Consumer participation in collective bargaining


Collective bargaining as an institutional process for solving problems arising directly out of employer-employee relationships has already gained an important place in human resources management. The two parties to the collective bargaining namely, the employees and employers have an opportunity to ventilate their side of the problems without any reference to the impact of that settlement on the consumer of their product in particular and the society in general, Consumer participation in collective bargaining therefore is a new dimension in Human resources management which needs a closer consideration.

Causes of disputes:

Majority of the disputes in industries are related to the problems of wages, salaries and benefits. It is a common knowledge that the industrial wages have been constantly influencing the prices as there is no fair link between wages and employee productivity.

The increase in wages affected the cost of production and naturally therefore the prices. The consideration for employer has been to bring about a minimum rise in wages and the effort of the working class has been to get as much wage as possible through either threat of strike or agreement under collective bargaining. Both parties have not taken into consideration the plight of the consumer. In the collective bargaining both parties may have a sense of satisfaction which results in the agreement but both parties ignore the consumer for whom ultimately they work and exist.

Collective bargaining no doubt is important not only to the employer and employees but also to the society as it paves the way for industrial, social and economic development by bringing about industrial peace. The industrial peace is important the employer and employee and the society for which the cost is paid by the consumers. It is common knowledge that producers do not sacrifice their share of profits even when they increase their wage bill, because this increased cost is shifted to the consumers.

Consumers are exploited in two ways i.e. when there is an increase in wages and benefits and when the producer takes increased share in profits. Thus, employer and employee enjoy the contributions of the consumer. Their agreement under collective bargaining also results in a drain on the income of the consumers.

The power of trade unionism in the protection of the right of workers and in meeting their demands in now well established. The employers also are forming associations to protect their rights and interests. The employers and employees both have unions, both have bargaining powers but the consumer stands alone. It is time when consumer awareness is also essential.

Consumerism is superfluous even in advanced economies where competition technical competence and quality of product / services prevail. And consumers in advanced countries resort to legal battles to assert their right to expose the evil design of economic offenders and defaulting manufacturers.

The consumer exploitation in India has been less publicized than actually what it is. Of late it is heartening to note that at least in the metropolitan cities consumer aggravations have come up and they are making efforts to bring bout consumer awareness with regard to the quality, quantity and prices of goods. All these efforts are no doubt necessary but they do not take into account the mechanism of price fixation. What appears to be fair on the basis of the cost components may not be a fair procedure.

The cost inflation factors are to be taken care of in fixing wages and prices. Wages and profit have always been influencing the cost of production. Since wages and profit both influence the cost and ultimately the price, consumers should have a say in it.

Further, industry, workers and government have been constantly struggling to maintain industrial peace through collective bargaining and in that process consumer has always been a victim of neglect.

Collective bargaining is an institutional process for solving problems arising directly out of employer-employee relationships. Through collective bargaining the two parties, become responsive to each other. Employees ventilate their problems relating to wages, employee benefits etc. while the management put-forth it demands regarding employee co-operation and commitment so as to maximize its profits. Thus, the two parties discuss the problems and each party tries to solve the problem of the other. The scope of collective bargaining is wider as the solutions for common problems can be found directly through negotiations between both the parties.