Collective bargaining has got the power to bring the change in the enterprise independently even though both the parties have power to influence each other. Collective bargaining brings about the trust in the relationship with each other. It also helps in following the rules and regulations. Conflicts arising can also be solved by following these rules. Collective bargaining plays a very important role in managing the employer-employee relationship. It helps in forming the trade unions and also in involving the negotiation process incase of any disputes.

There has been a recent developments in collective bargaining and they are single union deals and single table bargaining. Single union deal is like an agreement where the management allows only one trade union to represent the employees. Single union agreements may also have other agreements and those agreements are pendulum arbitration, no strike agreements and flexibility agreements. Pendulum arbitration is also called as final offer arbitration. It is a method where the third party involves when there is an disagreement between two parties and this bargaining is done in good faith to settle the conflicts between each other. Single table bargaining also gives similar benefits to the employer as single union deals while marinating a multi-union site. Here the negotiation process takes place between the unions. Flexible agreements are agreements that are done to modify the traditional working practices and also the flexibility in the function that are to be carried out in the working place.

There are lot of benefit from collective bargaining, there are many reasons for the decline of collective bargaining in recent days. It is because the power and the control of the trade union are in the hands of governments and also because of Act of employment legislation to control the power of trade unions. It is also because the focus is now a day shown on each individual at the work. It is also because of the growth of new managerial statistics. It is mainly because of the failure of the trade unions to develop effective strategies in developing the employer employee relationship. It is also because some privatised companies do not adopt collective bargaining and thus it is completely abandoned in major companies. It is because of these reasons the collective bargaining has fallen down to a greater extent in past years. But, Human resource management plays an important role in encouraging flexible working arrangements and in development of the human resource and in paying to the employee for their performance.


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