Read this essay to learn about Collective Bargaining. After reading this essay you will learn about:- 1. Meaning of Collective Bargaining 2. Importance of Collective Bargaining 3. Levels 4. Subject Matter for Discussions 5. Steps Involved 6. Conditions for Success 7. Principles of Negotiations 8. Advantages and Disadvantages.

Essay Contents:

  1. Essay on the Meaning of Collective Bargaining
  2. Essay on the Importance of Collective Bargaining
  3. Essay on the Levels of Collective Bargaining
  4. Essay on the Subject Matter for Discussions in Collective Bargaining
  5. Essay on the Steps Involved in Collective Bargaining
  6. Essay on the Conditions for Success of Collective Bargaining
  7. Essay on the Principles of Negotiations in Collective Bargaining
  8. Essay on the Advantages and Disadvantages of Collective Bargaining

Essay # 1. Meaning of Collective Bargaining:

Collective Bargaining is the method of negotiation between the representatives of labour and management to solve some labour dispute and to enter some agreement to prevent a dis­pute.

As we know that strike and lockouts go against the interests of the society, therefore genuine collective bargaining is important in promoting industrial harmony. Collective bar­gaining is a preventive method to prevent the situations arising for strikes and lockouts.


Collective bargaining can be defined in several ways, some of them are:

(i) Collective Bargaining can be described as a procedure whereby employers must reach an agreement about wage rates and basic conditions of labour with the trade unions instead of the individual workers.

(ii) Collective bargaining is a get together to enter a common organisation to determine that whatever conditions of work are allotted, shall be the same for all workers and to make a bargain with employers to that effect.

(iii) It is the process of discussion and negotiation between the employer and a union culminating in a written agreement or contract and adjustment of problems arising under the agreement.


Collective bargaining is basically a give-and-take process involving proposals and counter proposals.

Essay # 2. Importance of Collective Bargaining:

Collective Bargaining is the most effective instrument in the hands of workers for improv­ing their living conditions.

Following are the main advantages through collective bargaining:

i. It ensures lasting industrial peace and avoids conflicts.


ii. It fosters responsibility on both the parties.

iii. It helps in achieving the important status for workers.

iv. It encourages the industrial democracy.

v. It is best method to settle the dispute.

Essay # 3. Levels of Bargaining:


Collective bargaining can be conducted at three levels, organisation, industry and national. Structure for collective bargaining is different in different countries e.g., in U.S.A., it is at all the levels, in European countries industry, wide bargaining is both at regional and national level.

In India, since it is in the initial stage, it is still taking its shape and depends upon several factors like, type of industry, scope of industry, strength of trade union and type of dispute or demand.

Essay # 4. Subject Matter for Discussions in Collective Bargaining:

The parties decide the subject of discussion, generally a matter related to any of the acts meant for labour, like Factories Act, Minimum wages act, Payment of wage act, Industrial employment act etc., or any subject related to facilities, working conditions, pay, perks etc.

Some of the subjects are listed below:


i. Wages.

ii. Working hours.

iii. Health and safety.

iv. Insurance and pension.


v. Job rights, seniority, promotion policies.

vi. Discipline, suspension and discharge.

vii. Other benefits like bonus, incentives, other perks etc.

viii. Strikes and Lockouts.


ix. Union activities.

x. Management of Rights.

xi. Recognition Union.

Essay # 5. Steps Involved in Collective Bargaining:

(i) First step is to put up the demands and grievances by the employees collectively to the management.

(ii) Discussions and negotiations between the representatives of the employees and the representatives of the management regarding disputed issues.

This is a most important step, therefore, before negotiating; the management must make a careful analysis of the basic factors and specific issues to avoid a conflict in future. Analysis of past conflict is also necessary to understand the points of differ­ence.


(iii) The next step is to prepare a draft agreement incorporating following points:

a. Purpose of the agreement, its scope, and definition of important terms.

b. Rights and responsibilities of both the parties.

c. Settlement of issues.

d. Grievance procedure for future disputes.

e. Termination clause.

Essay # 6. Conditions for Success of Collective Bargaining:


For the success of collective bargaining, following points are essential:

(i) Representatives of the union must be from workers and not be outsiders. This is necessary to avoid influence of outsiders.

(ii) Management should have broad attitude and should understand the problems of labour.

(iii) To understand each other’s points, their problems and their obligations.

(iv) Discussions should be held in cordial atmosphere in the spirit to reach to some ami­cable settlement of dispute.

(v) The representatives of both sides should have adequate knowledge about the dispute.


(vi) These representatives should have full authority to speak on behalf of their respec­tive sides as well as to make decisions.

(vii) The discussions should be kept continuing. It is always advisable to leave the contro­versial points for discussions in the end, and leap over to the next issue.

Essay # 7. Principles of Negotiations in Collective Bargaining:

Negotiations can help in managing conflicts of all types in an effective and mutually satis­fying way. Negotiation uses the communication skills and bargaining to manage conflict and reach mutually satisfying outcomes.

Following principles (rules) should be followed for guidance by both unions and manage­ment:

i. Introduce everybody.

ii. Be friendly during negotiation.


iii. Always be willing to do right and fair things.

iv. Be willing to listen other’s view point.

v. Give opportunity to everybody to speak.

vi. Always try to search only correct and real solution.

vii. Define each issue clearly and discuss in the light of all available facts.

viii. Take one issue at a time.


ix. Question the evidence offered.

x. Use only verified data and facts.

xi. Sidetrack unrealistic demands without ridicule.

xii. Be factual rather than emotional.

How to win Negotiations as a Manager:

(a) Variables to be kept in mind:

Before starting the negotiations, following variables should be kept in mind:

(i) Social Perception:

It will be helpful for the managers if they have an idea of how the other party perceives, as this helps in choosing a negotiating design.

(ii) Seating arrangement:

A particular seating arrangement can give an extra power and command to your words and vice versa.

(iii) Group size:

It is easier to negotiate with small number (say two) than with large number (say ten or more).

(b) Points to remember in negotiations:

i. Do not assume that you know as to what others want.

ii. Initial offers are generally not accepted.

iii. Provide room to man oeuvre i.e., start with least.

iv. Get all the demands on the table before you start.

v. Listen carefully and analytically and watch expressive behaviour of other side.

vi. Make concessions conditional.

vii. Do not make concessions easily.

Essay # 8. Advantages and Disadvantages of Collective Bargaining:

The main advantages of collective bargaining are:

1. It provides freedom to both the parties to settle their disputes which encourage re­sponsibility and self-reliance which are necessary for the success of industrial democ­racy.

2. It helps in securing permanent industrial piece.

3. It assumes great significance to the workers in improving their condition.

4. It leads to eradication of frustration, dis-satisfaction and suppressed hostility.

Disadvantages of collection bargaining are:

1. Collective bargaining requires well established and strong trade unions, but these are not that much strong.

2. When a country is promoting industrial growth, strikes, lock-outs and other form of work stoppages which may emerge out of collective bargaining is quite harmful.

3. It is also apprehended that if work of settlement is left to collective bargaining, the employees would be gainers in most cases as the power of poorly organised workers is relatively weak.