Collective BargainingDefinition

Manual Published by the International Labour

Office, 1960

defines collective bargaining as:

Negotiations
about working conditions and terms of employment
between
an employer,
a group of employers or
one or more employers organization on the one hand,
and
one or more representative workers organizations on the
other,
with a view to reach an agreement.

Collective Bargaining-Definition
Collective bargaining refers to the
process of negotiations
between
a group of workers, usually represented by one or more trade unions, on
the one hand,
and
one or more employers or employers organizations, on the other,
with the set purpose of determining
the working conditions and
terms of employment applicable to an enterprise or industry.
It may also aim at regulating relations between the parties involved in
collective bargaining.
The anticipated outcome of bargaining is the conclusion of a collective
labour agreement to govern working conditions.

Subject Matter of Collective Bargaining

The International Labour Organisation has divided the subject
matter of collective bargaining into two categories: 1. Those which set out standards of employment which are
directly applicable to relations between an individual employer
and worker;
2. Those which regulate the relations between the parties to
the agreement themselves.

Objects of Collective
Bargaining

The International Confederation of Free Trade Union called collective

bargaining as A workers Bill of Rights". It enumerated the following
objects of the union in collective bargaining:
1. to establish and build union recognition as an authority in the work place;
2. to raise workers standard of living and win a better share in companys
profits;
3. 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. to establish orderly practices for sharing in these decisions and to settle
disputes which may arise in day-to-day life of the company;
5. to achieve broad general objectives such as defending and promoting the
workers interests throughout the country.

Objects of Collective
Bargaining
The ILO also states that:
In collective bargaining the object is to reach an agreement
on wages and other conditions of employment about which
the parties begin with divergent viewpoints but try to reach a
compromise. When a bargain is reached the terms of the
agreement are put into effect.

Prerequisites for Collective

Bargaining
1.
2.
3.
4.
5.

Freedom of association
Strong and Stable Trade Unions
Recognition of Trade Unions
Willingness to give and take (Mutual Trust)
Regulations of Unfair Labour Practices

Advantages of Collective
Bargaining

No third party intervention-It is a system based on bipartite

agreements and as such superior to any arrangement involving third
party intervention in matters which essentially concern employers and
workers;
It is quick and efficient method of settlement of industrial disputes
It avoids unnecessary legal proceedings and the issue is sorted out of
the Court.
It is a democratic method , promotes workers democracy and workers
participation in management.
It helps in establishing harmonious relationship between employee
and the employer.
It emphasizes on the interests and benefits of both parties.
It eliminates unnecessary expenditure and avoids bitterness among
involved parties.
It provides a flexible means for the adjustment of wages and
employment conditions.

Disadvantages of Collective
Bargaining
According to Willcox it has two vital defects:
First, there are situations in which a serious strike and a prolonged strike
simply cannot be tolerated.
Second, lack of representation of the public interest at the bargaining table.

Increased wages and improved facilities for workers will

indirectly result in high prices for goods and services.
Consumers are affected badly due to price rise; a process
which they do not actively participate in.
The collective bargaining process may not be fair at all times;
the decision is often influenced by power and politics.
In case of failure of the collective bargaining agreement, the
immediate consequence is strike or lock-out.

Reasons for failure of Collective Bargaining

in India
1.

Outsiders in the process of Collective Bargaining

Leaders from outside
Dismissed employees
The employers are reluctant to discuss and negotiate industrial matters with
outsiders, who have no personal or direct knowledge of day to day affairs of
the industry.
2.
Multiplicity of Unions
3.
Inter Union Rivalry
4.
No Statutory Provisions for recognizing unions as bargaining
agents
5.
Poor economic conditions of workers- as a result they cannot
afford a long standing strike.
The process of collective bargaining is not likely to succeed unless the
threat of strike/lockout is there in the back-ground.
6. Non-ratification of ILO Conventions

Importance
Importance to employees
Develops a sense of self respect and responsibility among the
employees.
Increases the strength of the workforce, thereby, increasing their
bargaining capacity as a group.
Increases the morale and productivity of employees.
Restricts managements freedom for arbitrary action against the
employees.
Unilateral actions by the employer are also discouraged.
Effective collective bargaining machinery strengthens the trade unions
movement.

Importance
Importance to employers
It becomes easier for the management to resolve issues at the bargaining
level rather than taking up complaints of individual workers.
Collective bargaining tends to promote a sense of job security among
employees and thereby tends to reduce the cost of labor turnover to
management.
Collective bargaining plays a vital role in settling and preventing industrial
disputes.

Importance
Importance to society
Collective bargaining leads to industrial peace in the country.
It results in establishment of a harmonious industrial climate which
supports which helps the pace of a nations efforts towards economic and
social development since the obstacles to such a development can be
reduced considerably.
The discrimination and exploitation of workers is constantly being
checked.
It provides a method or the regulation of the conditions of employment of
those who are directly concerned about them.

Legal Framework of Collective

Bargaining

Article 19(1)(c) guarantees freedom of association as a Fundamental Right.

This right is recognized in
Trade Union Act, 1929
Industrial Disputes Act, 1947
Industrial Employment (Standing Orders) Act, 1946

All India Bank Employees Case (1962) SCR 171

The right to form associations or unions in Article 19(1)(c) does not
guarantee the right to strike.
In 1923, India ratified the ILO Right of Association (Agriculture)
Convention, 1921(No. 11), during British Rule.
India has however not ratified ILO convention No. 87 (Freedom of Association and Protection of the
Right to Organise) and
ILO Convention No. 98 (Right to Organise and Collective Bargaining)
due to technical difficulties.

Core Conventions of the ILO

India has a poor track record on ratifying ILO conventions and
establishing workers rights among the world community.
Core Conventions of the ILO: - The eight Core Conventions of the
ILO (also called fundamental/human rights conventions) are:
(Conventions ratified by India)
1.
Forced Labour Convention (No. 29)
2.
Abolition of Forced Labour Convention (No.105)
3.
Equal Remuneration Convention (No.100)
4.
Discrimination (Employment Occupation) Convention (No.111)

Core Conventions of the ILO

(Conventions not yet ratified by India)
5.
Freedom of Association and Protection of Right to
Organised Convention (No.87)
6.
Right to Organise and Collective Bargaining Convention
(No.98)
7.
Minimum Age Convention (No.138)
8.
Worst forms of Child Labour Convention (No.182)

Reasons for not ratifying two

conventions
The main reason for our not ratifying these two Conventions is the
inability of the Government to promote unionisation of the Government
servants in a highly politicised trade union system of the country.
Freedom of expression, freedom of association and functional democracy
are guaranteed by our Constitution.
The Government has promoted and implemented the principles and rights
envisaged under these two Conventions in India and the workers are
exercising these rights in a free and fare democratic society.
Our Constitution guarantees job security, social security and fair working
conditions and fair wages to the Government servants. They have also
been provided with alternative grievance redressal mechanisms like Joint
Consultative Machinery, Central Administrative Tribunal etc. Hence, our
stand has been that this section of the workforce cannot be said to have
been deprived of the right of association.

 Following reasons may be ascribed for

non-ratification 1. Trade union rights for civil servants.
2. Not to allow the right of collective bargaining even to industrial
workers in certain government departmental undertakings like Railways,
Post and Telecommunications-Pay and conditions of work decided by the
Government on the basis of the Pay Commission Recommendations.

Legal Framework of Collective

Bargaining
1.
The Royal Commission on Labour (GOI 1931) did not favour the
prevalent idea that recognition should depend on the strength of the union.
It held the recognition should be based on reason and not force.
2.
National Commission on Labour (1969)
Left the matter to be decided according to the local
circumstances.
3.
1947 Amendment act which never enforced and 1950
Bill which never pursued provided for more than one
recognition.
4.
1956:- Second Five Year Plan document highlighted the importance
of one union, one industry.
5.
1958- The Indian Labour Conference evolved a Code of Discipline
in Industry, which did not and still does not have statutory force but which
contained criteria for the recognition of unions.

Union Recognition
There is no law at the national level for recognition of Unions.
Considerable divergence is found for determining the representative
union for purposes of collective bargaining .
These include:1.
Code of discipline, which is common in most public sector
undertakings;
2. Secret ballot- mandatory in three states AP (since 1975), Orissa (1994) &
WB (1998)
In 1995, the Supreme Court of India asked a government corporation, the Food
Corporation of India, to resolve the trade union recognition dispute through a
secret ballot. The judgement also mandated the procedure for a secret ballot.

3.
4.

Check off system, favored by some unions

Membership verification