FUTURE OF COLLECTIVE BARGAINING IN THE LIGHT OF CHANGING DIMENSIONS OF LABOUR FORCE

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FUTURE OF COLLECTIVE BARGAINING IN THE LIGHT OF CHANGING DIMENSIONS OF LABOUR FORCELABOUR AND INDUSTRIAL JURISPRUDENCE ll ProjectShubham Agarwal Roll no. 93

ACKNOWLEDGEMENT

Iwould like to express my special thanks of gratitude to my Prof. H.N. Tiwari who gave us the golden opportunity to do this wonderful project on the topic Future of collective bargaining in the 21st century in the light of changing dimensions of labour force which also helped me in doing a lot of Research and I came to know about so many new things I am really thankful to them.Secondly I would also like to thank my parents and friends who helped me a lot in finalizing this project within the limited time frame. Shubham Agarwal Semester Xth Roll no. 93

INTRODUCTION

The conflict between the management and the employee is inherent in an industrial society. One argues for more investment and profits while the other argues for better standard of living. These two conflicting interests can be adjusted temporarily through the principle of "give and take"[footnoteRef:2], The principle of give and take has been infused in the principle of collective bargaining. [2: Otto Kahn-Freund, Laboar aad the Law, L mdon, Stevens & Sons, (1977\ .). 49]

The phrase "collective bargaining" was coined by British labor reformers Sidney and Beatrice Webb of Great Britain which was the home of collective bargaining in the 1890s[footnoteRef:3]. The idea of collective bargaining emerged as a result of industrial conflict and growth of trade union movement and was first given currency in the United States by Samuel Crompers. In India the first collective bargaining agreement was conducted in 1920 at the instance of Mahatma Gandhi to regulate labour management relation between a group of employers and their workers in the textile industry in Ahmadabad[footnoteRef:4]. [3: Webb, Sydney and Beatrice, Industrial Democracy,1902,p.185] [4: Report of Royal Commission on Labour in India, 1931; p. 336-337]

Advocates of collective bargaining in the early decades of the twentieth century thought it essential for three reasons. First and foremost, a system of peaceful and routine bargaining would eliminate industrial strife and violence. Second, collective bargaining stood for "industrial democracy," and finally, collective bargaining promised to make capitalism work.

In any industrial establishment the friction between employer and the workmen is inevitable. There are demands by the workmen and if those demands are resisted by the employer, industrial dispute arises resulting in industrial tension and disturbing the peace and harmony in the industry. Collective Bargaining is one of the methods wherein the employer and the employees can settle their disputes.

There was always a need of a legislation which could ensure industrial justice pre-empt the industrial tensions and provide the mechanics of dispute resolution. When Industrial Disputes Act, 1947 was passed in India, it was passed to provide machinery and form for the investigation of industrial disputes and for the settlement thereof and for the purposes analogous and incidental thereto. As is evident from the Act itself that it is piece of legislation which mainly provides for investigation and settlement of Industrial disputes.

In the words of Justice Desai the emergence of the concept of welfare state implies an end to exploitation of workmen and as a corollary to that collective bargaining came into its own and lest the conflicting interests of the workmen and the employer disturb the industrial peace and harmony, a machinery for adjustment of such conflicting interests became the need of the time. The Act therefore was enacted to provide machinery and Forum for adjustment of such conflicting and seemingly irreconcilable interests without disturbing the peace and harmony in the industry assuring the industrial growth which was the prerequisite of for a welfare state.

Collective bargaining is one of the methods wherein the employer and the employees can settle their disputes. This method of settling disputes was adopted with the emergence and stabilization of the trade union Government. Before the adoption of the collective bargaining the labour was at a great disadvantage in obtaining reasonable terms for contract of service from its employer. With the development of the trade unions in the country and the collective bargaining becoming the rule it was equally found by the employers that instead of dealing with individual workmen it is convenient and necessary to deal with the representatives of the workmen not only for the making or modification contracts but also in the matter of taking disciplinary action against the workmen and regarding other disputes. So, collective bargaining has come to stay having regard to modern conditions of the society where capital and labour have organized themselves into groups for the purpose of fighting and settling their disputes.

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.[footnoteRef:5] [5: I.L., Labour Law and Labour Relations, N.M. Tripathi (Pvt) Ltd., Bombay, (1968), P.29:]

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."[footnoteRef:6] [6: See Eugene V. Schneider, Industrial Sociology, London, Mc GrawHill, (1971), P. 344.]

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.[footnoteRef:7] [7: [Report of National Commission on Labour, p.325]]

ANALYSIS OF THE CONCEPT OF COLLECTIVE BARGANING Collective bargaining is concerned with the relations between employers acting through management and organised labour. It is concerned not only with the negotiation of a formal labour agreement but also with the day-to-day dealings between management and the union. Collective bargaining is a voluntary process under which the representatives of both employers and labour enter into an agreement. The process does not stop as soon as a bargain is reached at between the employer and the trade union. It is a continuous process because the contract is only the beginning of collective bargaining. Bargaining requires an efficient and permanent arrangement for negotiations. No temporary or one-time arrangements can make the bargaining process successful.

Features of Collective Bargaining

The features of collective bargaining are as under:

It is a group process, wherein one group, representing the employers, and the other, representing the employees, sit together to negotiate terms of employment; Negotiations form an important aspect of the process of collective bargaining i.e., there is considerable scope for discussion, compromise or mutual give and take in collective bargaining; Collective bargaining is a formalized process by which employers and independent trade unions negotiate terms and conditions of employment and the ways in which certain employment-related issues are to be regulated at national, organizational and workplace levels; Collective bargaining is a process in the sense that it consists of a number of steps. It begins with the presentation of the charter of demands and ends with reaching an agreement, which would serve as the basic law governing labor management relations over a period of time in an enterprise. Moreover, it is flexible process and not fixed or static. Mutual trust and understanding serve as the by products of harmonious relations between the two parties; It a bipartite process. This means there are always two parties involved in the process of collective bargaining. The negotiations generally take place between the employees and the management. It is a form of participation; Collective bargaining is a complementary process i.e. each party needs something that the other party has; labor can increase productivity and management can pay better for their efforts; Collective bargaining tends to improve the relations between workers and the union on the one hand and the employer on the other; Collective Bargaining is continuous process. It enables industrial democracy to be effective. It uses cooperation and consensus for settling disputes rather than conflict and confrontation; Collective bargaining takes into account day to day changes, policies, potentialities, capacities and interests; It is a political activity frequently undertaken by professional negotiators.

Significance of Collective Bargaining

In an Industrial Establishment to solve the problems arising at the plant or industry level the need of the collective bargaining is eagerly felt. Through negotiations the solution to the common problems can be directly found out between the management and workers and here the collective bargaining plays significant role and its scope is very great. In so far the determination of terms and conditions of employment are concerned, one important consequence of collective bargaining has been that it has enabled trade unions to participate in the decision making process regarding hours of work, wages, working conditions etc. Earlier the employer used to decide these issues unilaterally, but now they have become subjects of bilateral negotiations with the advent of collective bargaining. Thus an element of industrial democracy has been introduced by collective bargaining in the field of industrial and labour management.

Collective bargaining is really useful from the stand point of management, trade unions and workers. Among workers it develops a sense of responsibility and self respect if it works well and thus contributes to a great extent to employees morale and productivity. It opens up channels of communication between top and bottom of an undertaking which is difficult otherwise. Further the managements freedom of action is restricted because the establishment loses its unilateral discretion regarding bargainable issues even when managements security is intact and thereby learns a new code of behavior by conceiving of the union as a method of dealing with the employees not an obstacle to such dealing.

The significance of collective bargaining from the national stand point is that it helps in creating peaceful industrial climate if properly conducted, thereby increases the pace of the countrys efforts towards social and economic development. Collective bargaining as an instrument of industrial peace has no parallel. It extends the democratic principle from the political to the industrial field and is an important aspect so far as the labour and management relations are concerned.

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.

COLLECTIVE BARGAINING PROCESS

The collective bargaining process begins when the majority of workers of an organization vote to be represented by a specific union. The National Labor Relations Board (see Labor Unions) then certifies the union. At this point, the management of the organization must recognize the union as the collective bargaining agent for all the employees of that organization. Once this part of the process is completed, collective bargaining can begin.

Bargaining always takes place between labor and management, but negotiations can include more than one group of workers and more than one employer. Single-plant, single-employer agreements are the most common. However, if an employer has more than one plant or work site, multiplant, single-employer agreements can be bargained. Several different union groups representing the workers of the same employer can use coalition bargaining. Industry wide bargaining involves one national union bargaining with several employers of a specific industry.Many different negotiation styles can be used when union and labor representatives sit down at the bargaining table. The two basic modes of bargaining are traditional bargaining and partnership bargaining, though there are many variations of each style.

The traditional style of bargaining has been used since collective bargaining began between management and the early labor unions. It is an adversarial style of negotiating, putting one side against the other with little or no understanding of, or education about, the other on the part of either party. Each side places its demands and proposals on the table, and the other side responds to them with counterproposals. The process is negative and involves a struggle of give-and-take on most issues. Even with its negative connotations, however, the traditional style of negotiating is still used effectively in bargaining many union contracts.

The partnership style of bargaining is the more modern approach to negotiations. It strives for mutual understanding and common education on the part of both labor and management, and it focuses on goals and concerns common to both parties. Because of its emphasis on each side's being aware of the issues concerning the other side, partnership-style bargaining is also known as interest-based bargaining. In this process, labor and management each list and explain their needs, and the ensuing discussion revolves around ways to meet those needs that will be not only acceptable but also beneficial to both parties. This style of bargaining is very positive and imparts a much more congenial atmosphere to the negotiating process. Many modern union-management contracts are bargained very successfully using the partnership style.

A blending of the traditional and partnership styles is widely used in labor-management negotiations. The combination approach is used for many reasons, including the fact that many union and management leaders are more familiar with the traditional style. However, with today's more participatory relationship between labor and management in the workplace, the partnership style is becoming more accepted and is being used more frequently. The negotiating process may also include both styles of bargaining because of the variety of issues being negotiated. The partnership style may be used to negotiate certain issues, while the traditional style may be invoked when bargaining other terms.

I.L.O CONVENTIONS ON COLLECTIVE BARGAINING

India is a founder member of the International Labour Organization, which came into existence in 1919. A unique feature of the ILO is its tripartite character. The membership of the ILO ensures the growth of tripartite system in the Member countries. At every level in the Organization, Governments are associated with the two other social partners, namely the workers and employers. All the three groups are represented on almost all the deliberative organs of the ILO and share responsibility in conducting its work.

The principal means of action in the ILO is the setting up the International Labour Standards in the form of Conventions and Recommendations. Conventions are international treaties and are instruments, which create legally binding obligations on the countries that ratify them. Recommendations are non-binding and set out guidelines orienting national policies and actions.

Specific features of Conventions

Conventions have a number of specific features, which can be grouped under four main ideas:

1. Conventions are adopted within an institutional framework. Thus, the adoption of Conventions does not follow the type of diplomatic negotiation which is usual in the case of treaties. They are rather prepared in discussions in an assembly that has many points in common with parliamentary assemblies. This also partly explains the fact that unanimity is not necessary for the adoption of Conventions. For the same reason, only the International Court of Justice can interpret the Conventions. The revision of Conventions is made only by the General Conference, which is the legislative body of the Organization.

2. The International Labour Conference, which adopts Conventions, is constituted by representatives of governments, employers and workers, each delegate being entitled to vote individually.

3. A two-thirds majority is sufficient for the adoption of a Convention, and governments should submit the Convention to their competent authorities for ratification, i.e. as a rule to their parliaments. Also, the governments have the obligation, when requested, to supply reports on various issues related to Conventions.

4. Some Conventions include flexibility clauses, because they are generally directed towards countries with very different economic, social and political conditions, as well as different constitutional and legal systems. The flexibility clauses comprise options regarding the following:

(a) Obligations: possibility of choosing, at the time of ratification, by means of formal declaration, the extent of the obligations undertaken. (for .e.g. Social Security Convention, No. 102)

(b) Scope: Governments may decide for themselves, subject to certain consultations, what the scope of the Convention shall be (for. e.g. Conventions of minimum wage fixing machinery, Nos. 26 and 29), or they may be permitted to exclude certain categories of persons or undertakings (for e.g. Conventions on night work, Nos.41 and 89), or the definitions of persons covered may be based on a specified percentage of the wage earners or population of the country concerned (for e.g. many social security Conventions), or exceptions are allowed for a certain part of the country (Various types of Conventions, for e.g. Nos. 24, 25, 62, 63, 77, 78, 81, 88, 94, 95, 96 etc.), or governments may themselves define a certain branch, industry or sector (for e.g. Weekly rest Convention, No. 106);

(c) Methods: State which ratifies a Convention shall take such action as may be necessary to make effective the provisions of such Convention, custom, administrative measures or, in certain circumstances, collective agreements.

Core Conventions of the ILO

The eight Core Conventions of the ILO (also called fundamental/human rights conventions) are: 1. Forced Labour Convention (No. 29) 2. Abolition of Forced Labour Convention (No.105) 3. Equal Remuneration Convention (No.100) 4. Discrimination (Employment Occupation) Convention (No.111) (The above four have been ratified by India).

5. Freedom of Association and Protection of Right to Organised Convention (No.87) 6. Right to Organise and Collective Bargaining Convention (No.98) 7. Minimum Age Convention (No.138) 8. Worst forms of Child Labour Convention (No.182)(These four are yet to be ratified by India)

ILO Conventions on Collective Bargaining

There are several other ILO Conventions and Recommendations that relate to collective bargaining. These are:1. the Right to Organise and Collective Bargaining Convention, 1949 (No. 98);2. the Collective Agreements Recommendation, 1951 (No. 91);3. the Voluntary Conciliation and Arbitration Recommendation, 1951 (No. 92);4. the Labour Administration Convention, 1978 (No. 150);5. the Labour Administration Recommendation, 1978 (No. 158);6. the Labour Relations (Public Service) Convention, 1978 (No. 151);7. the Labour Relations (Public Service) Recommendation, 1978 (No. 159); and8. the Collective Bargaining Recommendation, 1981 (No. 163).

In this chapter, we will discuss three main conventions on collective bargaining. Which are as follows:

Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87)

This Convention establishes the right of all workers and employers to form and join organizations of their own choosing without prior authorization, and lays down a series of guarantees for the free functioning of organizations without interference by the public authorities.

Right to Organize and Collective Bargaining Convention, 1949 (No. 98)

One of the most well-known and widely ratified Conventions that relate to collective bargaining is No. 98 the Right to Organise and Collective Bargaining Convention, 1949. This fundamentalConvention says that member States should encourage systems of voluntary negotiations in orderto regulate terms and conditions of employment through collective agreements. All the otherConventions and Recommendations listed above complement Convention No. 98 through clarifying concepts and supporting the principles that it defines.

Right to Organize and Collective Bargaining Convention, 1949 provides for protection against anti-union discrimination, for protection of workers and employers organizations against acts of interference by each other, and for measures to promote collective bargaining.

Collective Bargaining Convention, 1981 (No. 154)

The Collective Bargaining Convention (No. 154) was adopted by the International Labour Conference in 1981. It promotes free and voluntary collective bargaining. This Convention encourages collective bargaining in both the private sector and the public sector (with the exception of armed forces and the police), with the only reservation that national laws or Regulations or national practice may fix special modalities of application of the convention as regards the public service. Member States which ratify the convention may no longer confine themselves to consultations. They are bound to promote collective bargaining for determining working conditions and terms of employment, among other objectives. The extension of the scope of the Convention No. 154 to the public service was facilitated by the fact that, in contrast with convention No. 98, this instrument does not refer to the determination of terms and conditions of employment by means of collective agreements. Other indications of flexibility are also to be found in Convention 154 in its provision that collective bargaining should be progressively extended to all matters covered by the convention or that its provisions shall, in so far as they are not otherwise made effective by means of collective agreements, arbitration awards or in such other manner as may be consistent with the national practice, be given effect by national laws or regulations.

The definition of collective bargaining and scope are contained in Article 1 and 2 of the convention, Article 4 contains method of application and reads as follows;

the provisions of this convention shall, in so far as they are not otherwise made effective by means of collective agreements, arbitration awards or in such other manner as may be consistent with national practice, be given effect by national laws or regulations.

Promotion of Collective Bargaining

Article 5

1. Measures adapted to national conditions shall be taken to promote collective bargaining.2. The aims of the measures referred to in paragraph 1 of this Article shall be the following:(a) Collective Bargaining should be made possible for all employers and all groups of workers in the branches of activity covered by this convention;(b) Collective bargaining should be progressively extended to all matters covered by subparagraphs (b) and (c) of Article 2 of is Convention;(c) Establishment of rules of procedure agreed between employers and workers organizations should be encouraged;(d) Collective bargaining should not e hampered by the absence of rules governing the procedure to be used or b the inadequacy or inappropriateness of such rules;(e) Bodies and procedures for the settlement labour disputes should be so conceived as to contribute to promotion of collective bargaining. Article 6: The provisions of this convention do not preclude the operation of industrial relations systems in which collective bargaining takes place within the framework of conciliation and or arbitration machinery or institutions, in which machinery or institutions, the parties to the collective bargaining process voluntarily participate.

Article 7: Measures taken by public authorities to encourage and promote the development of collective bargaining shall be the subject of prior consultation and whenever possible, agreement between public authorities and employers and workers organizations.

Article 8: The measures taken with a view to promoting collective bargaining shall not be so conceived or applied as to hamper the freedom of collective bargaining.

Article 9: This convention does not revise any existing convention or recommendation.

Collective Bargaining Recommendation, 1981 (No. 163) - concerning the promotion of Collective Bargaining

Recommendation No. 163 outlines in more detail measures the Government and the parties might take to promote collective bargaining. The general conference of International Labour Organization, having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its sixty-seventh session on 3 June 1981, and having decided upon the adoption of certain proposals with regard to the promotion of collective bargaining, which is the fourth item on agenda of the session, and having determined that these proposals shall take the form of recommendation supplementing the collective bargaining convention, 1981, adopts the following recommendation, which may be cited as Collective Bargaining Recommendation, 1981:

1. The provisions of this recommendation may be applied by national laws or regulations, collective agreements, arbitration awards or in any other manner consistent with national practice;

2. In so far as necessary, measures adapted to national conditions should be taken to facilitate the establishment and growth, on a voluntary basis, of free, independent and representative employers and workers organizations.

3. In so far as necessary, measures adapted to national conditions should be taken so that - (a) representative employers and workers organizations are recognized for the purposes of collective bargaining; (b) in countries in which the competent authorities apply procedures for recognition with a view to determining the organizations to be granted the right to bargain collectively, such determination is based on pre-established and objective criteria with regard to the organizations representatives character, established in consultation with representative employers and workers organizations.

4. (1) Measures adapted to national conditions should be taken, if necessary, so that collective bargaining is possible at any level whatsoever, including that of the establishment, the undertaking, the branch of activity, the industry, or the regional or national levels. (2) In countries where collective bargaining takes place at several levels, the parties to negotiations should seek to ensure that there is co-ordination among these levels.

5. (1) Measures should be taken by the parties to collective bargaining so that their negotiators, at all levels, have the opportunity to obtain appropriate training. (2) Public authorities may provide assistance to workers and employers organizations, at their request, for such training. (3) The content and supervision of the programmes of such training should be determined by the appropriate workers or employers organization concerned. (4) Such training should be without prejudice to the right of workers and employers organizations to choose their own representatives for the purpose of collective bargaining.

6. Parties to collective bargaining should provide their respective negotiators, so that the necessary mandate to conduct and conclude negotiations, subject to any provisions for consultations within their respective organizations.

7. (1) Measures adapted to national conditions should be taken, if necessary, so that the parties have access to the information required for meaningful negotiations. (2) ZFor this purpose (a) public and private employees should, at the request of workers organizations, make available such information on the economic and social situation of the negotiating unit and the undertaking as a whole, as is necessary for meaningful negotiations; where the disclosure of some of this information could be prejudicial to the undertaking, its communication may be made conditional upon a commitment that it would be regarded as confidential to the extent required; the information to be made available may be agreed upon between the parties to collective bargaining; (b) the public authorities should make available such information as is necessary on the over-all economic and social situation of the country and the branch of activity concerned, to the extent to which the disclosure of this information is not prejudicial to the national interest.

8. Measures adapted to national conditions should be taken, if necessary, so that the procedures for the settlement of labour disputes assist the parties to find a solution to the dispute themselves, whether the dispute is one which arose during the negotiation of agreements, one which arose in connection with the interpretation and application of agreements or one covered by the examination of grievances recommendation, 1967.

9. This recommendation does not revise any existing recommendation.

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. LibertyFootwear Company[footnoteRef:8] 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". [8: AIR 1990 SC 247]

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 Tiwari[footnoteRef:9] the Calcutta High Court clarified that this policy of the legislature is also implicit in the definition of 'industrial dispute'. [9: (1979) Lab I.C. 523 (Cal)] ]

In Ram Prasad Viswakarma v. Industrial Tribunal[footnoteRef:10] 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. [10: (1961) I LL.J 504]

In Bharat Iron Works v. Bhagubhai Balubbai Patel[footnoteRef:11] 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. [11: (1976) Lab. I.C. 4 [S.C]]

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 theother 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.[footnoteRef:12] [12: S.N. Dhyani, Trade Union and the right to strike, S. Chand & Co. (Pvt.) Ltd, New Delhi, PP. 374-380.]

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.[footnoteRef:13] 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.[footnoteRef:14] 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. [13: See Section 22 of the Trade Unions Act, 1926,] [14: See Report of the National Commission on Labour, (1969), P. 288]

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 fund[footnoteRef:15] 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 [15: See Section-16 of the Trade Unions Act. 1926.]

the Commission suggests proportion of the outsiders and the workers in a union executive.[footnoteRef:16] 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. [16: id. at P. 291, The Commission has recommended as follows :Where the membership of union is;( i) below 1,000 the number of outsiders should not be more than 10%{ii) between 1,000-10,000 . . .. .. .. .. .. 20%(iii) above l,000 . . .. .. .. .. .. . 30%(iv) 'the permissible limit for industry -wise unions should be 30%]

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 theTrade 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."[footnoteRef:17] [17: Report of the National Commission on Labour, (1969)p. 329]

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.[footnoteRef:18] Presence of too many unions in an industry destroys the bargaining strength of workers. Our labour legislation also permits multi-unionism.[footnoteRef:19] [18: Mrs. P. Chakravarthy, Strike and Morale in Industry, Calcutta. Navana Printing Works, Pvt. Ltd. (1969) PP. 37-38.] [19: See Section-4 of the Trade Unions Act, 1926, permits any seven members to form a union and get registered.]

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 agreementswhich 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."[footnoteRef:20] [20: Justice Gulab Gupta, Our Industrial Jurisprudence, 1987, p.133]

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.[footnoteRef:21] 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. [21: Dr, B.R. Patil, "Collective Bargaining and Conciliation in India," 12, I.J.I.R. 41 (1976).]

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.[footnoteRef:22] In deciding industrial disputes the adjudicator is free to apply the principle of equity and good conscience. [22: Anirudh Prasad Singh, "New Dimension of Employer-Employee Relations in Progressive Industrial Society," 9, Lawyer, 164 (1977).]

However, it is said that the impact of the attitude of the judiciary towards workers has not proved conducive to the peaceful industrial relations.[footnoteRef:23] 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: [23: See Dr. Ahmedullah Khan, "Judicial Regulation of Industrial Relations" 9, Awards Digest, 177 (Where the author emphatically discussed the defects of judiciary as far as labour-management relation is concerned.)]

"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."[footnoteRef:24] [24: Kir Kaldy, The spirit of Industrial Relations (1974) P. 58, cited in S.N. Dhyani's op. cit., P.396.]

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.[footnoteRef:25] [25: Royal Calcutta Golf Club Mazadoor Union v. State of west Bengal, AIR 1956 Cal 550.]

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.[footnoteRef:26] 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.[footnoteRef:27] [26: Poona Mazdoor Sabha v. G.K.Dhuta, AIR b1956. Bom. 743.] [27: Ibid]

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. 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 unions 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 others 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 companys 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 companys 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 bedone 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.

BIBLIOGRAPHY

Books referred..1. Bhagoliwal, T.N., Economics of Labour& Industrial Relations, 1989, Sahitya Bhawan, Agra.1. Goswami, V.G., Labour and Industrial Law, 2004 Central Law Agency, Allahabad.1. Teller Ludwig, Labour Disputes and Collective Bargaining, Vol I, 1940 Barker Voorhis& co. INC New York.1. Coutinho,V.B, Strike in Industrial Conflict: A Critical and Comparitive Study,1993, 5th edn.1. Fred Witney et al; Labour Relations Law, 7th edn 1990.

Articles referred.1. Right to Strike : An Analysis, B.P.Rath and B.B.Das, IJIR 1999,pg 248-259.1. Perspectives On Collective Bargaining In India, LLJ, Vol 1, 2005 p.21-34 1. Strikes and Lock outs, Pankaj and Dharamveer Singh, Lab&IC, Vol 1,2005