10 Advantages and Disadvantages of Collective Bargaining

Collective bargaining is referred to as a process or negotiations between an employer or organization and a group of employees who are members of a trade union. The union will negotiate with an employer or a group of businesses on behalf of an employee or employees. It usually encompasses negotiations on number of hours worked, health and safety, salaries and grievances, among others.

Although it has been introduced as early as 1891 and have been in existence for more than a century, not all are for this process. There are advocates for as well as critics of collective bargaining and both have significant views on why it is good and bad for industries and the parties involved: the employers and employees. To have a better understanding, let us discuss the pros and cons of this contentious topic.

List of Advantages of Collective Bargaining

1. It is pro-employees.
Advocates for collective bargaining posit that with collective bargaining, it will be easier for employees to fight for their rights as hard-working people. By being members of trade unions, they will have a voice through the representatives of the unions whose aim is to work for the betterment of its employee members such as higher wages, shorter working hours, safer workplaces and better health care.

2. It keeps abusive employees powerless.
In collective bargaining, employees who normally will not have the means and confidence to fight for their rights if they are not part of a trade union will have individuals who will challenge employers who take advantage of their workers. Supporters of collective bargaining say that employees have better chances to get compensated accordingly or leave their jobs if they want to without having to worry they will be sued or not get their wages.

3. It prevents employees from going on strikes.
When there are big issues between employees and employers that are not settled, a popular option for employees are to go on strikes. These actions hamper operations and consequently cripple businesses. In the end, consumers suffer. With collective bargaining, there is no need for workers to stop working because they have representatives with them who will work for their benefits. Moreover, collective bargaining protects employers as well. This is because collective bargaining will result to an agreement. And normally, this will also be agreed upon if the negotiations are beneficial for both parties. With collective bargaining, employers are also protected in a way since business operations will not be totally affected.

4. It gives protection to all employees.
People who are in favor of collective bargaining say that in the contracts signed by the employers and trade union representatives, all employees in the company will benefit from whatever conditions are stipulated in the agreement, regardless if they are members of the trade union or not. Additionally, this gives employees the right to question the policies of the company they belong to.

5. It provides security and stability.
On the part of employees, this will give them security of tenure since they will not have to worry about getting terminated unlawfully and in case they will be, they have a support system as well as representatives to fight for their rights as employees. Conversely, business owners will be able to project the expenses to finance operations and compensation packages and benefits. This way their businesses will be more stabilized.

List of Disadvantages of Collective Bargaining

1. It is prone to inequality.
Critics of collective agreement say that this can lead to either the employers or employees getting less of what they deserve. If representation is weak on the side of employers, chances are, the business will lose a substantial amount of money from over-compensation or excessive benefits. On the other hand, if representation for employees is weak, they might not get employment benefits they should be enjoying.

2. It can be biased to employers.
Some groups not in favor of collective bargaining argue that this process gives too much power to employees and leave the employers with tied hands when it comes to running their businesses. Since trade unions can demand from employers and ask for collective bargaining negotiations, critics are worried that this practice may become a habit even if in truth, there is nothing irregular with how these employers run their businesses.

3. It takes a long period of time.
Another disadvantage claimed by anti-collective bargaining is the time it takes for the negotiations to finish and materialize. They talk about bureaucracy and what it does to the people involved in the process. Negotiations can take months and even years to finish, excluding the time it will take to execute the stipulations in the agreement contracts.

4. It can be unfair to senior employees and member employees.
If the issue is about salaries and benefits, say equality in wages, employees who have been working for long years for an organization are taken advantage of since they will be getting the same benefits with that of their junior and newer colleagues. For critics, this is not appropriate. Also, they contend that since that all the benefits included in the collective bargaining agreement will be handed down even to non-member of the trade union, for example, this is not fair to members who pay for their dues.

5. It can widen the gap between employers and employees.
Although collective bargaining is aimed to come up with solutions beneficial to both the management and employees, there are cases where nothing is agreed upon. When talks become futile, the situation might aggravate instead of mitigate. For the opposing group, this can, at times, create a barrier between employers and employees instead of a healthier relationship.

Collective bargaining has both advantages and disadvantages which can work for or against the parties involved. Although mutual benefits can be achieved legally with this, abuse and inequality can also take place. So long as the benefits outweigh the setbacks and employees get what they deserve without negative effects on the company’s resources and growth, collective bargaining can be a good thing.

Author Biography
Keith Miller has over 25 years experience as a CEO and serial entrepreneur. As an entreprenuer, he has founded several multi-million dollar companies. As a writer, Keith's work has been mentioned in CIO Magazine, Workable, BizTech, and The Charlotte Observer. If you have any questions about the content of this blog post, then please send our content editing team a message here.