Collective Bargaining

Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firms and workers representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation. ILO has defined collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another. Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment. It is called collective because both the employer and the employee act as a group rather than as individuals. It is known as bargaining because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations. Thus collective bargaining:

is a collective process in which representatives of both the management and employees participate. is a continuous process which aims at establishing stable relationships between the parties involved. not only involves the bargaining agreement, but also involves the implementation of such an agreement.

Significance of Industrial Relations Maintenance of harmonious industrials relations is on vital importance for the survival and growth of the industrials enterprise. Good industrial relations result in increased efficiency and hence prosperity, reduced turnover and other tangible benefits to the organization. The significance of industrial relations can be summarized as below: 1. It establishes industrial democracy: Industrial relations means settling employees problems through collective bargaining, mutual cooperation and mutual agreement amongst the parties i.e., management and employees unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization. 2. It contributes to economic growth and development: Good industrial relations lead to increased efficiency and hence higher productivity and income. This will result in economic development of the economy. 3. It improves morale of he work force: Good industrial relations, built-in mutual cooperation and common agreed approach motivate one to contribute ones best, result in

higher productivity and hence income, give more job satisfaction and help improve the morale of the workers. 4. It ensures optimum use of scare resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage. 5. It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in banning of the unfair practices being used by employers or trade unions. 6. It prompts enactment of sound labour legislation: Industrial relations necessitate passing of certain labour laws to protect and promote the welfare of labour and safeguard interests of all the parties against unfair means or practices. 7. It facilitates change: Good industrial relations help in improvement of cooperation, team work, performance and productivity and hence in taking full advantages of modern inventions, innovations and other scientific and technological advances. It helps the work force to adjust themselves to change easily and quickly Causes of Poor Industrial Relations Perhaps the main cause or source of poor industrial relations resulting in inefficiency and labour unrest is mental laziness on the part of both management and labour. Management is not sufficiently concerned to ascertain the causes of inefficiency and unrest following the laissez-faire policy, until it is faced with strikes and more serious unrest. Even with regard to methods of work, management does not bother to devise the best method but leaves it mainly to the subordinates to work it out for themselves. Contempt on the part of the employers towards the workers is another major cause. However, the following are briefly the causes of poor industrial relations: 1. Mental inertia on the part of management and labour; 2. An intolerant attitude of contempt of contempt towards the workers on the part of management. 3. Inadequate fixation of wage or wage structure; 4. Unhealthy working conditions; 5. Indiscipline; 6. Lack of human relations skill on the part of supervisors and other managers; 7. Desire on the part of the workers for higher bonus or DA and the corresponding desire of the employers to give as little as possible; 8. Inappropriate introduction of automation without providing the right climate;

9.

Unduly heavy workloads;

10. Inadequate welfare facilities; 11. Dispute on sharing the gains of productivity; 12. Unfair labour practices, like victimization and undue dismissal; 13. Retrenchment, dismissals and lock-outs on the part of management and strikes on the part of the workers; 14. Inter-union rivalries; and 15. General economic and political environment, such as rising prices, strikes by others, and general indiscipline having their effect on the employees attitudes. Objectives of Industrial Relations 1. To bring better understanding and cooperation between employers and workers. 2. To establish a proper channel of communication between workers and management. 3. To ensure constructive contribution of trade unions. 4. To avoid industrial conflicts and to maintain harmonious relations. 5. To safeguard the interest of workers and the management. 6. To work in the direction of establishing and maintaining industrial democracy. 7. To ensure workers participation in decision-making. 8. To increase the morale and discipline of workers. 9. To ensure better working conditions, living conditions and reasonable wages. 10. To develop employees to adapt themselves for technological, social and economic changes. 11. To make positive contributions for the economic development of the country. Scope The scope of industrial relations includes all aspects of relationships such as bringing cordial and healthy labour management relations, creating industrial peace and developing industrial democracy. The cordial and healthy labour management relations could be brought in by safeguarding the interest of the workers; by fixing reasonable wages; by providing good working conditions;

by providing other social security measures; by maintaining healthy trade unions; by collective bargaining.

The industrial peace could be attained by setting industrial disputes through mutual understanding and agreement; by evolving various legal measure and setting up various machineries such as Works Committee, Boards of Conciliation, Labour Courts etc.

The industrial democracy could be achieved by allowing workers to take part in management; and by recognition of human rights.

Approaches to Industrial Relations Industrial conflicts are the results of several socio-economic, psychological and political factors. Various lines of thoughts have been expressed and approaches used to explain his complex phenomenon. One observer has stated, An economist tries to interpret industrial conflict in terms of impersonal markets forces and laws of supply demand. To a politician, industrial conflict is a war of different ideologies perhaps a class-war. To a psychologist, industrial conflict means the conflicting interests, aspirations, goals, motives and perceptions of different groups of individuals, operating within and reacting to a given socio-economic and political environment. Psychological approach According to psychologists, problems of industrial relations have their origin in the perceptions of the management, unions and rank and file workers. These perceptions may be the perceptions of persons, of situations or of issues involved in the conflict. The perceptions of situations and issues differ because the same position may appear entirely different to different parties. The perceptions of unions and of the management of the same issues may be widely different and, hence, clashes and may arise between the two parties. Other factors also influence perception and may bring about clashes. The reasons of strained industrial relations between the employers and the employees can be understood by studying differences in the perception of issues, situations and persons between the management groups and labour groups. The organizational behavior of inter-groups of management and workers is of crucial importance in the pattern of industrial relations. The group-dynamics between the two conflicting groups in industrial relations tend to shape the behavioural pattern. Sociological approach Industry is a social world in miniature. The management goals, workers attitudes, perception of change in industry, are all, in turn, decided by broad social factors like the culture of the institutions, customs, structural changes, status-symbols, rationality, acceptance or resistance to change, tolerance etc. Industry is, thus inseparable from the society in which it functions. Through the main function of an industry is economic, its social consequences are also important such as urbanization, social mobility, housing and transport problem in industrial areas, disintegration of family structure, stress and strain, etc. As industries develop, a new industrialcum-social pattern emerges, which provides general new relationships, institutions and behavioural pattern and new techniques of handling human resources. These do influence the development of industrial relations.

Human relations approach Human resources are made up of living human beings. They want freedom of speech, of thought of expression, of movement, etc. When employers treat them as inanimate objects, encroach on their expectations, throat-cuts, conflicts and tensions arise. In fact major problems in industrial relations arise out of a tension which is created because of the employers pressures and workers reactions, protests and resistance to these pressures through protective mechanisms in the form of workers organization, associations and trade unions. Through tension is more direct in work place; gradually it extends to the whole industry and sometimes affects the entire economy of the country. Therefore, the management must realize that efforts are made to set right the situation. Services of specialists in Behavioural Sciences (namely, psychologists, industrial engineers, human relations expert and personnel managers) are used to deal with such related problems. Assistance is also taken from economists, anthropologists, psychiatrists, pedagogists, tec. In resolving conflicts, understanding of human behavior both individual and groups is a pre-requisite for the employers, the union leaders and the government more so for the management. Conflicts cannot be resolved unless the management must learn and know what the basic what the basic needs of men are and how they can be motivated to work effectively. It has now been increasingly recognized that much can be gained by the managers and the worker, if they understand and apply the techniques of human relations approaches to industrial relations. The workers are likely to attain greater job satisfaction, develop greater involvement in their work and achieve a measure of identification of their objectives with the objectives of the organization; the manager, on their part, would develop greater insight and effectiveness in their work. Principle of Good Industrial Relations The willingness and ability of management and trade unions to deal with the problems freely, independently and with responsibility. Recognition of collective bargaining. Desirability of associations of workers and managements with the Government while formulating and implementing policies relating to general economic and social measures affecting industrial relations. Fair redressal of employee grievances by the management Providing satisfactory working conditions and payment of fair wage. Introducing a suitable system of employees education and training. Developing proper communication system between management and employees. To ensure better working conditions, living conditions and reasonable wages. To develop employees to adapt themselves for technological, social and economic changes. To make positive contributions for the economic development of the country.

Role of state in industrial relations

In recent years the State has played an important role in regulating industrial relations but the extent of its involvement in the process is determined by the level of social and economic development while the mode of intervention gets patterned in conformity with the political system obtaining in the country and the social and cultural traditions of its people. The degree of State intervention is also determined by the stage of economic develop. For example, in a developing economy like ours, work-stoppages to settle claims have more serious consequences than in a developed economy and similarly, a free market economy may leave the parties free to settle their relations through strikes and lockouts but in other systems varying degrees of State participation is required for building up sound industrial relations. In India, the role played by the State is an important feature in the field of industrial relations and State intervention in this area has assumed a more direct form. The State has enacted procedural as well as substantive laws to regulate industrial relations in the country. Role of management in industrial relations The management have a significant role to play in maintaining smooth industrial relations. For a positive improvement in their relations with employees and maintaining sound human relations in the organization, the management must treat employees with dignity and respect. Employees should be given say in the affairs of the organization generally and wherever possible, in the decision-making process as well. A participative and permissive altitude on the part of management tends to give an employee a feeling that he is an important member of the organization a feeling that encourages a spirit of cooperativeness and dedication to work. Management must make a genuine efforts to provide congenial work environment. They must make the employees feel that they are genuinely interested in their personal development. To this end, adequate opportunities for appropriate programmes of 18training and development should be provided. Managements must delegate authority to their employees commensurate with responsibility. They must evolve well conceived and scientific wage and salary plan so that the employees may receive just compensation for their efforts. They must devise, develop and implement a proper incentive plan for personnel at all levels in the organization. There must be a well-planned communication system in the organization to pass on information and to get feed back from the employees. Managements must pay personal attention to the problems of their employees irrespective of the fact whether they arise out of job environment or they are of personal nature. They must evolve, establish and utilize appropriate machineries for speedy redressal of employees grievances. Manageemnts must provide an enlightened leadership to the people in the organization.

An environment of mutual respect, confidence, goodwill and understanding on the part of both management and employees in the exercise of their rights and performance of their duties should prevail for maintaining good industrial relations Role of trade unions in maintaining industrial relations The trade unions have a crucial role to play in maintaining smooth industrial relations. It is true that the unions have to protect and safeguard the interests of the workers through collective

bargaining. But at the same time they have equal responsibility to see that the organization do not suffer on account of their direct actions such as strikes, even for trivial reasons. They must be able to understand and appreciate the problems of managements and must adopt a policy of give and take while bargaining with the managements. Trade unions must understand that both management and workers depend on each other and any sort of problem on either side will do harm to both sides. Besides public are also affected, particularly when the institutions involved are public utility organizations.

Definition of "Mediation" and "Conciliation" Mediation Mediation is the concept of making peace between aggravated parties. It is an ancient practice, and is carried out by a peace-maker. Mediation comes into play when two or more parties come together to discuss their differences and settle their differences. Mediation has been used among people, nations, litigants, labor and government, etc. A mediator, who is an outsider, may be present for settlement of disputes. The mediator's role is to assist the parties in their negotiations. Conciliation Conciliation is generally the process of encouraging the aggravated parties to come together for mediation. In industrial relations however, the distinctions between the terms 'mediation' and 'conciliation' are negligible, and this trend also applies to other countries. Therefore, conciliation may be defined as the services of a third party that are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at a settlement or mutually agreed solution. Conciliation tends to bring a speedy solution to industrial disagreements, hence, avoiding unnecessary strikes and lock-outs. Role of a conciliator: A conciliator's function is to define a series of steps toward settlement of differences between the parties seeking reconciliation. A conciliator may open a series of options, attitudes, and offer alternative possibilities of settlement. The roles of a conciliator are summarized below: a. Discussion Leader A conciliator encourages a clear and friendly communication, creates a safe environment, and discourages any bias or antagonism between the parties. b. Safety Valve A conciliator may be placed between the aggravated parties and may take on collateral damage without damaging the atmosphere of conciliatory meetings. c. Communication link A conciliator may serve as an important communication link between the aggravated parties.

d. An innovator A conciliator may offer new suggestions and priorities, and provide the parties different views to the solution. e. A sounding board A conciliator may step in between any heated arguments taking place during the conciliatory process. f. Protector A conciliator may be a protector of the parties while preparing the parties for a collective bargaining position during separate meetings. h. A stimulator A conciliator may motivate the parties to a peaceful solution by supporting good arguments from opposing sides. i. An advisor A conciliator ensures that misunderstandings don't occur between the parties, and that room is open only to responsible discussions. j. A face saver A conciliator may get the defeated party a form of accommodating settlement, which, in reality, holds on real value. This is done in order to mask the loss of face or prestige of the losing party. k. Promoter of collective bargaining A conciliator promotes collective bargaining and development of a mutual understanding between the parties. ADJUDICATION The ultimate legal remedy for the settlement of an unresolved dispute is its reference to adjudication by the Government. Adjudication involves intervention int the dispute by t third party intervention in the dispute by a third party appointed by the Government for the purpose of deciding the nature of final settlement. On getting a report for the failure of conciliation, the Government has to decide whether it would be appropriate to refer the dispute to adjudication. The rational behind this is that the developing countries can ill-afford to suffer form loss of production due to long-drawn strikes and lock-outs. Further, the trade union movement is yet not strong and mature enough to adopt and rely on only collective bargaining for protecting the interests of the workers. Therefore, the necessity for intervention by the Government is felt. This is the Government does by making reference of the dispute to the adjudication machinery.

Procedure of the machinery for settlement of disputes where an industrial dispute has been referred to a labour court, tribunal or national tribunal for adjudication, it shall hold its proceedings expeditiously and shall as soon as it is practicable on the conclusion submit its award to the appropriate government. Procedure of the machinery for settlement of disputes where an industrial dispute has been referred to a labour court, tribunal or national tribunal for adjudication, it shall hold its proceedings expeditiously and shall as soon as it is practicable on the conclusion submit its award to the appropriate government. Procedure of the machinery for settlement of disputes where an industrial dispute has been referred to a labour court, tribunal or national tribunal for adjudication, it shall hold its proceedings expeditiously and shall as soon as it is practicable on the conclusion submit its award to the appropriate government. unlike limit of 14 days and 2 months under conciliation proceedings and proceedings before a conciliation officer/Board of conciliation respectively, there is no time limit fixed in respect of tribunals. Submission of failure of report is applicable only to conciliation officer and board of conciliation as they are not adjudicating bodies and have no power to pronounce a decision. Tribunals have power to pass the award and this award is binding on both the parties to the dispute an is submitted to the government. Where the dispute is referred for adjudication to a labour court, tribunal or national tribunal by the government within two weeks of he date of receipt of the order of reference, the party representing workmen and employer involved in the dispute must file with these authorities, a statement n demands relating only to the issues as are included int the order of reference. A copy of such statement must be forwarded to each one of the opposite parties involved in the said dispute. The time limit for filing the statement may be extended at the discretion of the above authorities. The opposite party is also required to file its rejoinder with the above authorities within two weeks of the receipt of such statement and simultaneously forward a copy thereof to the party. But such rejoinder must confine itself only to those issues which are included int the order or reference. The time limit for filing the rejoinder may be extended at the discretion of authorities. The next step after filing of statement and the rejoinder is to fix up the date which first hearing of the dispute will take place; this date should be fixed within six weeks of the date on which it was referred for adjudication. But the adjudication authority may fix a later date for first hearing and the reasons for that are to be recorded in writing. The hearing must ordinarily be continued from day to day and arguments must follow immediately after the closing evidence. The adjudicating authority shall not ordinarily grant an adjournment for a period exceeding a week at a time and not more than three adjournments in all at the instance on one of ht parties to the dispute. Where such adjournment is granted by the adjudicating authority, the reasons for it are to be recorded. If these reasons appear to be biased, arbitrary or prejudicial to any party, it may seek interference by court. The adjudicating authority enjoys same powers as are vested in a civil court (under the code of civil procedure, 1908). these are: (i) Entering the premises, for the purpose of enquiry into any existing or apprehended disputes, after giving reasonable notice.

(ii) enforcing attendance of any person and examining him or oath; it may accept, admit or call for evidence at any stage of the proceeding. (iii) compelling the production of documents and material objects and their inspection, for its the authority must assign reasons. (iv) issuing commission for the examination for witness. (v) appointing one or more persons as assessor or assessors to advise it in the proceedings before it. (vi) determining the costs of , and incidental to,any proceedings before the adjudication machinery. Meaning of grievances The term grievance is used to designate claims by workers of a trade union concerning the workers' individual or collective rights under an applicable collective agreement, individual contract of employment, law, regulation, works rule, custom or usage. Such claims involve questions relating to the interpretation or application of the rules concerned. The term grievance is used in certain countries to designate this type of claim, while in some other countries reference is made to disputes over right' or legal disputes. The grounds for a grievance may be any measure or situation which concerns the relations between employer and worker or which affects or may affect the conditions of employment of one or several workers in the undertaking when that measure or situation appears contrary to provisions or an applicable collective agreement or of an individual contract of employment, to works rules, to laws or regulations or to the custom or usage of he occupation branch of economic activity or country, regard being faith. Causes of Grievances Grievances generally arise form the day-do-day working relations in the undertaking, usually a worker or trade union protest against an act or omission or management that is considered to violate worker's rights. Grievances typically arise on such questions as discipline and dismissal, the payment of wages and other fringe benefits, working time, over-time and time-off entitlements, promotions, demotion and transfer, rights deriving form seniority rights of supervisors and union officers, job classification problems, the relationships of works rules to the collective agreement and the fulfillment of obligations relating to safety and health laid down in the agreement. Such grievances, if not dealt with in accordance with a procedure that secures the respect of the parties, can result in embitterment of the working relationship an a climate of industrial strife. In large undertakings, a common type of grievance procedure involves successive steps at different levels, a workers' grievance being first discussed with the immediate supervisor, and then if no solution is found with higher levels of management. The number of levels and steps in the procedure usually increases with the size of the undertaking. Sometimes, when an important question of principle, which would involve a number of workers, is concerned the matter may go directly to a higher level of management. Under some procedures, bipartite or joint grievance committees within the undertaking hear grievances when they have been considered at lower levels at a number of earlier stages in the procedure. A settlement reached jointly by the worker

and management representatives at any level is also deemed to be settle if an appeal is not lodged at the next highest level within a given time. Causes of industrial disputes The new industrial set-up has given birth to the capitalistic economy which divided the industrial society into two groups of labour and capitalists. The interests of these two groups are not common which created industrial disputes. The main resources of industrial disputed may be classified into four groups: (i) Economic (ii) Managerial (iii) Political (iv) others Economic Causes of industrial disputes Really, the most common causes of industrial disputes are economic causes. These are follows:(a) Wages: The wage-increase was the prime most cause of dispute both after the first and second world wars. A large number of strikes were organised during this time because of the rise in cost of living. The real wages of the workers declined faster and they were dissatisfied with their present wages and struggled for the improvement in wages. By having a cursory glance on the history of industrial dispute, it becomes clear that cause of most of the industrial disputes was wages. (b) Dearness Allowance and Bonus: Increase in cost of living was the main cause of the demand of dearness allowance by the workers to equate their wages with the rise of prices. Bonus also play an important role as a cause of industrial dispute. Both the quantum and the method of bonus payment has led to a number of disputes. (c) High Industrial Profits: During and after the world wars, prices of the commodities went up and the industrialists earned a huge profits. In order to get share in the prosperity of the industry, it naturally led to the resentment on their part. The increased profits also led to the demands of higher wage and bonus. Now, in the changing world, concept of labour has changed considerably. They think themselves as a partner of the industry and demand their share in the profits. (d) Working Conditions and Working Horus: The working conditions in Indian industries are not hygienic. There is not ample provision of water, heating, lighting, safety etc. Working hours are also greater. The demand of palatable working conditions and shorter hours of work led to labour disputes. (e) Modernization and Automation of Plant and Machinery: The attempt at modernization and introduction of automatic machinery to replace labour has been the major cause of disputes of India. Workers go on strike, off and on, to resist rationalization. A strike in cotton textile industry in Kanpur in 1955 for 80 days long is an example of such disputes. Workers in life-insurance corporation went on strike recently against introducing computers in the corporation.

(f) Weakness of Trade Unions: Weaknesses of trade unions encourages the employers to deny certain basic needs of the workers such as medical, education and housing facilities etc. This led to resentment on the part of workers who resorted to direct action. What are Industrial Relations? The concept of Industrial relations has been defined using various terminologies, but in the strictest sense, it is essentially the relationship between management and labor. The full concept of industrial relations is the organization and practice of multi-pronged relationships between labor and management, unions and labor, unions and management in an industry. Dale Yoder defines it as a "whole field of relationships that exists because of the necessary collaboration of men and women in the employment process of an industry." Role of Industrial Relations: Industrial relations are associated with labor, management, labor unions, and the state. The scene of industrial relations has grown tremendously, and cannot be represented merely by relations between management and labor. It has become a comprehensive and total concept embracing the sum total of relationship that exists at various levels of the organizational structure. Additionally, it connotes relationships between workers themselves within the labor class, and relations among the management within the managerial class. In an open sense, industrial relations denote all types of relations within a group and outside a group - both formal and informal relations. Objectives of Industrial Relations: 1. Protect management and labor interests by securing mutual relations between the two groups. 2. Avoid disputes between management and labor, and create a harmonizing relationship between the groups so productivity can be increased. 3. Ensure full employment and reduce absenteeism, hence, increasing productivity and profits. 4. Emphasize labor employer partnership to establish and maintain industrial democracy. This is done to ensure the sharing of profit gains, and personal developmental of all all employees. 5. Provide better wages and living conditions to labor, so misunderstandings between management and labor are reduced to a minimum. 6. To bring about government control over plants where losses are running high, or where products are produced in the public interest. 7. To bridge a gap between various public factions and reshape the complex social relationships emerging out of technological advances by controlling and disciplining members, and adjusting their conflicts of interests.