Directorate of distance education master of business administration

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271
Lesson 19 - 
Collective Bargaining
Meaning and Definition
 
Collective bargaining takes place when a number of work people 
enter into a negotiation as a bargaining unit with an employer or group 
of employers with the object of reaching an agreement on the conditions 
of the employment of the work people.
Collective bargaining is probably the most effective method of 
resolving industrial disputes. It occurs when representatives of a labour 
union meet management representatives to determine employee’s wages 
and benefits, to create or revise work rules, and to resolve disputes or 
violations of the labour contract. 
The bargaining is collective in the sense that the chosen 
representative of the employees (i.e. the union) acts as a bargaining agent 
for all the employees in carrying out negotiations and dealings with the 
management.
Concept
 
Effectively, collective bargaining is a managerial tool that 
facilitates an amicable and mutually acceptable agreement between 
the management and the employees, to solve all employment – related 
problems. In some cases, third-party intervention might be necessary to 
resolve these matters.
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ӹ Collective bargaining constitutes the negotiations between 
the management and the union with the ultimate objective of 
settlement of the disputed issues. 
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ӹ Collective bargaining is basically a give and take process involving 
proposals and counter proposals.
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ӹ  Meetings between management representatives and union leaders 
are conducted in an attempt to arrive at an agreement or at the 
settlement of the dispute. 

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272
ӹ
ӹ The two parties bargain with each other on disputed issues to 
arrive at an agreement. 
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ӹ The agreement is signed by both the parties and the length of 
time the treaty will operate may be specified. 
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ӹ Collective bargaining introduces an element of democracy in the 
field of Industrial Relations and Management. 
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ӹ Collective bargaining imposes certain restrictions upon the 
employer. Unilateral action is prevented. The employer is no 
longer free to make and enforce employment decisions.