Recognised under Section 2(f) of UGC Act
POST-MID ASSIGNMENT
PROJECT REPORT ON:
COLLECTIVE BARGAINING IN INDIA
SUBMITTED TO :- SUBMITTED BY:-
Name: SUSANTA SHADANGI Name: GAURANG SWAMI
Signature: Id No.: 22FLICDDN01016
Batch: BBA LLB (Hons.)
(2022-2027)
COLLECTIVE
BARGAINING IN INDIA
Abstract
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 paper 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. Finally, recognition of
collective bargaining at the State level has been discussed briefly.
Introduction
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
method of industrial dispute resolution namely; collective bargaining,
conciliation1, mediation, arbitration, 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. 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.
This paper 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. Finally, recognition of
collective bargaining at the State level has been discussed briefly.
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 . 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 disputes . 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 recognizes 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 , 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 , 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 , 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 , 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 themselves 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, 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 , 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.
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 , 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 unequals 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”
The Constitution of India – 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 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
, 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” .
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
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,
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 .
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.
