TRADE UNIONS AND

COLLECTIVE BARGAINING
INTRODUCTION

A trade union is a formal association of workers, acting collectively,

who seek to protect and promote their mutual interests through
collective action

Features
 It is an association of employees or employers or of independent workers
 It is a relatively permanent formation of workers
 It is formed to secure certain economic benefits to members
 It emphasizes joint, coordinated action and collective bargaining
Objectives of trade unions

 Securing economic benefits to members

 Improving the working conditions
 Protecting members from unilateral acts and disciplinary actions of
management
 Fighting against inappropriate personnel policies
 Promoting the welfare of members
 Improving employer-employee relations
 Carrying out negotiations with management in a fair manner
 Safeguarding organisational health and the interests of the industry

Functions of trade unions

 Intra-mural functions
 Extra-mural functions
 Political functions
 Social functions
Structure Of Trade Unions

 Craft union: union whose members do a type of work, often

using specialized skills and training.
 Industrial union: It is a union that includes many persons
working in the same industry or company regardless of jobs
held.
 General union: This type of union consists of workers
employed in different industries and crafts within a particular
city or region.
 Federation: It is a group of autonomous, national and
international unions
Growth Of Trade Union Movement And
Membership

 Early period: Social workers, philanthropists, religious leaders led the

movement, mostly, on humanitarian grounds.

 After the Factories Act, 1881 was passed, important unions sprouted
up slowly.

 Modest beginning: The outbreak of World War! and the subsequent

economic, political and social conditions influenced the growth of trade
union movement.

 The establishment of ILO in 1919 helped formation of several unions

between 1919 and 1923.

Contd
Growth Of Trade Union Movement And
Membership

 All India Trade Union Congress: AITUC was formed in 1920 followed

by the establishment of All India Railwaymen's Federation in 1922.

Unions began to adopt militant postures to achieve their demands.

Splits and mergers were quite common. The influence of political

parties was quite significant.

The Legal Framework

 The Trade Union Act, 1926 legalizes the formation of trade unions by

any seven persons employed in a unit quite easily.

 A registered union has certain advantages to its credit. Due to inter

union and intra union rivalry, it is not easy to carry out negotiations

with a recognized union in India.

 Problems Of Trade Unions

Factors responsible for ever-growing list of problems faced by trade

unions in India:

 Trade union leadership:

 Outside leaders have hijacked trade union movement right from the
beginning.

 Absence of strong leaders from the ranks of workers,

 Inability to represent woes of workers in a forceful manner

 Presence of towering political personalities willing to serve cause of

workers, illiteracy of workers, by and large, contributed to this peculiar
phenomenon.
Current Trends In Trade Unionism

Of late, trade unions have been pushed to the wall due to factors
such as: global competition, restructuring exercises carried out by
companies from time to time just to survive, rising costs of
manufacturing, lack of support from the general public and the
government; privatisation, failure to deliver results in case of a
prolonged battle etc.

Reasons for the Paradigm shift

 Political base shrinking
 Public sympathy disappearing
 Jobs vanishing at an alarming rate
 Membership figures sinking
Collective Bargaining process
The Bargaining Process
 Collective Bargaining Process
 The process of negotiating a labor agreement,
including the use of economic pressures by both
parties.
 Bargaining Zone
 Area within which the union and the employer are
willing to concede when bargaining.
 Interest-based Bargaining
 Problem-solving bargaining based on a win-win
philosophy and the development of a positive
long-term relationship.
The Bargaining Process (cont’d)
 Good Faith Bargaining Requirements
 Meetings to be held at reasonable times and
places to discuss employment conditions.
 Proposals and counterproposals submitted by
each party must be realistic and reasonable.
 Both parties must sign a written document of the
agreement reached through negotiations
 Interest-based Bargaining
 Problem-solving bargaining based on a win-win
philosophy and the development of a positive
long-term relationship.
 Good Faith Bargaining

Bargaining Subject
Categories

Mandatory Permissive Illegal

Subjects Subjects Subjects
 Union recognition: criteria and rights
The Bombay Industrial Relations Act, 1946, classified the registered unions as:
1. Representative union having a membership of not less than 25% of the total
employees as members in an industry;
2. Qualified union having at least 5% of membership in an industry; and
3. Primary union having a membership of at least 15% of employees in an
undertaking.
The rights of a Representative union under the Act are:
a. First preference to appear or act in any proceedings under the Act as the
representative of employees;
b. Right to submit a dispute for arbitration;
c. To make a special application to the Labour Court to hold an inquiry; and
d. Office-bearers of the union cannot be dismissed or discharged.
The Legal Framework

Code of Discipline, 1958

 When multiple unions exit, the union claiming recognition should
be functioning for at least one year after recognition
 The membership of the union should cover at least 15% of
workers in the establishment
 To be recognised as a representative union for an industry in a
local area, the union should have membership of at least 25 per
cent of workers in that area
 In case of multiple unions in an establishment or industry, the
one with the largest membership should be recognised.
 The Legal Framework

Verification of trade union membership

 Majority character of a union is not easy to decide because of claims
and counter claims from warring factions.
 Proper membership records, often, not available.
 Problem of common names appearing in the registers of more than one
union. Union leaders often divide workers along caste, community,
religion, linguistic and regional lines.
 Check off system (whereby members pay their respective fee directly
into the account of the union concerned) is offered as a viable
alternative to solve the knotty issue.
Evil effects of outside leadership

 Slow growth of unions

 Weakening of the overall goals for which unions existed

 Coming in the way of nurturing strong leaders from the ranks of workers

 Inability to understand the problems of workers

 Inhibiting the development of one union in one industry

 Personal agendas of leaders gaining priority over workers' overall interests

 Multiple unions: in the way of a healthy and democratic

growth of labour movement in the country. Small size,
naturally, affected the bargaining powers of the union severely.
 The Legal Framework

 Union rivalry: No unity due to inter-union and intra-union rivalry

helped the cause of the employer more than that of workers.

 Financial woes: Membership fee pathetically low. Few opportunities

to raise funds . To keep workers in good humor, often, unions had to
organize functions and programs, out of grants offered by
employers. This had a telling effect on their bargaining powers.

 Other problems: Illiteracy, low membership, heterogeneous nature of

labor, lack of interest on the part of a large majority of workers,
absence of paid office bearers etc were some of the other problems
faced by trade unions.
Measures to strengthen trade union
movement
 Urgent need to improve trade union finances

 Develop leaders from the ranks of workers

 Recognize a bargaining agent on the basis of strong membership

figures

 Promote one union one industry policy

 Strict criteria for recognizing a representative union

 Strong political support for labor-related issues etc

Bargaining Zone and Negotiation Influences
Items in a Labor Agreement
Management and Union Power in
Collective Bargaining
 Bargaining Power
 The power of labor and management to achieve
their goals through economic, social, or political
influence.
 Union Bargaining Power
 Strikes, pickets, and boycotts
 Management Bargaining Power
 Hiring permanent replacement workers
 Continuing operations staffed by management
 Locking out employees
Union Power in Collective Bargaining

Boycott
Our
Employer
This Union
On Strike

Striking Picketing
Boycotting
Employer Power in Collective Bargaining

Management methods for applying

economic pressure during bargaining:

Outsourcing normal work

Locking out workers

Hiring replacement workers

Demanding concessions