Significance of Collective Bargaining

In an Industrial Establishment to solve the problems arising at the plant or industry level the
need of the collective bargaining is eagerly felt. Through negotiations the solution to the
common problems can be directly found out between the management and workers and here
the collective bargaining plays significant role and its scope is very great. In so far the
determination of terms and conditions of employment are concerned, one important
consequence of collective bargaining has been that it has enabled trade unions to participate
in the decision making process regarding hours of work, wages, working conditions etc.
Earlier the employer used to decide these issues unilaterally, but now they have become
subjects of bilateral negotiations with the advent of collective bargaining. Thus an element of
industrial democracy has been introduced by collective bargaining in the field of industrial
and labour management.

Collective bargaining is really useful from the stand point of management, trade unions and
workers. Among workers it develops a sense of responsibility and self respect if it works well
and thus contributes to a great extent to employee’s morale and productivity. It opens up
channels of communication between top and bottom of an undertaking which is difficult
otherwise. Further the management’s freedom of action is restricted because the
establishment loses its unilateral discretion regarding bargainable issues even when
management’s security is intact and thereby learns a new code of behavior by conceiving of
the union as a method of dealing with the employees not an obstacle to such dealing.

The significance of collective bargaining from the national stand point is that it helps in
creating peaceful industrial climate if properly conducted, thereby increases the pace of the
country’s efforts towards social and economic development. Collective bargaining as an
instrument of industrial peace has no parallel. It extends the democratic principle from the
political to the industrial field and is an important aspect so far as the labour and management
relations are concerned.
Functions of Collective Bargaining

The functions of the collective bargaining are as under:

1. Adjustment and balance of power between the management and union when they are
in conflict with each other. This function of the system of collective bargaining is one
of the methods of effecting social change.

2. When two parties are in a state of continuous conflict, it helps in bringing about
compromise, truce or agreement for establishing peace between the parties. Industrial
truce results when two parties to a dispute arrive at a compromise or agreement
without resorting to strike or lock-out. Such truce may be stable or temporary. It
depends upon the parties as to what extent one party is willing to sacrifice and the
other party is willing to accept the demands, or terms. Both the parties are morally
bound to implement the agreement once it is signed.

3. For establishing industrial jurisprudence it analyses the rights and duties of conflicting
parties.
4. It also adjusts labour management disputes apart from performing functions like
negotiation, administration and enforcement of agreements by which union
management relationship is governed.

COLLECTIVE BARGAINING PROCESS

The collective bargaining process begins when the majority of workers of an organization
vote to be represented by a specific union. The National Labor Relations Board (see Labor
Unions) then certifies the union. At this point, the management of the organization must
recognize the union as the collective bargaining agent for all the employees of that
organization. Once this part of the process is completed, collective bargaining can begin.

Bargaining always takes place between labor and management, but negotiations can include
more than one group of workers and more than one employer. Single-plant, single-employer
agreements are the most common. However, if an employer has more than one plant or work
site, multiplant, single-employer agreements can be bargained. Several different union groups
representing the workers of the same employer can use coalition bargaining. Industry wide
bargaining involves one national union bargaining with several employers of a specific
industry.
Many different negotiation styles can be used when union and labor representatives sit down
at the bargaining table. The two basic modes of bargaining are traditional bargaining and
partnership bargaining, though there are many variations of each style.