Collective Bargaining: The Concept of Collective Bargaining

The procedure opted by employers and workers to reach a collective agreement regarding employment terms and rights and the duties of workers is known as collective bargaining. Collective bargaining aims to resolve issues pertaining to wages, working conditions, health and safety, and working hours of workers.

The Concept of Collective BargainingDuring the collective bargaining process, workers are represented through trade unions. The process of collective bargain involves negotiation and discussion between the management and trade union. The term “collective” is used because both the employer and employees come together and put a collective effort to establish mutually agreeable terms and conditions for employment.  The concept of collective bargaining was introduced very late in India, as trade unions were formed only in the 20th century. The concept of collective bargaining attained significance only after 1962.

Collective Bargaining: Pros and Cons of Collective Bargaining

The collective bargain concept has its own merits and demerits. Here are its key advantages:

  • It avoids unnecessary legal proceedings and the issue is sorted out of the Court.
  • It promotes worker’s democracy and worker’s participation in management.
  • It helps in establishing harmonious relationship between employee and the employer.
  • It emphasizes on the interests and benefits of both parties.
  • It eliminates unnecessary expenditure and avoids bitterness among involved parties.

Here are the few disadvantages of collective bargaining:

  • Increased wages and improved facilities for workers will indirectly result in high prices for goods and services.
  • Consumers are affected badly due to price rise; a process which they do not actively participate in.
  • The collective bargaining process may not be fair at all times; the decision is often influenced by power and politics.
  • In case of failure of the collective bargaining agreement, the immediate consequence is strike or lock-out


Final Legal Take Away Tip: Consumer organizations that represent consumers must be involved in the process of collective bargaining to safeguard the interests of consumers, who are victimized by many collective bargaining agreements.
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There are lot of acts,rules and regulations under labor laws.Some of the acts and rules like Industrial Disputes Act, Equal remuneration Act,company Act,Workman's Compassion act including Trade Union Act,Model Employment Standing order Act,Factory Act need reformation in short and precise manner.As both central and state government are the model employers, their employees are getting very higher salary in comparison to the employees of private sectors. The wage structures of government of India and State governments are also defective.The white collar employees are more protective than blue collar employees. In addition to the fair wages, the central and state government employees are getting 50% pension after retirement under Central Civil Service (Pension) Rules-1972 where as state government employees are getting same 50% pension under State Civil Service Pension Rules. At present a peon who is a class-IV employee under state or central government, gets approximately 10,000/ PM,where as an IAS Officer get approximately one 100,000/PM. After retirement the peon will get Rs.5000/PM as pension where as the IAS one will get Rs.50,000/-PM. Think about the wage of private companies. Some of the talents get very higher salary from reputed national and multinational companies. Majority of employees get too less amount. Even Aircel,Air tell,Reliance and some other companies pay Rs. 3000 to 5000 PM to their employees. Central Labor Commissioners or Sate Labor Commissioners are not capable to settle the disputes in time. Some times it takes years together to refer a case to Ministry of Labor for further reference to Labor Court or Industrial Tribunal. Hence, you may compare the social securities of the workers of both private and government sectors including corporate organizations.

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