Labour Law Project Naya
Labour Law Project Naya
Labour Law Project Naya
UNIVERSITY, LUCKNOW
FACULTY OF LAW
PROJECT- ON
SUBMITTED TO
VIPIN SHAH
GUEST FACULTY
D.S.M.N.R.U
SUBMITTED BY
PREETI SINGH
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INDEX
o Introduction
o Features of collective bargaining
o Collective bargaining process
o Strike and lockout as a method of collective bargaining
o Under the act two types of settlement have been recognised
o Problems relating to collective bargaining in india
o Conclusion & suggestions
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INTRODUCTION
According to K. Alexander
“Collective bargaining is a process of bargaining between the employers and their
workers by which they settle their disputes among themselves relating to employment
or non-employment or terms of employment or conditions of labour of the workmen,
on the strength of the sanctions available to each side. Occasionally such bargaining
results in amicable settlement arrived at voluntarily and peaceful between the parties.
But quite often the workers and the employers have to apply sanctions by resorting to
the weapons of strikes and lock-outs to pressurize one another which makes both the
sides aware of the strength of one another and that finally forces each to arrive at a
settlement in the mutual interests. It is thus the strength of the parties which determines
the issues rather than the wordy duals which are largely put on for show as any element
of strength in one party is by the same token an element of weakness in another”.
1
I.L., Labour Law and Labour Relations, N.M. Tripathi (Pvt) Ltd., Bombay, (1968), P.29:
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more employers' organizations, on the one hand, and one or more workers'
organizations, on the other, for –
(a) Determining working conditions and terms of employment; and/or
(b) Regulating relations between employers and workers; and/or
(c) regulating relations between employers or their organizations and a
workers' organization
It is a group process, wherein one group, representing the employers, and the other,
representing the employees, sit together to negotiate terms of employment;
Negotiations form an important aspect of the process of collective bargaining i.e., there
is considerable scope for discussion, compromise or mutual give and take in collective
bargaining;
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over a period of time in an enterprise. Moreover, it is flexible process and not fixed or
static. Mutual trust and understanding serve as the by products of harmonious relations
between the two parties;
It a bipartite process. This means there are always two parties involved in the process
of collective bargaining. The negotiations generally take place between the employees
and the management. It is a form of participation;
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Healthy collective bargaining generates a spirit of self-confidence and self-
reliance among the workers. It is based on a ‘give and take’ policy on both
sides. Collective bargaining leads to increased goodwill and understanding
between labour and management. This in turn helps to create peaceful and
comfortable atmosphere in industrial relations.
Importance to employees
Collective bargaining develops a sense of self respect and responsibility among
the employees
It increases the strength of the workforce, thereby, increasing their bargaining
capacity as a group
Collective bargaining increases the morale and productivity of employees;
It restricts management’s freedom for arbitrary action against the employees.
Moreover, unilateral actions by the employer are also discouraged;
Effective collective bargaining machinery strengthens the trade unions
movement;
The workers feel motivated as they can approach the management on various
matters and bargain for higher benefits;
It helps in securing a prompt and fair settlement of grievances. It provides a
flexible means for the adjustment of wages and employment conditions to
economic and technological changes in the industry, as a result of which the
chances for conflicts are reduced;
It helps in securing a prompt and fair settlement of grievances. It provides a
flexible means for the adjustment of wages and employment conditions to
economic and technological changes in the industry, as a result of which the
chances for conflicts are reduced.
Importance To Employers
It becomes easier for the management to resolve issues at the bargaining level
rather than taking up complaints of individual workers.
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Collective bargaining tends to promote a sense of job security among
employees and thereby tends to reduce the cost of labor turnover to
management.
Collective bargaining opens up the channel of communication between the
workers and the management and increases worker participation in decision
making.
Collective bargaining plays a vital role in settling and preventing industrial
dispute
Importance to society
Collective bargaining leads to industrial peace in the country;
It results in establishment of a harmonious industrial climate which helps the
pace of a nation’s efforts towards economic and social development since the
obstacles to such a development can be reduced considerably;
The discrimination and exploitation of workers is constantly being checked;
It provides a method or the regulation of the conditions of employment of those
who are directly concerned about them.
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should explain to them the circumstances and make efforts to redress the
grievances/complaints of the workers.
The presence of genuine spirit of mutual trust, goodwill and bargaining should
be there on the part of both the parties;
Competence for bargaining with mutual respect and implementation of the
agreement arrive at should be possessed by both the parties.
The parties to collective bargaining should be honest and the agreement should
be conducted by these honest, competent and reasonable leaders;
Keeping in view the changing circumstances, it is desirable that the
management should change their policies and should keep in view the dignity of
the workers. Appropriate labour policy should be adopted by the management
and this policy to be followed by all employees. Necessary precautions must be
taken.
If there are more than one union the management should enter into negotiation
with union having majority representation.
It is equally desirable on the part of the union to raise reasonable demands.
They should not put up such demands as are beyond the paying capacity of the
establishment or may be against the national policies.
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finally to dynamic nature of the scope of collective bargaining. At the same
time, they show how important negotiation has become as an institution.
And, the future holds promise of an even greater role for collective”.
2
[ALJ, (1965) p.39]
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employees of that organization. Once this part of the process is completed, collective
bargaining can begin.
Bargaining always takes place between labor and management, but negotiations can
include more than one group of workers and more than one employer. Single-plant,
single-employer agreements are the most common. However, if an employer has more
than one plant or work site, multiplant, single-employer agreements can be bargained.
Several different union groups representing the workers of the same employer can use
coalition bargaining. Industry wide bargaining involves one national union bargaining
with several employers of a specific industry. Many different negotiation styles can be
used when union and labor representatives sit down at the bargaining table. The two
basic modes of bargaining are traditional bargaining and partnership bargaining, though
there are many variations of each style.
The traditional style of bargaining has been used since collective bargaining began
between management and the early labor unions. It is an adversarial style of
negotiating, putting one side against the other with little or no understanding of, or
education about, the other on the part of either party. Each side places its demands and
proposals on the table, and the other side responds to them with counterproposals. The
process is negative and involves a struggle of give-and-take on most issues. Even with
its negative connotations, however, the traditional style of negotiating is still used
effectively in bargaining many union contracts.
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more congenial atmosphere to the negotiating process. Many modern
unionmanagement contracts are bargained very successfully using the partnership style.
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Mediation is usually the first alternative when negotiations are at a stalemate. The two
parties agree voluntarily to have an impartial third party listen to the proposals of both
sides. It is the mediator's job to get the two sides to agree to a settlement. Once the
mediator understands where each side stands, he or she makes recommendations for
settling their differences. The mediator merely makes suggestions, gives advice, and
tries to get labor and management to compromise on a solution. Agreement is still
voluntary at this point. The mediator has no power to force either of the parties to settle
the contract, though often labor and management do come to agreement by using
mediation.
Sources Of Power
If the collective bargaining process is not working as a way to settle the differences
between labor and management, both sides have weapons they can use to bolster their
positions. One of the most effective union tactics is the strike or lockout. While on
strike, employees do not report to work and, of course, are not paid. Strikes usually
shut down operations, thus pressuring management to give in to the union's demands.
Some employees, even though allowed to belong to unions, are not allowed to strike.
Federal employees fall into this category. The law also prohibits some state and
municipal employees from striking.
During a strike, workers often picket at the entrance to their place of employment. This
involves marching, carrying signs, and talking to the media about their demands. The
right to picket is protected by the U.S. Constitution as long as it does not involve
violence or intimidation.
Problems sometimes arise during strikes and picketing when management hires
replacement workers, called scabs or strikebreakers, who need to cross the picket line
in order to do the jobs of the striking workers.
The boycott is another union strategy to put pressure on management to give in to the
union's demands. During a primary boycott, not only union members but also members
of the general public are encouraged to refuse to conduct business with the firm in
dispute with the union.
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Though it is rarely done, management may use the lockout as a tactic to obtain its
bargaining objectives. In this situation, management closes down the business, thus
keeping union members away from working. This puts pressure on the union to settle
the contract so employees can get back to their jobs and receive their wages.
Management sometimes uses the injunction as a strategy to put pressure on the union to
give in to its demands. An injunction is a court order prohibiting something from being
done, such as picketing, or requiring something to be done, such as workers being
ordered to return to work.
Grievance Procedures
Collective bargaining is a successful way for workers to reach their goals concerning
acceptable wages, hours, and working conditions. It allows workers to bargain as a
team to satisfy their needs. Collective bargaining also allows management to negotiate
efficiently with workers by bargaining with them as a group instead of each one
individually. Though traditional bargaining can be negative and adversarial, it does
produce collective bargaining agreements between labor and management. Partnership
bargaining can lead to increased understanding and trust between laborand
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management. It is a positive, cooperative approach to collective bargaining that also
culminates in contracts between labor and management.
The right to strike is labors’ ultimate weapon and in the course of the century, it has
emerged as the inherent right of every worker. It is an element, which is of the very
essence of the principle of collective “Bargaining” 3 . In Conway v Way 4 the Court
adopted the phrase “industrial warfare” where the Court described ‘strike’ and ‘lock-
outs’ as the ‘weapons allowed by the law’. The strike is the antithesis of lockout. It is
regarded as a powerful weapon of collective bargaining and is generally fraught with a
possibility of industrial dislocation with all its attending hardships and evils, the
occurrence of which is regarded as one of the powerful levers to bring about
agreements. The trade unions with sufficient memberships strength are able to bargain
more effectively with the management than individual workmen. The bargaining
strength would be considerably reduced if it is not permitted to demonstrate by
adopting agitational methods such as “work to rule”, absenteeism”, “sit down strike”
3
AP State Road Transport Corporation Employee’s Union v APSRTC (1970) Lab IC 1225 (AP
4
Conway v Way (1909) AC 506 (HL)
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and “strike”. Collective Bargaining for securing improvement on matters like wages,
basic pay, dearness allowance, bonus, provident fund, gratuity, leave, holidays and
other terms of service and conditions of labour, is the primary object of trade unions
and when demands like this are put forward, a strike thereafter may justifiably be
resorted to in an attempt to induce the employer to agree to the demands or at least to
open negotiations. Sometimes the threat of strike is enough to make the employer
concede to the demands of the union.
But the right to strike is not absolute and the industrial jurisprudence has subjected it to
certain limitations.5 In Syndicate Bank v K.Umesh Naik6, Sawant, J stated the law in
the following words-
“The strike, as a weapon, was evolved by the workers as a form of direct action, during
their long struggle with the employers. It is essentially a weapon for the last resort
being an abnormal aspect of the employer employee relationship and involves
withdrawal of labour disrupting production, services and the running of the enterprise.
It is a use by the labour of their economic power to bring the employer to see and meet
their point of view over the dispute between them. The cessation or stoppage of works
whether by the employee or the employer is detrimental to the production and economy
and the well being of the society as a whole. It is for this reason that the industrial
legislation while not denying the right of workmen to strike, has tried to regulate it
along with the right of the employer to lock out and has also provided a machinery for
peaceful investigation, settlement, arbitration, adjudication of the disputes between
them. The strike or lock-out is not to be resorted to because the concerned party has a
superior bargaining power or the requisite economic muscle to compel the other party
to accept its demand. Such indiscriminate use of power is nothing but assertion of the
rule of ‘might is right’. Its consequences are lawlessness, anarchy and chaos in the
economic activities, which are most vital and fundamental to the survival of the
society. Such action, when the legal machinery is available to resolve the dispute, may
5
B.R.Singh v Union of India (1990) Lab IC 389
Syndicate Bank v K.Umesh Naik, AIR 1995 SC 319
6
Syndicate Bank v K.Umesh Naik, AIR 1995 SC 319
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be hard to justify. This will be particularly so when it is resorted to by the section of the
society, which can well await resolution of the dispute by the machinery provided by
the same. The strike or lock-out, as a weapon, has to be used sparingly. For redressal of
urgent and pressing grievances when no means are available or when available means
have failed to resolve it. It has to resort to, compelling the other party to the dispute to
see the justness of the demand. It is for this reason that the industrial legislation such as
the Act places additional restriction on strikes and lock outs in public utility services.”
7
S.N. Dhyani, Trade Union and the right to strike, S. Chand & Co. (Pvt.) Ltd, New Delhi, PP. 374-380.
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settlement arrived at by process of collective bargaining with the employer has been
given a statutory recognition under Section 18 of the Act.
1. Settlement arrived in the course of conciliation proceeding before the authority. Such
settlements not only bind the member of the signatory union but also non-members as
well as all the present and future employees of the management.
2. Settlement not arrived in the course of conciliation proceedings but signed
independently by the parties to the settlement, binds only such members who are
signatory or party to the settlement.
Section 19 of the Act prescribes the period of operation inter alia of such a settlement
and envisage the continuation of the validity of such a settlement unless the same is not
replaced by another set of settlement, while Section 29 prescribes the penalty for the
breach of such a settlement.
The Industrial Disputes Act, 1947 provides for the appointment of Conciliation
Officers, charged with the duty of mediation in promoting the settlement of industrial
disputes. On a reference to the Conciliation Officer, a Conciliation Board is constituted
consisting of representatives of employees and employer with the conciliation officer
as the chairman. The memorandum of settlement duly signed by the conciliation officer
is to go from one camp to the other and find out greatest common measure of
agreement, to investigate the dispute and to do all such things as he thinks fit to arrive
at a fair and amicable settlement of the dispute.8
A settlement arrived at by agreement between the employer and the workmen otherwise
than in the course of conciliation proceedings shall be binding on the parties to the
8
Royal Calcutta Golf Club Mazadoor Union v. State of west Bengal, AIR 1956 Cal 550.
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agreement. A settlement comes into operation on such date as is binding on the parties
to the agreement, and for such period as has been agreed upon. Dealing with the
binding nature of settlement Chagla, J has observed that; “Industrial Law takes no
notice of any private settlement or agreement arrived at between parties in the course of
industrial dispute. Such a private agreement belongs to the realm of contract, it may
give rise to contractual rights; it has no sanctions in industrial law and industrial dispute
does not end until a settlement is arrived at which has been given a binding effect under
the provision of S.19 (2) and such settlement can be only arrived at when conciliation
proceedings are held under S.12 of the Industrial Disputes Act, 1947”. 9 From this
observation, it would be wrong to infer that a private settlement in respect of an
industrial dispute does not end an industrial dispute. In this respect the following
observation of chief Justice Chagala are relevant, “But when parties do arrive at a
settlement, the law gives to it a greater sanctity than it gives to an award and therefore
, the industrial law does not contemplate any interference with the finality of a
settlement and it compels the settlement to run on for the period mentioned in the
settlement itself and neither party is permitted to challenge that settlement during its
duration.”10
The collective bargaining scene in India is not very encouraging. The major emphasis
of both union and employers is to settle the disputes through adjudication rather than
sorting out the issues among themselves.
9
Poona Mazdoor Sabha v. G.K.Dhuta, AIR b1956. Bom. 743.
10
Ibid
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I. Due to the dominance of outsiders in trade unionism in the country, there is
multiplicity of unions which are weak and unstable, and do not represent
majority of the employees. Moreover, there are inter-union rivalries, which
further hinder the process of collective bargaining between the labour and the
management.
II. Since most of the trade unions are having political affiliations, they continue to
be dominated by politicians, who use the unions and their members to meet
their political ends.
A lot has been said about the development of collective bargaining in India. But in fact,
collective bargaining which is a two way affair, has been used at present only as a one-
way exercise in which the union, as the aggressive partner, makes the demands, and the
management , as the passive partner, derives satisfaction merely by countering the
extent to which it is able to minimize the additional burdens while meeting the union’s
demands. There are not many examples even now where union as well as the
management, as equal partners, have approached the process of collective bargaining
with the objective and spirit that collective bargaining must bring concrete benefit to
both the parties.
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