DEFENITIONS OF COLLECTIVE BARGANING

There is no precise definition of “Collective bargaining”. In fact keeping in view the change in the

society with its fast changing social norms the scope and content of collective also varies from country

to country. Nevertheless, Collective bargaining has been defined by different experts in different ways.

It is treated as a method by which problem of wages and conditions of employment are resolved

peacefully and voluntarily between labour and management. 4

This chapter deals with the various definitions of collective bargaining which will be helpful in

understanding the concept of collective bargaining, its ambit and scope as has been coined by

various writers.
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”.

Convention 154 of International Labour Organization (ILO) under Article 2 says: For the

purpose of this Convention the term collective bargaining extends to all negotiations which take place

between an employer, a group of employers or one or 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

ILO has defined collective bargaining as,

“negotiation about working conditions and terms of employment between an employer and a group of

employees or one or more employees’ organizations with a view to reaching an agreement wherein

the terms serve as a code of defining the rights and obligations of each party in their

employment/industrial relations with one another”.

This definition however confines the term collective bargaining as a means of improving
conditions of employment. But in fact, collective bargaining serves something more.
Perlman aptly stated,

"Collective bargaining is not just a means of raising wages and improving conditions of employment.

Nor is it merely democratic government in industry. It is above all technique. Collective bargaining as

a technique of the rise of a new class is quite different, from the desire to displace or "abolish" the "old

ruling class", to gain equal rights as a class, to acquire an exclusive jurisdiction in that sphere where

the most immediate interests, both material and spiritual, are determined. And a shared jurisdiction

with the older class or classes in all other spheres."5

The best justification for collective bargaining is that it is a system based on bipartite agreements, as

such superior to any agreement involving third party intervention in matters which essentially concern

employers and workers.6

In Encyclopedia of Social Sciences, collective Bargaining has been defined a process of discussion

and negotiations between two parties, one or both of whom is a group of persons acting in concert.

The resulting bargain is an understanding as to terms and conditions under which a continuing service

is to be performed. More especially, collective bargaining is the procedure by which an employer or

employers and a group of employees agree upon the conditions of work.

In the words of John T Dunlop, “Collective Bargaining is:

(1)
a system which establishes, revises and administers many of the rules which govern the
worker’s place of work;

(2)

a procedure which determines the quantum of compensation which employees should

receive and which influences the distribution of economic ills;
(3)

a method of settling disputes during the pendency of agreement and of determining, after its expiry,

whether a dispute should be re-opened or whether a strike or a lock-out should be resorted or not.
In sum collective bargaining, is labor relations, procedure whereby an employer or employers agree to

discuss the conditions of work by bargaining with representatives of the employees, usually a labor

union. Its purpose may be either a discussion of the terms and conditions of employment (wages,

work hours, job safety, or job security) or a consideration of the collective relations between both

sides (the right to organize workers, recognition of a union, or a guarantee of no reprisals against the

workers if a strike has occurred). The merits of collective bargaining have been argued by both

opponents and proponents of the process; the former maintain that it deprives the worker of his

individual liberty to dispose of his service, while the latter point out that without the union's protection

the worker is subject to the dictation of the employer.

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.

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.

Principles of Collective Bargaining

As mentioned before that the collective bargaining has succeeded in introducing industrial
democracy in industrial and labour managements. Industrial democracy implies that the majority

union should have the right to sole representation i.e. the right to speak and act for all workers and to

enter into agreements with the employer. There are certain principles which have to be followed by

both the management and workers for collective bargaining. These principles are as follows:
1.
There should be a realization on the part of both unions and managements that for taking wiser
an more expedient decisions, collective bargaining is a proper method.
2.

An opportunity should be provided to trade union leaders for putting their complaints, demands,

needs, etc. before the managements and the management should explain to them the circumstances

and make efforts to redress the grievances/complaints of the workers.

3.
The presence of genuine spirit of mutual trust, goodwill and bargaining should be there on the
part of both the parties;
4.
Competence for bargaining with mutual respect and implementation of the agreement arrive at
should be possessed by both the parties.
5.
The parties to collective bargaining should be honest and the agreement should be conducted by
these honest, competent and reasonable leaders;
6.

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.
7.
If there are more than one union the management should enter into negotiation with union having
majority representation.
8.

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.

Scope of Collective Bargaining

The growth of collective bargaining is associated with the recognition of trade unionism. With the

growth of trade unions and industrialization the scope of collective bargaining is expanding. Initially

collective bargaining was used for determining hours of work, wages and terms of employment, but

now within its purview are included the issues like leave with pay, regulation of forced leave, pension,
seniority promotions, sickness and maternity benefits, etc. Since in the field of bargaining collective

action is now common, collective bargaining has assumed an institutional form. In the words of C.W.

Randle:

“The subject matter of collective bargaining had broadened until it has virtually eliminated the field of

the management prerogatives. The area pattern of bargaining has moved from simple style plant

bargaining to region-wise and 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”.

Advantages and Disadvantages of Collective Bargaining

Advantages of Collective Bargaining

According to National Commission Report on labour collective bargaining has been preferred
over compulsory adjudication system for several reasons:
(a)
It is a system based on bipartite agreements, and as such, superior to any arrangement involving
third party intervention in matters which essentially concern employees and workers;
(b)
It is quick and efficient method of settlement of industrial disputes; and
(c)
It is democratic method of settlement of industrial disputes;

in the agreement. But there are other ways also whereby the problem is raised. For example, a suit

may be filed by the labour organization, an employer or employer’s association for specific

performance or to claim damages or to seek the enforcement of an arbitration clause stipulated in the

agreement. If there is an alleged violation of the agreement it is sometimes sought to enjoin a strike or

lock-out called for the purpose or sometimes the labour organization is the plaintiff seeking to enjoin a

lock-out in breach of the agreement or failure to hire union employees etc. Where the legality of the

agreement is designed to be destroyed, the validity of collective bargaining agreement is also tested

in this proceedings. As for example, to secure a closed shop or to regulate an entire industry by

prescribing rules governing competition etc.

Duration of Collective Bargaining Agreements
The durations of collective bargaining agreements vary widely. Unions generally favour shorter

contracts, while managements favour longer ones. In the United States many of the contracts are for

a period of one to three or more years, with options to renew. In the United Kingdom, “open end”

contracts, which can be negotiated on notice at any time, are the rule. In the Scandinavian countries,

one year contracts with renewal clauses are usual.

The position in India is not clear. A study of 114 contracts in 1961 by the Employers Federation of

India showed that a majority of them were for one to five years, with a strong trend in favour of longer

terms. (This may perhaps be evidence of control by employer or of employer’s superior bargaining

power or both). The long-term contract has two advantages for management over the short-term one:
(1)
It imparts stability to labour-management relations, and
(2)
It helps in planning production and expansion programmes based on fixed labour costs
(one of the highest items in the budgets of many industries).
Contents or Subject Matter of Collective Bargaining Agreements
The subjects for collective bargaining are determined by the parties in some countries and by law
in others. In Denmark, Germany, Italy, Norway, Sweden, Switzerland, the United Kingdom and

the United States, the parties determine their subjects freely (of course within legal limits). In Brazil,

Columbia, Equador and some other Latin American Countries the law specifies that every contract

must include clauses regulating wages, hours, rest periods, holidays, the duration of the agreement,

the procedure for its extension. In France, every national collective contract must contain provisions

on freedom of employees (with particular reference to the prohibition of discrimination on grounds of

membership in any particular union), length of notice, and organization of apprenticeship and training.

In Canada, every contract must contain a grievance procedure.25

In India the selection of subjects, while it is for the parties to decide, is nevertheless rather narrowly

circumstanced by law. For example, the negotiators of a contact must always keep in mind the

provisions of the Factories Act, 1948, the Industrial Employment (Standing Orders) Act, 1946, the

Minimum Wages Act, 1948 and the Payment of Wages Act, 1936. These deal with many subjects

such as safety precautions, health measures, amenities, conditions of employment, retrenchment

must be carried out, rationalization must be undertaken, and disciplinary proceedings must be

handled.
Some contracts are short and deal with a few matters, while others are elaborate and deal with
many. Usually all contracts in India contain most or all of the following clauses:
(1)
A preamble stating the positions of the parties;
(2)
Recognition by the employer of the union as sole bargaining agent and of its right to
organize the workers;
(3)
Recognition of the right of management to carry on its normal activities and meet its
responsibilities;
(4)
Wages, bonus and dearness allowance;
(5)
Grades, job classification and job evaluation;
(6)
Hours of work, holidays, leave and overtime;
(7)
Dismissal, discharge, termination and retirement from service in so far it is not covered by
the company’s standing orders;
(8)
Medical benefits, provident fund, pension and gratuity;
25 ILO, Collective Bargaining 46-47
(9)

Joint machinery for the efficient and smooth functioning of the industry, such as a joint production

committee, a joint labour relations committee, a job evaluation committee, or a discipline, safety and

welfare committee;
(10) Grievance procedure;
(11) No-strike clause, and an undertaking that disputes will be settled through mutual
consultation; and
(12) The duration and termination of the contract.

The signing of the contract makes a great impression on the rank and file of the union. “ Its formal

language is the mark of its significance and…a guarantee that the management will carry out its

pledged word. It strengthens the position of the union in the eyes of the members, and it provides

basis for a continuing and dignified relationship between the management and the employers”.26
Enforcement of Collective Bargaining Agreements

The enforcement of bargaining contracts depends in some countries on the good faith of the parties

and in others, on that, plus the law. In the United Kingdom, such contracts are called “gentlemen’s

agreements”. To enforce them in a court of law, workers must rely on their individual contracts with

their employer, which may in some cases incorporate the larger agreement. In a great many countries

of Europe, Latin America and Asia, the effects of the contract are regulated by special legislation.

They can then be enforced in a court of law, either by the union or by the individual worker, through

an action for damages for breach of contract. Scandinavian countries, Germany, Ireland and some

Latin American countries have established special courts to enforce the contracts on the grounds that

procedure in ordinary courts is long and costly, that delay may result in a strike and to secure a quick

remedy. The actions here must usually be brought by the unions; but in some cases individuals may

be allowed to start proceedings.27

In India, the collective bargaining agreements can be enforced under section 18 of the Industrial
Disputes Act, 1947, as a settlement arrived at between the workers and the employers. The
appropriate government may refer the dispute over a breach of contract to a labour court or to an
industrial tribunal

EVOLUTION OF INDUSTRIAL JURISPRUDENCE IN INDIA

The evolution of Industrial Jurisprudence in India can be traced back to the period of post

Independence. Before the Independence, the industrial jurisprudence existed in a rudimentary form.

The paramount concern of the Pre-independence industrial jurisprudence was the amelioration of the

working condition of the workers at the factories. There was hardly any deal with the social justice to

the working class. It was only after the commencement of our Constitution, that the adequate

provisions for the social justice to the workers were inserted.

The aspect of industrialization in India was based on the program of planning, which was accepted

after thirties. It is important to take into consideration that the plantation industry of Assam was the

first to attract the industrial legislation. The situation there was that the employers exercised hard

practices against the employees. The employees were not allowed to leave the tea gardens. A

number of Acts were passed from 1863 onward, but they only protected the interests of the

employers. Some other Acts were also passed to regulate the condition. But the Workmen’s

Compensation Act, 1923 was the landmark Act.

Indian Constitution and Social Justice

Industrial Jurisprudence was not in a much developed form before the commencement of the

Constitution of India. Before the Independence, the paramount concern of the Government was to

ameliorate the condition of the factory workers. It was after the commencement of the Constitution

that the paramount concern of the Government shifted towards the social justice for the labourers,

who constituted the bulk of the population. Bhagwati J., in a landmark case opined that concept of

justice does not emanate from the fanciful notions of any particular adjudication but must be founded
on a more solid foundation28. Justice Gajendragadkar opined that “the concept of social and economic

justice is a living concept of revolutionary import; it gives sustenance to the rule of law and meaning

and significance to the idea of welfare state” 29.

The Indian Constitution also enshrines the idea of social justice as one of the objectives of the
State.

COLLECTIVE BARGANING IN INDIA

Collective Bargaining in India has been the subject-matter of industrial adjudication since long

and has been defined by our Law Courts. In Kamal Leather Karamchari Sangathan v. Liberty

Footwear Company30 the Supreme Court observed that, "Collective bargaining is a technique by

which dispute as to conditions of employment is resolved amicably by agreement rather than

coercion".
According to the Court, the Industrial Disputes Act, 1947, seeks to achieve social justice on the

basis of colIective bargaining. In an earlier judgment in Titagarh Jute Co. Ltd. v. Sriram

Tiwari31 the Calcutta High Court clarified that this policy of the legislature is also implicit in the
definition of 'industrial dispute'.

In Ram Prasad Viswakarma v. Industrial Tribunal 32 the Court observed that, "it is well known how before

the days of 'collective bargaining', labour was at a great disadvantage in obtaining reasonable terms

for contracts of service from its employer. As trade unions developed in the country and collective

bargaining became the rule, the employers found it necessary and convenient to deal with the

representatives of workmen, instead of individual workmen, not only for the making or modification of

contracts but in the matter of taking disciplinary action against one or more workmen and as regards

all other disputes.”

In Bharat Iron Works v. Bhagubhai Balubbai Patel 33 it was held that 'Collective bargaining, being the order

of the day in the democratic social welfare State, legitimate trade union activities, which must shun all

kinds of physical threats, coercion or violence, must march with a spirit of tolerance, understanding

and grace in dealings on the part of the employer. Such activities can flow in healthy channel only on

mutual cooperation between the employer and the employees and cannot be considered as irksome

by the management in the best interests of its business.

Dialogue with representatives of a union help striking a delicate balance in adjustments and
settlement of various contentious claims and issues."
These definitions only bring out the basic element in the concept i.e., civilized confrontation
between employers and employees and the whole process is regulated by statutory provisions.

Types of Collective Bargaining Agreements in India

Collective bargaining as it is practiced in India can be divided into three classes. First is, the bipartite

agreement drawn up in voluntary negotiation between management and union. The second type is

known as a settlement, while the third type of collective agreement is consent award. These are

discussed below:

1.
Bipartite Agreements: These are most important types of collective agreements because

they represent a dynamic relationship that is evolving in establishment concerned without any

pressure from outside. The bipartite agreements are drawn up in voluntary negotiation between

management and union. Usually the agreement reached by the bipartite voluntarily has the same

binding force as settlement reached in conciliation proceedings. The implementations of these types

of agreements are also not a problem because both the parties feel confident of their ability to reach

the agreement.
2.
Settlements: It is tripartite in nature because usually it is reached by conciliation, i.e. it

arises out of dispute referred to the appropriate labour department and the conciliation officer plays an

important role in bringing about conciliation of the differing view points of the parties. And if during the

process of conciliation, the conciliation officer feels that there is possibility of reaching a settlement, he

withdraws himself from the scene. Then the parties are to finalise the terms of the agreement and

should report back to conciliation officer within a specified time. But the forms of settlement are more

limited in nature than bipartite voluntary agreements, because they strictly relate to the issues referred

to the conciliation officer.

3.
Consent Award: Here the negotiation takes place between the parties when the dispute is
actually pending before one of the compulsory ad judicatory authorities and the
agreement is incorporated to the authorities, award. Thus though the agreement is reached
voluntarily between the parties, it becomes part of the binding award pronounced by an
authority constituted for the purpose.

The idea of national or industry-wide agreements and that too on a particular pattern may appear to

be a more ideal system to active industrial relation through collective bargaining, but the experience of
various countries shows that it is not possible to be dogmatic about the ideal type of collective

bargaining, because it largely depends upon the background, traditions and local factors of a

particular region or country.

POSITION OF COLLECTIVE BARGAINING IN INDIA

Collective Bargaining machinery essentially is a reflection of a particular social and political climate. The

history of the trade union movement shows that union are affiliated to one or the other political parties. As a

result most of the trade unions are controlled by outsiders. Critic says that the presence of outsiders is

one of the important reasons for the failure of collective bargaining in India.34

Outsiders in the Process of Collective Bargaining

The Trade Unions Act, 1926, permits outsiders to be the office bearers of a union to the extent of half

the total number of office bearers. 35 So, it permits one to be the leader of the union who does not

actually work in the industry. Sometimes a dismissed employee working as a union leader may create

difficulties in the relationship between the union and the employer. 36 Nevertheless, experience shows

that outsiders who have little knowledge of the background of labour problems, history of labour

movement, fundamentals of trade unionism and the technique of the industry and with even little

general education assume the charge of labour union and become the self-appointed custodian of the

welfare of workers. The employers, therefore, have been reluctant to discuss and negotiate industrial

matters with outsiders, who have no personal or direct knowledge of day to day affairs of the industry.
Accordingly employers refuse recognition to the unions which are either controlled by the politicians or
affiliated to a particular political party or controlled by a particular individual. Government cannot
morally compel employers to accord recognition to unions without driving out the politicians from
them. The State must outright ban "outsiders" from the trade union body. Further, provision for
political fund37 by trade unions should be eliminated, since it invariably encourages the politicians to
prey upon them. The National Commission on Labour has overlooked this aspect. The Commission
does not favour a legal ban on non-employees for holding the union office. It says that without
creating conditions for building up the internal leadership, a complete banning of outsiders would only make
unions weaker. The Commission
hopes that internal leadership would develop through their education and training. Accordingly

the Commission suggests proportion of the outsiders and the workers in a union executive. 38 On

realizing the problems of outsiders in the union, the Industrial Relations Bill, 1988 proposes to reduce

the number of outsiders to two only. Another hurdle in the success of collective bargaining in India, is

the absence of a compulsory ‘recognition’ provision in the Act.

Impact of Recognition as Bargaining Agent in Collective Bargaining

In view of the prevailing multi-trade-unionism in the country, recognition of a bargaining agent has

assumed importance. Unfortunately, no attempt has been made at the national level to either lay

down a procedure for recognition of a trade-union as bargaining agent or work out a procedure. There

is no provision either in the Indian Trade Union Act 1926 or in the Industrial Disputes Act 1947 for the

purpose. The Government of India proposed an amendment in the

Trade Union Act in 1950 making recognition of a union compulsory. The measure however, faced

serious opposition and remained unimplemented. The Standing Labour Committee (l8th Session) and

National Commission on Labour favoured a statutory -provision for the purpose but their

recommendations have yet to be accepted. The National Commission on Labour attached

considerable importance to the matter of recognition of unions and observed as under:

"Industrial Democracy implies that the majority union should have the right to sole representation, i.e.,

the right to speak and act for all workers and enter into agreements with the employer."39
In the absence of statutory provision, the matter is regulated by the Code of Discipline which was
evolved at Nainital session of Indian Labour Conference in 1952. The Code of Discipline provides for
verification of trade-union membership by Central Industrial Relations Machinery of the Government. Its
voluntary character has however, made it ineffective and it has been
found difficult to implement it in view of statutory provisions in the Industrial Disputes Act.
At the present not even public sector undertakings are following the Code of Discipline and are
bargaining with more than one union.

States like Bombay and Madhya Pradesh have, however, given statutory recognition to the procedure

for determination of bargaining agent. Both, Bombay Industrial Relations Act 1946 and Madhya

Pradesh Industrial Relations Act, 1960, provide for the determination of represent- tative union by the

Registrar of Representative Unions. Special provisions have been made for agreements signed by

representative unions. In spite of it, the experience shows that there had been serious opposition to

statutory recognition of a union as sole bargaining agent of the workers of the establishment. Indeed

the experience is that wherever there is a union recognition, representative of rival unions have come

together to force the employer to bargain with them." The fear of retaliation by unrecognized unions

has proved to be the biggest stumbling block in the success of statutory recognition system.

Multi -Unionism

Political orientation of trade unions is the primary reason for multi-unionism. Communal sentiments,

provincial feelings and caste are other major causes for multi-unionism. 40 Presence of too many
unions in an industry destroys the bargaining strength of workers. Our labour legislation also permits

multi-unionism.41

Multi-unionism adversely affects collective bargaining process. Where there are too many unions, with

whom should management negotiate? Each union may claim recognition. Each union may present

separate charter of demands in a spirit of rivalry. When conflicting demands are made, it may be

impossible to accept any of them. Moreover, if one union is ready to accept some of the demands,

other union may object to them. In this context, it is difficult to think of any effective collective

bargaining process in India.

Politicization of Trade-Union Movement in India

It is well known that the trade-union movement in India is divided on political lines and exists on

patronage of various political parties. Most of the trade-union organizations have aligned themselves

with a political party with whom they find themselves philosophically close. It is because of this that

the Indian National Trade Union Congress is considered to be the labour wing of congress (I) whereas

H.M.S. is considered to be the labour wing of Socialist party. Bhartiya Majdoor Sangh pledges its

allegiance to B.J.P. and C.I.T.U has the support of C.P.I. (M). It is also the case with the . AITUC

which had started as a national organization of workers but subsequently came to be controlled by the

Communist Party of India and is now it's official labour wing. Political patronage of trade-unions has

given a new direction to the movement whose centre of gravity is no longer the employees or

workmen. The centre has shifted towards it leadership whose effectiveness is determined by the

extent of political patronage and the consequent capacity to obtain the benefit. This shifting centre of

power is the necessary consequence of political parties search for workers votes, which they seek by

conferring benefits on them. Since the public sector which is really the instrumentality of the State,

has emerged as the biggest employer in this country, the collective bargaining -between the union

patronized by the party-in-power and the employer has become an important methodology. It is

because of this process that agreements conferring benefits are signed even in those units where

financial losses are mounting. It is also our experience that inspite of wage increase and improved

conditions of service, there has been no corresponding improvement in production or the productivity

and most of the losses are being passed on to the consumers by increasing prices of the products. It
is in this context that Justice Gupta has, in his, "Our Industrial Jurisprudence" made the following

observations:

"If our experience is any guide, it reveals that level of increase in wages etc., (in public sector

undertaking ) is now decided by the Bureau of Public Enterprises which takes into consideration only

the 'Political impact' and 'Consumer resistance' as two dominant factors. This is the reason why the

prices of almost all products of necessity like coal, iron and steel, cement, sugar etc. have been

constantly increasing. A survey of pending and decided industrial disputes of the last

10 years reveals that there was virtually no industrial dispute regarding wage structure or bonus

in any industry of some significance. There are also not many collective bargaining agreements

which have tried to link wages with productivity. Clearly, therefore, the basic idea of 'sharing the

prosperity' which developed because of our commitment to the cause of 'social justice' is no longer

current and the expected end-product of the process of 'social justice" is no longer expected."42

Critical Evaluation

In Indian labour arena we see, multiplicity of unions and inter-union rivalry. Statutory provisions for

recognising unions as bargaining agents are absent. It is believed that the institution of collective

bargaining is still in its preliminary and organizational stage. 43 State, therefore, must play a

progressive and positive role in removing the pitfalls which have stood in the way of mutual, amicable

and voluntary settlement of labour disputes. The labour' policy must reflect a new approach.

Hitherto the State has been playing a dominant role in controlling and guiding labour- management

relation through its lopsided adjudication machinery. The role of the industrial adjudicator virtually

differs from that of a judge of ordinary civil court. The judge of a civil court has to apply the law to the

case before him and decide rights and liabilities according to its established laws. Whereas industrial

adjudicator has to adjust and reconcile the conflicting claims of disputants and evolve "socially

desirable" rights and obligations of the disputants. 44 In deciding industrial disputes the adjudicator is

free to apply the principle of equity and good conscience.

However, it is said that the impact of the attitude of the judiciary towards workers has not proved

conducive to the peaceful industrial relations. 45 It is accepted that the end of judicial proceeding is

pain and penalties. It cannot solve the problems of industries. Accordingly it is said that:

"While statutes, rules, regulations, pains and penalties have their place in the ordering of industry, they do not

touch the core of the problems of industrial relations."46

Moreover, advocates of adjudication contend that as the collective bargaining procedure might end in

a strike or lockout, which implies a great loss to the parties concerned and the country, if for the sake

of industrial peace, the adjudication becomes necessary. But has there been industrial peace and

satisfactory progress since adjudication was adopted after world-war-II? We do agree that industrial

peace can be established by the adjudication for the time being. But the conflicts are driven deeper

and it will retard industrial production. In the absence of effective collective bargaining the anti –

productivity tendencies are bound to appear.

LAWS RELATING TO COLLECTIVE BARGAINING IN INDIA

As discussed earlier, collective bargaining is a technique by which disputes of employment are

resolved amicably, peacefully and voluntarily by settlement between labour unions and

managements. The method of collective bargaining in resolving the Industrial dispute, while

maintaining industrial peace has been recognized as the bed rock of the Industrial Disputes Act, 1947.

Under the provision of the Act, the settlement arrived at by process of collective bargaining with the

employer has been given a statutory recognition under Section 18 of the Act.
Under the Act two types of settlement have been recognised:

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.47

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 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”.48 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.”49

PROBLEMS RELATING TO COLLECTIVE BARGAINING IN INDIA

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.

Whatever bargaining takes place, it is limited to large plants only. Smaller organisations

generally do not prefer this form of handling the issues.

As discussed in the previous chapter, several factors are responsible for this state of affairs.
These are listed below:

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.

III.
There is a lack of definite procedure to determine which union is to be recognised to

serve as a bargaining agent on behalf of the workers

IV.

In India, the law provides an easy access to adjudication. Under the Industrial Disputes Act, the

parties to the dispute may request the Government to refer the matter to adjudication and the

Government will constitute the adjudication machinery, i.e., labour court or industrial tribunal. Thus,

the faith in the collective bargaining process is discouraged.

V.

There has been very close association between the trade unions and political parties. As a result,

trade union movement has leaned towards political orientations rather than collective bargaining.
 CONCLUSION & SUGGESTIONS

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.

The following steps should be taken for the success of collective bargaining.

1.
Strong Trade Union: A strong and stable representative trade union is essential for effective

collective bargaining. For having such a trade union, workers should have freedom to unionize so that

they can exercise their right of unionization and form a trade union for the purpose of electing their

representatives for collective bargaining.

A weak union not enjoying the support of majority of workers is not likely to be effective. The

management will not negotiate with such a union; because mutual agreements are not likely to be

honoured by a large section of the labour-force. Moreover, there is always a danger that non-union

members may sabotage it.

2.
Compulsory Recognition of Trade Unions: There must be an acceptable and recognised

bargaining agent. That means that there must be recognised union or unions to negotiate the

terms and conditions of the agreement with the management.

Recognition of trade union has to be determined through verification of fee membership method. The

union having more membership should be recognised as the effective bargaining agent. A strong,

stable and the most representative union should be recognised by the employers for the purpose

because any agreement with that union will be acceptable to majority of workers and it will help in

establishing sound industrial relations in the organisation.

3.
Mutual Accommodation: There has to be a greater emphasis on mutual accommodation rather

than conflict or uncompromising attitude. Conflicting attitude does not lead to amicable labour

relations; it may foster union militancy as the union reacts by engaging in pressure tactics.

The approach must be of mutual give and take rather than take or leave. The take or leave philosophy

is followed in America where there is contractual labour. As of now this is not the case in India. So if

the union and the management have to look for a long-term relationship they have to respect each

other’s rights.

4.
Enactment of Legislation: The State should enact suitable legislation providing for compulsory

recognition of trade union by employers. State has to play a progressive role in removing the pitfalls

which stand in the way of mutual, amicable and voluntary settlement of labour disputes. The new

labour policy must reflect the new approach and new objectives.

5.
Mutual Trust and Confidence: Trade unions and management must accept each other as responsible parties in

the collective bargaining process. There should be mutual trust and confidence. In fact in any relationship trust

is the most important factor.

Management must accept the union as the official representative. The union must accept the

management as the primary planners and controllers of the company’s operations. The union must

not feel that management is working and seeking the opportunity to undermine and eliminate the

labour organisation. The company management must not feel that the union is seeking to control

every facet of the company’s operations.

6.
Efficient Bargaining Mechanism: No ad-hoc arrangements are satisfactory for the reason that

bargaining is a continuing process. An agreement is merely a framework for every day working

relationships, the main bargain is carried on daily and for this there is a need to have permanent

machinery.

As for machinery being efficient, it has three aspects:

(a) Availability of full information

(b) Selection of proper representatives

(c) Recognition of natural temperament of each other.

7.
Emphasis on Problem-solving Attitude: There should be an emphasis upon problem-solving

approach with a de-emphasis upon excessive legalism. Litigation leads to loss of time and energy and

it does not benefit anyone. Therefore the emphasis is to look for mutually acceptable solutions rather

than creating problems for each other.

Lastly, the overall political environment should be congenial. The political environment
should support collective bargaining.

8.
Political Climate: For effective collective bargaining in a country, it is important to have sound

political climate. The Government must be convinced that the method of arriving at the agreements

through mutual voluntary negotiations is the best for regulating certain conditions of employment. The

provision for political fund by trade unions has to be

done away with-since it unvariably encourages the politicians to prey upon the union.

Therefore, positive attitude of the political parties is a must for the promotion of

collective bargaining.

Such an approach would help and encourage the development of strong, stable and representative

trade unions, growth of mechanism for the resolution of industrial conflict, recognition of unions, etc.