UNIT-V

MANAGING INDUSTRIAL RELATIONS

Contents:
Trade Unions - Employee Participation Schemes-Collective Bargaining–Grievances and disputes
resolution mechanisms – Safety at work – nature and importance – work hazards – safety mechanisms -
Managing work place stress.

Introduction:
A trade union is an organization of workers that have banded together to achieve common goals such as
better working conditions. The trade union, through its leadership, bargains with the employer on behalf of
union members (rank and file members) and negotiates labor contracts (collective bargaining) with employers. This
may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing and
promotion of workers, benefits, workplace safety and policies. The agreements negotiated by the union
leaders are binding on the rank and file members and the employer and in some cases on other non- member
workers.
What is Trade Union?
Trade union as per Trade Union Act 1926 – “Any combination formed primarily for the purpose of
regulating the relations between workmen and employers or workmen and workmen or employers and
employers or for imposing restrictive conditions on the conduct of any trade or business and includes any
federation of two or more trade unions.”
From the above definition it is clear that Trade union is not just an association of the workmen of a factory
or a trade or a business but also can be formed by officers and managers. organizations. The term trade
union however is commonly used to refer to the organization of workers formed to protect their rights and
enhance their welfare.
According to V.V. Giri, “Trade unions are voluntary associations of workers formed together to promote
and protect their interests by collective action.”

OBJECTIVES OF TRADE UNION

Trade unions are formed to protect and promote the interests of their members. Their primary function is
to protect the interests of workers against discrimination and unfair labor practices. Trade unions are
formed to achieve the following objectives:
Representation: Trade unions represent individual workers when they have a problem at work. If an
employee feels he is being unfairly treated, he can ask the union representative to help sort out the difficulty
with the manager or employer. Unions also offer their members legal representation. Normally this is to help
people get financial compensation for work-related injuries or to assist people who have to take their
employer to court.

Negotiation: Negotiation is where union representatives, discuss with management, the issues which
affect people working in an organization. There may be a difference of opinion between management and
union members. Trade unions negotiate with the employers to find out a solution to these differences. Pay,
working hours, holidays and changes to working practices are the sorts of issues that are negotiated. In many
workplaces there is a formal agreement between the union and the company which states that the union
has the right to negotiate with the employer. In these organizations, unions are said to be recognized for
collective bargaining purposes.

Voice of Decision Effective Workers: The economic security of employees is determined not only
by the level of wages and duration of their employment, but also by the management’s personal policies which
include selection of employees for layoffs, retrenchment, promotion and transfer. These policies directly
affect workers. The evaluation criteria for such decisions may not be fair. So, the intervention of unions in
such decision making is a way through which workers can have their say in the decision making to safeguard
their interests.

Member Services: During the last few years, trade unions have increased the range of services they offer
their members. These include:

Education and Training: Most unions run training courses for their members on employment rights,
health and safety and other issues. Some unions also help members who have left school with little
education by offering courses on basic skills and courses leading to professional qualifications.

Legal Assistance: As well as offering legal advice on employment issues, some unions give help with
personal matters, like housing, wills and debt.

Financial Discounts: People can get discounts on mortgages, insurance and loans from unions.

Welfare Benefits: One of the earliest functions of trade unions was to look after members who hit hard
times. Some of the older unions offer financial help to their members when they are sick or unemployed.

Role of Trade Union:

Trade unions are unique organisations whose role is variously interpreted and understood by different
interest groups in the society. Traditionally trade unions role has been to protect jobs and real earnings, secure
better conditions of work and life and fight against exploitation and arbitrariness to ensure fairness and equity
in employment contexts. In the wake of a long history of union movement and accumulated benefits under
collective agreements, a plethora of legislations and industrial jurisprudence, growing literacy and awareness
among the employees and the spread of a variety of social institutions including consumer and public interest
groups the protective role must have undergone, a qualitative change. It can be said that the protective role
of trade unions remains in form, but varies in substance.

There is a considerable debate on the purposes and role of trade unions. The predominant view, however, is
that the concerns of trade unions extend beyond ‘bread and butter’issues. Trade unions through industrial action
(such as protests and strikes) and political action (influencing Government policy) establishminimum economic
and legal conditions and restrain abuse of labour wherever the labour is organised. Trade unions are also seen
as moral institutions, which will uplift the weak and downtrodden and render them theplace, the dignity and
justice they deserve.
FUNCTIONS OF TRADE UNION
Trade unions perform a number of functions in order to achieve the objectives. These functions can be
broadly classified into three categories:
1. Militant Functions
2. Fraternal Functions

1. Militant Functions:
One set of activities performed by trade unions leads to the betterment of the position of their members in relation
to their employment. The aim of such activities is to ensure adequate wages secure better conditions of work and
employment get better treatment from employers, etc. When the unions fail to accomplish these aims by the
method of collective bargaining and negotiations, they adopt an approach and put up a fight with the management in
the form of go-slow tactics, strike, boycott, gherao, etc. Hence, these functions of the trade unions are known as
militant or fighting functions. Thus, the militant functions of trade unions can be summed up as:
• To achieve higher wages and better working conditions
• To raise the status of workers as a part of industry
• To protect labors against victimization and injustice

2. Fraternal Functions:
Another set of activities performed by trade unions aims at rendering help to its members in times of
need, and improving their efficiency. Trade unions try to foster a spirit of cooperation and promote friendly
industrial relations and diffuse education and culture among their members. They take up welfare measures for
improving the morale of workers and generate self confidence among them. They also arrange for legal
assistance to its members, if necessary. Besides, these, they undertake many welfare measures for their
members, e.g., school for the education of children, library, reading-rooms, in-door and out-door games, and
other recreational facilities. Some trade unions even undertake publication of some magazine or journal.
These activities, which may be called fraternal functions, depend on the availability of funds, which the unions
raise by subscription from members and donations from outsiders, and also on their competent and enlightened
leadership. Thus, the fraternal functions of trade unions can be summed up as:
• To take up welfare measures for improving the morale of workers
• To generate self confidence among workers
• To encourage sincerity and discipline among workers
• To provide opportunities for promotion and growth
• To protect women workers against discrimination.
TYPES OF TRADE UNION
Trade Union Act was established in the year 1926. TU is any association (temporary /permanent) for the
purpose of regulating the relationship between employers-workers, employer-employer, worker-worker for
imposing restrictive conditions on trade practices. It also includes federation of unions referred as
association of professional persons. In countries like England, trade union is referred as association of
professional person. In India it is considered as cursi - union /semi- union. In America, TU is
considered as the association of all persons in a trade. Functions of TU: functions can be categorized
into:
1. Militant/protective
2. Positive/fraternal.
3. Intramural/extramural

1. Militant /protective: as the name suggests it protects their members, aims at securing better
conditions of work, employment for members. It uses instruments like strikes, lockouts etc. for protecting
the interest of their members.
2. Positive/fraternal: It provides financial support to their members during time of temporary
unemployment.
3. Intramural/extramural: intramural refers to welfare schemes & activities within the framework of
factory premises (safety, secure working environment, minimum wages, minimum working hours, and leave
with wages) Extramural refers to the welfare schemes outside the factory premises (medical assistance,
health care, education etc.)
TU are born out of the necessities of the workers to protect and defend them from injustice, encroachment and
wrong. Unions classified according to purpose under this head, normally two types of unions have been kept.
1) Reformist
2) Revolutionary
1. Reformist Unions: These unions are those which aim at the preservation of the capitalist society and
maintenance of the usual employer-employee relationship, elimination of competitive system of production.
The reformist unions have been subdivided by hoxie according to the objectives: into business unions and
uplift unionism.
2. Revolutionary Unions: These unions aim at destroying the present structure completely and
replacing it with new and different institution according to the ideas that are regarded as preferable. The
revolutionary unionism is also of two types namely, anarchist and political. Dr horie also enumerates a
third type of unionism namely predatory unions and gorilla union.
According to membership structure there are four types of Trade unions:
1. Craft unionism
2. staff unionism
3. Industrial union
4. General union.

1. Craft Union: Workers, those are working in same as similar type of work/trade/business. They have
similar skills, specialization. Members are mostly non manual workers. Members are craft conscious than
class conscious .They take the membership on the basis of similar type of work. They strengthen their union
by integration of their members.
2. Staff Union: Organization, those are basing upon a sense of common status, same type of need. They try
to seek their membership from non manual sectors of the economy like clerical, supervisors, operators,
technicians, craftsmen etc. Unique feature of staff union was women workers were also members of staff
union. Staff union gained popularity by taking women workers as their members.
3. Industrial Union: Irrespective of crafts, skill, grade, position, gender etc. The workers working in one
industry were members of industrial union. This union is more class conscious than trade conscious.
4. General union: It covers all types of industries. Labor class people from any type of industry can be
members of general union. It is more open than the industrial unions. Their numerical strength is high.

IMPORTANCE OF TRADE UNION

The existence of a strong and recognized trade union is a pre-requisite to industrial peace. Decisions taken
through the process of collective bargaining and negotiations between employer and unions are more
influential. Trade unions play an important role and are helpful in effective communication betweenthe
workers and the management. They provide the advice and support to ensure that the differences of
opinion do not turn into major conflicts. The central function of a trade union is to represent people at work.
But they also have a wider role in protecting their interests. They also play an important educational role,
organizing courses for their members on a wide range of matters. Seeking a healthy and safe working
environment is also prominent feature of union activity.
Trade unions help in accelerated pace of economic development in many ways as follows:
a. By helping in the recruitment and selection of workers.
b. By inculcating discipline among the workforce
c. By enabling settlement of industrial disputes in a rational manner
d. By helping social adjustments. Workers have to adjust themselves to the new working conditions, the
new rules and policies. Workers coming from different backgrounds may become disorganized,
unsatisfied and frustrated. Unions help them in such adjustment.
Trade unions are a part of society and as such, have to take into consideration the national
integration as well. Some important social responsibilities of trade unions include:
e. Promoting and maintaining national integration by reducing the number of industrial disputes
f. Incorporating a sense of corporate social responsibility in workers achieving industrial peace.

RIGHTS AND LIABILITIES OF TRADE UNION

Disabilities of Unregistered Union: A trade union shall not enjoy any of the rights, immunities or
privileges of a registered trade union unless it is registered.

Immunity from Civil Suit in Certain Cases: No suit or other legal proceeding shall be maintainable
in any civil court against any registered trade union or any officer or member thereof in respect of any act done
in contemplation or in furtherance of a trade dispute to which a member of the trade union is a party on the
ground only that such act induces some other person to break a contract of employment, or that it is an
interference with the trade, business or employment of some other person or with the right of some other
person to dispose of his capital or of his labour as he will.

Liability in Tort: A suit against a registered trade union or against any members or officers thereof on behalf
of themselves and all other members of the trade union in respect of any tortuous act alleged to have been committed
by or on behalf of the trade union shall not be entertained by any court. Nothing in this section shall affect the
liability of a trade union or any trustee or officers thereof to be sued in any court touching or concerning the specific
property or rights of a trade union or in respect of any tortuous act arising substantially out of the use of any specific
property of a trade union except in respect of an act committed by or on behalf of the trade union in contemplation
or furtherance of a trade dispute.
Liability in Contract: Every registered trade union shall be liable on any contract entered into by it or by
an agent acting on its behalf: Provided that a trade union shall not be so liable on any contract which is void or
unenforceable at law.

Objects in Restraint of Trade Not Unlawful in Case of Registered Trade Union: The
objects of a registered trade union shall not, by reason only that they are in restraint of trade be deemed
to be unlawful so as to render any member of such trade union liable to criminal prosecution for conspiracy
or otherwise or to render void or voidable any agreement or trust.

Proceedings By and Against Trade Unions:

1. A registered trade union may sue and be sued and be prosecuted under its registered name.
2. An unregistered trade union may be sued and prosecuted under the name by which it has been
operating or is generally known.
3. A trade union whose registration has been cancelled or withdrawn may be sued and prosecuted
under the name by which it was registered.
4. Execution for any money recovered from a trade union in civil proceedings may issue against any
property belonging to or held in trust for the trade union other than the benevolent fund of a
registered trade union.
5. Any fine ordered to be paid by a trade union may be recovered by distress and sale of any
movable property belonging to or held in trust for the trade union in accordance with any written
law relating to criminal procedure.
6. In any civil or criminal proceedings in which a registered trade union is a party such trade union
may appear in such proceedings by anyone of its officers or by an advocate and solicitor.
Strikes and Lock-outs: No trade union of workmen shall call for a strike, and no member thereof
shall go on strike, and no trade union of employers shall declare a lock-out –

• In the case of a trade union of workmen, without first obtaining the consent by secret ballot of at least
two-thirds of its total number of members who are entitled to vote and in respect of whom the strike
is to be called; and in the case of a trade union of employers, without first obtaining by secret ballot
the consent of at least two-thirds of its total number of members who are entitled to vote;
• Before the expiry of seven days after submitting to the Director General the results of such secret
ballot in accordance with section 40 (5);
• If the secret ballot for the proposed strike or lock-out has become invalid or of no effect by virtue of
section 40 (2), (3), (6) or (9);
• In contravention of, or without complying with, the rules of the trade union;
• In respect of any matter covered by a direction or decision of the Minister given or made in any
appeal to him under this Act; or
• In contravention of, or without complying with, any other provision of this Act or any provision of any other
written law.
1. Any trade union which, and every member of its executive who, commences, promotes,
organises or finances any strike or lock-out which is in contravention of subsection (1) shall be
guilty of an offence and shall, on conviction, be liable to a fine not exceeding two

2. Any member of a trade union of workmen who commences, participates in, or otherwise
acts in furtherance of, any strike which is in contravention of subsection (1) shall forthwith cease
to be a member of the trade union, and thereafter such member shall not be eligible to become
a member of any trade union except with the prior approval of the Director General in writing;
and the trade union of which he has so ceased to be a member shall forthwith –

a) remove the name of such member from its membership register;

b) inform the Director General and the member concerned of such removal; and
c) exhibit conspicuously in its registered office in a place where it may be easily read a list
of members whose names are so removed.
3. The Director General may, where he is satisfied that subsection (1) has been contravened
by any person and the trade union concerned has failed to carry out the provisions of
subsection (3), or where there is undue delay in so doing, after such investigation as he deems
necessary, order the trade union to remove forthwith the names of the members concerned from
its membership register.

4. The satisfaction of the Director General under subsection (4) that subsection (1) has been
contravened by any person may be arrived at regardless as to whether or not there is any
prosecution of any person for contravention of the said subsection (1).

5. Any registered trade union which, and every member of its executive who, fails to comply with
subsection (3) or with an order of the Director General under subsection (4) shall be guilty of an offence and shall,
on conviction, be liable to a fine not exceeding one thousand ringgit, and a further fine of one hundred ringgit for
every day during which such offence continues.

6. In every proceeding for an offence under this section the onus of proving that the requirements
specified in subsection (1) have been complied with shall be on the trade union, the member of
its executive or the member of the trade union, as the case may be.

7. Thousand ringgit, or to imprisonment for a term not exceeding one year, or to both, and a
further fine of one hundred ringgit for every day during which such offence continues.

PHASES OF GROWTH OF TRADE UNION IN INDIA

Trade union is a direct product of Industrialization and a very recent development. In India, the
foundation of modern industry was laid between 1850 and 1870. Prior to that trade was
confined to individuals and families like craftsmen and artisans. They had expertise and
specialized skills which was inheritedby their off springs.After Industrial revolution, these people
started losing their individual identities and had to join factories to earn their livelihood and
compete with mass production. There was a psychological dislocation as they were losing their
identities. Indian trade union movement can be divided into three phases.
The first phase falls between 1850 and 1900 during which the inception of trade unions
took place. During this period of the growth of Indian Capitalist enterprises, the working and
living conditions of the labour were poor and their working hours were long. Capitalists were
only interested in their productivity and profitability. In addition to long working hours, their
wages were low and general economic conditions were poor in industries. In order to regulate the
working hours and other service conditions of the Indian. Textile labourers, the Indian Factories
Act was enacted in 1881. As a result, employment of child labour was prohibited. Mr. N M
Lokhande organized people like Rickshawalas etc., prepared a study report on their working
conditions and submitted it to the Factory Labour Commission. The Indian Factory Act of 1881
was amended in 1891 due to his efforts. Guided by educated philanthropists and social workers
like Mr. Lokhande, the growth of trade union movement was slow in this phase. Many strikes
took place in the two decades following 1880 in all industrial cities. These strikes taught
workers to understand the power of united action even though there was no union in real terms.
Small associations like BombayMill- Hands Association came up.

The second phase of The Indian trade union movement falls between 1900 and 1947. this
phase was characterized by the development of organized trade unions and political movements
of the working class. It also witnessed the emergence of militant trade unionism. The First
World War (1914-1918) and the Russian revolution of 1917 gave a new turn to the Indian trade
union movement and organized efforts on part of the workers to form trade unions. In 1918, B
P Wadia organized trade union movements with Textile mills in Madras. He served strike
notice to them and workers appealed to Madras High Court because under ‘Common Law’,
strike is a breach of law. In 1919, Mahatma Gandhi suggested to let individual struggle be a
Mass movement. In 1920, the First National Trade union organization (The All India Trade
Union Congress (AITUC)) was established. Many of the leaders of this organization were
leaders of the national Movement. In 1926, Trade union law came up with the efforts of Mr. N
N Joshi that became operative from 1927.

The third phase began with the emergence of independent India (in 1947), and the
Government sought the cooperation of the unions for planned economic development. The
working class movement was also politicized along the lines of political parties. For instance
Indian national trade Union Congress (INTUC) is the trade union arm of the Congress Party.
The AITUC is the trade union arm of the Communist Party of India. Besides workers, white-
collar employees, supervisors and managers are also organized by the trade unions, as for
example in the Banking, Insurance and Petroleum industries.
LABOUR LAWS
Law-”Law is a rule or a system of rules recognized by a country or a community as regulating the
actions of its members and enforced by the imposition of penalties.”
Factors responsible for development of Labor laws
• Exploitation of the workmen by the capitalists
• Social pressure and pressure from trade unions
• Government policies based on Government philosophy which in turn was based on
 the political ideologies
• Constitution of India (Directive Principles of state policy)
• Supreme Court’s recommendations on the cases that came up in the courts
• Recommendations of various commissions and committees set up by government
from time to time
• Conventions and recommendations of International labor organization (ILO)
• Awareness about environment
Common Features of All Laws:
• Short title and commencement
• Preamble i.e. purpose of the law
• Definitions
• Substantive provisions
• Penalty provisions
• Records/ Registers/ Returns
• Inspectorate/ Enforcement authority

Categories of Labor Laws:

• Regulatory legislations to oversee the conditions of work at workplace
Eg. Machinery arrangement, spittoons, working hours, leave with wages etc.
• Legislations related to wages
Eg. Payment of Wages Act, 1936, Minimum Wages Act, 1948
• Legislations related to social security
Eg. ESI Act, 1948, Employees Provident Fund Act, 1952
• Legislations related to Industrial Relations (IR)
Eg. Industrial disputes Act, 1947, Industrial Employments (Standing Orders) Act,
1946, Trade Union Act, 1926
• Legislations related to service conditions
Eg. Regulations of environment Act (for Dock workers), Conditions of Service Act (for
Sales Promotion employees)
Miscellaneous:
Eg. Apprentices Act, 1961, Environment protectionAct, 1986
The trade unionism in India developed quite slowly as compared to the western nations.
Indian trade union movement can be divided into three phases.
The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor
markets
consist of three sectors:
1. The rural workers, who constitute about 60 per cent of the workforce.
 2. Organized sector, which employs 8 per cent of workforce, and
3. The urban informal sector (which includes the growing software industry and other
services, not included in the formal sector) which constitutes the rest 32 per cent of
the workforce.
At present there are twelve Central Trade Union Organizations in India:
1. All India Trade Union Congress (AITUC)
2. Bharatiya Mazdoor Sangh (BMS)
3. Centre of Indian Trade Unions (CITU)
4. Hind Mazdoor Kisan Panchayat (HMKP)
5. Hind Mazdoor Sabha (HMS)
6. Indian Federation of Free Trade Unions (IFFTU)
7. Indian National Trade Union Congress (INTUC)
8. National Front of Indian Trade Unions (NFITU)
9. National Labor Organization (NLO)
10. Trade Unions Co-ordination Centre (TUCC)
11. United Trade Union Congress (UTUC)
12. United Trade Union Congress - Lenin Sarani (UTUC - LS)

MULTIPLICITY AND EFFECTIVENESS OF TRADE UNION

Multiple unionism leads to multiple enrolment in unions and no subscribing members, causing
delay or failure to get recognition. This restrains a union’s bargaining power during a period
of prolonged strife while the unions are squabbling among themselves for dominance, the
workers are deprived of their wages and the plant suffers a loss of production. Multiple
unionism qualitatively weakens the movement resulting in the formation of small- sized unions
without effective organization.
However it must be noted that in spite of foregoing there are many organizations where multiple
unions exist and the management does effectively negotiate, and conclude agreements. In many
plants, workers are unionized –on a craft basis –their special skills or training bonding them
together. Multi-unionism is more a problem where general unions exist, for whom all
categories can be organized in one general union.
Structure of Unit:
• Objectives
• Introduction
• Concept/Definition of Collective Bargaining
• Why Workers Join Unions?
• Advantages of Collective Bargaining
• Objectives and Features of Collective Bargaining
 • Types of Collective Bargaining
• Process of Collective Bargaining
• Developing a Bargaining Relationship
• Preparation for Negotiation
• Negotiation Stage
• Collective Agreements
• Collective Bargaining Practice in India
• Summary
• Self Assessment Questions
• References Books
COLLECTIVE BARGAINING

Introduction:
Collective bargaining is specifically an industrial relations mechanism or tool, and is an aspect
ofnegotiation, applicable to employment relationship. As a process, the two are in essence the
same, and the principle applicable to negotiations is relevant to collective bargaining as well.
In collective bargaining the union always has a collective interest since the negotiations are
for the benefit of several employees. Where collective bargaining is not for one employer but
for several, collective interests become a feature for both parties to the bargaining process. In
collective bargaining certain essential conditions need to be satisfied, such as the existence of
freedom of association and a labor law system. Further, since the beneficiaries of collective
bargaining are in daily contact with each other, negotiations take place in the background of a
continuing relationship which ultimately motivates the parties to resolve the specific issues.
Objectives:
After completing this unit, you would be able to:
• Understand the concept of collective bargaining;
• Understand the features and objectives of collective bargaining;
• Learn about the different types of collective bargaining;
• Learn the process of collective bargaining;
• Understand the collective bargaining practices in India.
Concept/Definition of Collective Bargaining:
Collective bargaining is a process whereby organized labor and management negotiate the terms
and the conditions of employment. Let us explore some definitions from different sources:

“Collective bargaining is a method by which trade unions protect and improve the condition of
their member’s working lives.”

According to Flanders “Collective Bargaining as a means of joint regulation”

According to ILO, (convention no: 87) “Collective Bargaining is a fundamental right. The
right to Collective Bargaining forms an integral part of the ILO declaration on fundamental
Principles (1998).”

OECD (Organization for Economic Co-operation and Development), WTO (World Trade
Organization) and the United Nations advocates Collective Bargaining in similar tones. Collective
Bargaining is apart of “Core Labor Standards, Social clause and Global Compact respectively”
This means future that Collective Bargaining should be considered as a Fundamental Right.

Today collective bargaining has assumed a complex nature, conducted in the most formal
environment, associating the services of a large number of experts, legal practitioners,
consultants and specialized personnel. Today it is regarded as a social process, because it
occurs in a social setting.

In majority of the cases collective bargaining process deals with issues like:
• Rate of wages, pay.
• Hours of employment, working conditions
• Employment policies
• Productivity settlement
Why Workers Join Unions?
It is essential to understand why workers join unions to understand the importance of
collective bargaining, these are:
• Dissatisfaction with working environment, including working conditions,
compensation, and supervision
• A desire to have more influence in affective change in the work environment
• Employee beliefs regarding the potential benefits of unions.

Advantages of Collective Bargaining:

To understand the collective bargaining it is necessary to know about the various
advantages of collective bargaining, these are:

• Collective bargaining has the advantage of settlement through dialogue and consensus
rather than through conflict and confrontation. Agreement resulting from collective
bargaining usually represents the choice or compromise of the parties themselves.
• Collective bargaining agreements often institutionalize settlement through dialogue. For
instance, a collective agreement may provide for methods by which disputes between the
parties will be settled. In that event parties know beforehand that if they are in disagreement
there is an agreed method by which such disagreement may be resolved.

• Collective bargaining is a form of participation because it involves a sharing of rule

making power between rule making power between employers and unions in the
areas which in earlier times were regarded as management prerogative e.g. transfer,
promotion, redundancy.
 • Collective bargaining agreements sometimes renounce or limit the settlement of
disputes through trade union action.
• Collective bargaining is an essential feature in the concept of social partnership
towards which labor relations should strive. Social partnership in this context may be
described as a partnership between organized employer institutions and organized
labor institutions designed to maintain non- confrontational process in the settlement
of disputes which may arise between employers and employees.
• Collective bargaining has a valuable by- products relevant to the relationship
between the two parties.
• In societies where there is a multiplicity of unions and shifting union loyalties, collective
bargaining a consequent agreements tend to stabilize union membership.
• Collective bargaining is the most important and effective in improving industrial relations.
Objectives and Features of Collective Bargaining:
There are some basic objectives of collective bargaining on that basis whole process
generally work, these are:
• Settle the conflicts related to working conditions and wages.
• To protect the interest of the workers through collective action.
• To resolve the difference between the workers and management through voluntary
negotiations and to arrive at a consensus.
• To avoid third party intervention in matters relating to employment.
• Practically speaking any issues that has any relevance to management and workers
becomes the subject matter of bargaining.
Features of Collective Bargaining:
“Collective Bargaining is a mutual obligation on the employer and employee to
bargain in good faith towards the settlement”. Keeping this statement in mind let’s
explain the features of collective bargaining in detail:
Collective: It’s collective in two ways:
1) All the workers collectively bargain for their collective interest, because they
do not have individual capacity.
2) Workers and the management jointly arrive at an amicable solution through
negotiations. The Union is expected to bring out the common consensus on collective
issues rather than individual issues.
Bargaining Power: In collective bargaining the bargaining strength of both the parties across
the table is equal. Ideally it is industrial democracy at work. It will only be democratic only if
boththe parties are equipped with knowledge and skill. The strength of the union also
depends on the demand and supply of working force. Similarly how much capital is invested
upon one worker also determines the ratio of bargaining power. For example: A pilots union
would have more bargaining power than the union of road transport. Because the capita land
stake invested on the pilot is much higher than the drivers.

Flexible: In collective bargaining both the parties should have to flexible mental set up to
arrive amicably at a common consensus.

Voluntary: Both the parties come in front of each other voluntary in order to arrive at a
voluntary agreement, which is mutually acceptable to both the parties.

Continuous: Collective bargaining not only commences with negotiation and ends in
argument, but it’s a continuous process that includes implementation of the agreement and
also further negotiations.

Dynamic: It’s a dynamic process because it involves the following:

1. A process of agreement which itself contains various concepts which may
change and alter time to time.
2. The implementation process is also on going.
3. The mental makeup of the parties keeps on changing.
4. Various strategies used by both the parties keeps on changing based on
the demand of the situation.
5. We all are a part of the global economy and the product, consumer’s taste;
market place etc keeps on changing. This has tremendous effect on
companies. The same has impact on the bargaining as well.

Power relationship: Both the parties want to extract the maximum from each other. But to
reach a consensus both the parties have to retreat from their positions in order to reach a
common consensus. In such an attempt both the parties try to reach on a common ground
without any serious dilution of their power. Example: If the job of the worker is not skilled
and he is being easily replaceable, he would have lesser bargaining power. Because, there is
a huge mass of unemployed youth waiting to be replaced.

Representation: The Collective Bargaining process must be represented by those who have
the capacity to take decisions.

Bipartite Process: The employees and the employers negotiate the issue directly across the
table. And there is no third party intervention like pressure groups, legal consultants.

Good Faith Bargaining Process: Good faith bargaining is characterized by the following events:
1) Meeting for the purposes of negotiations, the contract is used scheduled and
conducted with the union of responsible time and place.
2) Realistic proposals are submitted.
3) Reasonable counter proposal should be offered.
 4) Each party has to sign once it has been completed.
Types of Collective Bargaining:
In bargaining situations, demands are pitched higher than what one would really settle for
and offers are initially made lower than what one is really prepare to give. On the other hand it’s
a charter in which some major and some minor demands consist. All these variations in
bargaining can be divided in three types, theses are:
1. Distributive Bargaining: Distributive bargaining is the most common type of
bargaining and involves zero-sum negotiation. In other words, one side wins and other side loses.
Union employees may try to convince management that they will strike if they don’t get the
wages or working conditions they desire. Management, in turn may be willing to try to ride the
strike out, especially if theyhave cross-trained other workers or have external replacements to fill
in for those on strike. In this bargaining, union and management have initial offers or demands,
target points, resistance points and settlement ranges.

2. Integrative Bargaining: Integrative bargaining is similar to problem- solving sessions

in which both sides are trying to reach mutually beneficial alternatives. Both the employer and
union try to resolve the conflict to the benefit of both parties.

3. Concessionary Bargaining: It involves a union’s giving back to management some

of what it has gained in previous bargaining. Why would labor be willing to give back what it
worked so hard to obtain? Usually such a move is prompted by labor leader who recognize the
need to assist employers in reducing operating cost in order to prevent layoffs and that motivates
concessionary bargaining.

PROCESS OF COLLECTIVE BARGAINING

Developing a bargaining Relationship:
One of the very important facets which need to be considered before studying the
process of collective bargaining is “Understanding and developing of a good Bargaining
relationship”. This step consists of these activities mainly;

Recognition of the Bargaining Agent: In those organizations where there is a single

trade union, that union is generally granted recognition to represent the workers. But where
there is more than one union, any of these criteria may be used for identifying the representative
union, namely:

• Selection of the union by a secret ballot.

• Selection through verification of membership by some government agency if required.
• Bargaining with a joint committee of all major unions.
• Bargaining with a negotiation committee in which different unions would be represented in
proportion to their verified membership
• Bargaining with a negotiation committee which consists of elected representative
of every department of the organization selected by secret ballot, irrespective of their
 union affiliations.

Levels of bargaining: Collective bargaining is possible at all levels, such as:

• At the level of the enterprise,

• It may be at the level of the industry in a particular region.
• At the level of the entire industry in the country, that is, at the national level.
From the point of view of an individual establishment, enterprise-level bargaining is generally
useful in the sense that the settlement is tailored to the conditions of that organization.

Scope and Coverage of Collective Bargaining: Though in many organizations

bargaining is struck only by specific issues like wage increase, bonus, or seniority,
promotion, etc., yet it is considered advantageous, both for the management and the trade
unions, to cover as many issues of interests to both parties as possible. Now a days the
orientation of collective bargaining is changing from conflict to cooperation and there by
building an atmosphere of trust, progress and social welfare. For example:union must strive for
larger scope and coverage like wages and service conditions for contract labor, temporary, part
time employees, trainees etc.

Process Variation of Collective Bargaining: The negotiation process has been

visualized in different ways. Collective bargaining procedure can be compared with the similar
to an exercise in politics where the relative strength of the parties stems from decisiveness
and that it resembles with a debate. They are also of the view that both the parties on the
bargaining table become entirely flexible and willing to be persuaded only when all the facts
have been presented. However with the increasing maturity of collective bargaining, there has been
enlargement of the rational process. In addition several other factors also influence the negotiation
process. Among these factors some are mentioned below:

• Objectives of the parties.

• Kind of experience, knowledge the parties have.
• The Industrial legislation of the concerned country.
• The personalities and training of the negotiators.
• The history of the labor relations in the enterprise.
• The size of the bargaining unit and
• The economicenvironment.
Although several negotiators may attempt to bluff or outsmart the opposite group, others seldom
think of using these tactics. While some bargainers may attempt to dictate the contract on a
unilateral ground, others visualize that this process is eventually self defeating. While some
negotiators may come together with excessive unrealistic proposals, others may have quite
realistic ones. In some negotiations, there may be in each side implicit faith in the counterpart while
in others there may prevail a climate of mutual distrust, suspicion and even hatred, in view of the
past adverse labor relations. Moreover if the objective is to obtain solution to their mutual
problems, the parties are likely to conduct the negotiation on the ground of rationality and
fairness. However if the objective is to “put management in its place” or to “weaken or to even
destroy the union”, the process of negotiation may take quite different forms. Thus several
factors operate causing variations in the conduct of collective bargaining negotiations. “Militant
unions vs. irrational management”, “Rational unions vs. oppressive management”,
“Progressive union and progressive management”-There can be many permutations and
combinations and results of the bargaining process would vary depending on these.

Preparation for Negotiation: Prior to the actual bargaining sessions, enough care should be
taken by both the parties to have a thorough preparation for the negotiations. This has become a pre
– requisite to collective bargaining in view of several reasons. Consultation with the lower level
members of their respective organizations can help both the parties to obtain valuable information and
evolve specific bargaining table approaches. The consultation process also increases the morale of the
two organizations. Again the technical assistance of legal and public relations experts can also be
utilized gainfully in the collective bargaining process. Finally care should be taken to preplan with
mutual consent the meeting places, ground rules relating to transcripts of the sessions , publicity
releases, the payment system of union representatives and allied issues.
Negotiation Stage:
Methodology for bargaining is very important in negotiating process. It will help the negotiator
to develop those personal and managerial (administrative) qualities of preparedness,
knowledge, ability, sensitivity, timing, analytical abilities, composure and patience. These
qualities develop as a result of observation, experience involvement and conscious individual
effort and experience.
As a bargaining methodology it is desirable to list all the bargaining items, whether
introduced by the employer or the employee that the parties will consider during the course
of the collective bargaining negotiations. These bargaining items could be separated into two
parts –
• The cost or financial items
• The other for non cost or non financial items.

After listing the items priority rating can be determined for these items based on its value or
importance relative to all other items on the agenda. The range of the objectives could be
decided. This methodology provides a systematic framework for approaching collective
bargaining negotiations. Some advantagesto collective bargaining negotiations result from the
use of the methodology by objectives.

Management Strategies:
Prior to the bargaining session, management negotiators prepare by developing the strategies
and proposals they will use. Three major areas of preparation have been identified:

• Determination of the general size of the economic package that the company
anticipates offering during the negotiations.
• Preparation of statistical displays and supportive data that the company willuse during
 negotiations.

• Preparation of a bargaining book for the use of company negotiators, a compilation of

information on issues that will be discussed, giving an analysis of the effect of each
clause, its use in other companies, another fact.
An important part of this calculation is the cost of various bargaining issues or demands. The
relative cost of pay increases, benefits, and other provisions should be determined prior to
negotiations. Other costs should also be considered. For instance, what is the cost to
management, in terms of its ability to do its job, of union demands for changes in grievance
and discipline procedures or transfer and promotion provisions? The goal is to be as well
prepared as possible by considering the implications and ramifications of the issues that will be
discussed and by being able to present a strong argument for the position management takes.

Union Strategies: Like management, unions need to prepare for negotiations by

collecting information. More and better information gives the union the ability to be more
convincing in negotiations. Since collective bargaining is the major means by which the union
can convince its members that it is effective and valuable, this is a critical activity. Union should
collect information in at least three areas:
• The financial situation of its company and its ability to pay;
• The attitude of management towards various issues, as reflected in past negotiations
of inferred from negotiations in similar companies; and
• The attitudes and desires of the employees
The first two areas give the union an idea of what demands the management is likely to accept.
The third area is important but is sometimes overlooked. The union should be aware of the
preferences of the membership. For instance, is a pension preferred over increased vacation or
holiday benefits? The preferences will vary with the characteristics of the workers. Younger
workers are more likely to prefer more holidays, shorter work weeks, and limited overtime,
whereas older workers are more interested in pension plans, benefits and overtime. The union
can determine these preferences by using a questionnaire to survey its members.

Collective Agreements: Collective agreements are commonly classified under two

headings –‘procedural’ and ‘substantive’.

Procedure Agreements: Procedure agreements spell out the steps by which the industrial
relations processes are carried out. Procedure agreements are collective agreements which
relate to:

• Machinery for consultation, negotiation or arbitration on terms and conditions of

employment or for any other matters which arise between trade unions and
employers.
• Negotiating rights
• Facilities for trade union officials and
• Disciplinary matters and individual workers’ grievances.

Substantive Agreements: These contain the ‘substance’ of any agreement on terms and
conditions of the employment. They cover payments of all kinds, i.e. wage rates, shift allowances,
incentive payments also holidays and fringe benefits such as pensions and sick pay and various
other allowances.

Mixed Procedural/ Substantive Agreements: The distinction between ‘procedural’

and ‘substantive’ agreements while useful, does not always apply in practice. It is possible to
have both ’substantive’ and ‘procedural’ elements in the same agreement. There is, however, a
tendency for procedural agreements to have a separate and long term existence and consequently
they are not subject to a great deal of alteration. On the other hand, substantive agreements are
altered from time to time to take account of on-going negotiations.

Notwithstanding the variations in collective bargaining process, in recent days it is characterizedby

rational discussions based on facts. In modern collective bargaining process the low level of
behavioral patterns such as emotional outburst, tricks, distortion of facts, misrepresentations
and deceit are largely avoided. The labor and management representatives have realized that these
elements cause unhealthy labor relations and increase the possibility of industrial conflict.
Implicitly, one of the goals of collective bargaining is to promote a rational and harmonious
relationship in the organization. Accordingly, the negotiators should have qualities of patience,
trustworthiness, friendliness, integrity and fairness. Each party should share the attitude of self
assessment and consider that the other party may not necessarily be wrong all the time. If such
an open attitude is developed in both the parties, the negotiation process is likely to become
successful.
Harvard Law School’s Program on Negotiation describes the collective bargaining process as
comprising five core phases:

1. Preparation and Framing: In this phase both the school board and the union examine
their own situation in order to develop the issues that they believe will be most important, including
assessing ‘you’re interests as well as the interests of the other side’.

2. Bargaining Over How to Bargain: Here, the parties decide the ground rules that will
guide the negotiations. This is where the logistics are determined, such as the rules for
secrecy and the frequency of negotiating meetings;

3. Opening and Exploring: This phase involves the initial opening statements and the
possible options that exist to resolve them. In a word, this phase could be described as
‘brainstorming’;

4. Focusing and Agreeing: This stage comprises the time when ‘what ifs’ and
‘proposals’ are set forth and the drafting of agreements take place; and

5. Implementation and Administration: This stage is described as consisting of

‘effective joint implementation through shared visions, strategic planning and negotiated
change.’

COLLECTIVE BARGAINING PRACTICES IN INDIA

Collective bargaining in India has been the subject matter of industrial adjudication since
long and has been defined by our Law Courts .Collective bargaining is a technique by which
dispute as to conditions of employment is resolved amicably by agreement rather than coercion.
Collective Bargaining machinery essentially is a reflection of a particular social and political
climate. The history of the trade union movement shows that union is affiliated to one or the other
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.
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. So, it permits one to be the leader of the union
who does not actual y 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.
Nevertheless, experience shows that outsiders who have little knowledge of the background
of labor problems, history of labor movement, fundamentals of trade unionism and the technique
of the industry and with even little general education assume the charge of labor 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.
The process of collective bargaining is not likely to succeed unless the threat of
strike/lockout is there in the back-ground. Strike and lock-out are the weapons used by both
the parties daring the collective bargaining process. Without having these weapons at hands,
neither of the party to the dispute can defeat the claim of the other. The peculiar feature of our
country while compared to the advanced nations of the world is that the economic condition of
the workers is very poor and as a result they cannot afford a long- standing strike.
In Indian labor arena we see, multiplicity of unions and Inter-union rivalry. Statutory
provisions for recognizing unions as bargaining agents are absent. It is believed that the institution
of collective bargaining is still in its preliminary and organizational stage. 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 labor disputes. The labor policy must reflect a new
approach. Hitherto the State has been playing a dominant role in controlling and guiding labor-
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 rights and obligations of the disputants. In deciding industrial disputes
the adjudicator is free to apply the principle of equity and good conscience.
For an effective Collective Bargaining in India, recognition of trade union has to be
determined through verification of fee membership method. The union having more
membership should be recognized as the effective bargaining agent. The State should enact
suitable legislation providing for compulsory recognition of trade union by employers. The
provision for political fund by trade unions has to be done away with- since it invariably
encourages the politicians to prey upon the union. State has to play a progressive role in removing
the pitfalls which stand in the way of mutual, amicable and voluntary settlement of labor disputes.