Collective Bargaining: A Critical Analysis

The conflict between the management and the employee is inherent in an industrial society.
One argues for more investment and profits while the other argues for better standard of
living. These two conflicting interests can be adjusted temporarily through the principle of
"give and take"1, The principle of give and take has been infused in the principle of collective
bargaining.

The phrase "collective bargaining" was coined by British labor reformers Sidney and Beatrice
Webb of Great Britain which was the “home of collective bargaining” in the 1890’s2. The
idea of collective bargaining emerged as a result of industrial conflict and growth of trade
union movement and was first given currency in the United States by Samuel Crompers. In
India the first collective bargaining agreement was conducted in 1920 at the instance of
Mahatma Gandhi to regulate labour management relation between a group of employers and
their workers in the textile industry in Ahmadabad3.

Advocates of collective bargaining in the early decades of the twentieth century thought it
essential for three reasons. First and foremost, a system of peaceful and routine bargaining
would eliminate industrial strife and violence. Second, collective bargaining stood for
"industrial democracy," and finally, collective bargaining promised to make capitalism work.

In any industrial establishment the friction between employer and the workmen is inevitable.
There are demands by the workmen and if those demands are resisted by the employer,
industrial dispute arises resulting in industrial tension and disturbing the peace and harmony
in the industry. Collective Bargaining is one of the methods wherein the employer and the
employees can settle their disputes.

There was always a need of a legislation which could ensure industrial justice pre-empt the
industrial tensions and provide the mechanics of dispute resolution. When Industrial Disputes
Act, 1947 was passed in India, it was passed to provide machinery and form for the
investigation of industrial disputes and for the settlement thereof and for the purposes
analogous and incidental thereto. As is evident from the Act itself that it is piece of
legislation which mainly provides for investigation and settlement of Industrial disputes.
1
Otto Kahn-Freund, Laboaraad the Law, L mdon, Stevens & Sons,(1977\ .). 49
2
Webb, Sydney and Beatrice, Industrial Democracy,1902,p.185
3
Report of Royal Commission on Labour in India, 1931; p. 336-337
Important Definitions
According to K. Alexander

“Collective bargaining is a process of bargaining between the employers and their workers by
which they settle their disputes among themselves relating to employment or non-
employment or terms of employment or conditions of labour of the workmen, on the strength
of the sanctions available to each side. Occasionally such bargaining results in amicable
settlement arrived at voluntarily and peaceful between the parties. But quite often the workers
and the employers have to apply sanctions by resorting to the weapons of strikes and lock-
outs to pressurize one another which makes both the sides aware of the strength of one
another and that finally forces each to arrive at a settlement in the mutual interests. It is thus
the strength of the parties which determines the issues rather than the wordy duals which are
largely put on for show as any element of strength in one party is by the same token an
element of weakness in another”.

Convention 154 of International Labour Organization (ILO) under Article 2 says: For
the purpose of this Convention the term collective bargaining extends to all negotiations
which take place between an employer, a group of employers or one or more employers'
organizations, on the one hand, and one or more workers' organizations, 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 organizations and a workers'
organization

ILO has defined collective bargaining as,

“negotiation about working conditions and terms of employment between an employer and a
group of employees or one or more employees’ organizations with a view to reaching an
agreement wherein the terms serve as a code of defining the rights and obligations of each
party in their employment/industrial relations with one another”.