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Unit 7: Industrial Relations

designed to maintain non-confrontational processes in the settlement of disputes which arise Notes
between employers and employees.
Collective bargaining has valuable by-products relevant to the relationship between the two
parties. For instance, a long course of successful and bonafide dealings leads to the generation
of trust. It contributes towards some measure of understanding by establishing a continuing
relationship. Once the relationship of trust and understanding has been established, both
parties are more likely to attack problems together rather than each other.
In societies where there is a multiplicity of unions and shifting union loyalties, collective
bargaining and consequent agreements tend to stabilize union membership. For instance,
where there is collective agreement employees are less likely than otherwise to change
union affiliations frequently. This is also of value to employers who are faced with constant
changes in union membership and consequent inter-union rivalries, resulting in more
disputes in the workplace than otherwise.
Collective bargaining agreements which determine wage rates on a national or industry
level, place business competition on a more equal footing as a result of some standardization
of the costs of labour. This is probably a less important advantage today in the face of
technological innovations and productivity drives.

Perhaps most important of all, collective bargaining usually has the effect of improving
industrial relations. This improvement can be at different levels. The dialogue tends to
improve relations at the workplace level between workers and the union on the one hand
and the employer on the other. It also establishes a productive relationship between the
union and the employers’ organization where the latter is involved in the process.
As between the employer on the one hand and his employees and union on the other,
collective bargaining improves relations for the following reasons or in the following ways:

(i) It requires a continuing dialogue which generally results in better understanding of
each other’s views.
(ii) Where collective bargaining institutionalizes methods for the settlement of disputes,
differences or disputes are less likely to result in trade union action.
(iii) It could lead to cooperation even in areas not covered by collective bargaining
arrangements.

As between unions on the one hand and employers’ organizations on the other, collective
bargaining improves the industrial relations climate in the following ways:
(a) It acts as a means of exerting influence on the employer or the employee, as the case
may be, where the unreasonable position of one party results in a deadlock. The
employers’ organization or the union, as the case may be, has an interest in exerting
influence on its respective members; the maintenance of the relationship between the
two parties is seen as important to issues well beyond the current dispute. Both parties
know that the current dispute is only one of many situations which are likely to arise
in the future, and that a good relationship needs to be maintained for the overall
benefit of their respective members.
(b) The entry of a union and employers’ organization into a dispute facilitates conciliation
or mediation. Sometimes one or both parties are able to divorce themselves from the
main conflict or from their position as representatives of their members, and mediate
with a view to narrowing the differences and finding compromise solutions.
(c) Collective bargaining often leads employers’ organizations and trade unions to establish
links, and to look for and increase areas of common agreement. This in turn ensures
to the benefit of their respective members.

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