Labour Relations: Collective Bargaining


Collective bargaining is a method that is vital in dispute resolution in the workplace. It entails a democratic and civilised process of solving work-related problems, which considers employees grievances and employer concerns in a bid to find amicable solutions. Collective bargaining aims at addressing employee issues via their employers, who plead the employees’ cases to trade unions, as opposed to the employees themselves engaging the trade unions. Concerns of employees commonly addressed include, pensions, working hours, holidays, termination of contracts, and general working conditions. Industrialists, therefore, view collective bargain as an extension of democracy to the work environment since a resolution that favours two parties, namely, employers and employees, is established.

Collective bargaining is indispensable in the labour market because employers and employees have diverse interests. The work environment is replete with employee demands and disputes, and the solutions to previously existing problems are not definitive due to the dynamism of the workplace (Ndungu 92). Therefore, lasting solutions to common employee-related problems need to be established, but recurrence of some problems that require different approaches makes collective bargain a herculean task.

Collective bargaining in the workplace ensures that both the employer and employee have their interests tabled and a suitable solution attained. Thus, collective bargaining is indispensable in the continual co-existence between workers and their bosses. In this view, this essay describes the goals and advantages of collective bargaining for both employers and employees.

Goals and Advantages of Collective Bargaining for the Employer

Collective bargaining smoothens the relationship between the employer and employees by playing an integral role in dispute resolutions. Luqman states that the three key aims of the collective bargain, include the establishment of a working and employment conditions, legitimise the relations between the employers and the workers, and improve the interactions between the employers and employees (969). The statement sums cardinal objectives of collective bargaining. Generally, the aforementioned goals favour both the employer and employee, for it is imperative that the negotiating parties have their rights and welfare considered to ensure successful discussions resulting in a win-win situation. An agreement deadlock has always been eminent when ongoing discussions tend to favour one side of the negotiating parties.

Collective bargaining has allowed employers and managers to foresee their budgetary expenses. Based on previous employment negotiations, chief executive officers and managers are in a position to know whether they need to cut back on salaries or miscellaneous in order to create a conducive working environment that favours both organisation and workers. Collective bargaining brings to the fore employee concerns such as poor wages and pension that employers must address. Upon reaching an agreement on the increment of wages and rolling out of pension schemes, employers must, therefore, re-adjust their budgets to accommodate these extra expenses.

In a situation where collective bargaining does not exist, then stalemates would always exist when it comes to meeting the employees’ demands of increased pay and pensions because business owners would not be willing to meet the demands. Collective bargaining in a given company or in different companies helps employers to anticipate bloated budgets and prepare adequately in the event of employees-related expenses.

The goals of collective bargaining are to protect employer rights. Although the negotiations are between employer and trade unions, the complaints in most cases are from the employees since they do not understand their rights. In developed countries, employers have the rights to pursue other avenues such as lockouts or replace the striking employees, who have resorted to pursuing industrial action. Ndungu reports that between 2002 and 2006, the number of employers, who resorted to using lockout increased from 6- 27% (91). Though this right is rather draconian in that it favours employers, it is nevertheless, a right.

Negotiations, however, should not be hell-bent on putting the employers on a tight spot, but to make both the employers and employees compromise and come to a common ground, where both parties are satisfied. In the absence of collective bargains and rights, trade unions would run employers roughshod. Trade unions would force employers to unfairly subscribe and attend to employees illogical and untenable whims. Collective bargaining, therefore, brings sanity and fairness in negotiations and ensure both parties to observe, but not trample on the opposing teams rights. In observing and upholding of rights, mutual respect exists between the parties involved in the discussion, which is important in finding solutions.

Collective bargaining opens the channels of communication. Communication is prime in averting possible strikes, resulting in economic losses for the employers and social loses for the employees. Ndungu avers that strikes are the result of failed talks between the bosses and their workers (92). In the event of a strike, employers suffer more because they incur losses in terms of tax deficits and not meeting the demands of the market. It is through collective bargains that employers and workers’ representatives attain a return-to-work formula. Collective bargaining brings both the employers and workers to a level ground where they abandon their hardliner stances and work on the way forward.

Without collective bargaining, impasses between workers and bosses would be insolvable, resulting in huge socioeconomic losses to both employers and employees. In light of this, it suffices to say that collective bargaining breaks communication deadlocks and is key to a continual relationship between employer and employee, and survival of businesses.

Collective bargaining increases the quality and size of the workforce, making employers experience a dilemma in the selection of employees due to their job qualifications. Collective bargaining has since time immemorial advocated and clamoured for the betterment of employees’ working and living conditions. As a result, most people aspire to join certain professions and invest heavily in their training and acquiring relevant expertise to attract the best job packages. High levels of expertise, in turn, lead to quality products and professionalism, which bode well with employers. Potential employees also tend to respect certain professions that they would have otherwise overlooked because of the inhumane working conditions.

The poor working conditions are due to the under-representation of the workers when it comes to advocating for better pay packages through trade unions. In this regard, collective bargaining makes different professions attractive to potential employees.

Goals and Advantages of Collective Bargaining for the Employees

Collective bargaining minimises the tendency to victimise individuals. South Africa has reported episodes of heightened “brutality and intimidation” by employers (Ndungu 93). Victimisation is evident when employers sometimes resort to mete out unjustified treatment on their employees to try to prevent them from complaining about the wrongdoings at their respective workplaces. In most workplaces, the management is not always responsive to employees’ complaints and sometimes downplays the workers’ wants. In certain scenarios, the management tends to be dictatorial and employ dubious methods during negotiations.

Disgruntled employees, who are part of management, might whistleblow on the management and the concerns they raise cannot be pinned on them when addressed through collective bargaining. On the contrary, if whistleblowers act on their own and raise the alarm about the manner the management conducts its businesses and tramples on employee rights, it would be easy for the employer to dismiss the individual as a rogue employee and a detractor. Thus, the management would easily frustrate complainants with a view of silencing them and covering up their faults without attending to the concerns raised. Collective bargaining, thus, acts to make anonymous complaints and avoid victimisation by airing workers’ grievances.

Employees get to know their rights through collective bargaining, which also ensures that employers do not violate these rights. Both the employer and employee have inalienable rights that they must uphold for mutual benefits. Prior to commencement of negotiations, trade union officials mention workers’ rights, including freedom to associate and complain. In Pakistan, the labour market is still not aware of employees’ rights and importance of collective bargaining (Luqman 970).

The lack of knowledge about the importance of workers knowing their rights has led to the introduction of collective bargaining in Pakistan. Collective bargaining secures the concerned parties’ rights. In this view, the employer is made aware of the employee rights, and therefore, less likely to victimise the employees or trample on their rights. As knowledge is power, trade unions sensitise the employees on their rights so that they are in a position to act from an enlightened point of view and channel their grievances in a civilised and logical manner.

Collective bargaining empowers the employees and promotes their status in their workplace. Ndungu states that in South Africa, legislation favour employers, who tend to misuse their powers on striking employees (90). To bring some form of a balance, employees need empowerment. Empowerment emanates from employee representation by trade unions, which employers and governments recognise as legal bodies mandated to advance employees’ interests.

As a result, all the departments in an organisation would respect employees and their roles in an organisation. Part of this respect stems from the fact that the address of issues through unions, the employees have the inalienable bargaining power. On the contrary, it would be easier for employers to victimise individuals and dismiss their concerns or even sack them. With empowerment and respect, employees are treated with dignity in the workplace and whenever they raise complaints, the management gives them audience and work with them to find a way round the problem.

Collective bargaining affords the employees the opportunity to better themselves and the community. According to Luqman, the last decade has seen a stagnation on salary increments and heightened introduction of draconian legislations aimed at curtailing the benefits that arise from collective bargaining (970). Some countries do not willingly support the existence of collective bargaining because they think it negatively affects the economy by propagating employees’ rights. However, it is through collective bargaining that employees have better working and living conditions, including, better healthcare, improved wages and holidays, just to mention a few.

The impact collective bargain has on the employees’ welfare is thus not something to be trivialised and some of the benefits accruing from the pursuance of better lives through collective bargaining act to underscore its importance. Countries that have a high number of trade unions tend to have a satisfied workforce evidenced by increased health insurance, better pay, pension coverage, minimal work-related deaths, lower poverty levels, and work leaves and holidays. Workers not in unions have also gained from these benefits. By bettering the lives of employees, collective bargaining aims to increase productivity in return for the benefits the employees have accorded.

Collective bargaining inspires strikes, which over the years have revolutionised industries. Collective bargaining is the foundation stones for trade unions that sanction strikes for it compel organisations to comply with the rights of employees (Luqman 970). Trade unions represent employees’ rights and its members sit at the negotiation table and haggle for better working conditions. Trade unions, therefore, unite the employees and are used to instigate strikes and go slow, if employers take a hard-line stance and refuse to cede ground for the resolution of stalemates. A truce to ongoing strikes can only be arrived at only when stakeholders return to the negotiation table and find a favourable solution.

Collective bargaining, therefore, aims at ensuring there is an agreement between the employers and workers over contentious matters. Though the negotiators must reach an agreement, the rights of both employers and employees require careful consideration during negotiations.

Collective bargaining is key in informing the reforms of labour laws. Collective bargaining has been in existence since the establishment of industries and the drafters of labour laws, in a bid to not only protect the worker and ensure their betterment, have adopted some of the employees’ complaints. Consequently, the International Labour Organisation (ILO) upholds collective bargaining as the driver of industries, and the basis upon which trade unions exist. The ILO additionally, provides the guidelines upon which trade unions operate and protects them against coercion from the state. Trade unions and ILO also act as a source of employment for employees, who have actively involved themselves in negotiation for better working conditions processes. The employment opportunities that ILO and trade unions avail reward those die-hard employees, who champion workers’ rights and somehow inspire workers to continue fighting for what is rightfully theirs without fear of being sacked.

Collective bargaining is important because it legitimises employees’ rights. Trade unions collaborate with legislative bodies to ensure that workers’ rights are entrenched in national and international labour laws. Ndungu recognises the right to strike as an important right that ILO and trade unions upholds in their quest to improve working conditions and remuneration of employees (84). This legitimisation works to preserve the rights of workers and ensure they are always recognised. Employers being aware of this provision in the constitution are, therefore, less likely to deny workers, some of their basic rights, when they decide to go on a rampage to demand for better wages. The fact that strikes are legitimate also goes a long way in reducing victimisation at the workplace.

Trade unions, which fight for the workers’ interest, aim to ensure equity in wages and salaries. Numerous studies conducted in the United States and United Kingdom attest to the fact that a decrease in the number of trade unions has contributed immensely to wage inequality (Hayter 31; Luqman 972; Ndungu 88).

Consequently, wages seem to be either stagnating or declining, while the compensations for executives are on an upward trend. Trade unions, through collective wage-setting institutions have been at the forefront in the waging the war against inequitable pay. In retaliation, opponents of collective bargaining have been peddling rumours to the effect that collective wage-setting mechanisms would lead to wage pressure that would in turn lead to a decrease in the labour market performance and sabotage employment. However, empirical evidence dismisses the rumours as unfounded and vouches for the merits of collective bargaining, including markets in which collective wage-setting mechanisms have considerate and equitable wage distribution. Unions achieve equity via advocating for collective contracts that have less wage disparity.


Collective bargaining provides a platform where both employers and employees meet to discuss work-related issues and find amicable solutions. It lays down the ground rules for dispute resolution, something that is imperative during negotiations and arrive at a decision. To this end, collective bargaining has numerous benefits to employers and employees leading to increased industrialisation and satisfaction in the labour markets.


Albeit there have been instances whereby collective bargaining has been demonised as a potential risk to performance of businesses and a threat to employment, even forcing some countries to formulate legislations that curtail the potential benefits that might emanate from collective bargains, this essay has highlighted its benefits. The merits of having collective bargaining favour both the employers and employees and thus opponents of collective bargains cannot conclusively say that it affects negatively on business performance. In the light of the evidence captured in this write-up, collective bargaining is not detrimental to both employers and employees and so the essay supports continual existence and upholding of collective bargaining, as a key driver of economies and revolutionary to industries.

Works Cited

Hayter, Susan. “A Fair Globalisation: The Role of Collective Bargaining in Stemming the Rising Tide of Inequality in earning and Income.” International Journal of Labour Research 1.2 (2009): 27-40. Print.

Luqman, Adeel. “Collective Bargaining and its Implementation: A Case Study of HBFC in Pakistan.” Institute of Interdisciplinary Business Research 3.9 (2012): 969-974. Print.

Ndungu, Kimani. “Perspectives on Collective Bargaining in the Global South. The case of South Africa.” International Journal of Labour Research 1.2 (2009): 81-95. Print.

Cite this paper

Select style


BusinessEssay. (2022, November 18). Labour Relations: Collective Bargaining. Retrieved from


BusinessEssay. (2022, November 18). Labour Relations: Collective Bargaining.

Work Cited

"Labour Relations: Collective Bargaining." BusinessEssay, 18 Nov. 2022,


BusinessEssay. (2022) 'Labour Relations: Collective Bargaining'. 18 November.


BusinessEssay. 2022. "Labour Relations: Collective Bargaining." November 18, 2022.

1. BusinessEssay. "Labour Relations: Collective Bargaining." November 18, 2022.


BusinessEssay. "Labour Relations: Collective Bargaining." November 18, 2022.