Collective Bargaining: Definition, Objective, Types, Pros & Cons

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What is Collective Bargaining?

The International Labour Organization has defined collective bargaining as:

Negotiations about working conditions and terms of employment between an employer or group of employers on the one hand and one or more representatives of workers’ organizations on the other.’

A collective bargaining is a process to reach an agreement in which one of the parties is the employers (or their representatives) and the other is the workers (or their representatives).

Collective Bargaining
“Cancelled Stamp From The United States Featuring Collective Bargaining, Out Of Conflict Accord”

Collective bargaining refers to the negotiation that takes place between employers and their workers. The latter organized in such a way that they negotiate collectively.

When we talk about collective bargaining, it should be noted that it is a right included in the Constitution of the International Labor Organization.

Objectives of Collective Bargaining

  1. Setting terms of employment.
  2. Setting rules in the workplace.
  3. Settlement of trade disputes and grievances.

Items for Negotiations

  1. Mandatory items, somehow statutory, such as wages and salaries.
  2. Voluntary item: Items which are not binding on the parties such as long service awards.
  3. Exclusive lists: These are items exclusively reserved for management. They are not subject to negotiation such as promotion and deployment of staff.

Systems of Collective Bargaining

Basically, it can be of two types:

  • Informal

The negotiation is carried out under the norms or rules defined by the negotiating parties themselves, outside the framework of national regulation. Given the above, the negotiation is not legally binding but should be respected by the parties (by mutual agreement).

  • Formal

The negotiation is done under the rules established by local legislation. The agreement in this case is binding and the negotiation is carried out under established rules regarding the procedure, requirements, negotiating subjects and deadlines.

Collective bargaining as a Right

As we said at the beginning, collective bargaining is considered a fundamental right. This right is explicitly included in the Constitution of the International Labor Organization (ILO) and reaffirmed in the ILO Declaration on fundamental principles and rights at work.

Collective bargaining in State Companies

Although collective bargaining is mainly applied to the field of private companies, it is also found in the field of public administrations.

The negotiation principles are the same but the public sector has some nuances such as: the general good must be a factor to consider in the negotiations, it is subject to the assigned budget, criteria of meritocracy, equality and capacity must be considered.