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.
During 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