labour economics

Topics: Employment, Supply and demand, Wage Pages: 4 (1231 words) Published: December 20, 2013
Labour Economics
Wage Determination
What are Trade Unions?
Trade Unions are also known as Labour Unions. It is the association of labourers in a particular trade, industry, or company, created for the purpose of securing improvements in pay, benefits, working conditions, or social and political status through collective bargaining. It’s an organization whose membership consists of workers and union leaders who are united to protect and promote their common interests.

What do you mean by Collective Bargaining?
It is a formalized process by which employers and independent trade unions negotiate terms and conditions of employment and the ways in which certain employment – related issues are to be regulated at national, organizational and workplace levels. It is a collective and a continuous process. The principle of ‘give and take’ has been infused in the principle of Collective Bargaining. It is a technique that has been adopted by the unions and the managements to reconcile their conflicting interests. It is called ‘collective’ because the employees as a group select representatives to meet and discuss differenced with the employer. It is known as ‘bargaining’ because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations. Definition of Collective Bargaining by Byar & Rue (1991), it is a process that involves the negotiation, drafting, administrative and interpretation of a written agreement between an employer and a union for a specific period of time. Importance of Collective Bargaining:-

To Employees:-
1. CB helps to develop a sense of responsibility and accountability among the employees. 2. CB increases the morale and productivity of employees.
3. It helps in securing a prompt and fair settlement of grievances. 4. Effective collective Bargaining machinery strengthens and gives value to the trade union movement. 5. The discrimination and exploitation of workers,...
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