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Understanding Collective Bargaining in India: Legal Framework, Process and Case Studies

I. Introduction

Collective bargaining is a process of negotiation between employers and employees, typically represented by a union, to determine the terms and conditions of employment. This negotiation can cover a wide range of issues, including wages, benefits, working hours, job security, and workplace safety.

In India, collective bargaining has played a critical role in the growth and development of the labour movement. It has helped workers secure better wages, safer working conditions, and greater job security. The right to collective bargaining is recognized as a fundamental right under the Indian Constitution, and is protected by various laws and regulations.

However, despite its importance, collective bargaining in India faces several challenges, including fragmentation of trade unions, limited participation of women, and inadequate legal protections for informal sector workers. Nonetheless, the potential benefits of collective bargaining make it a critical tool for promoting social justice and improving working conditions in India. In the following sections, we will delve deeper into the history, legal framework, and current state of collective bargaining in India, and explore some case studies to illustrate its impact.

II. Historical Overview of Collective Bargaining in India

India has a rich history of labour movements, with trade unions playing a critical role in advancing the rights and interests of workers. The early years of trade unions in India were characterized by a struggle for recognition and legitimacy, as colonial authorities sought to suppress worker organizing efforts.

In 1926, the Indian government passed the Trade Unions Act, which granted legal recognition to trade unions and provided some basic protections for union activities. This marked a significant turning point for the labour movement in India, as it allowed unions to operate more freely and engage in collective bargaining with employers.

After independence in 1947, collective bargaining became an increasingly important tool for Indian workers to secure better working conditions and wages. The Industrial Disputes Act, 1947, provided a legal framework for collective bargaining and established mechanisms for resolving labour disputes.

Over the years, the Indian labour movement has grown in size and diversity, with unions representing workers across a range of industries and sectors. Despite this progress, collective bargaining in India has faced several challenges, including fragmentation of unions, low levels of unionization in the informal sector, and limited participation of women. Nonetheless, the history of collective bargaining in India demonstrates the critical role that organized labour can play in promoting social justice and improving working conditions.

III. Legal Framework for Collective Bargaining in India

Collective bargaining in India is governed by a complex set of laws and regulations, which provide both rights and protections for workers and guidelines for employers. The key laws and regulations related to collective bargaining in India include:

• The Industrial Disputes Act, 1947: This law establishes the legal framework for the settlement of industrial disputes and provides for the formation and registration of trade unions. The act also provides for the appointment of conciliation officers, boards, and courts to facilitate the resolution of disputes between workers and employers.
• The Trade Unions Act, 1926: This act provides legal recognition and protection for trade unions and defines their rights and responsibilities. It also sets out the process for the registration of trade unions and the rights of members, including the right to participate in collective bargaining.

Other relevant laws and regulations: Other laws and regulations that impact collective bargaining in India include the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Factories Act, 1948. These laws establish minimum wage standards, provide for the payment of bonuses, and establish workplace safety standards, respectively.

It is important to note that while these laws and regulations provide some basic protections for workers engaged in collective bargaining, they do not necessarily guarantee successful outcomes. The effectiveness of collective bargaining ultimately depends on the strength and unity of the bargaining parties and the broader political and economic context in which negotiations take place.

IV. The Process of Collective Bargaining in India

Collective bargaining in India typically follows a well-defined process that involves several steps, parties, and mechanisms for resolution. The key elements of the process include:

• Steps involved in collective bargaining: The process of collective bargaining typically begins with the formation of a bargaining committee, which represents the workers and engages in negotiations with the employer. The committee presents its demands and expectations, and the employer responds with its proposals. The bargaining process may involve several rounds of negotiations, with each party making concessions and compromises to reach a mutually acceptable agreement.
• Parties involved in collective bargaining: Collective bargaining in India involves two primary parties - the trade union or worker representative and the employer. In some cases, the government may also play a role in the bargaining process, particularly in situations where disputes arise and mediation or arbitration is required.
• Role of the government in collective bargaining: The government in India plays a critical role in supporting and regulating collective bargaining. It provides legal recognition and protections for trade unions, establishes mechanisms for the resolution of disputes, and ensures compliance with labour laws and regulations. The government may also intervene in the bargaining process to facilitate negotiations or resolve disputes.

Successful collective bargaining in India requires a strong and unified bargaining committee, a responsive and cooperative employer, and a supportive legal and regulatory framework. Despite these challenges, collective bargaining remains a critical tool for workers to secure better wages, safer working conditions, and greater job security in India.

V. Issues and Challenges in Collective Bargaining in India

Despite the legal and regulatory framework in place for collective bargaining in India, there are several issues and challenges that workers and unions face. These include:

• Fragmentation of trade unions: The labour movement in India is highly fragmented, with a large number of small and often competing unions representing workers in the same industries. This fragmentation can undermine the bargaining power of workers and make it difficult to negotiate effectively with employers.
• Lack of collective bargaining in the informal sector: A significant portion of the Indian workforce is engaged in the informal sector, which includes workers who are self-employed, casual labourers, or part of the gig economy. These workers are often not covered by the legal and regulatory framework for collective bargaining, making it difficult for them to negotiate for better wages and working conditions.
• Limited participation of women in collective bargaining: Women are underrepresented in trade unions and collective bargaining in India. This is partly due to social and cultural barriers that prevent women from participating in union activities and negotiations. The limited participation of women in collective bargaining can lead to a lack of attention to issues that specifically affect women, such as workplace harassment and discrimination.

Addressing these challenges will require concerted efforts from all stakeholders, including the government, trade unions, and employers. This may involve reforms to the legal and regulatory framework for collective bargaining, as well as efforts to promote greater unity and participation among workers and unions. It is important to recognize that collective bargaining is not only a tool for improving the working conditions of individual workers but also a critical means of advancing social justice and equality in India.

VI. Recent Developments in Collective Bargaining in India

The landscape of collective bargaining in India has undergone significant changes in recent years, driven by changes in the legal framework, evolving trends in the labour market, and the impact of technology. Some of the recent developments include:

• Changes in the legal framework: In recent years, the Indian government has introduced several reforms to the legal framework for collective bargaining. These include changes to the Industrial Disputes Act, 1947, that make it easier for employers to hire and fire workers, as well as changes to the Trade Unions Act, 1926, that make it easier for trade unions to register and operate. These changes have been controversial and have been met with opposition from labour activists who argue that they undermine the bargaining power of workers.
• Trends in collective bargaining in recent years: One of the notable trends in collective bargaining in India in recent years is the increasing use of non-traditional forms of bargaining, such as collective agreements, which are negotiated between individual employers and trade unions rather than through industry-wide negotiations. This approach has been particularly effective in industries where there are few employers and a high degree of concentration. Another trend is the increasing use of social media and other digital platforms to mobilize and organize workers and to communicate with employers.
• Impact of technology on collective bargaining: Technology has had a profound impact on the labour market in India, and this has also affected collective bargaining. The rise of the gig economy, for example, has created new challenges for collective bargaining, as many gig workers are not covered by the legal and regulatory framework for collective bargaining. On the other hand, technology has also created new opportunities for organizing and mobilizing workers, particularly through social media and other digital platforms.

These recent developments highlight the dynamic and constantly evolving nature of collective bargaining in India. As the labour market continues to change, it is likely that collective bargaining will also continue to evolve, and it will be important for workers, trade unions, employers, and policymakers to adapt to these changes.

VII. Case Studies

To illustrate the practice of collective bargaining in India, it is useful to look at specific examples of successful bargaining as well as challenges faced in particular sectors. Some examples include:

• Successful Collective Bargaining: The National Thermal Power Corporation (NTPC) in India provides a successful example of collective bargaining. The NTPC workers' union successfully negotiated with the management to increase the salaries of the employees. The management agreed to a 20% increase in salaries and other benefits for the workers. This collective bargaining helped to reduce the discontent of the workers, resulting in higher motivation and improved productivity.
• Challenges Faced in Specific Sectors: The garment industry in India is one of the largest employers in the country. However, workers in this industry face several challenges in terms of collective bargaining. Many workers are employed on a contract basis, which makes it difficult for them to unionize and engage in collective bargaining. The industry is also highly competitive, with many small and medium-sized enterprises competing for business. This fragmentation can undermine the bargaining power of workers and make it difficult to negotiate effectively with employers.
• Successful Collective Bargaining in the Automobile Industry: In the automobile industry, the Maruti Suzuki Workers Union (MSWU) provides a successful example of collective bargaining. In 2011, the MSWU successfully negotiated with the management to increase wages and other benefits for workers. This collective bargaining helped to improve the working conditions of the workers, resulting in higher motivation and improved productivity.

These case studies demonstrate the potential benefits of collective bargaining in India as well as the challenges faced in specific sectors. By studying successful examples and addressing the challenges faced, workers, trade unions, employers, and policymakers can work towards improving the working conditions and welfare of workers in India.

VIII. Conclusion

Collective bargaining is a crucial process in ensuring fair working conditions and social justice for workers in India. The historical overview of collective bargaining in India shows that the process has come a long way since the early years of trade unions. The legal framework for collective bargaining in India, as provided by the Industrial Disputes Act, 1947, and the Trade Unions Act, 1926, has helped to regulate the process and ensure that workers are protected.

However, there are still several issues and challenges that need to be addressed. Fragmentation of trade unions, lack of collective bargaining in the informal sector, and limited participation of women in collective bargaining are some of the challenges faced in India. Nevertheless, recent developments in the legal framework, trends in collective bargaining, and the impact of technology provide opportunities for improvement.

Successful case studies such as the National Thermal Power Corporation and Maruti Suzuki Workers Union show the potential benefits of collective bargaining in India. Collective bargaining can lead to improved working conditions, higher motivation, and increased productivity. Therefore, it is crucial that workers, trade unions, employers, and policymakers work together to address the challenges faced and improve the welfare of workers in India.

In conclusion, collective bargaining is a vital process that has the potential to improve the working conditions of workers in India and promote social justice. It is necessary for all stakeholders to work together to strengthen the process and ensure that the rights and welfare of workers are protected.

Disclaimer:  This article provides general information existing at the time of preparation and author takes no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and author neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement.

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CA Sanat Pyne (F.C.A. & M.COM) Category Others   Report

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• collective bargaining agreement

All about a collective bargaining agreement in India

This article is written by Adhila Muhammed Arif , a student of Government Law College, Thiruvananthapuram. This article seeks to elucidate the concept of collective bargaining and its agreement in India, its requisites, its types, and the laws concerning it. 

It has been published by Rachit Garg.

Table of Contents

Introduction 

The term collective bargaining refers to the process of negotiation that takes place between workers or labourers and their employers on the terms of their contracts. In most instances, the labourers are represented by a trade or labour union. This is usually done in order to achieve certain demands and rights of the labourers, namely those pertaining to working hours, salaries, working conditions, etc. This form of industrial dispute resolution has been revolutionary for labour relations in the Indian industries, both private and public. This is because conflicts in the area of commerce and business are inevitable and it is not practical to resolve all such disputes through courts. Hence, collective bargaining has become a suitable alternative to adjudicate industrial disputes. 

What is collective bargaining 

According to Article 2 of the Collective Bargaining Convention, 1981 (No. 154) of the International Labour Organisation , “collective bargaining extends to all negotiations which take place between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more workers’ organisations, 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 organisations and workers or workers’ organisations” .

In the case of Ram Prasad Viswakarma v. Industrial Tribunal (1961) , it was observed that before collective bargaining was introduced, labourers found it very difficult to negotiate the terms and conditions of their contracts. With the arrival of trade unions, collective bargaining became the norm. It became more convenient as employers only had to negotiate with the representatives of the labourers instead of engaging with every individual labourer. 

In the case of Bharat Iron Works v. Bhagubhai Balubhai Patel (1976) , it was observed that collective bargaining is a part of the modern-day concept of the welfare State. It must be practised in a healthy manner in which there is mutual cooperation between the employers and the employees. Negotiation between the management and trade union helps in reaching a settlement regarding various issues. 

Aims of collective bargaining 

The following are the aims and objectives of collective bargaining: 

• Upholding industrial democracy 
• Ensuring equality and justice for socially and economically backwards groups
• Protecting the working class from exploitation
• Meeting the legitimate expectations of labourers regarding the work they have undertaken 

Advantages of collective bargaining 

The following are the advantages of collective bargaining: 

• Being a part of a group helps employees to voice their demands and negotiate better with their employers. It is harder for employers to dismiss the demands of a unified large group of employees or a trade union in comparison with individual employees. 
• It helps to improve the workplace conditions for employees. 
• It makes the rights and obligations of both employers and employees clear. 

Disadvantages of collective bargaining 

The following are the disadvantages of collective bargaining: 

• It is a long complicated process as the union of employees and the employers go back and forth while negotiating. It is time-consuming and requires both parties to take time off of their work. 
• Another issue that stands as a hindrance to the effectiveness of this process is the presence of multiple trade unions in India. Sometimes the interunion rivalry gets in the way of negotiating for better working conditions. 
• Most trade unions are also backed by or associated with a political party. Oftentimes, it is the decision of the party that influences the trade union’s demands. 
• There is no way to determine which union represents the employees. 

Indian statutes and case laws recognizing collective bargaining

Industrial disputes act, 1947.

This Act was enacted for the purpose of governing the investigation and settlement of industrial disputes. According to Section 18 of the Act, any settlement other than a conciliation, which is arrived at through an agreement by an employer and his employees shall be binding on them. This essentially means that Section 18 recognises industrial dispute settlement through collective bargaining. 

In the case of Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company (Regd.) and Ors. (1990), the Supreme Court laid down that the Industrial Disputes Act, 1947 was enacted for the purpose of securing social justice by means of collective bargaining. The court further stated that arbitration comes within the purview of statutory tribunals. The workers involved must be aware of what is presented before the arbitrator and must be able to share their arguments and claims before him. Even though it is the labour union that helps to resolve the disputes, the labourers must be involved in the process and suggest remedies.

Trade Union Act, 1926 

This Act deals with the registration, rights, liabilities and immunities of a trade union. The most important function of a trade union is to regulate the relationship between an employer or management and its employees. 

In the case of D.N. Banerjee v. P.R. Mukherjee (1952) , Justice Chandra Shekhar Aiyer observed that due to the increased importance of capital and labour in the modern-day world, they have organised themselves into groups to settle disputes. This is based on the theory that unity is strength and collective bargaining is a result of that. 

The Industrial Employment (Standing Orders) Act, 1946

‘Standing Order’ in this Act is defined in Section 2(g) as the rules related to matters such as classification of workmen, attendance, conditions of granting leaves, manner of intimation to workers about work and wage-related details, etc. As per Section 3 of the Act, the employer must first submit the draft of the standing order to the Certifying Officer, and must also conform to the model set for the standing order as far as possible. After that, the Officer forwards copies of the draft to the trade union or to the workmen. If there is no trade union for seeking objections, the officer must give both the parties an opportunity of being heard and then certify the standing order with necessary modifications and send its copies to both parties. Here, it is apparent that the certifying officer acts as the negotiator and the process of framing a standing order involves both employer and employees. This provision essentially employs the method of collective bargaining. 

The Constitution of India, 1950

Several provisions enumerated in the Indian Constitution , particularly the fundamental rights and the directive principles of state policy justify the concept of collective bargaining. Firstly, Article 19 of the Indian Constitution allows every Indian citizen to form an association, which in turn covers the right to form a trade union as well. In Article 43 A, the state is permitted to make laws that encourage workers to take part in the management. 

Stages of collective bargaining 

The following are the stages that the process of collective bargaining typically goes through: 

Forming a union

As per Section 9A of the Trade Unions Act, 1926, the minimum number of employees to constitute a trade union is seven. Though registration of a union is not compulsory, it definitely comes with its advantages such as providing adequate representation for workers, using funds for specific purposes, immunity from civil suits, etc. 

Making a charter of demands

In this stage, either the union or the employer may initiate the proceedings of collective bargaining. The trade union then drafts a charter of demands through several discussions conducted among all of its members. 

Negotiation

The negotiations begin with the submission of the charter of demands. Generally, it is the union that formally presents proposals for changes in the existing labour agreements in the initial meeting. Then, the management gets the opportunity to present counter-proposals. This keeps going on until they can form an agreement. When it becomes impossible for them to reach an agreement, a third party may be appointed as a mediator or an arbitrator. 

Forming an agreement 

Once a negotiation becomes successful, the management and the union form a written agreement. This agreement is called a collective bargaining agreement. 

Strikes 

In case the negotiation process fails, the union may declare a strike. As per Section 22 of the Industrial Disputes Act, public utility sector employees must provide six weeks’ notice of a strike, and may strike fourteen days after providing such notice. Neither the management nor the union is permitted to take any industrial action while the conciliation is pending, and not until seven days after the conciliation proceedings conclude, or two months after the legal proceedings conclude. 

Conciliation 

The conciliation process begins when the conciliation officer receives a notice of strike. There are two alternatives that can be taken in this step. As per Section 4 of the Act, during the cooling-off period, the state government may appoint a conciliation officer for investigating, mediating and promoting settlement. As per Section 5 of the Act, the second alternative is that the state government may appoint a Board of Conciliation and it shall be composed of a chairman and either two or four members. Strikes are not organised during the process of conciliation as per Sections 22 and 23 of the Act. Section 20 of the Act provides that this step ends with a settlement or a reference to an industrial tribunal or labour court, and sometimes no settlement is arrived at. 

Arbitration or adjudication by industrial tribunals or labour courts 

In case of failure of the conciliation process, the parties could go for either a voluntary or compulsory arbitration, and the recommendations of the arbitrator may be binding on the parties. Section 7A of the Act provides for a labour court or industrial tribunal within a state to adjudicate such disputes. Section 7B of the Act provides for the constitution of national tribunals to resolve disputes involving questions of national interest. The employer and the employees may refer the case by a written agreement to a labour court, industrial tribunal or national tribunal for adjudication or arbitration. 

Collective bargaining agreements

A collective bargaining agreement is essentially a legal agreement in written form between an employer and a trade or labour union representing the employees. It is the agreement that forms after the process of negotiation between the employer and the union or the workmen. It is an important stage in the process of collective bargaining that the employer and the union reach when the negotiation becomes successful. 

Types of collective bargaining agreements

In India, there are mainly three types of collective bargaining agreements, which are listed below: 

Bipartite or voluntary agreement 

Bipartite agreements are those agreements or settlements formed in voluntary negotiations in the process of collective bargaining. As per Section 18 of the Industrial Disputes Act, such agreements are binding on the parties involved. 

Settlement 

A settlement commonly refers to an agreement of tripartite character as a third party is involved in arriving at it. This is the agreement that is arrived at by the employer and the employees with the help of a conciliation officer. If during the process of conciliation, the conciliation officer feels that there is a possibility of reaching a settlement, he withdraws it himself. After that, the parties examine the terms of the agreement and report back to the officer within a specified period. 

Consent award 

When a dispute is pending before a compulsory adjudicatory authority, the parties can still negotiate between themselves. The agreement that is formed as a result of such a negotiation shall also be incorporated into the authority’s award and it gains a binding force. 

Elements of a collective bargaining agreement

When trade unions and employers enter into collective bargaining agreements, such agreements enumerate the various clauses that govern the relationship between the employees represented by trade unions and employers. The following are some of the clauses that can be found in a collective bargaining agreement: 

• Duration of the settlement 
• Settlement terms with respect to matters like wages, benefits, leaves, working hours, rest hours, allowances, concessions, etc
• Conditions with respect to strikes 
• Obligations of the employees
• Obligations of the management
• Penalties for non-compliance with the agreement
• Dispute resolution 

Conclusion 

To conclude, collective bargaining agreement is an essential step arrived at by the employer and the employees involved in the process of collective bargaining. This is the first resort that employers and unions go to for resolving disputes. It is formed as a result of a successful negotiation of voluntary nature. This helps in resolving disputes without the help of the courts or tribunals and makes the task of negotiating with employers simpler and more efficient. 

References 

• https://blog.ipleaders.in/collective-bargaining-in-india-laws-and-realities/  
• http://www.penacclaims.com/wp-content/uploads/2020/04/Charul-Mishra.pdf  
• https://www.mylawman.co.in/2018/12/noteslabour-law-all-about-collective.html  
• https://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/India-Trade-Unions-and-Collective-Bargaining.pdf  
• https://www.amrc.org.hk/content/collective-bargaining-india-recent-trends  
• https://thefactfactor.com/facts/law/civil_law/labour_laws/collective_bargaining/collective-bargaining-01/255/#:~:text=Definition%20by%20Different%20Authors%3A&text=Dale%20Yoder%20defines%20collective%20bargaining,more%20employers%20on%20the%20other . 
• https://thefactfactor.com/facts/law/civil_law/labour_laws/collective_bargaining/bargaining/3087/  
• https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/collectivebargainingagreement.aspx  
• https://www.investopedia.com/terms/c/collective-bargaining.asp  

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Collective Bargaining in India: Evolution, Challenges, Successes and the Path Ahead

Table of Contents

Introduction: The Basics of Collective Bargaining

What is collective bargaining.

Collective bargaining is a process of negotiation between employers and a group of employees aimed at reaching agreements to regulate working conditions. The primary aim of collective bargaining is to improve the working and living conditions of workers. Through collective bargaining, workers come together to have a stronger voice and increase their bargaining power with employers. This process determines their terms of employment, workplace rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies.

In collective bargaining, workers are represented by a trade union or worker’s association, which acts as an organized voice for the negotiation process. The outcome of collective bargaining procedures is called the collective bargaining agreement (CBA). The CBA is a written legal contract between the employer and union that covers topics like wages, hours and other work conditions. CBAs usually last for a fixed term of years and can be renegotiated when they expire.

The entire collective bargaining process between workers and management creates a sense of joint decision-making, rather than employers simply imposing their will on employees. The negotiation aims to arrive at solutions which work for the benefit of both parties. This gives the workers a sense of workplace democracy where their voices are heard in decisions affecting their lives. Overall, collective bargaining leads to improved efficiency for organizations and productivity for workers.

History of Collective Bargaining in India

The roots of collective bargaining in India can be traced back to the pre-independence period. Early examples of collective bargaining agreements were seen at factories and mines during the First World War. However, formal recognition of collective bargaining only began in 1958 with the passing of the Industrial Disputes Act. This law provided trade unions with legal status to engage in collective bargaining.

Over the next few decades, the collective bargaining process saw gradual growth. But the agreements were largely informal in nature. Trade unions became increasingly politicized during this period as well. Major incidents like the Railway strike in 1974 resulted in large-scale workers’ unrest that shook the nation.

By the 1980s, economic liberalization policies started getting introduced in India. Collective bargaining also underwent changes due to privatization and rising diversity in the labour force. Globalization brought newer employment terms and reshaped industrial relations. With the New Economic Policy of 1991, collective bargaining was further affected. While protective labour legislations remained, their implementation was diluted. Employers took advantage by deterring unions and eroding workers’ security.

Presently, collective bargaining in India remains fragmented across industries, regions and unions. In the organized industrial sector, majority union recognition and multi-union scenarios create complications. Recent decades have seen a shift towards decentralized plant-level negotiations rather than industry-wide settlements. But collective bargaining has survived despite multiple constraints. Trade unions continue their efforts to consolidate workers’ interests. The future evolution of collective bargaining will depend on how these challenges are addressed by all stakeholders.

The Legal Framework

Trade unions and their role.

Trade unions play a vital role in collective bargaining agreements. They represent workers in the negotiation process with employers. Unions equalize the bargaining power between management and employees. They present collective demands of workers which individuals cannot put forth alone.

The Trade Union Act, 1926 provides rules for the registration of trade unions in India. Currently, there are over 10 central trade union organizations (AITUC, BMS, CITU, HMS, AIUTUC, TUCC, SEWA, UTUC, INTUC, LPF, and more) affiliated with major political parties. There are also independent national federations (AIBEA, AIIEA, AIRF, NFIR, and more) representing unions in sectors like banking, insurance, railways, etc.

The state-wise geographical distribution of unions is uneven, with higher density in states like Kerala, West Bengal and Maharashtra.

Key functions performed by trade unions include:

• Representing workers in bargaining and settlement of disputes.
• Articulating workers’ demands like fair wages, job security, better working conditions, etc.
• Providing support services to members like welfare schemes, education, training, etc.
• Regulating relations between employers and workers.
• Undertaking political activity for furthering workers’ interests.

However, Indian trade unions face several challenges like small size, low membership, lack of recognition and proliferation into multiple unions. These factors reduce their efficacy in collective bargaining agreements.

Relevant Laws and Regulations

The legal framework governing collective bargaining in India consists of the following key legislations:

• Industrial Disputes Act, 1947: This central law lays down the mechanisms for dispute resolution between employers and workmen. It provides rules for strikes, lockouts, layoffs, retrenchment as well as collective bargaining procedures.
• Trade Unions Act, 1926: This act provides rules for the registration of trade unions and defines their rights and liabilities. It gives legal status to registered unions.
• Industrial Employment Standing Orders Act, 1946: This law requires employers to clearly define conditions of employment under them. It covers aspects like work hours, pay scales, leave, disciplinary procedures, etc.
• Contract Labour (Regulation and Abolition) Act, 1970: This law regulates the employment of contract labour and provides for its abolition under certain circumstances. It protects the interests of contract workers.
• Factories Act, 1948: This law regulates working conditions in factories with over 10 workers. It has provisions for health, safety, working hours, leave, overtime, employment terms, etc.

Several state-level amendments also govern collective bargaining. But the presence of multiple labour laws creates issues due to archaic, overlapping and inconsistent provisions. Lack of implementation and enforcement poses another challenge. Overall, the legal framework provides a basic structure but needs reforms to support collective bargaining better.

Process of Collective Bargaining

Collective bargaining involves a three-phase process consisting of pre-negotiation preparations, actual negotiations and post-negotiation implementation of the collective agreement.

Pre-Negotiation Phase

The pre-negotiation phase lays the groundwork for effective bargaining between employers and unions. It involves steps like:

• Identifying the Bargaining Agent: The representing union is identified based on factors like membership numbers, recognition, etc. Larger unions typically enjoy greater bargaining power.
• Gathering Information: Unions collect data about employers’ financial position, industry standards, prevailing market wage rates, etc. to bolster demands.
• Formulating Demands: Based on the information gathered, unions finalize their charter of demands. This covers desired improvements in wages, benefits, work hours, leave and other working conditions.
• Securing Mandate: Union leaders secure a mandate from workers through meetings before representing them in negotiations. This boosts their bargaining position.
• Establishing Bargaining Teams: Both employer and union decide their negotiating teams, who are empowered to take decisions during bargaining.

Through adequate preparation, the pre-negotiation phase sets the stage for constructive bargaining to take place.

Negotiation Phase

The actual negotiation phase involves discussions and concessions by both parties to reach a settlement. Key elements of this phase are:

• Opening Dialogue: Employer and union teams present opening remarks highlighting their positions. This initiates formal talks.
• Presenting Demands: The union team presents their charter of demands and the logic and evidence supporting them.
• Employer Response: The employer side evaluates demands in view of business costs, profits and market conditions. They present counter-arguments.
• Clarification and Debate: Through discussion and question-answer sessions, both sides provide clarity and justify their stances.
• Creating Options: Various alternative options are explored to arrive at an acceptable solution. New possibilities get generated through brainstorming .
• Concessions and Compromises: Through a series of concessions, the teams narrow down demands and reach compromises agreeable to both parties.
• Reaching Consensus: Final outcomes are summarized and a draft agreement is prepared reflecting consensus.

The negotiation phase requires patience, communication skills and willingness to accommodate each other’s interests for a mutually beneficial outcome.

Post-Negotiation Phase

After the agreement is reached, the post-negotiation phase involves:

• Ratification of Agreement: The draft agreement is presented to union members and the employer’s board. Their approval finalizes the agreement.
• Signing Agreement: Union leaders and employer representatives formally sign the collective bargaining agreement, giving it legal status.
• Communicating the Agreement: The agreed terms are notified to all workers through union meetings and employer communications.
• Implementing Agreement: The organization implements the provisions like wage hikes, new workplace policies, etc. Grievance handling mechanisms address implementation issues.
• Administration of Agreement: Both parties adhere to the agreement provisions during its validity period, generally 3-5 years. Violations are addressed through dispute resolution processes.
• Renewal of Agreement: When nearing expiry, either party can initiate re-negotiation for a new agreement. The process repeats.

Effective post-negotiation activities ensure smooth adoption and sustainability of the collective agreement over time.

Challenges Faced in Collective Bargaining

Despite a long presence, collective bargaining faces multiple challenges in India:

• Weak Trade Unions: Small size, lack of financial resources, inadequate training and inter-union rivalries diminish the bargaining power of unions. Their politicization also dilutes the focus on worker welfare.
• Legislative Hurdles: Complex web of labour laws and lack of reforms constrain collective bargaining efficiency and scope. Enforcement and implementation issues persist.
• Employer Hostility: Employers frequently deter union formation and resist demands. Unfair labour practices like the victimization of unionized workers weaken unions.
• Workforce Divisions: Bargaining gets complicated due to the presence of permanent, contractual, casual and migrant workers with divergent interests.
• Government Role: While the government is expected to play a neutral role, its intervention is often criticized as being pro-employer and anti-labour.
• Political Control: High political affiliation of unions diverts focus from workers’ welfare. Rivalries between unions also emerge.
• Emerging Sectors: New-age sectors like IT and ITeS remain beyond the purview of bargaining due to the predominance of white-collar workforce.
• Globalization: Increased competition and changing business dynamics limit the scope for bargaining, though investments and technologies can be negotiated.

Progressive collective bargaining requires overcoming these stumbling blocks through labour law reforms, capacity building of unions, increased tri-partyism and continuing social dialogue.

Successful Cases of Collective Bargaining in India

Despite limitations, collective bargaining has delivered benefits through some successful agreements:

• Bank Employees’ Wage Settlements: Unions like AIBEA, AIBOC have secured satisfactory wage revisions and benefits for public and private sector bank employees through successive settlements.
• LIC Employees’ Agreement: LIC unions have negotiated agreements providing LIC staff with job security, promotional channels and compensation matching industry standards.
• Coal India Limited Wage Pacts: Unions have used collective bargaining to gain better wages and bonuses for CIL workers who contribute significantly to the company’s profits.
• Tata Motors Agreement: The Tata Motors union signed a pioneering 5-year wage settlement in 2017 using an inflation-linked formula, reducing adversarial bargaining.
• Indian Airlines and Air India Deal: Collective bargaining in 2005 after the merger of the two airlines resulted in wage parity between employees thus reducing friction.
• Maruti Suzuki Agreement: A long-term wage settlement was signed in 2012 aligning workers’ pay with productivity and market reality.
• NTPC Worker Agreements: NTPC unions have secured progressive settlements with increased pay scales through sustained collective bargaining.

These examples showcase how collective bargaining can harmonize worker-management relations, uphold worker rights and also improve organizational efficiency.

The Future of Collective Bargaining in India

The future trajectory of collective bargaining will depend on how its long-standing challenges are addressed by stakeholders . Some key measures needed include:

• Legislative Reforms: Complex labour regulations should be consolidated into fewer, simpler and more coherent codes covering wages, social security, industrial relations and occupational safety & health. The new laws must expand bargaining coverage, institute worker-friendly provisions and robust enforcement mechanisms.
• Building Union Capacity: Grassroot worker education, leadership training, promotion of internal democracy and transparency can help unions expand membership and bargaining capabilities. Political affiliations need to be balanced with a focus on worker welfare.
• Institutionalizing Collective Bargaining: Formal structures should be created for regular social dialogue between workers and management like Works Councils, Wage Boards, Safety Committees, etc. This will make the bargaining process driven by relationships rather than only agreements.
• Increasing Tripartism: Government, industry and unions should cooperate through formal platforms like Indian Labour Conference and informal consultations to build consensus on labour reforms, decent work and dispute resolution.
• Decentralized Bargaining: Company or unit-level settlements tailored to each enterprise’s conditions may produce better outcomes than centralized industry-wide bargaining. But sectoral coordination is still needed.
• Leveraging Technology: Unions can use technologies like digital tools, social media and data analytics to increase worker participation, identify demands, formulate negotiation strategies and monitor implementation.
• Understanding Global Best Practices: Assessing successful bargaining models in countries like Germany, Sweden, South Africa, etc can provide valuable insights to create the most optimal solutions for the Indian context.

The future lies in reimagining collective bargaining as an instrument of social justice and industrial democracy beyond just ends-driven agreements. But the road to this future will need all stakeholders to come together and steer collective bargaining into a new era focused on workplace cooperation and national progress.

Conclusion: Embracing a Collaborative Future

Collective bargaining may have originated as an adversarial process, but it has evolved to become an expression of collaborative intent between management and labour. Despite limitations, collective bargaining remains a resilient mechanism to establish industrial democracy in India. Its foundations have been laid through legislation, trade union struggles and sporadic successes over the years.

But radical improvements in labour-management relations are needed today by abating legacy issues, fast-tracking reforms and building faith between stakeholders. The aim must be to make collective bargaining not just agreement-centric but relationship-centric. Its processes should get institutionalized through formal consultations at sector, company and workplace levels.

The future lies in reimagining collective bargaining as the bedrock of workplace cooperation, a harmonizer of productivity and employee welfare and an instrument of social justice. The journey towards this future undoubtedly faces complexities in India’s diverse socio-economic landscape. But the destination is worth aspiring for. It promises inclusive industrial growth built on partnership, trust and mutual interdependence between management and labour.

Collective bargaining remains a living process subject to evolution. By learning from the past and embracing change, India can nurture collective bargaining into a mature mechanism that serves the goals of enterprise, efficiency and equity. The collective gains for industries, workers and the nation from such collaboration will be manifold.

FAQs about Collective Bargaining in India

Q: what is collective bargaining.

Ans: Collective bargaining refers to negotiations between an employer and a group of employees, aimed at reaching agreements to regulate working conditions. The employees are normally represented by a trade union in the bargaining process.

Q: Which organizations can participate in collective bargaining?

Ans: Legally, collective bargaining is applicable to all commercial, industrial and service organizations in the public and private sectors that hire wage labourers, apprentices and employees. This includes factories, banks, insurance companies, railways, ports, plantations etc.

Q. What are the benefits of collective bargaining?

Ans: Collective bargaining leads to improved working conditions, better employer-employee relations, increased productivity and reduced conflicts. Employees gain higher job security and improved compensation through collective negotiations.

Q: What topics are covered under collective bargaining?

Ans: Wages, bonuses, allowances, working hours, leave, overtime, health and safety norms, grievance handling, disciplinary procedures, workforce reduction, work rules and other service conditions are commonly discussed.

Q: What is the role of trade unions in collective bargaining?

Ans: Registered trade unions represent workers in collective bargaining with employers. They articulate employee demands, negotiate agreements and follow up on implementation.

Q: How does government influence collective bargaining?

Ans: The government frames supporting labour legislation, regulates labour markets and ensures adherence to labour laws. It also provides dispute resolution mechanisms like arbitration and adjudication.

Q: What are the main collective bargaining challenges in India?

Ans: Weak trade unions, changing business environment due to globalization, excessive fragmentation of workers and complex labour regulations are key obstacles faced.

Q: How can collective bargaining be strengthened?

Ans: Simplifying labour laws, building union capacity through training, increasing tri-partite dialogue, decentralizing industry-level settlements and using technology can improve bargaining.

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Nokia India Exits Economic Zone: Employees Enter ‘Collective’ Conflict Zone

Case Preview

Nokia india exits economic zone: employees enter ‘collective’ conflict zone.

In 2014, after Narendra Modi took over as the Prime Minister of India, he invited foreign companies to invest in India with his ‘Make in India’ campaign. While the campaign was discussed among the business circles and became an agenda for several companies, the news of Nokia’s closure was doing the rounds. While business experts were lining up to discuss the benefits of ‘Make in India’, the Nokia employees and trade unions were negotiating with the company and urging politicians to save Nokia and their jobs. But all their efforts went in vain and Nokia ended its run in India on November 1st 2014, and shifted its operations to Vietnam.

Since January 2013, Nokia faced tax disputes amounting to more than $3.5 billion. The Tamil Nadu Sales Tax department accused Nokia of showing domestic sales as exports and evading sales tax, while the Income Tax department accused the company of unpaid taxes, interest and penalties relating to the import of software from its Head Office in Finland. However, Nokia denied all the accusations as baseless. In September 2013, Nokia sold its Devices and Services division to Microsoft for $7.5 billion but kept Nokia’s Sriperumbudur factory out of the deal since it was mired in tax troubles and seized by the IT officials. Though, Microsoft initially announced that Nokia’s existing plant in TSEZ would be a contract manufacturing facility, later the manufacturing was shifted to Vietnam. And hence from November 1 st 2014 the Indian operations of Nokia at Sriperumbudur came to a grinding halt, leaving nearly 30,000 workers jobless disturbing the larger ecosystem.

While trade unions put efforts to save the plant, they could not do much except to protest and bargain the severance package for the last batch of the Nokia employees. Many industry experts opined that there was not much left for the trade unions to do except negotiating the severance package as none of the political parties and the governments seemed concerned in saving the interests of the workers...........................

In 2013, Nokia was the world’s second largest 1 mobile phone (GSM, CDMA and WCDMA) manufacturer (Exhibit I). It was also engaged in the manufacture of mobile phone infrastructure, equipment for traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers, for every major market (Annexure I). Its mobile phones and other products were sold in more than 150 countries with its Devices and Services segment (other two segments being Location & Commerce/NAVTEQ and Nokia Siemens Networks) contributing around 60% of the Group’s revenue (Annexure II). Nokia, once the largest vendor and the market leader of mobile phones (with around 40% market share globally and 62.5% 2 in India in 2007), sold its Devices and Services division to the US software giant Microsoft Corporation in 2013, owing to the failure of its products and operating system, advent of android devices from competitors and continuous fall in the market share of its mobile phones over the past 5 years (Exhibit II). Nokia, which began in 1865 with a paper mill, had an eventful journey of over 150 years (expanded into five businesses – rubber, cable, forestry, electronics and power generation) before its culmination. Headquartered in Finland, Nokia, as of December 2014, was still a leader in the fields of network infrastructure (Nokia Networks), location-based technologies (HERE) and advanced technologies and intellectual property rights (Nokia Technologies), sans the Devices and Services division.....................

Nokia in India

In 1994, the Indian government opened up the country’s telecom market to private enterprises. Recognizing India’s potential market, several global telecom handset manufacturers chose to test the Indian waters. One among them was Finland-based Nokia, which made its entry into the country in 1994, and forged ahead of rivals to command the top spot in the market. With its focus on innovative product features (designs unique to India – cheaper price, torch, battery life, ringtones, etc.), distribution, investment in manufacturing, and..............

The Sriperumbudur Factory

In December 2004, Nokia announced that it would setup a mobile manufacturing factory in India and began scouting for an appropriate manufacturing destination in India. Nokia’s sales in India during that time were around 1 million units per month, but the company wanted to increase it to 6–7 million units per month. Till then the handsets were imported from China and sold in India.............

Tax Woes and the Shutdown

Though the factory was the largest in the world and claimed to be designed prioritising workers safety, and was providing better income for the employees, it was not free from problems. There were many problems at the factory – strikes, no provision of rest area for men, salaries were frozen for a year, accidents due to faulty machinery, problem with the local politicians, etc. In 2010, Ambika (22), an assembly-line employee died as her head got trapped in the robotic loading machine..........

Labor Unions and Collective Bargaining

On October 31 st 2014, the members of the Nokia India Thozhilalar Sangam (NITS) (translation – Nokia India Workers Union) and the remaining 850 employees agreed to the settlement package (of ₹ 650,000 to ₹ 1 million18 depending on the experience of the worker excluding PF and gratuity) put forth by the Nokia management. Earlier, in October, the Nokia management had served an ultimatum to the union that, it either get the consent of the workers for the settlement package or accept the severance package as per government rules (15 days of salary per every working year)..........

Collapse of a Manufacturing Cluster

On July 10th 2014, Chennai-based BYD Electronics India, one of the component manufacturers for Nokia, which ceased functioning after the June 21 st –22 nd 2014 protests at Nokia, was officially shutdown. Reports  said that this was the first casualty since the announcement of the Nokia shutdown..........

Shattered Dreams of Workers

After the announcement of the deal, Nokia entered into a ‘limited period service agreement’ with Microsoft to use the factory as a contract manufacturing facility. But the continuing uncertainty of tax dispute and freezing of assets by the IT department led Nokia to ramp down and shut the plant and shift production to Vietnam. On November 1st 2014, the Sriperumbudur plant was officially shutdown.........

Impact on ‘Make in India’

While on one hand, the Indian Prime Minister Narendra Modi showcased India as a destination for manufacturing through his ‘Make in India’ campaign, Nokia’s closure, on the other hand, came as a blow to the campaign. In addition to creating a devastated labor situation in Tamil Nadu, the shutdown of the Nokia factory had killed one of the few functional electronics manufacturing ecosystems in India............

Assignment Questions

• I. What do you think were the reasons behind the shutdown of the Nokia’s Sriperumbudur plant? Was its decision justifiable? Could it have been avoided?
• II. How were the TSEZ workers and unions trying to save the jobs and the company from the closure? Explain the role of trade unions and collective bargaining in case of issues related to workers in factories/companies? What could be the relevant provisions of collective bargaining (as applicable from Industrial Disputes Act, 1947 and Trade Unions Act, 1926) that can be invoked to present the case of Nokia’s employees?

III. ..................

Exhibit I: Top Mobile Phone Brands in 2013

Exhibit II: Nokia’s Market Share

Exhibit III: Incentives and Facilities Offered to the SEZs

Exhibit IV: Nokia’s Volumes and Market Share

Exhibit V: Plight of Few Employees After Nokia

Teaching Note Preview

This case study enables a discussion on the role of trade unions and the collective bargaining that happened between the Nokia employee unions and the Nokia  management during the shutdown of its plant at Sriperumbudur, India. In 2013, the Tamil Nadu Sales Tax department and the Income Tax department had accused Nokia of evading taxes summing up to more than $3.5 billion. But Nokia denied of having any such arrears. In September 2013, it sold its Devices and Services division to Microsoft. Since January 2014, the Nokia employees and their unions have been persuading the governments of Tamil Nadu and the Centre to save the plant and their jobs, but to no avail. Nokia shut its operations in India on November 1 st 2014 and started producing in another low-cost haven, Vietnam. This left 30,000 direct and indirect employees devastated with no means of livelihood and also came as a blow to the ‘Make in India’ campaign. The case study enables the participants to discuss the role played by trade unions and debate about the alternate course of actions that could have benefited both the parties.

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

• • Gary Dessler and Biju Varkkey, “Labor Relations and Collective Bargaining”, Human Resource Management, 12 th Edition (Indian Adaptation), Pearson Education, Inc., 2011 – To understand the role of trade unions, and collective bargaining in case of industrial disputes between the workers and the management of a company and the instruments used by the unions to bargain
• • Trade Unions Act, 1926 and Industrial Disputes Act, 1947 – To understand the principles/basic tenets of collective bargaining from the provisions of the Acts

Case Positioning and Setting

This case study can be used in either MBA or Executive MBA or Executive Development Programs, for the following modules/topics in the Human Resource Management course:

• • Labor Relations and Collective Bargaining – To understand the limits and limitations of Trade Unions in affecting a meaningful collective bargaining advantage
• • Trade Unions Act, 1926 and Industrial Disputes Act, 1947 – To sensitize the participants to the principles/basic tenets of collective bargaining as interpreted from the Acts
• III. ...................

Suggested Orchestration

The classroom discussion and analysis was facilitated under three broad sections [Exhibit (TN)-I] and could be summarized through the Board Plan [Exhibit (TN)-II]............

Exhibit (TN)-I: Classroom Discussion Dashboard

Exhibit (TN)-II: The Board Plan

Exhibit (TN)-III: Classroom Orchestration

Exhibit (TN)-IV: Nokia's Contribution to the Manufacturing Ecosystem

Exhibit (TN)-V: Efforts of Nokia and Its Employees to Stop the Closure

Exhibit (TN)-VI: Issues Negotiated through Collective Bargaining

This case study can be used to sensitize the participants of the broad provisions/tenets of collective bargaining mechanism. Set in the backdrop of Nokia's decision to shut its Indian plant (in Sriperumbudur, Tamil Nadu), invoking the relevant provisions of collective bargaining, this case study requires the participants to debate on alternative course of action in the interest of the employees. While the Indian Prime Minister Narendra Modi's 'Make in India' campaign was gaining ground, Nokia was quitting the country to invest in the low-cost haven, Vietnam, leaving thousands of direct and indirect employees devastated. The resultant dissent (especially from Nokia's employees) was a telling tale of how a celebrated FDI can cause major disruption when it decides to exit. Earlier, in 2013, the Tamil Nadu Sales Tax department and the Income Tax department had accused Nokia of evading taxes summing up to more than $3.5 billion, while Nokia denied of having any such arrears. In September 2013, it sold its Devices and Services division to Microsoft and shutdown its plant at Sriperumbudur on November 1st 2014. Even the efforts of various trade unions to persuade the Government of Tamil Nadu and the Government of India to keep the plant operating for the workers' benefits failed. What more could have been done by the trade unions in terms of collective bargaining or as industry experts said, was there no case at all for collective bargaining? How should have the governments dealt with the issue to avoid any negative effect on the country's investment climate?

• To understand how the political and business environment affects the inflow and sustenance of FDIs in the country in the backdrop of Nokia's entry (2005) into India and its exit (2014)
• To understand the role of trade/labor unions in resolving industrial disputes by examining the efforts of Nokia India's employees to save their jobs
• To examine the relevant provisions of Collective Bargaining (as enshrined in Industrial Disputes Act, 1947, and Trade Unions Act, 1926) and debate on the application of the same in the case of Nokia India
• To discuss and debate on the alternative courses of action, if any, for both the aggrieved parties
• Labor Relations and Collective Bargaining - To understand the limits and limitations of Trade Unions in affecting a meaningful collective bargaining advantage
• Trade Unions Act, 1926 and Industrial Disputes Act, 1947 - To sensitize the participants to the principles/basic tenets of collective bargaining as interpreted from the Acts

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ISSN 2581-5369

HeinOnline, MANUPATRA, Google Scholar Indexed

Collective Bargaining in India: A Critical Analysis of its Structure and Framework

Shubhangi agrawal.

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Student at Amity Law School, Noida, India

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Collective bargaining is the term used to define the process whereby employers must attempt to negotiate an agreement with the trade unions rather than with specific workers over terms of employment and working conditions. This is typically done with the objective to enable workers voice their concerns and engage in improved negotiations with their employers in order to fulfil certain demands and rights of the workers, including those pertaining to working hours, salary, working conditions, etc. This practice is often quite effective since it frequently results in companies acting to address the concerns of the employees. In India's private and public businesses, this method of resolving industrial disputes has revolutionised labour relations. This is due to the fact that business and commerce will inevitably encounter problems, and it is impractical to have courts adjudicate every one of them. As a result, using collective bargaining as a form of dispute resolution in the workplace has proven to be effective. This paper's primary objective is to critically analyse the concept of collective bargaining in general, including a study of its scope, aims, types, conditions, environment, theories, and various levels, among other topics. Additionally, it makes an effort to examine its concept from an Indian perspective in order to comprehend its framework and structure in the Indian context.

• Negotiation
• trade union
• industrial disputes
• conciliation

Research Paper

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International Journal of Law Management and Humanities, Volume 6, Issue 1, Page 2075 - 2088

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This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (https://creativecommons.org/licenses/by-nc/4.0/), which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.

Copyright © IJLMH 2021

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https://doij.org/10.10000/IJLMH.114297

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...allegations of mala fides, fraud or even corruption or other inducements. But in the absence of such allegations a settlement in the course of collective bargaining is entitled to due weight and...consideration. This Court then observed as under:“25. It has to be kept in view that under the scheme of labour legislations like the Act in the present case, collective bargaining and...the principle of industrial democracy permeate the relations between the management on the one hand and the Union which resorts to collective bargaining on behalf of its members-workmen with the...

...P.K Goswami, J.— This appeal by special leave brings forth a rather disquieting feature of union rivalry whereby the significance of collective bargaining , which is the forte...the President of the third respondent in this case. That being the position, prima facie, this is a settlement in the course of collective bargaining and, therefore, is entitled to due weight and...that may influence parties to come to a settlement as a phased endeavour in the course of collective bargaining . Once cordiality is established between the employer and labour in arriving at a...

...investigation and settlement of industrial disputes and for certain other purposes mentioned in the Act. Under the Act, the principal techniques of settlement of disputes are — (1) Collective Bargaining , (2...Act.9. It has to be kept in view that the Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. Thus...during conciliation proceedings. In all these negotiations based on collective bargaining the individual workman necessarily recedes to the background. The reins of bargaining on his behalf are handed...

...have on the one hand to remember the importance of collective bargaining in the settlement of industrial disputes, and on the other hand, the principle that the party to a dispute should have a fair...great importance in modern industrial life of collective bargaining between the workman and the employers. 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 his employer. As trade unions developed in the country and collective bargaining became the rule the employers found it necessary and...

...unguided power on the Central Government to frame schemes affecting the conditions of service of the workmen without any scope for collective bargaining .4. In any...destruction of GIC workers' substantive right to collective bargaining , even though bank employees are fully competent to negotiate and enter into binding agreement. For exercising this right both are..., although in case of bank employees, with no rational differentia, the right to collective bargaining is recognised and not disturbed and the right to adjudication was recognised in Bharat Bank case...

...Orders get incorporated in the contract of service of each employee with his employer. A facet of collective bargaining is that any settlement arrived at between the parties would be treated as...in the contract of employment of each employee with his employer. As far as the incorporation of the results of collective bargaining into the individual contract of employment is concerned, the...courts have in effect created a presumption of more or less systematic translation of the results of collective bargaining into individual contracts where these results are in practice operative and...

...recognition of trade unions for facilitating collective bargaining for certain undertakings, to state their rights and obligations; to confer certain powers on unrecognised unions; to provide for...Court held that the Act was enacted to provide for facilitating collective bargaining for certain undertakings; to confer certain powers on unrecognised unions; to define and provide for the prevention.... It was made applicable to industries to which the BIR Act applied. It was clear from the scheme of the Act that, with a view to facilitating collective bargaining in certain undertakings, the concept...

...labour have Organised themselves into groups for the purpose of fighting their disputes and settling them on the basis of the theory that in union is strength, and collective bargaining has come to stay...relation to matters of collective bargaining and the like.”18. The justification for this rather long quotation is that it deals With the specific point now in...

...to redress the grievances of the workmen in the undertaking; that the Company is refusing to enter into the collective bargaining with the Union and in the circumstances it is alleged that the...and to meet and discuss grievances of the employees in the Undertaking and finally the Company is directed not to refuse collective bargaining with the Union.(b) Being aggrieved by the...stage of the matter viz., interim stage cannot direct the Company to enter into the collective bargaining with the Union. However, it is clarified that since the Complainant Union is the...

...a settlement as a phased endeavour in the course of collective bargaining . Once cordiality is established between the employer and labour in arriving at a settlement which operates well for the period... collective bargaining have impelled us not to interfere with this settlement.”11. The principles thus enunciated fully govern the facts of the case in...

...upon unions so formed a right to effectively function as an instrument for agitating and negotiating and by collective bargaining secure, uphold or enforce the demands of workmen in respect of their...object for which labour unions are brought into being and exist is to ensure collective bargaining by labour with the employers. The necessity for this has arisen from an incapacity stemming from the...handicap of poverty and consequent lack of bargaining power in workmen as compared with employers which is the raison d'etre for the existence of labour organizations. Collective bargaining in order...

...management of the petitioner Bank for the purpose of collective bargaining . The main grievance put forth by the respondent Association in the said petition was that the petitioner Bank had adopted a policy of...really commands the support of the majority of the employees and that such a procedure is intended to enable both the trade union and the employer to carry on collective bargaining efficaciously so that...industry and was of the view that, though such non-recognised unions may not have the right to participate in the process of collective bargaining with the employer over issues concerning the workmen in...

...) The legislative history indicates that the legislature, after providing broadly for the investigation and settlement of disputes on the basis of collective bargaining , recognised the need of individual...

...naturally produced an association of employers and a union of workmen, each recognising the other, for the necessary convenience of collective bargaining . Apparently, these hardware merchants huddled...throwing dim light on the rule regarding representation in industrial litigation. We deem it needless to go deeper into this question, for in industrial law, collective bargaining , union representation at...party array into a short and meaningful one, group representation through unions being familiar in collective bargaining and later litigation. We do not expect the rigid insistence on each workman...

... collective bargaining agent in the second respondent Board for a period of two years or till the next verification ballot, whichever was earlier. Subsequently verification ballot was not held in time...Employees Union, the Andhra Pradesh Electricity Board Employees Union and Telugu Nadu Vidyuth Karmika Sangh for the purpose of collective bargaining pending holding of verification ballot. The said order...law.6. I do not find any merit in the submission of the learned counsel. It should be noted that collective bargaining is a diplomacy between the Capital and the Labour. The whole...

...14 was entitled to act on behalf of all of them by way of collective bargaining and could legitimately enter into the settlement which was for the benefit of all workmen concerned. Under these...was a package deal entered into by Respondent 2-Union with the appellant-Company and in such a collective industrial bargaining there was always give and take; that there were no exceptional grounds...corruption or other inducements. But in the absence of such allegations a settlement in the course of collective bargaining is entitled to due weight and consideration.24...

...cessation of work may be loss to the management but the obvious intendment of such a collective bargaining strategy is to force the employer to accept the demand of the workers for betterment of...industrial disputes, which means adjudication of such disputes also. The Act envisages collective bargaining , contracts between union representing the workmen and the management, a matter which is...). Undoubtedly this expression must receive a wide connotation, calculated as it is to produce industrial peace. Indeed, the legislation substitutes for free bargaining between the parties a binding award...

...service rules but, in substance, are the result of collective bargaining with the management, as the writ petition itself reveals. These triple categories of new posts have been filled, admittedly...

... Collective Bargaining by Ludwig Teller, it is said at p. 536 that industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general the creation of new...distinction between commercial and industrial arbitration, and after referring to the same passage in Labour Disputes and Collective Bargaining by Ludwig Teller (Vol. 1, p. 536), proceeded to lay down as...

...industrial jurisprudence that the right of collective bargaining itself is a very valuable right. Where, therefore, in exercise of such a right the reference is made under S. 10 of the...here is very comprehensive in its terms. The modern industrial jurisprudence has advanced so much today that it had come to be recognised as collective bargaining . It is one of the most powerful...weapons in the hands of the employees. This Act is a legislation relating to such collective bargaining in economic field. That is the reason why we have referred to the very definition of “industrial...

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Collective Bargaining in India: Strengthening Workers' Rights and Promoting Industrial Harmony

• "The right to bargain collectively with an employer enhances the human dignity, liberty and autonomy of workers by giving them the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives, namely their work."
• "Collective bargaining is not simply an instrument for pursuing external ends...rather [it] is intrinsically valuable as an experience in self-government."
• "Collective bargaining permits workers to achieve a form of workplace democracy and to ensure the rule of law in the workplace. Workers gain a voice to influence the establishment of rules that control a major aspect of their lives."

History of Collective Bargaining in India

Types of collective bargaining agreements.

• Voluntary agreement or Bi-partite agreement: Under Section 18 of the Industrial Disputes Act, such agreements that enforce settlement between the parties through voluntary negotiations under the process of collective bargaining are considered to be binding on the parties to the agreement.  
• Enforcement of Consent Award: When the dispute between the parties has been referred to the Court of Law and the decision in underway, the room for negotiation still remains open for the parties. Any agreement reached between the parties hereunder shall form a part of the award delivered by the Court. It, henceforth, becomes a binding decision on the parties.  
• Settlement: An out of Court settlement usually involves three parties, with a conciliator officer being the third party. Throughout the process of conciliation, the officer shall endeavor to strike a settlement between the parties at dispute. If the parties agree to reach a common middle ground, then an agreement to effect the same is executed, which thereby becomes binding on all the parties involved in the dispute.

Collective Bargaining: The Process

Interpretations.

• Article 2, Convention 154 of the International Labour Organization ("ILO")[4]:
• "collective bargaining extends to all negotiations which take place between an employer, a group of employers or one or more employers' organisations, on the one hand, and one or more workers' organisations, on the other, for
• determining working conditions and terms of employment; and/or
• regulating relations between employers and workers; and/or
• regulating relations between employers or their organisations and workers or workers' organisations."  
• Dale Yoder has defined it as: "Collective bargaining is the term used to describe a situation in which the essential conditions of employment are determined by bargaining process undertaken by representatives of a group of workers on the one hand and of one or more employers on the other."  
• In the case of Ram Prasad Vishwakarma v. The Chairman, Industrial Tribunal [5], the Supreme Court emphasized the importance of collective bargaining in the settlement of industrial disputes along with the principle of fair hearing of the parties to the dispute. "It is now well-settled that a dispute between an individual workman and an employer cannot be an industrial dispute as defined in section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of the workmen or by a considerable number of workmen."

Conditions of Collective Bargaining

Validity and recognition of collective bargaining in india.

• Industrial Disputes Act, 1947
• Trade Union Act, 1926
• The Industrial Employment (Standing Order) Act, 1946

Industrial Disputes Act 1947

• The promotion of measures for securing and preserving amity and good relations between the employer and workmen;
• an investigation and settlement of industrial disputes, between employers and employers, employers and workmen, or workmen and workmen, with a right of representation by a registered trade union or federation of trade unions or association of employers or a federation of associations of employers;….and (5) collective bargaining".

Trade Union Act 1976

The industrial employment (standing orders) act, 1946, issues in an effective collective bargaining procedure in india.

• The right of the management is the primary obstacle to the expansion of collective bargaining. A management's prerogative is their right or privilege to use the labour force, raw materials, and financial resources anyway they see fit. The management opposes and does not like the concept of engaging in negotiations on numerous topics with labour unions and their representatives.  
• In accordance with the Industrial Disputes Act of 1947, for instance, the parties to a disagreement may ask the government to send the subject for adjudication, and the government may accept. However, the law does not impose collective bargaining in this way. Government should encourage unions' leaders to have more confidence in collective bargaining.  
• Political parties in India are closely associated with the trade unions, and this strong relationship has deterred them from negotiating contracts through collective bargaining. The general tendency of the political parties is to show their strength and put political pressure rather than collective bargaining and negotiations.  
• The existence of several unions is another issue. Multiple unions lead to internal competition and disputes. The primary negotiating problems are set aside in this trade union competition, and political interest predominates over economic motivation. Trade union conflict offers management the opportunity to take advantage of the circumstance and force workers to accept the conditions that management desires. A weak union may agree to anything that the stronger union rejects in order to acquire more support and to fight the stronger union. Economic concerns are excluded from collective bargaining during the process.

Recommendations of the National Commission of Labour[19]:

• Karol Leather Karamchari Sangathan v. Liberty Footwear Company, (1989) 4 SCC 448
• Facilties Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27
• Sydney and Beatrice, Industrial Democracy (1987)
• Convention 154, International Labour Organization, art 2
• Ram Prasad Vishwakarma v. The Chairman, Industrial Tribunal, 1961 AIR 857
• Bharat Iron Works v. Bhagubhai Balubhai Patel & Ors., 1976 AIR 98
• Ratna Sen, Industrial Relation in India, Shifting Paradigm, Macmillan, 2003
• Re Kerala Education Bill case, AIR 1957 SC 956
• Kesavananda Bharti v. State of Kerala, AIR 1978 SC 1461
• Industrial Disputes Act 1947, s 18
• Dimakuchi Tea Estate vs. The Management of Dimakuchi Tea Estate, AIR 1958 SC 353
• Industrial Disputes Act 1947, s 19
• Industrial Disputes Act 1947, s 29
• Royal Calcutta Golf Club Mazdoor Union v. State of West Bengal, AIR 1956 Cal 550
• D.N. Banerjee vs. P.R. Mukherjee, 1 L.L.J. 1951 (SC)
• Tamil Nadu Electricity Workers Federation vs. Madras State Electricity Board, AIR 1965 Mad. 111
• The Industrial Employment (Standing Orders) Act, 1946, s 3
• Glaxo Laboratories vs. Labour Court, 1984 1 LLJ 16
• National Commission of Labour on Collective Bargaining (1969)
• S.C. Srivastava, Industrial Relations and Labour Laws, 4th Ed., Reprint, 2002, Vikas Publishing House Pvt. Ltd., New Delhi
• International Covenant on Economic, Social and Cultural Rights, art 8

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