The term “collective bargaining” simply means negotiation.

It provides
an opportunity to the workers to achieve industrial democracy. It is
applied in different levels starting from craft-level to national level. In
Indian industry, the process of collective bargaining started in the
second half of the 19th century and got legislative recognition in the
first half of the 20th century. This project dwells upon the concept of
collective bargaining in general which includes the discussion of its
scope, objectives, types, conditions, environment, theories and
different levels. Besides, the relevant provisions of Industrial Disputes
Act, Trade Union Act, Standing Order and the Constitution, along with
some cases of the Apex Court have been dealt with for justifying the
legality of collective bargaining.

Peace is sine qua non for development and disputes dissipate valuable
time, effort and money of the society. But, in a realistic sense, conflict
is inevitable. Commerce, business, development work, administration,
etc., all suffer because of long time taken in resolving disputes through
traditional court of law. To get out of this maze of litigation, there is
an alternative methods of industrial dispute resolution namely;
collective bargaining, conciliation[1], mediation[2], arbitration[3],
worker’s participation in management, wage boards etc. Of all these,
collective bargaining is considered as the best possible method
because in this the disputants themselves sit together and resolve their
differences in an amicable and respectable manner. A number of
theories – from the fields of industrial relations, economics, political
science, history and sociology as well as the writings of activists,
workers and labour organizations have attempted to define and
explain collective bargaining. One theory suggests that collective
bargaining is a human right and thus deserving of legal protection[4].
In June 2007 the Supreme Court of Canada in Facilities Subsector
Bargaining Assn. v. British Columbia[5] extensively reviewed the
rationale for considering collective bargaining to be a human right.
The Court made the following observations in this case:

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.

Definition
According to Dale Yoder, “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 words of Flippo, “Collective bargaining is a process in which the

representatives of a labour organisation and the representatives of
business organisation meet and attempt to negotiate a contract or
agreement, which specifies the nature of employee-employer-union
relationship.”

Collective bargaining is a voluntary process under which the

representatives of both employers and labour enter into an agreement.
We also note that 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.

The I.L.O. defines collective bargaining as “the negotiations about

working conditions and terms of employment between an employer, or
a group of employers, or one or more employers' organisations, on the
one hand, and one or more representative workers' organisation on
the other with a view to reaching agreement."[6] Similarly, according
to Ludwing and Teller, collective bargaining is “an agreement between
a single employer or an association of employers on the one hand and
labour union on the other hand which regulates terms and conditions
of employment”. The Webbs describe collective bargaining as an
economic institution, with trade unionism acting as a labour cartel by
controlling entry into the trade. Prof. Allan Flanders has argued on the
other hand, that collective bargaining is primarily a political rather
than an economic process.

This definition 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 excessive 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."

Collective Bargaining in India has been the subject matter of industrial

adjudication since long and has been defined by our Law Courts. In
Karol Leather Karamchari Sangathan v. Liberty Footwear Company[7]
the Supreme Court observed that, "Collective bargaining is a technique
by which dispute as to conditions of employment is resolved amicably
by agreement rather than coercion." According to the Court, the
Industrial Disputes Act, 1947 seeks to achieve social justice on the
basis of collective bargaining. In an earlier judgment in Titagarh Jute
Co. Ltd. v. Sriram Tiwari[8] , the Calcutta High Court clarified that
this policy of the legislature is also implicit in the definition of
‘industrial dispute'.

In Ram Prasad Viswakarma v. Industrial Tribunal[9] 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 of
other disputes."

In Bharat Iron Works v. Bhagubhai Balubhai Patel[10], it was held

that "Collective bargaining, being the order of the day in the
democratic, social welfare State, legitimate trade union activities,
which must shun all kinds of physical threats, coercion or violence,
must march with a spirit of tolerance, understanding and grace in
dealings on the part of the employer. Such activities can flow in
healthy channel only on mutual cooperation between the employer and
the employees and cannot be considered as irksome by the
management in the best interests of its business. Dialogue with
representatives of a union help striking a delicate balance in
adjustments and settlement of various contentious claims and issues."
These definitions only bring out the basic element in the concept i.e.,
civilized confrontation between employers and employees and the
whole process is regulated by statutory provisions.

Aims and Objectives

1. Balances the Legitimate Expectations – Management can

legitimately expect that most qualified labour will be available at a
price which permits a reasonable margin for investment. On the other
hand, labours can claim job for each worker and steady increment in
the wages. In other words, management’s interest in planning
production and in being protected against its interruption is the exact
equivalent to the worker’s interest in planning his and his family’s life
and in being protected against an interruption in his mode of
existence, either through a fall of his real income or through the loss
of his job. Collective Bargaining balances this conflicting interest
through the process of negotiation.

2. Maintain Equality – Collective Bargaining is a means to maintain

equality between the worker and the workmen as the latter is at least
advantageous position from the outset. The bargaining power of an
individual worker is, more often than not, quite weak because of
factors like illiteracy, indebtedness and socio-economic backwardness.
Therefore, there is no match for the economically and consequently,
political, superior employer. These expose the worker to exploitation,
discrimination and indignities. As Lord Wedderburn rightly argues,
“the Common Law assumes that it is dealing with a contract made
between equals, but in reality, save in exceptional circumstances, the
individual worker brings no equality of bargaining power to the labour
market”.

3. Promote Industrial Democracy – Trade Union seeks to promote

industrial democracy. They have now come to symbolize: workers’
right to organize, to put forth their demands collectively16 and to
resort to industrial action, i.e; strike, when their demands are not
conceded by their employers. They seek to impress upon their
employers that their collective voice be heard when decisions affecting
their working lives are made. Thus, union assures that individual
interest should be subordinated to the collective well being of its
members. Given that joint regulation takes place of authoritarian
decision making, collective bargaining can be a vehicle for the
democratization of industrial life. The International Confederation of
Free Trade Union stated that the objects of the collective bargaining is
to express in practical terms the workers’ desire to be treated with due
respect and to achieve democratic participation in decision affecting
their working conditions.

4. Rule-making Function – Collective bargaining performs rule-

making function. Collective Agreements govern employment
relationships in the bargaining unit and thereby create generally
applied standards. This indicates the power of groups to provide for
their own internal regulation (e.g; by custom and practice) and that
there are limits to the sovereign power of an employer. Collective
bargaining can thus be regarded as an expression of pluralism. Thus,
collective bargaining is not just a means for raising wages and
improving conditions of employment. Nor is it merely democratic
government in industry. It is above all a technique whereby an inferior
social class or group exerts a never- slackening pressure for a bigger
share in social sovereignty, as well as for more welfare and greater
security and liberty. In short, collective bargaining helps in
establishment and maintenance of the mutual relations of the workers
and the management. Consequently, it strengthens the union as an
organization. Further, it makes enterprise more responsive to human
needs.

Collective Bargaining in India

Origin & Development - Since Collective Bargaining is the off-shoot of
Trade Union activity, it is worthwhile to trace the origin of Trade
Union first. The credit for organised labour movement in India goes to
N.M. Lokhande, who was a factory worker himself. In 1884, he
organised an agitation in Bombay and prepared a memorandum
demanding limitation of working hours, a weekly rest day,
compensation for injuries etc. and in response of these demands a
weekly holidays was actually granted by the mill owners of Bombay. In
fact, in 1890, the Bombay Mill hands’ Association was organised with
Lokhande as chairman and workers newspaper “Deenabandhu” was
started. The trade union movement got its momentum at the close of
the World War I and the period of 1918-21 was an epoch-making
period in the history of Indian labour movement. The Madras Labour
Union (1918) founded by P.P. Wadia was the first India’s Trade
Union[11]. By the year 1920 the Trade Union had emerged on the
Indian Scene in almost all the sector to protect the legitimate interests
of the working classes. Collective Bargaining formally started in 1920s
in the textile industry in Ahmedabad at the time when Mahatma
Gandhi was introducing the concept of arbitration. Collective
Bargaining started because of failure of arbitration.
Thereafter, lots of collective bargaining agreements were executed
especially after Independence. But there was little support for the
growth of this practice, since neither British India nor Independent
India made legal provisions for collective bargaining. Nevertheless,
like many other countries, collective bargaining in India got some
impetus from various statutory provisions. The Trade Union Act, 1929,
the Bombay Industrial Relations Act, 1946, the Industrial Disputes Act,
1947, and the Madhya Pradesh Industrial Relations Act, 1960 provided
a machinery for consultation and paved the way for Collective
bargaining.

Validity & Recognition – The analysis of the following documents along

with the decisions of the Court justifies the legality and recognition of
collective bargaining in India.
1. Industrial Disputes Act, 1947 – The Act is basically enacted for
providing the mechanism for the settlement of disputes41. According
to Section 18 of the Act, “A settlement arrived at by agreement
between the employer and workman otherwise than in the course of
conciliation proceeding shall be binding on the parties to the
agreement ….” Thus, settlement other than conciliation which may
take place by a binding agreement between the employer and the
employee is nothing but an implication of the collective bargaining
agreement. In other words, Section 18 recognises collective
bargaining. In fact, the definition of settlement under the Act itself
contains the element of collective bargaining.

In the case of Workmen of Dimakuchi Tea Estate vs. The

Management of Dimakuchi Tea Estate, [12]the examination of the
salient provisions of the Act shows that the principal objects of the Act
are –
“(1) the promotion of measures for securing and preserving amity and
good relations between the employer and workmen; (2) 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”.

Further, in Karnal Leather Karamchari Sanghatan (Regd.) vs.

Respondent:Liberty Footwear Company (Regd.) and Ors[13], the
Court laid down that the Act (Industrial Disputes Act, 1947) seeks to
achieve social justice on the basis of collective bargaining. The
voluntary arbitration is a part of infrastructure of dispensation of
justice in the industrial adjudication. The arbitrator thus falls within
the rainbow of statutory tribunals. When a dispute is referred to
arbitration, it is therefore, necessary that the workers must be made
aware of the dispute as well as the arbitrator whose award ultimately
would bind them. They must know what is referred to arbitration, who
is their arbitrator and what is in store for them. They must have an
opportunity to share their views with each other and if necessary to
place the same before the arbitrator. This is the need for collective
bargaining and there cannot be collective bargaining without involving
the workers. The Union only helps the workers in resolving their
disputes with management but ultimately it would be for the workers
to take decision and suggest remedies. It seems to us therefore, that
the arbitration agreement must be published before the arbitrator
considers the merits of the dispute. Non-compliance of this
requirement would be fatal to the arbitral award.

In the case of Amalgamated Coffee Estates Ltd. vs. Workmen[14],

the Apex Court held that the process of negotiated settlements is at the
heart of the solution of the collective disputes. Unlike a settlement in
the course of conciliation proceedings, a bipartite settlement with a
majority union is equally binding if it is held to be fair and reasonable.
Likewise, Central Provinces Transport Services vs. Patwardhan[15],
the Court held that the Industrial Disputes Act essentially deals with
collective disputes.

2. Trade Union Act, 1926 – The Act provides for the registration of
trade union and determines the rights, liabilities and immunities of
the union. The primary purpose for the formation of the trade union is
to regulate the relations between the employer and employee or
among themselves48 and it is well established that collective
bargaining is one of the means of regulating such a relation. In the
case of D.N. Banerjee vs. P.R. Mukherjee[16], the court recognises
collective bargaining. Justice Chandra Shekhar Aiyer observed that
“having regard to the modern condition of society where capital and
labour have organised themselves into groups for the purpose of
fighting their disputes and settling them on the basis of the theory that
Union is Strength, collective bargaining has come to stay”.

Further, in Tamil Nadu Electricity Workers Federation vs. Madras

State Electricity Board[17], the Madras High Court observed that the
whole theory of organised labour and its statutory recognition in
industrial legislation is based upon the unequal bargaining power that
prevails as between the capital employer and in individual workman,
or disunited workman. Collective bargaining is the foundation of this
movement, and it is in the interest of labour that statutory recognition
has been accorded to Trade Unions and their capacity to represent
workmen, who are members of such bodies.

3. The Industrial Employment (Standing Orders) Act, 1946 – Standing

Order is drafted by the employer which contains the conditions of
employment. As per Section 3 of the Act, initially, the employer needs
to submit the draft standing order to the Certifying Officer which
should be in conformity to the model standing order as far as possible.
Thereafter, the said Officer forward the copy of the draft to the trade
union or to the workmen, if there is no trade union for seeking
objections (if any) and after giving both the parties an opportunity of
being heard, the Officer shall certify the standing order with necessary
modifications (if required) and shall send it copies to both the parties.

Thus, the process of framing of standing order clearly suggest that

both the employer and the employee takes part in it rather than it
being in the hands and whims of either of them, though with the help
of the Certifying Officer who acts as a negotiator. In other words,
framing of standing order is a kind of negotiation with the help of the
third person (Certifying Officer) which implies the process of
collective bargaining. In the case of Glaxo Laboratories vs. Labour
Court[18], Justice Desai assesses the imminent need for the Act in his
inimitable style: “In the days of Laissez-faire when industrial relation
was governed by the harsh and weighted law of hire and fire the
management was the supreme master, the relationship being referable
to contract between unequal’s and the action of the management
treated almost sacrosanct. The Act, as its long title shows, required the
employers in industrial establishments to define with sufficient
precision the conditions of employment under them and to make the
said conditions known to the workmen employed by them. The
contract was not left to be negotiated by two unequal persons but
statutorily imposed”

4. The Constitution of India, 1950 – The Constitution of India in the

Chapters on Fundamental Rights and Directive Principles of State
Policy justify the legality of collective bargaining. In this context,
Article 19 permits to form association which implicates the validity of
trade union and as mentioned above that one of the main purposes of
trade union is collective bargaining. Further, several Directives
Principles[19] also justifies the provisions for improving the
conditions of the labour in general and Article 43-A in particular
provides that State shall ensure the participation of workers in the
management. Although the said Directives are not directly enforceable
in the court of law, still its binding nature can by established with the
help of some decisions of the Apex Court of India. In Re Kerala
Education Bill case[20], the Supreme Court observed that though the
directives principles cannot override the fundamental rights,
nevertheless, in determining the scope and ambit of fundamental
rights the court may not entirely ignore the directive principles but
should adopt “the principles of harmonious construction and should
attempt to give effect to both as much as possible”[21].

Recognition – The willingness of an employer or of an employers’

association to bargain with a particular union is known as the
“recognition” of the union. Thus, recognition is the process through
which management acknowledge and accept a trade union as
representative of some or all of the workers in an establishment or
industry and with which it is willing to conduct discussions on all
issues concerning those workers. When this acceptance also includes
the willingness of the management to bargain with that union or
unions, they may be termed as bargaining agent or agents. The
National Commission on Labour attached considerable importance to
the matter of recognition of unions. The Commission stated that the
provision for union recognition has been realised is evident from
the…Bombay Industrial Relations Act, 1946 and certain other state
Acts (Madhya Pradesh and Rajasthan), the amendments incorporated
(but not enforced) in the Trade Union Act and the Code of Discipline,
as also the fact that it was included in the Second Plan.

The Commission suggested a compulsory recognition of the union

under a Central Law in all undertaking employing 100 or more
workers or where the capital invested is above a stipulated size. The
Commission also recommended the rights of the recognised unions.
Nevertheless, there is no law at the national level for recognition of
trade unions. However, some States such as Maharashtra, Andhra
Pradesh, Madhya Pradesh, West Bengal and Orissa have enacted the
legal provisions for the recognition. Thus, it is evident that in spite of
absence of expressly centrally enacted provisions on collective
bargaining in India, there are enough protections for the relevance of
collective bargaining in India.

Features of Collective Bargaining

The features of collective bargaining are as under:

# It is a collective process. The representatives of both workers and
management participate in bargaining;
# It is a continuous process. It establishes regular and stable
relationship between the parties involved. It involves not only the
negotiation of the contract, but also the administration of the contract;
# It is a flexible and dynamic process. The parties have to adopt a
flexible attitude through the process of bargaining;
# It is a method of partnership of workers in management.

Subject-matter of Collective Bargaining

Collective bargaining has two pronged concerns:
(1) Chalking out a broad contract of employment relationship between
employers and workers, and
(2) The administration of the contract. In fact, it has been recognised
as a method of determining the wage rates and other terms and
conditions of employment and of regulating the relations between the
management and organised labour.

Collective bargaining includes provisions with respect to hiring, lay-

offs, promotions, transfers, work scheduling, work assignment, wages,
welfare programmes, retirement benefits, discipline, etc. The Indian
Institute of Personnel Management suggested the following subject
matter of collective bargaining:

# Purpose of agreement, its scope, and the definition of important

terms;
# Rights and responsibilities of the management and of the trade
union;
# Wages, bonus, production norms, leave, retirement benefits, and
terms and conditions of service;
# Grievance redressal procedure;
# Methods and machinery for the settlement of possible future
disputes;
# Termination clause.

Importance of Collective Bargaining

Collective bargaining is an important method of regulating relations
between employers and employees. It involves negotiation,
administration and enforcement of the written contracts between the
employees and the employers. It also includes the process of resolving
labour-management conflicts. There is a strong view that parties
should be left to themselves to settle their disputes and the State
should not intervene in these matters.
Pre-requisites for Collective Bargaining
Please understand that effective negotiations and enforcement
requires a systematic preparation of the base or ground for bargaining
which involves the following three steps:

1. Recognition of the Bargaining Agent. The management should give

recognition to the trade union for participating in the collective
bargaining process. In case there is more than one union, selection
could be done through verification of membership by a government
agency giving representation to all the major unions through joint
consultations. Thus, the bargaining agent of the workers should be
properly identified before initiating any action.

2. Deciding the Level of Bargaining. Whether the dealings are confined

to enterprise level, industry level, regional or national level should be
decided as the contents, scope and enforcement agencies differ in each
case.

3. Determining the Scope and Coverage of Bargaining. It would be

better to have a clear understanding of what are the issues to be
covered under bargaining. Many a time, bargaining is restricted to
wage and working conditions related issues but it would be
advantageous for both the management and union to cover as many
issues as possible to prevent further friction and disputes. Therefore,
all the important and interrelated issues are to be taken for
consideration.

Problems of Collective Bargaining

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. Several factors are responsible for this
state of affairs. These are listed below:

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.

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.
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

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.
Collective bargaining can help bring industrial peace in our country by
promoting mutual understanding and cooperation between workers
and managements. It provides a framework for deciding the terms and
conditions of employment without resorting to strikes and lockouts
and without the intervention of outsiders. The management and the
union can develop a matured relationship. Instead of fighting amongst
themselves, they should work towards the betterment of the
organisation.

The following steps should be taken for the success of collective

bargaining.
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 unionise so that they can
exercise their right of unionisation 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.

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. Please understand that the
process of collective bargaining cannot begin until unions are
recognised by the employers. Employers will give such recognition
only if they believe it to be in their interest or if it is a legal
requirement. 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
organization.

Mutual Accommodation: There has to be a greater emphasis on mutual

accommodation rather than conflict or uncompromising attitude.
Conflicting attitude does not lead to amicable labour relations; it may
foster union militancy as the union reacts by engaging in pressure
tactics. The approach must be of mutual give and take rather than take
or leave. The take or leave philosophy is followed in America where
there is contractual labour. As of now this is not the case in India. So if
the union and the management have to look for a long-term
relationship they have to respect each other’s rights.
Mutual Trust and Confidence: Trade unions and management must
accept each other as responsible parties in the collective bargaining
process. There should be mutual trust and confidence. In fact in any
relationship trust is the most important factor. Management must
accept the union as the official representative. The union must accept
the management as the primary planners and controllers of the
company’s operations. The union must not feel that management is
working and seeking the opportunity to undermine and eliminate the
labour organisation. The company management must not feel that the
union is seeking to control every facet of the company’s operations.

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.

Emphasis on Problem-solving Attitude: I am sure you will agree that

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.

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. 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.
Types of Collective Bargaining

Types of Collective Agreements in India Collective bargaining as it

is practiced in India can be divided into three classes.
1. Bipartite Agreements: These are most important types of collective
agreements because they represent a dynamic relationship that is
evolving in establishment concerned without any pressure from
outside. The bipartite agreements are drawn up in voluntary
negotiation between management and union. Usually the agreement
reached by the bipartite voluntarily has the same binding force as
settlement reached in conciliation proceedings. The implementations
of these types of agreements are also not a problem because both the
parties feel confident of their ability to reach the agreement.

2. Settlements: It is tripartite in nature because usually it is reached

by conciliation, i.e. it arises out of dispute referred to the appropriate
labour department and the conciliation officer plays an important role
in bringing about conciliation of the differing viewpoints of the
parties. And if during the process of conciliation, the conciliation
officer feels that there is possibility of reaching a settlement, he
withdraws himself from the scene. Then the parties are to finalise the
terms of the agreement and should report back to conciliation officer
within a specified time. But the forms of settlement are more limited
in nature than bipartite voluntary agreements, because they strictly
relate to the issues referred to the conciliation officer.

3. Consent Award: Here the negotiation takes place between the

parties when the dispute is actually pending before one of the
compulsory ad judicatory authorities and the agreement is
incorporated to the authorities, award. Thus though the agreement is
reached voluntarily between the parties, it becomes part of the binding
award pronounced by an authority constituted for the purpose. The
idea of national or industry-wide agreements and that to on a
particular pattern may appear to be a more ideal system to active
industrial relation through collective bargaining, but the experience of
various countries shows that it is not possible to be dogmatic about
the ideal type of collective bargaining, because it largely depends upon
the background, traditions and local factors of a particular region or
country.

Good faith bargaining a term that means both parties are

communicating and negotiating and those proposals are being
matched with counterproposals with both parties making every
reasonable effort to arrive at agreements. It does not mean that either
party is compelled to agree to proposal. Bargaining in good faith is the
cornerstone of effective labour management relations. It means that
both parties communicate and negotiate. It means that proposals are
matched with counterproposals and that both parties make every
reasonable effort to arrive at agreement. It does not mean that either
party is compelled to agree to a proposal. Nor does it require that
either party make any specific concessions. As interpreted by the
courts, a violation of the requirement for good faith bargaining may
include the following:

1. Surface bargaining. This involves merely going through the motions

of bargaining without any real intention of completing a formal
agreement.

2. Concession. Although no one is required to make a concession, the

courts’ definitions of good faith suggest that willingness to
compromise is an essential ingredient in good faith bargaining.

3. Proposals and demands. This is considered as a positive factor in

determining overall good faith.

4. Dilatory tactics. The law requires that the parties meet and ‘confer
at reasonable times and intervals.’ Obviously, refusal to meet at tall
with the union does not satisfy the positive duty imposed on the
employer.

5. Imposing conditions. Attempts to impose conditions that are as

onerous or unreasonable as to indicate bad faith will be scrutinized by
the board.

6. Unilateral changes in conditions. This is viewed as a strong

indication that the employer is not bargaining with the required intent
of reaching an agreement.
7. By passing the representative. An employer violates its duty to
bargain when it refuses to negotiate with the union representative.
The duty of management to bargain in good faith involves, at a
minimum, recognition that this statutory representative is the one
with whom the employer must deal in conducting bargaining
negotiations.

8. Commission of unfair labour practices during negotiations. Such

practices may reflect poorly upon the good faith of the guilty party.

9. Providing information. Information must be supplied to the union,

upon request, to enable it to understand and intelligently discuss the
issues raised in bargaining.

10. Bargaining items. Refusal to bargain on a mandatory item (one

must bargain over these) or insistence on a permissive item (one may
bargain over these) is usually viewed as bad faith bargaining.

Process of Collective Bargaining

However there are certain fundamental procedures and stages that are
followed in the organisations. That standardisation is as follows:
Process of collective bargaining and negotiation the process can be
divided into four main phases:

I. Organising and Recognition. The first thing to be done by the

employees is to form a group of seven persons or more (as per Trade
Unions Act, 1926) and get the trade union registered under the Act.
The registration of the union is advisable, because there are certain
advantages of getting the union registered. It can use its general funds
for certain specified purposes; it can create a separate fund for
political purposes; it gets immunity from civil suit in certain cases; it
can have representation of its members to the works committee; etc.
After getting the union registered, efforts should be made to increase
its membership; it should enjoy the support of the majority of workers
in the plant. In case, it is not the only union in the plant, efforts should
be made to make it the most representative union so that it s is
recognised as the exclusive bargaining representative for all the
employees within the specified bargaining unit by the employers. Once
the union is recognised as the bargaining agent, each worker is
covered by the negotiated contract as must abide by the governance.

II. Preparation for Negotiation. After a union has been recognised as

the exclusive bargaining agent, both the union and management begin
preparation for negotiations. The preparation for negotiation is
basically composed of three activities:
a. Fact gathering
b. Goal setting
c. Strategy development.

Facts are gathered from both internal sources and the external
sources. The internal data would include things like:
• Grievance and accident record
• Employee performance report
• Overtime figures
• Reports on transfers
• Turnover
• Absenteeism etc.

External information should include:

• Statistics on the current economy
• Economic forecasts for short and intermediate terms
• Data on communities in which the company operates
• Industry labour statistics this information helps management in
knowing its position and the position of similar other organisations
under the existing circumstances, and in anticipating the same in the
near future.

On the basis of these data, the management sets tentative goals for
achieving in the negotiations. Please understand that when the
management has the above data in hand the management is in a better
position to develop a strategy for dealing with the union’s demands.
This includes assessing the union’s power and specific tactics. The
degree of union influence is affected by factors like the labour market,
economic conditions, rates of inflation, and recent contract
settlements. Also understand in the process of negotiations,
management’s ability to tolerate a strike will also be crucial. If the
company’s products are highly demanded, the management will be
against a strike, even for a short period. On the other hand, if the sales
have been low, management may be prepared even for a lengthy
strike, and, therefore, will be unwilling to concede to union’s demand.

There are four outcomes that can be achieved in negotiations. They

are:
• Lose-Lose
• Lose-Win
• Win-lose
• Win-Win

The first situation is where both the parties lose. In the second and the
third situation, only one party wins and the other one loses. The fourth
situation is in which both the parties win.
III. Negotiation. For negotiating a contract, the first meeting between
labour and management negotiation teams usually establishes rules,
policies, and schedules for future meetings. Sometimes, at the first
meeting, the representatives of labour formally present their specific
proposals for changes in the existing labour agreements. At succeeding
meetings, management submits counter-proposals. Both groups seek
opportunities to suggest compromise solutions in their favour until an
agreement is reached. If labour and management find it impossible to
come to an agreement, a third-party (a fact finder, a mediator, or an
arbitrator) may be brought in from outside. If, even with the
assistance of the outsider, no viable solution can be found to resolve
the parties’ differences, there may be a strike or lockout. It should be
clearly understood that strikes and lockouts should not be resorted to!
We have already seen the ill effects of these weapons. Weapons! , Now
don’t give that lost look! We have read this in Industrial disputes. This
brings us to the last phase in negotiations and that is contract
administrational.

IV. Contract Administration. The final phase in the process of

collective bargaining is contract administration. Once a contract is
agreed upon, it then must be administered. The way it will be
administered is included in the contract itself.

For effective administration of the contract and to have harmonious

industrial relations in the organisation, the contract must spell out a
procedure for handling contractual disputes. Almost all collective
bargaining agreements contain formal procedures to be used in
resolving grievances over the interpretation and application of the
terms of contract. I am sure you will agree that the grievance
procedures should be designed in such a way that makes it possible to
resolve grievances as quickly as possible and at the lowest level
possible in the organisation. The grievances should be referred to
higher levels, and, ultimately, to arbitration, only when they cannot be
resolved at the initial level. This is essential for speedy resolution of
grievances and for creating and efficient and effective working climate
in the organisation.

Conclusion
Collective Bargaining is the process of joint decision making and
basically represents a democratic way of life in industry. For the
success of collective bargaining the process must begin with proposals
rather than demands and the parties should be ready and willing to
compromise otherwise the whole idea of collective bargaining would
be frustrated. In Indian context, the problem lies in the fact that in the
absence of any statutory provisions at Central Level for the
recognition of a representative trade union by an employer affects the
bargaining power of the trade union. In addition, besides, unorganised
labour being a hurdle, the unions are generally weak. Rivalry on the
basis of caste, creed, and religion is another characteristic of Indian
Trade Unions which come in the way of successful collective
bargaining. Further, division of union on the basis of political
ideologies and weak financial position retards the growth of Trade
Unions.[22]

Therefore, it is recommended that India should provides for a

recognition of the Trade Union at the central level, so that peace and
harmony with the management and workers can be maintained, which
in turn can provide better service to the community and hence lead to
the growth and development of the economy. In fact, India is under
international obligations to provide effective mechanism for collective
bargaining. In this regard, it is also recommended that India can ratify
ILO Conventions No. 87 of 1948 and No. 98 of 1949 – both of these
conventions assure the right to effective collective bargaining. In
short, we may say that the time has come for repeating the history.

As per Sir Henry Maine, the progressive society move from status to
contract. However, given the necessity of collective bargaining as an
effective tool for the settlement of industrial dispute, the progressive
society has to move otherwise i.e; from contract to status rather than
from status to contract.
~~~~~~~~~~~~
Bibliography
Statutes
# Industrial Disputes Act, 1947
# Trade Union Act, 1926
# The Industrial Employment (Standing Orders) Act, 1946
# The Constitution of India, 1950

Books
# S.C. Srivastava, Industrial Relations and Labour Laws, 4th Ed.,
Reprint, 2002, Vikas Publishing House Pvt. Ltd., New Delhi.
# S.K. Puri, Labour & Industrial Law, 8th Ed. 2004 (Reprint),
Allahabad Law Agency.
# O.P. Malhotra, The Law of Industrial Disputes, 6th Ed., 2004.

[1] In this method, a third party provides assistance with a view to

help the parties to reach an agreement.
[2] In mediation, a third party provides assistance with a view to help
the parties to reach an agreement by submitting his own proposals for
settlement of their disputes.
[3] The resort to arbitration procedure may be compulsory or
arbitrary.
[4] Article 23 of the Universal Declaration of Human Rights identifies
the ability to organise trade unions as a fundamental human right.
[5] 2007 SCC 27.
[6] International Labour Office, Collective Bargaining (A Worker’s
Education Manual) (1960), p.3.
[7] (1989)4 SCC 448.
[8] (1979) I LLJ 495 Cal.
[9] (1961) I LLJ 504.
[10](1976) Lab. 1.C:.4[S.C.].
[11] S.K. Puri, Labour & Industrial Law, 8th Ed. 2004 (Reprint),
Allahabad Law Agency.
[12] AIR 1958 SC 353.
[13] Supra Note 7.
[14] 1965 II LLJ 110 SC.
[15] (1956) SCR 956.
[16] 1 L.L.J. 1951 (SC).
[17] AIR, 1965 Mad. 111.
[18] 1984 1 LLJ 16.
[19] See Articles 39, 41, 42 and 43 of the Constitution.
[20] AIR 1957 SC 956.
[21] See Ranjan Dwivedi vs. Union of India (AIR 1983, SC 624),
Kesavananda Bharti vs. State of Kerala (AIR 1978 SC).1461), Unni
Krishnan vs. State of A.P. (1993) 1 SCC 645.
[22] S.C. Srivastava, Industrial Relations and Labour Laws, 4th Ed.,
Reprint, 2002, Vikas Publishing House Pvt. Ltd., New Delhi.

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