Types of Collective Bargaining

Types of Collective Bargaining

Collective bargaining plays a critical role in maintaining peace in organisations. It is a way to include employees’ participation when it comes to issues concerning them. There are various ways of collective bargaining employees can use to put their concerns and views across to their employers. Some of them include distributive bargaining, integrative bargaining, composite bargaining and concessionary bargaining to name a few.

What is collective bargaining

Collective bargaining is a process of discussion and negotiation between 2 or more parties. It is a procedure by which a group of employees and employers, or their representatives, discuss the conditions of work, pay and any relevant issues that may affect either party. Some see collective bargaining as a political process instead of an economic process, where any resulting agreement is simply a compromise of settlements of power conflicts between the trade union and the employer or organisation’s management. Collective bargaining can also be seen as another way of involving employees in the decision-making process of organisations. That way, the terms and conditions of employment are determined by both the worker and the employer.

Distributive Bargaining

This form of bargaining is concerned with the distribution of profits or surplus. Wages, salaries and bonuses including other monetary issues are discussed. Distributive bargaining is a type of collective bargaining where one group benefits at the expense of another. In this case a trade union may negotiate for higher salaries, higher bonuses or shared profits. For distributive bargaining to be effective, the trade union will need to have market power in such a way that if it is to call for a strike the effect will be detrimental to the employer. Distributive bargaining works if a trade union’s members comprise of 80% to 100% of the employers’ workforce for the bargaining to be effective. In this type of collective bargaining normally employers will bargain for the least possible wage or salary whilst employees seek for the highest bid.

Integrative Bargaining

In this type of collective bargaining, both parties seek a win-win outcome. Whatever decision is made benefits both parties or, both parties lose. Integrative bargaining is more cooperative than distributive bargaining. For example, a trade union can negotiate for better working conditions for its employees and may be willing to accept a salary freeze for the employer to invest in the plant. Both parties win in that they both bear the cost. Also, employees may forgo their yearend bonuses for salary increases. Another example is when an employer pays for the training and education of his/her workers and in return enjoys the rewards in the form of  higher productivity whilst the workers gain skills.

Productivity Bargaining

Productivity bargaining is a type of collective bargaining where both parties negotiate for higher productivity and higher pay. Employees or the trade union representing them may argue that an increase in salaries will increase productivity. However, to the employer this may not be apparent. Thus, target driven bonuses or increases in salaries may be considered. A trade union may negotiate with the employer for a change in a process or in the way in which labour is set up in order to increase productivity. If efficiency is increased the employer would have to revise the wages upwards. Productivity bargaining can be any negotiations by an employer and employees related to increasing productivity so that the employer may benefit from increased efficiency in return, the employees will then enjoy financial or other forms of benefits.

Composite Bargaining

This type of collective bargaining is not concerned with wages and salaries. Composite bargaining refers to issues related to working conditions, job security and disciplinary processes. Anything that may affect the long-term relationship of the employer and his/her employees falls under collective bargaining. If employees work in a safe and clean environment, they are less likely to leave or have disputes. On the other hand, the employer enjoys a low employee turnover and retains the best talent. Disputes relating to layoffs are also resolved through composite bargaining. The aim of this type of collective bargaining is to ensure the long-term relationship of employees and employers.

Concessionary bargaining

Concessionary bargaining is a type of collective bargaining where the trade union and the employer seek to maintain the existence of the business and to ensure that the workers remain employed. A trade union can agree on pay cuts so that no worker is retrenched during a recession. That way the company can survive in the long-term together with the jobs of the workers. In the case of concessionary bargaining unions can give up previous benefits in order to ensure the long-term survival of the business which also means the survival of union members’ jobs.

Attitudinal Restructuring

Attitudinal restructuring is another type of collective bargaining which is concerned with the shaping and reshaping of employers’ and employees’ attitudes. It is necessary to maintain smooth and cooperative industrial relationships especially when there is resentment on either side. The main goal of this type of collective bargaining is to create trust amongst employers and employees.

Inter Organisational bargaining

Inter organisational bargaining aims to resolve internal conflicts within the organisation. Conflicts may arise in an organisation and within the labour union: amongst members or between members and management. This may occur when some members feel that their needs are not being addressed or worse disregarded. The main objective of interorganisational bargaining is to resolve internal differences be it within the union itself or within the company.

Collective bargaining is a long continuous process that can be complicated. It involves various procedures and processes and often lengthy negotiations. If collective bargaining goes well, all the parties can resolve their conflicts and come up with a solution that each party benefits from. If not, industrial action can take place which will negatively affect all the parties involved. Collective bargaining protects the employees more by giving them a larger voice to address their concerns. This is important with any type of collective bargaining. Many workers deal with employers that can easily replace them if they voice their concerns. However, collective bargaining allows employees to come together and have their issues heard and addressed by the employer.

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