Advantages And Disadvantages Of Collective Bargaining | Purpose, Types, Meaning, Features, Process, Limitations

Advantages And Disadvantages Of Collective Bargaining: Collective bargaining is the process in which the employers and the employees negotiate on a certain basis mostly the agreements have regard to the salaries, working conditions, rewards, benefits, and other aspects of compensation to the Employees. Generally, these types of negotiations take place between the labor Union and the head of the organization. The primary goal of collective bargaining is to reach a certain conclusion along with an agreement through a written contract. In fact, as per international labor laws, collective bargaining is the fundamental right of all the employees working in a firm or an organization.

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What is Collective Bargaining? What are the advantages and disadvantages of Collective Bargaining?

Collective bargaining is a type of agreement that is made between the employees or the representatives of the employees and the upper management. This agreement consists of the terms and conditions of the employees which are in the interest of both the employees and the organization. According to Dale Yoder-” Collective Bargaining is essentially a process in which employees act as a group seeking to shape conditions and relationships in their employment”. So Collective Bargaining is simply a decision that can be reached collectively by mutual agreement of the employees and their employers.

• Advantages of Collective Bargaining
• Disadvantages of Collective Bargaining
• Comparison Table for Advantages and Disadvantages of Collective Bargaining
• FAQ’s on Advantages And Disadvantages Of Collective Bargaining

Purpose of Collective Bargaining

• The prime Purpose of Collective Bargaining is to reach a collective agreement between the labor Union and the top management by agreeing on mutual terms and conditions.
• Collective Bargaining helps to induce cordial relationships among the staff and the head of the company or organization, where the demands of both sides are entertained.
• Collective Bargaining helps to protect the rights of the labor. The International Labour Organization recognizes Collective Bargaining as a universal fundamental right of laborers.
• Since Collective Bargaining is directly between the labor and the employers, there is no government intervention with regard to the agreements.
• Collective Bargaining promotes democracy and a free working style in the organization itself.
• Collective Bargaining is a speedy process, unlike some government schemes that stay pending for long times. The direct involvement of both parties speeds up the agreement process and implementation of the changes(if any).

Steps of Collective Bargaining

The process of Collective Bargaining cannot be initiated or processed at random. There are certain steps to be followed-

• Preparation of Negotiation Draft: In a process of negotiation two parties or two teams are constructed where one team is of the management and another one is of the union of the laborers. The very first process involves the drafting of the negotiation in which the other party, which is the union of labor, drafts their demand in an agreement in order to present it to the management.
• Negotiations: After the preparation of the negotiation draft the negotiation process starts this process includes two stages- 1. Piecemeal approach 2. Total approach. In a piecemeal approach, issues are considered step by step gradually. Whereas, in the total approach issues are discussed with a total effect.
• Agreement of Negotiations: Once the negotiation has been completed between the parties, a draft is prepared which is called an agreement. In this agreement, all the points, which have been bargained on, are written and the legal language is reduced to the minimum so that it is readable by all the employees. In India under the Industrial Dispute Act1947, this act is called settlement
• Agreement of Ratification: Ratification is mostly for the union side. Once the agreement is prepared it is sent to the Employees or the workers for their agreement to the written Bargaining. This agreement by the workers is shown by the voting pattern. If the agreement signed between the parties gets the majority of 50%+1 votes, then the agreement can be brought into action and implied.
• Implementing Agreement: Once the contract or the agreement has been ratified by the workers, it is then brought into action by finally implementing the agreement to both the parties-the employer and the employees.

Types of Collective Bargaining

There are primarily four types of Collective Bargaining-

• Composite Bargaining: Composite Bargaining may sound like compensation, but it has got no relevance to it. Rather, composite bargaining focuses more on the issues of workers like the conditions of the job, job security, and the policies like hiring and firing of the employees, employee security, and organizational discipline.
• Distributive Bargaining: Distributive Bargaining Type primarily focuses on the employees over the employers. This type of bargaining favors the employees in terms of financial benefits. These financial benefits may include bonuses, salaries, or any other monetary rewards. Labor or the employees have got exceptionally higher powers, which they can use when they feel exploited or not being paid according to the amount of work.
• Concessionary Bargaining: The root word for concessionary is a concession and hence the name is self-explanatory. This type of bargaining involves the concession in exchange for job security. The union of labor makes concessions with the employers in return for job security. Concessionary bargaining can be seen the most during the recession period. In this type of bargaining, the union of laborers may agree to leave some of the benefits provided by the organization to safeguard their job and survival.
• Integrative Bargaining: Integrative bargaining often results in a win-win situation where the demands of employees and employers are fulfilled. Here both the parties agree to face the profit and loss equally.

Advantages of Collective Bargaining

There are many advantages of Collective bargaining-

• Helps the workers to demand their needs: Being a single worker, one may not be able to demand the needs but a group of workers called a union can strongly put up their point before the administration and ask them to work in their favor.
• Helps to improve the quality of life of workers: The general terms and conditions included in a collective bargaining agreement are the increased salaries and wages, proper working conditions, fixed working hours, occupational health, and many other such issues which work in the favour of the union. If these conditions are met by the management this certainly improves the quality of life of workers.
• Helps to increase the mutual cooperation: In an agreement both the parties put up the points of their comfort and requirements when the agreement reaches its conclusion it is a mutual decision between both the parties hence the demands of both the parties are satisfied. Hence, it increases mutual cooperation.
• Collective Bargaining represents every member of the organization: Collective bargaining process involves every worker in an organization. Whatever agreement is made it is applied to all the workers and there can be no exceptional case.
• Creates a firm bond between workers in the union: When the rights of workers are violated at some point of time by the management this act and the act of collective bargaining brings the workers together as a Union and forms the bond between them even more tightly.

Disadvantages of Collective Bargaining

Collective Bargaining has certain disadvantages also-

• May lead to inequality: In an organization all through the supreme commander has the head of the organization yet if the head is nice he will tell to keep all the workers and employees at one level.  The collective Bargaining process may create a difference between the management and workers.
• The union can take undue advantages: Since according to the International Labour Organisation collective bargaining has been given the title of the fundamental right of all the laborers, the laborers are quite expected to take the undue advantage of the facility provided for their benefit.
• Unfair to the senior workers: The process of collective bargaining can be initiated at any point in time. Maybe there are new workers in the organization along with the existing one who has been serving the organization for a very long time. If the new workers are provided with the facilities and increased wages, it will be an unfair action toward the senior workers who have been serving for a long time.
• Repeated bargains may create differences between workers and management: All those collective bargaining procedures have been applied for the benefit of working people and to safeguard their rights but repeated bargains between the workers and the management male create differences among them which may result in some bad consequences also because at the end the organization has got right to change the decision on their own.

Comparison Table for Advantages and Disadvantages of Collective Bargaining

FAQ’s on Advantages And Disadvantages Of Collective Bargaining

Question 1.
What is the importance of Collective Bargaining?

Answer:
Collective Bargaining preserves the rights of the workers and allows them to put up their demands before the management.

Question 2.
Why should an employee bargain collectively?

Answer:
The Collective Bargaining process works in the favor of all the parties involved. The agreement drafted upholds the interests of the employees, employers, management, and organization.

Question 3.
What are the major issues solved or talked about in the Collective Bargaining process?

Answer:
The major and important issues included in collective bargaining are better working conditions, safety issues, increased salary or wages, equal treatment, training, occupational health, and many more.

Question 4.
What happens when Collective Bargaining fails?

Answer:
In case the agreement fails to bring in the action because of any or all undue demands the company or the head can unilaterally implement his own terms and proposals.