3. Collective bargaining is a voluntary
process used to determine terms and
conditions of work and regulate
relations between employers,
workers and their organizations,
leading to the conclusion of a
collective agreement.
4. Collective bargaining is a right of
every worker. It includes employee
unionisation,negotiations,
administration, and interpretation of
collective bargaining agreements
governing pay, hours of work, and
other working conditions, as well as
contending in concerted economic
activities dispute resolution
procedures.
5. Combined with strong freedom of
association, sound collective
bargaining practices ensure that
employers and workers have an
equal voice in negotiations and that
the outcome is fair and
equitable. Collective bargaining
allows both sides to negotiate a fair
employment relationship and
prevents costly labour disputes.
6. 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.
7. 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.
8. Bharat Iron Works v.Bhagu bhai
Balubhai Patel (1976)
It was observed that collective
bargaining is a part of the modern-day
concept of the welfare State. It must be
practiced 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.
10. The following are the aims and
objectives of collective bargaining:
1)Upholding industrial democracy.
2)Ensuring equality and justice for
socially and economically backwards
groups.
3)Protecting the working class from
exploitation.
4) Meeting the legitimate expectations of
labourers regarding the work they have
undertaken.
11. 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.
12. It helps to improve the workplace
conditions for employees.
It makes the rights and obligations
of both employers and employees
clear.
13. 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,
14. 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.
15. Karnal Leather Karamchari Sanghatan
v. Liberty Footwear Company (Regd.)
and Ors. (1990)
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.
16. 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.
17. 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.
18. D.N. Banerjee v. P.R. Mukherjee (1952)
Justice C. S. 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.
19. 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.
20. 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.
21. 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.
22. 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.
23. The Constitution of India
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
24. 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.
25. Stages of collective bargaining
The following are the stages that
the process of collective
bargaining typically goes
through:
26. 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.
27. 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.
28. 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.
29. 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.
30. 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.
31. 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.
32. 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.
33. 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.
34. 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.
35. 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.
36. 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.
37. 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.
38. 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.
39. Types of collective bargaining
agreements
In India, there are mainly three
types of collective bargaining
agreements, which are listed
below:
40. 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.
41. 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.
42. 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.
43. 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.
44. Elements of a collective bargaining
agreement
Duration of the settlement,
Settlement terms with respect to
matters like wages, benefits, leaves,
working hours, rest hours,
allowances,
45. concessions, etc
Conditions with respect to strikes,
Obligations of the employees,
Obligations of the management,
Penalties for non-compliance with
the agreement
Dispute resolution
46. 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.
