Collective Bargaining

Mrs. G.V. Hewagama Department of Human Resources Management University of Kelaniya

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G.V. Hewagama Department f HRM

History
Master and Servant relationship prevented labour from enjoying rights. Direct negotiation Pace of Industrialization Employers found it is more convenient to deal with a group rather than individual First Identified Britain & USA War, Inflation push for more wages Collective action & unionization: these two has close relationship
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Collective Bargaining (CB)

CB is a process in which employer s representatives & worker representatives/ trade unions meet, discuss and attempt to negotiate about working conditions and terms of employment. Collective attempt Bargaining act of negotiation not confrontations
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Definition
Voluntary negotiation between employers or employer s organizations and worker s organization with a view to the regulation of terms and conditions of employment by collective agreement .
( ILO Convention, No 98, 1949)

Collective agreement is the outcome of effective collective bargaining.

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Salient Features of CB
Group Process Consists of number of steps Negotiations rather than confrontations It is a bipartite process

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Legal Frame work of Collective bargaining in Sri Lanka The Trade Union Ordinance No 14 of 1935 recognized the right to organize and bargain collectively and which were the two essential elements Industrial Disputes Act No 19 of 1950 Further it recognizes collective bargaining as a method of resolving industrial disputes.

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Objective
To reach to a collective agreement (formal document signed by both parties states all terms and conditions of employment that both parties have decided on). Enhance the level of well being of the workers and success of the organization by ensuring smooth functioning.

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Levels of Collective Bargaining

Firm level bargaining: Workers representatives and the single employer reach an agreement at organizational level by considering problems specific to both sides . Industry level: Representative unions and representative employer s association reaching an agreement without necessarily taking into account specific conditions at firm level .
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Bargaining Scope
Range of issues covered or the subject matter of collective agreement. The contents of collective agreements varied widely; Wage Concessions; Extent to which a firm increases the price for labour supplied by the employer. E.g. Salary, Allowances and Increments Benefit concession; Non-wage aid instituted to meet some of the problems. E.g.: Medical, Insurance, Gratuity, Bonus, Leave, Terminal Benefits
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 Administrative issues; The subjects, which most directly serve to protect job rights of workers. E.g.: Promotion, Dispute settlement Procedure, Probation, Transfer, Disciplinary Action, Working hours, overtime etc. Institutional Issues; The subjects which tend to supply the institutional needs of either the labour and management. E.g.: Union Recognition, Trade union action, Union Meetings etc.
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Subject Mater of Collective Bargaining

Wages and salaries Allowances Incentives and privileges Welfare facilities Hours of working Leave Transfers EPF, ETF Discipline, GSP, Health & safety, Training Conflict settlement Other working conditions
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Importance of CB
-Mutual Benefits to both parties Management will gain:  flexibility, labour peace, chances of implementing difficult proposals like pay for performance The union will gain:  increased stability for the membership,  skills upgrading,  greater voice in decision making and enhanced employability.
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Importance of CB
Collective bargaining also reduces union control over member interaction with management Both parties can set productivity standards leads to increase productivity. As same as wage concession one of the outcomes of CB will increase the job satisfaction of workers and there is a positive relationship between job satisfaction and productivity.
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Collective Agreements The Industrial Dispute Act defines a Collective Agreement as one between a a) An employer or employers and b) Any workmen or trade union or unions consisting of workmen and which relates to the terms and conditions of employment of any workmen, or to privileges, rights or duties of any employer or employers or any workmen or to the manner of settlement of any industrial dispute.
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 A collective agreement which is in writing and signed by both parties and which is transmitted to the Commissioner of Labour is required to be published in the Government Gazette, if he is satisfied that its terms and conditions are not less favourable than those applicable to any other workmen in the same industry . Where an agreement provides for it to have effect for 03 years period of time or until a specified date, but a party is entitled to terminate it by notice earlier than the period provided in the agreement.

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 Under the Industrial Disputes Act, every collective agreement, which is in force, shall be binding on the parties and the terms of the agreement shall be implied terms of the contract of employment between the employers and workmen bound by the agreement.

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 In the event of any question as to the nature, scope or effect of the terms and conditions of a collective agreement or whether the employer is observing the agreement, that question shall be decided by the commissioner subject to an appeal with in the prescribed time and in the prescribed manner to the industrial court and the decision of that court on that question shall be final.
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 analysis of over 200 collective agreements reveals that most of the early Collective agreements mainly considered clauses related to regulate wages and other benefits. Parties now enter into Collective agreements with wider bargaining scope than earlier such as payment of non recurring cost of living, grievance procedures and disciplinary procedure etc.

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Collective Agreements
The bulk of the collective agreements signed have been in large-scale organizations in the private sector. The Employers Federation of Ceylon which has a membership over 360 members has signed the majority of collective agreements There is no limitation described by the law related to number of participants in the collective bargaining process. Most of the collective agreements have been negotiated in Sri Lanka were private sector organizations representing organizations in the Banking sector, the Mercantile Commercial and Industrial sector and also the Plantation sector.
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The collective bargaining process comprises of three core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation. 2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached. 3. Administration
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Stages of a Negotiation
%

claim

Employer s Maximum 54-

Settlement

Union Minimum

32-

offer

Bargaining Closing

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Important points to remember Internal policy issues, viability of the firms in terms of profits & Labour cost. An organization has competing interests: Share holders, employees & customers. Internal strategies in reconciling these issues and fixed priorities for the demand of several groups from time to time Cost implications of unions demands & effects on profit, effects of prices of the product or services Other welfare & HR policies can be addressed: Problems relating to recruitment, promotion, grievance settlement etc.

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 brainstorming / The exchange of messages takes place and opinion of both the parties is sought. negotiations are easy if a problem solving attitude is adopted. A consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change

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Different Types of Bargaining

Inter-Organizational: employers & unions discuss and arrive at a consensus of approach among themselves before parties meet at the bargaining table Attitudinal structuring: approach: CB as ongoing relationship, not a ad-hoc settlement, Trust & confidence in other party, evolving long-term bipartite relationship

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 Distributive bargaining: one party gains and other party losses Integrative bargaining: productivity aspects are taken into account & mutual problem solving: gains can be increased.

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Types of Collective Bargain Structures Unitary Bargaining Multi-Union Bargaining Multiple Bargaining (Industry or National level)

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A Model of Collective Bargaining Process

(1) Assemble the Bargaining Team (3) Determine officers (5) Top Mgt. Approval (7) Govt. Agent Participation (2) Monitor the Environment (4) Determine time place & Rounds (6) Check union Actions

Preparatory Stage

Negotiation Stage

(8) Discussion (9) Reach an Agreement (10) Approve the agreement (11) Legalization

Administration Stage

(12) Communication of the Agreement (13) Adjustment (14) Ensure union management corporation

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1) Management Representatives 2) Delegation of authority 1) Hints/ clues of the union Government Agent participation
demands 2) Inflation, cost of living 3)Grievances 4) Informal Communication

Preparatory Stage
Check Union Actions (Possible Strikes)

Decide on Management s counter proposal

Bargain Plan present to Management

Date Time Place No. of Rounds

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Negotiation Stage
Discussion as planned (Systematic, intelligence) Discussion of each mater separately Follow common bargaining strategies Reach to a collective agreement In writing and stipulate policies, procedures and terms and conditions over maters agreed by both parties (framework) Approval of the Agreement by the top management and union members

Legislation: Signed by both parties & published in Gazette.

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Administrative Stage
Communicate the agreement to all concerned within the organization

Wages, GSP, benefits etc. need to be adjusted to conform the agreement

Union Management should work without violating the agreement

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Essentials of Successful Collective Bargaining 1) 2) 3) 4) 5) 6) 7) 8) 9) Presence of an appropriate management Presence of appropriate unions or unions Recognition of trade union for collective bargaining Set up of appropriate bargaining machinery Open mind and flexibility Presence of mutual accommodation Favourable political climate Presence of adequate authority for bargainers Commitment to productivity
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