Collective Bargaining: Meaning, Features, Process, Advantages, and Disadvantages

Meaning of Collective Bargaining

Collective bargaining refers to the process of negotiation between employers and groups of employees with regard to terms of employment. It takes place among the management of the company and trade union representing the group of workers to arrive at a mutual decision. This is termed collective bargaining as here both the parties eventually agree to a decision which is taken after a lot of discussions and negotiations. The employment conditions include working conditions, workplace rules, working hours, shift length, base pay, and overtime pay, work holidays, vacation time, sick leave, health care benefits, and benefits at the time of retirement. 

The result of collective bargaining is known as collective agreement which works like a labor contract in between employer and labor unions. Collective bargaining is an effective tool for resolving the industrial disputes by holding a meeting among parties. However, both the parties need to avoid a rigid attitude as they need to negotiate for resolving the differences. They can reach a common agreement peacefully without the assistance of any third party.

Features of Collective Bargaining 

Various features of collective bargaining are as discussed in points given below: –

  1. Group action: Collective bargaining is a group or collective process where both the party’s bargain for a common interest and benefits. No individual action takes place here. Both of the parties are represented by their groups who negotiate with one another to arrive at an agreement which is acceptable to both of them.
  2. Continuous process: It is a continuous process which does not end with one agreement. Collective bargaining is a day-to-day process that stabilizes the relationship in between the management and trade unions. 
  3. Equal strength: There is an equal bargaining strength with both of the parties across the table. Management and workers negotiate with one another from a position of equal strength. 
  4. Logical process: Collective bargaining is a logical process involving a series of steps in systematic order. The charter of demands is represented initially by trade unions, then the negotiations take place and finally the agreement is reached which defines the terms and conditions of employment. 
  5. Bipartite process: It is a two-way process in which both the parties collectively take some action. There is no involvement of third party in collective bargaining process. Management and workers negotiate over issues directly face-to-face across the table. 
  6. Voluntary: It is a voluntary process in which management and worker come out of their wish for discussions and negotiations. There is no compulsion on any of them to attend the bargaining table.   
  7. Flexible but not rigid: In collective bargaining, management and workers need to adopt a flexible approach throughout the bargaining process. No result can be achieved if they are rigid while negotiation. 
  8. Dynamic nature: Collective bargaining is relatively a new concept which is expanding and changing day by day. The way in which parties discuss and arrive at a common point keeps on changing. 
  9. Common point: This is the special feature of collective bargaining process in which they eventually reach a middle point acceptable to both parties. They start their discussions from completely divergent points finally establishing a common point. 

Process of Collective Bargaining 

There are five steps involved in the process of collective bargaining followed by both parties in order to reach an amicable solution. 

  1. Preparation: The first step of collective bargaining involves composition of negotiation team. This team is composed of representatives of both the parties having proper knowledge and negotiation skills. Each of the member should be well-versed with issues which they are going to raise. They should determine the reason for doing negotiation by having a proper understanding of main issues. 
    Management should prepare a change proposal needed in employment terms and be ready with statistical figures for justifying their stand. On the other hand, trade union should also prepare their charter of demands to be presented in front of management team. 
  2. Discuss: Now in this step, the ground rules are decided by parties which will guide the negotiations. The discussion is lead by representative from management team who is known as prime negotiator. Here the issues for which the meeting is held are identified. There are two types of negotiation process which are piecemeal negotiation and total approach.
    Piecemeal negotiation is one in which issues are taken one by one whereas in total approach all issues are negotiated considering the total effect.  
  3. Propose: In this stage, the conversation is initiated by chief negotiator via an opening statement. The initial demands are put forth by both the parties. This session is also termed as brainstorming as here each party give their opinions thereby leading to arguments and counter arguments. 
  4. Bargain: It is a stage where negotiation begins among the parties trying to win over one another. The negotiation may continue for many days till a final agreement is reached by parties. Sometimes an amicable solution is reached by parties soon but at times even third party intervenes in the form of adjudication to settle down the dispute. 
  5. Settlement: This is the final stage of collective bargaining process where both the parties agree for a common solution to problem. A mutual agreement is created among management and workers and is signed by both of them for a universal acceptance. 

Advantages of Collective Bargaining

The advantages of collective bargaining can be well-understood as given below: –

  1. Give workers a larger voice: Collective bargaining provides strength to workers by binding them together into a large group. They are able to create a louder voice which eventually leads to mutually beneficial outcome. On the other hand, it become difficult for workers to negotiate with their employer in case if thy are individuals. The workers who do not have their unions are faced with “take it or leave it” type of offers.
  2. Enhance worker’s quality of life: It enables workers in improving their quality of life. Collective bargaining agreements lead to raise the pay level of workers and various other type of benefits. In addition to this, focus is also made on improving safety and working conditions of employees. All this result in offering a valid CBA to workers thereby enjoying a higher quality of life.
  3. Offer security and stability: Collective bargaining provide employees a security of work tenure as they do not need to worry about their unlawful termination. They have a well-defined support system as well as a team of representatives who will fight for the rights of employees. Businesses are also able to project expenses for financing their operations and compensation benefits thereby eventually stabilizing them. 
  4. Prevent employees strike: Collective bargaining avoids disputes in between the employer and employees which often leads to strikes. The workers have their representatives who work for their benefits and come with a mutual agreement. In absence of this process, the issues in between the parties may go on rising which hampers the business operations. 
  5. Creates a binding result: It binds both the parties together where they are bound to a collective bargaining agreement. This agreement is a legal standard that is used a part of legal defense. Both parties need to follow the stipulations set forth in contract and if any of them is not doing so then may be held liable by injured party. This provides extra safety to employees and employer for defending their positions.  
  6. Is a transparent process: It is a transparent process in which all discussions are kept in written form for using as a reference material. Whatever is transpired over the table in between the parties can be easily known. Such type of accountability level may not be available in other workplaces. 

Disadvantages of Collective Bargaining

Various limitation of collective bargaining is as discussed below: –

  1. Prone to inequality: Collective agreement may lead to inequality among the parties in which either of them may get less of what they deserve. If representation of workers is weak, they may not get enough employment benefits which they deserve. In the same way if employer representation is weak, business will lose a substantial amount of money due to excessive benefits and over-compensation.  
  2. Requires government duties: The process of collective bargaining require governance duties to be performed by representative. Such duties are carried out of the regular work duties which means they need to take more time away from their partners, children’s and parents. Moreover, these duties are unpaid sometimes due to which peoples may speed up the negotiation process resulting in a poor contract outcome. 
  3. Can be a financial burden: Whenever a person becomes a member of union, there are various dues which need to be paid. These members do not pay their dues at some occasions. As a result of this, the paying members may eventually end up paying for those dues. 
  4. Influence relationship between members: Collective bargaining may not always result in grouping of workers.  Many times, all workers will not agree to certain issues which are agreed to by union members in agreement. The divisions and differences may surface among workers due to unionization which were not present prior to reaching an agreement. As a result of this, it will turn into fraction of relationships of those in union group.