Collective Bargaining

 The term ‘Collective Bargaining’ was coined by Sidney & Beatrice Webb during
industrial revolution in Great Britain (1891). In India, this technique was used for
the first time in case of Ahmedabad Textile Mills Strike-Lock Out dispute in
1920.
 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.”
 The International Labour Organisation (Art. 2 of Collective Bargaining
Convention 1981- C154) defines collective bargaining as “ the term collective
bargaining extends to all negotiations which take place between an employer, a
group of employers or one or more employers' organisations, on the one hand, and
one or more workers' organisations, on the other, for-

(a) Determining working conditions and terms of employment; and/or

(b) Regulating relations between employers and workers; and/or
(c) Regulating relations between employers or their organisations and a workers'
organisation or workers' organisations.”

 According to Sidney & Beatrice Webb, features of CB are-

1. Collective or Group Representation

2. Discussions & Negotiations with Offers & Counter-Offers
3. Reconciling conflicting interests
4. Flexible approach

Importance of Collective Bargaining

In June 2007 the Supreme Court of Canada in Facilities Subsector Bargaining

Assn. v. British Columbia 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.

In Karnal Leather Karamchari Sangathan v. Liberty Footwear

Company[1989] 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 Ram Prasad Viswakarma v. Industrial Tribunal [1961] 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 [1976], 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 & Objectives

1. Balances the Legitimate Expectations & Ensures peaceful co-existence

2. Negotiation without Adjudication
3. Maintain Equality - 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”.
4. Promote Industrial Democracy & Protect Workmen’s interest –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.
5. Amicable settlement of disputes through process of Give & Take
6. Rule-making Function

Validity & Recognition

Art.2 of ILO DECLARATION ON FUNDAMENTAL PRINCIPLES AND

RIGHTS AT WORK (1998) Declares that all Members, even if they have not
ratified the Conventions in question, have an obligation, arising from the very fact
of membership in the Organization, to respect, to promote and to realize, in good
faith and in accordance with the Constitution, the principles concerning the
fundamental rights which are the subject of those Conventions, namely: (a)
freedom of association and the effective recognition of the right to collective
bargaining;

1. Industrial Disputes Act, 1947 – Section 18

In the case of Workmen of Dimakuchi Tea Estate vs. The Management of
Dimakuchi Tea Estate, Collective Bargaining was declared to be one of the
principal objects of the Industrial Disputes Act.
2. Trade Union Act, 1926 - In the case of D.N. Banerjee vs. P.R. Mukherjee (1951),
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”.

3. Constitution of India – Article 19(1)(c) In All India Bank Employees

Association v National Industrial Tribunal (1961), the Supreme Court held that
“even a very liberal interpretation of Art.19(1)(c) cannot lead to the conclusion that
the Trade Unions in India, have a guaranteed right to an effective bargaining.” +
Article 43-A

Process of Collective Bargaining

Prof. Vom D Kennedy – “arguments, horse trading, bluff, cajolery and threats”.

Neil W Chamberlein – “By its very nature, it is a rough & tough undertaking. Its
essence is the reluctant exchange of commitments, both parties want to yield less
and get more. It is not qualitatively different from a business deal, in which both
negotiators have something less than 100 per cent trust in one another.”

Preparation – Discussion – Proposal – Bargaining – Settlement - Enforcement

Pre-requisites for successful Collective Bargaining

1. Recognition of Bargaining Agent 2. Equal Bargaining Power

3. Deciding the Level of Bargaining 4. Determining the Scope and Coverage 

5. Availability of Full information 6. Selection of Proper Representatives

7. Compliance of CB agreement 8. Support of Labour Administration

9. Good Faith between parties concerned

Bargaining Power

For Employer – (a) Availability of substitute labour (b) Market’s demand for his
goods (c) Possible effects of closure on company and its consumers
 For Workmen – (a) Capacity to undergo hardship (b) Availability of alternate
employment (c) Financial position of the Union

Kinds of Collective Bargaining

(1) Plant level Industry level Region-wide Nation-wide

(2) Voluntary – Settlement (by conciliation) – Consent Award (during adjudication)
(3) Conjunctive Bargaining – Co-operative Bargaining
(4) Productivity Bargaining - Composite Bargaining

Subject-Matter of Collective Bargaining Agreements

Recognition of Representative - Wages – Working Hours– Job classification –

Other Benefits (Health & Safety) – Grievance Procedure

Duration of Collective Bargaining Agreements – 1 to 5 years.

Enforcement of Collective Bargaining Agreements

United Kingdom – Like Individual contracts

European countries, Latin America and Asia – Special Legislation

Germany & Ireland – Special Courts

India – Section 18 of Industrial Disputes Act, 1947

Problems of Collective Bargaining

A. Inter-Union rivalries B. Political influence

C. Inefficient Legal framework D. Easy access to adjudication

Advantages

(i) Quick & Efficient (ii) Democratic (iii) Maintains harmonious relations

(iv) Independent procedure (v) Absence of Complex Rules

Disadvantages

(i) Consumer is not represented (ii) Settlements are influenced by power politics

(iii) Industrial unrest when parties fail to agree