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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.

Otto Kahn-Freund, Laboar aad the Law, L mdon, Stevens & Sons, (1977\ .). 49
Webb, Sydney and Beatrice, Industrial Democracy,1902,p.185
Report of Royal Commission on Labour in India, 1931; p. 336-337
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.

In the words of Justice Desai the emergence of the concept of welfare state implies an end to
exploitation of workmen and as a corollary to that collective bargaining came into its own and
lest the conflicting interests of the workmen and the employer disturb the industrial peace and
harmony, a machinery for adjustment of such conflicting interests became the need of the time.
The Act therefore was enacted to provide machinery and Forum for adjustment of such
conflicting and seemingly irreconcilable interests without disturbing the peace and harmony in
the industry assuring the industrial growth which was the prerequisite of for a welfare state.

Collective bargaining is one of the methods wherein the employer and the employees can settle
their disputes. This method of settling disputes was adopted with the emergence and stabilization
of the trade union Government. Before the adoption of the collective bargaining the labour was
at a great disadvantage in obtaining reasonable terms for contract of service from its employer.
With the development of the trade unions in the country and the collective bargaining becoming
the rule it was equally found by the employers that instead of dealing with individual workmen it
is convenient and necessary to deal with the representatives of the workmen not only for the
making or modification contracts but also in the matter of taking disciplinary action against the
workmen and regarding other disputes. So, collective bargaining has come to stay having regard
to modern conditions of the society where capital and labour have organized themselves into
groups for the purpose of fighting and settling their disputes.

Aims and objective

The aim of this project is to analyze the process of “Collective Bargaining” and the objective has
been to understand the impact of Collective Bargaining in India.

Scope and limitation

The researcher has limited the scope of the project paper to the concept of collective bargaining
and its impact in India.

Method of analysis

The researcher has endeavored to use a combination of critical and descriptive styles of writing
throughout this project and has cited various cases to critically analyze the theory of collective

Research questions

Following are some the basic questions the researcher has tried to answer in this paper;
1. What is the concept of collective bargaining?
2. Whether strike and lockouts are established means of weapons of collective bargaining?
3. What is the impact of collective bargaining in India?
4. What are the problems related to the collective bargaining process in India?
5. How can collective Bargaining be strengthened as a mode of settling industrial disputes?

Sources of data etc.

The main sources have been Statutes, books, articles on Collective Bargaining, obtained from the
library of NALSAR, Hyderabad and from the library of NLSIU, Bangalore. Besides these, the
researcher has also done extensive research on the internet and referred to various websites and
e-articles related to the Project topic.

There is no precise definition of “Collective bargaining”. In fact keeping in view the change in
the society with its fast changing social norms the scope and content of collective also varies
from country to country. Nevertheless, Collective bargaining has been defined by different
experts in different ways. It is treated as a method by which problem of wages and conditions of
employment are resolved peacefully and voluntarily between labour and management.4

This chapter deals with the various definitions of collective bargaining which will be helpful in
understanding the concept of collective bargaining, its ambit and scope as has been coined by
various writers.

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 –

I.L., Labour Law and Labour Relations, N.M. Tripathi (Pvt) Ltd., Bombay, (1968), P.29:
(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”.

This definition however confines the term collective bargaining as a means of improving
conditions of employment. But in fact, collective bargaining serves something more.

Perlman aptly stated,

"Collective bargaining is not just a means of raising wages and improving conditions of
employment. Nor is it merely democratic government in industry. It is above all technique.
Collective bargaining as a technique of the rise of a new class is quite different, from the desire
to displace or "abolish" the "old ruling class", to gain equal rights as a class, to acquire an
exclusive jurisdiction in that sphere where the most immediate interests, both material and
spiritual, are determined. And a shared jurisdiction with the older class or classes in all other

The best justification for collective bargaining is that it is a system based on bipartite
agreements, as such superior to any agreement involving third party intervention in matters
which essentially concern employers and workers.6

See Eugene V. Schneider, Industrial Sociology, London, Mc GrawHill, (1971), P. 344.
[Report of National Commission on Labour, p.325]
In Encyclopedia of Social Sciences, collective Bargaining has been defined a process of
discussion and negotiations between two parties, one or both of whom is a group of persons
acting in concert. The resulting bargain is an understanding as to terms and conditions under
which a continuing service is to be performed. More especially, collective bargaining is the
procedure by which an employer or employers and a group of employees agree upon the
conditions of work.

In the words of John T Dunlop, “Collective Bargaining is:

(1) a system which establishes, revises and administers many of the rules which govern the
worker’s place of work;
(2) a procedure which determines the quantum of compensation which employees should
receive and which influences the distribution of economic ills;
(3) a method of settling disputes during the pendency of agreement and of determining, after
its expiry, whether a dispute should be re-opened or whether a strike or a lock-out should
be resorted or not.

In sum collective bargaining, is labor relations, procedure whereby an employer or employers

agree to discuss the conditions of work by bargaining with representatives of the employees,
usually a labor union. Its purpose may be either a discussion of the terms and conditions of
employment (wages, work hours, job safety, or job security) or a consideration of the collective
relations between both sides (the right to organize workers, recognition of a union, or a guarantee
of no reprisals against the workers if a strike has occurred). The merits of collective bargaining
have been argued by both opponents and proponents of the process; the former maintain that it
deprives the worker of his individual liberty to dispose of his service, while the latter point out
that without the union's protection the worker is subject to the dictation of the employer.

Collective bargaining is concerned with the relations between employers acting through
management and organised labour. It is concerned not only with the negotiation of a formal
labour agreement but also with the day-to-day dealings between management and the union.
Collective bargaining is a voluntary process under which the representatives of both employers
and labour enter into an agreement. The process does not stop as soon as a bargain is reached at
between the employer and the trade union. It is a continuous process because the contract is only
the beginning of collective bargaining. Bargaining requires an efficient and permanent
arrangement for negotiations. No temporary or one-time arrangements can make the bargaining
process successful.

Features of Collective Bargaining

The features of collective bargaining are as under:

 It is a group process, wherein one group, representing the employers, and the other, representing
the employees, sit together to negotiate terms of employment;
 Negotiations form an important aspect of the process of collective bargaining i.e., there is
considerable scope for discussion, compromise or mutual give and take in collective bargaining;
 Collective bargaining is a formalized process by which employers and independent trade unions
negotiate terms and conditions of employment and the ways in which certain employment-
related issues are to be regulated at national, organizational and workplace levels;
 Collective bargaining is a process in the sense that it consists of a number of steps. It begins with
the presentation of the charter of demands and ends with reaching an agreement, which would
serve as the basic law governing labor management relations over a period of time in an
enterprise. Moreover, it is flexible process and not fixed or static. Mutual trust and understanding
serve as the by products of harmonious relations between the two parties;
 It a bipartite process. This means there are always two parties involved in the process of
collective bargaining. The negotiations generally take place between the employees and the
management. It is a form of participation;
 Collective bargaining is a complementary process i.e. each party needs something that the other
party has; labor can increase productivity and management can pay better for their efforts;
 Collective bargaining tends to improve the relations between workers and the union on the one
hand and the employer on the other;
 Collective Bargaining is continuous process. It enables industrial democracy to be effective. It
uses cooperation and consensus for settling disputes rather than conflict and confrontation;
 Collective bargaining takes into account day to day changes, policies, potentialities, capacities
and interests;
 It is a political activity frequently undertaken by professional negotiators.

Significance of Collective Bargaining

In an Industrial Establishment to solve the problems arising at the plant or industry level the need
of the collective bargaining is eagerly felt. Through negotiations the solution to the common
problems can be directly found out between the management and workers and here the collective
bargaining plays significant role and its scope is very great. In so far the determination of terms
and conditions of employment are concerned, one important consequence of collective
bargaining has been that it has enabled trade unions to participate in the decision making process
regarding hours of work, wages, working conditions etc. Earlier the employer used to decide
these issues unilaterally, but now they have become subjects of bilateral negotiations with the
advent of collective bargaining. Thus an element of industrial democracy has been introduced by
collective bargaining in the field of industrial and labour management.

Collective bargaining is really useful from the stand point of management, trade unions and
workers. Among workers it develops a sense of responsibility and self respect if it works well
and thus contributes to a great extent to employee’s morale and productivity. It opens up
channels of communication between top and bottom of an undertaking which is difficult
otherwise. Further the management’s freedom of action is restricted because the establishment
loses its unilateral discretion regarding bargainable issues even when management’s security is
intact and thereby learns a new code of behavior by conceiving of the union as a method of
dealing with the employees not an obstacle to such dealing.
The significance of collective bargaining from the national stand point is that it helps in creating
peaceful industrial climate if properly conducted, thereby increases the pace of the country’s
efforts towards social and economic development. Collective bargaining as an instrument of
industrial peace has no parallel. It extends the democratic principle from the political to the
industrial field and is an important aspect so far as the labour and management relations are

Functions of Collective Bargaining

The functions of the collective bargaining are as under:

1. Adjustment and balance of power between the management and union when they are in conflict
with each other. This function of the system of collective bargaining is one of the methods of
effecting social change.

2. When two parties are in a state of continuous conflict, it helps in bringing about compromise,
truce or agreement for establishing peace between the parties. Industrial truce results when two
parties to a dispute arrive at a compromise or agreement without resorting to strike or lock-out.
Such truce may be stable or temporary. It depends upon the parties as to what extent one party is
willing to sacrifice and the other party is willing to accept the demands, or terms. Both the
parties are morally bound to implement the agreement once it is signed.

3. For establishing industrial jurisprudence it analyses the rights and duties of conflicting parties.
4. It also adjusts labour management disputes apart from performing functions like negotiation,
administration and enforcement of agreements by which union management relationship is

Subject-matter of Collective Bargaining

Collective bargaining has two pronged concerns:

(1) Chalking out a broad contract of employment relationship between employers and workers, and
(2) The administration of the contract.

In fact, it has been recognised as a method of determining the wage rates and other terms and
conditions of employment and of regulating the relations between the management and
organized labour. Collective bargaining includes provisions with respect to hiring, lay-offs,
promotions, transfers, work scheduling, work assignment, wages, welfare programmes,
retirement benefits, discipline, etc.

Pre-requisites for collective bargaining

Effective negotiations and enforcement requires a systematic preparation of the base or ground
for bargaining which involves the following steps:

1. Recognition of the Bargaining Agent: The management should give recognition to the trade
union for participating in the collective bargaining process. In case there is more than one union,
selection could be done through verification of membership by a government agency giving
representation to all the major unions through joint consultations. Thus, the bargaining agent of
the workers should be properly identified before initiating any action.

2. Deciding the Level of Bargaining: Whether the dealings are confined to enterprise level,
industry level, regional or national level should be decided as the contents, scope and
enforcement agencies differ in each case.

3. Determining the Scope and Coverage of Bargaining: It would be better to have a clear
understanding of what are the issues to be covered under bargaining. Many a time, bargaining is
restricted to wage and working conditions related issues but it would be advantageous for both
the management and union to cover as many issues as possible to prevent further friction and
disputes. Therefore, all the important and interrelated issues are to be taken for consideration.
4. Spirit of Give and Take: When there is a spirit of give and take between the management and
union, collective bargaining can be an effective technique of settling industrial disputes.

5. Good Faith and Mutual Agreement: The parties to collective bargaining should act in good
faith and do the things on the basis of mutual agreement as there is no legal sanction behind the
terms and conditions agreed upon by the parties.

Importance of Collective Bargaining

Collective bargaining is an important method of regulating relations between employers and

employees. It involves negotiation, administration and enforcement of the written contracts
between the employees and the employers. It also includes the process of resolving labour-
management conflicts.

Healthy collective bargaining generates a spirit of self-confidence and self-reliance among the
workers. It is based on a ‘give and take’ policy on both sides. Collective bargaining leads to
increased goodwill and understanding between labour and management. This in turn helps to
create peaceful and comfortable atmosphere in industrial relations.

Importance to employees

 Collective bargaining develops a sense of self respect and responsibility among the employees
 It increases the strength of the workforce, thereby, increasing their bargaining capacity as a
 Collective bargaining increases the morale and productivity of employees;
 It restricts management’s freedom for arbitrary action against the employees. Moreover,
unilateral actions by the employer are also discouraged;
 Effective collective bargaining machinery strengthens the trade unions movement;
 The workers feel motivated as they can approach the management on various matters and
bargain for higher benefits;
 It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for
the adjustment of wages and employment conditions to economic and technological changes in
the industry, as a result of which the chances for conflicts are reduced;
 It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for
the adjustment of wages and employment conditions to economic and technological changes in
the industry, as a result of which the chances for conflicts are reduced.

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 opens up the channel of communication between the workers and the
management and increases worker participation in decision making.
 Collective bargaining plays a vital role in settling and preventing industrial dispute

Importance to society

 Collective bargaining leads to industrial peace in the country;

 It results in establishment of a harmonious industrial climate which helps the pace of a nation’s
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.

Principles of Collective Bargaining

As mentioned before that the collective bargaining has succeeded in introducing industrial
democracy in industrial and labour managements. Industrial democracy implies that the majority
union should have the right to sole representation i.e. the right to speak and act for all workers
and to enter into agreements with the employer. There are certain principles which have to be
followed by both the management and workers for collective bargaining. These principles are as

1. There should be a realization on the part of both unions and managements that for taking wiser
an more expedient decisions, collective bargaining is a proper method.

2. An opportunity should be provided to trade union leaders for putting their complaints, demands,
needs, etc. before the managements and the management should explain to them the
circumstances and make efforts to redress the grievances/complaints of the workers.

3. The presence of genuine spirit of mutual trust, goodwill and bargaining should be there on the
part of both the parties;

4. Competence for bargaining with mutual respect and implementation of the agreement arrive at
should be possessed by both the parties.

5. The parties to collective bargaining should be honest and the agreement should be conducted by
these honest, competent and reasonable leaders;

6. Keeping in view the changing circumstances, it is desirable that the management should change
their policies and should keep in view the dignity of the workers. Appropriate labour policy
should be adopted by the management and this policy to be followed by all employees.
Necessary precautions must be taken.

7. If there are more than one union the management should enter into negotiation with union having
majority representation.
8. It is equally desirable on the part of the union to raise reasonable demands. They should not put
up such demands as are beyond the paying capacity of the establishment or may be against the
national policies.

Scope of Collective Bargaining

The growth of collective bargaining is associated with the recognition of trade unionism. With
the growth of trade unions and industrialization the scope of collective bargaining is expanding.
Initially collective bargaining was used for determining hours of work, wages and terms of
employment, but now within its purview are included the issues like leave with pay, regulation
of forced leave, pension, seniority promotions, sickness and maternity benefits, etc. Since in the
field of bargaining collective action is now common, collective bargaining has assumed an
institutional form. In the words of C.W. Randle:

“The subject matter of collective bargaining had broadened until it has virtually eliminated the
field of the management prerogatives. The area pattern of bargaining has moved from simple
style plant bargaining to region-wise and finally to dynamic nature of the scope of collective
bargaining. At the same time, they show how important negotiation has become as an institution.
And the future holds promise of an even greater role for collective”.

Advantages and Disadvantages of Collective Bargaining

Advantages of Collective Bargaining

According to National Commission Report on labour collective bargaining has been preferred
over compulsory adjudication system for several reasons:

(a) It is a system based on bipartite agreements, and as such, superior to any arrangement involving
third party intervention in matters which essentially concern employees and workers;
(b) It is quick and efficient method of settlement of industrial disputes; and
(c) It is democratic method of settlement of industrial disputes;
Disadvantages of Collective Bargaining

Two vital defects in collective bargaining have been pointed out by Willcox. These defects are:

(a) There are situations in which a serious strike and prolonged strike simply cannot be tolerated.
(b) The second great flaw in collective bargaining as a solvent for labour disputes is the lack of
representation of the public interest at the bargaining table. Whether prices can be raised without
strangling and ability to sell goods or services, unions and companies are in a position to agree
on wage increase that will cause higher prices, then the consumer must shoulder the full burden
of their agreement7.

[ALJ, (1965) p.39]

The collective bargaining process begins when the majority of workers of an organization vote to
be represented by a specific union. The National Labor Relations Board (see Labor Unions) then
certifies the union. At this point, the management of the organization must recognize the union
as the collective bargaining agent for all the employees of that organization. Once this part of the
process is completed, collective bargaining can begin.

Bargaining always takes place between labor and management, but negotiations can include
more than one group of workers and more than one employer. Single-plant, single-employer
agreements are the most common. However, if an employer has more than one plant or work
site, multiplant, single-employer agreements can be bargained. Several different union groups
representing the workers of the same employer can use coalition bargaining. Industry wide
bargaining involves one national union bargaining with several employers of a specific industry.
Many different negotiation styles can be used when union and labor representatives sit down at
the bargaining table. The two basic modes of bargaining are traditional bargaining and
partnership bargaining, though there are many variations of each style.

The traditional style of bargaining has been used since collective bargaining began between
management and the early labor unions. It is an adversarial style of negotiating, putting one side
against the other with little or no understanding of, or education about, the other on the part of
either party. Each side places its demands and proposals on the table, and the other side responds
to them with counterproposals. The process is negative and involves a struggle of give-and-take
on most issues. Even with its negative connotations, however, the traditional style of negotiating
is still used effectively in bargaining many union contracts.

The partnership style of bargaining is the more modern approach to negotiations. It strives for
mutual understanding and common education on the part of both labor and management, and it
focuses on goals and concerns common to both parties. Because of its emphasis on each side's
being aware of the issues concerning the other side, partnership-style bargaining is also known as
interest-based bargaining. In this process, labor and management each list and explain their
needs, and the ensuing discussion revolves around ways to meet those needs that will be not only
acceptable but also beneficial to both parties. This style of bargaining is very positive and
imparts a much more congenial atmosphere to the negotiating process. Many modern union-
management contracts are bargained very successfully using the partnership style.

A blending of the traditional and partnership styles is widely used in labor-management

negotiations. The combination approach is used for many reasons, including the fact that many
union and management leaders are more familiar with the traditional style. However, with
today's more participatory relationship between labor and management in the workplace, the
partnership style is becoming more accepted and is being used more frequently. The negotiating
process may also include both styles of bargaining because of the variety of issues being
negotiated. The partnership style may be used to negotiate certain issues, while the traditional
style may be invoked when bargaining other terms.

Collective Bargaining Issues

Labor unions were formed to help workers achieve common goals in the areas of wages, hours,
working conditions, and job security. These issues still are the focus of the collective bargaining
process, though some new concepts have become the subjects of negotiations.

The Settlement Process

Union contracts are usually bargained to remain in effect for two to three years but may cover
longer or shorter periods of time. The process of negotiating a union contract, however, may take
an extended period of time. Once the management and union members of the negotiating team
come to agreement on the terms of the contract, the union members must accept or reject the
agreement by a majority vote. If the agreement is accepted, the contract is ratified and becomes a
legally binding agreement remaining in effect for the specified period of time.

If the union membership rejects the terms of the agreement, the negotiating teams from labor and
management return to the bargaining table and continue to negotiate. This cycle can be repeated
several times. If no agreement can be reached between the two teams, negotiations are said to
have "broken down," and several options become available.

Mediation is usually the first alternative when negotiations are at a stalemate. The two parties
agree voluntarily to have an impartial third party listen to the proposals of both sides. It is the
mediator's job to get the two sides to agree to a settlement. Once the mediator understands where
each side stands, he or she makes recommendations for settling their differences. The mediator
merely makes suggestions, gives advice, and tries to get labor and management to compromise
on a solution. Agreement is still voluntary at this point. The mediator has no power to force
either of the parties to settle the contract, though often labor and management do come to
agreement by using mediation.

If mediation fails to bring about a settlement, the next step can be arbitration, which can be either
compulsory or voluntary. Compulsory arbitration is not often used in labor-management
negotiations in the United States. Occasionally, however, the federal government requires union
and management to submit to compulsory arbitration. In voluntary arbitration, both sides agree
to use the arbitration process and agree that it will be binding. As in mediation, an impartial third
party serves in the arbitration process. The arbitrator acts as a judge, listening to both sides and
then making a decision on the terms of the settlement, which becomes legally binding on labor
and management. Ninety percent of all union contracts use arbitration if the union and
management can't come to agreement (Boone and Kurtz, 1999).

Sources of Power

If the collective bargaining process is not working as a way to settle the differences between
labor and management, both sides have weapons they can use to bolster their positions. One of
the most effective union tactics is the strike or lockout. While on strike, employees do not report
to work and, of course, are not paid. Strikes usually shut down operations, thus pressuring
management to give in to the union's demands. Some employees, even though allowed to belong
to unions, are not allowed to strike. Federal employees fall into this category. The law also
prohibits some state and municipal employees from striking.
During a strike, workers often picket at the entrance to their place of employment. This involves
marching, carrying signs, and talking to the media about their demands. The right to picket is
protected by the U.S. Constitution as long as it does not involve violence or intimidation.

Problems sometimes arise during strikes and picketing when management hires replacement
workers, called scabs or strikebreakers, who need to cross the picket line in order to do the jobs
of the striking workers.

The boycott is another union strategy to put pressure on management to give in to the union's
demands. During a primary boycott, not only union members but also members of the general
public are encouraged to refuse to conduct business with the firm in dispute with the union.
Though it is rarely done, management may use the lockout as a tactic to obtain its bargaining
objectives. In this situation, management closes down the business, thus keeping union members
away from working. This puts pressure on the union to settle the contract so employees can get
back to their jobs and receive their wages.

Management sometimes uses the injunction as a strategy to put pressure on the union to give in
to its demands. An injunction is a court order prohibiting something from being done, such as
picketing, or requiring something to be done, such as workers being ordered to return to work.

Grievance Procedures

Once a collective bargaining agreement is settled and a union contract is signed, it is binding on
both the union and management. However, disagreements with contract implementation can
arise and violations of the contract terms can occur. In these cases, a grievance, or complaint, can
be filed. The differences that must be resolved are usually handled through a step-by-step
process that is outlined in the collective bargaining agreement. The grievance procedure begins
with a complaint to the worker's immediate supervisor and, if unresolved at that level, moves
upward, step by step, to higher levels of management. If no resolution is found at any of these
levels, the two parties can agree to have the grievance submitted to an impartial outside arbitrator
for a decision binding to the union and management.
Collective bargaining is a successful way for workers to reach their goals concerning acceptable
wages, hours, and working conditions. It allows workers to bargain as a team to satisfy their
needs. Collective bargaining also allows management to negotiate efficiently with workers by
bargaining with them as a group instead of each one individually. Though traditional bargaining
can be negative and adversarial, it does produce collective bargaining agreements between labor
and management. Partnership bargaining can lead to increased understanding and trust between
labor and management. It is a positive, cooperative approach to collective bargaining that also
culminates in contracts between labor and management.

Levels of Collective Bargaining

Collective bargaining operates at three levels:

1. National level
2. Sector or industry level
3. Company/enterprise level

Economy-wide (national) bargaining is a bipartite or tripartite form of negotiation between

union confederations, central employer associations and government agencies. It aims at
providing a floor for lower-level bargaining on the terms of employment, often taking into
account macroeconomic goals

Sectoral bargaining, which aims at the standardization of the terms of employment in one
industry, includes a range of bargaining patterns. Bargaining may be either broadly or narrowly
defined in terms of the industrial activities covered and may be either split up according to
territorial subunits or conducted nationally.

Company/enterprise level, this bargaining level involves the company and/or establishment. As
a supplementary type of bargaining, it emphasizes the point that bargaining levels need not be
mutually exclusive.

The Right to Strike as Method of Collective Bargaining

The right to strike is labors’ ultimate weapon and in the course of the century, it has emerged as
the inherent right of every worker. It is an element, which is of the very essence of the principle
of collective “Bargaining”8. In Conway v Way9 the Court adopted the phrase “industrial warfare”
where the Court described ‘strike’ and ‘lock-outs’ as the ‘weapons allowed by the law’. The
strike is the antithesis of lockout. It is regarded as a powerful weapon of collective bargaining
and is generally fraught with a possibility of industrial dislocation with all its attending hardships
and evils, the occurrence of which is regarded as one of the powerful levers to bring about
agreements. The trade unions with sufficient memberships strength are able to bargain more
effectively with the management than individual workmen. The bargaining strength would be
considerably reduced if it is not permitted to demonstrate by adopting agitational methods such
as “work to rule”, absenteeism”, “sit down strike” and “strike”. Collective Bargaining for
securing improvement on matters like wages, basic pay, dearness allowance, bonus, provident
fund, gratuity, leave, holidays and other terms of service and conditions of labour, is the primary
object of trade unions and when demands like this are put forward, a strike thereafter may
justifiably be resorted to in an attempt to induce the employer to agree to the demands or at least
to open negotiations. Sometimes the threat of strike is enough to make the employer concede to
the demands of the union.

But the right to strike is not absolute and the industrial jurisprudence has subjected it to certain
limitations.10 In Syndicate Bank v K.Umesh Naik11, Sawant, J stated the law in the following

“The strike, as a weapon, was evolved by the workers as a form of direct action, during their
long struggle with the employers. It is essentially a weapon for the last resort being an abnormal

AP State Road Transport Corporation Employee’s Union v APSRTC (1970) Lab IC 1225 (AP
Conway v Way (1909) AC 506 (HL)
B.R.Singh v Union of India (1990) Lab IC 389
Syndicate Bank v K.Umesh Naik, AIR 1995 SC 319
Syndicate Bank v K.Umesh Naik, AIR 1995 SC 319
aspect of the employer employee relationship and involves withdrawal of labour disrupting
production, services and the running of the enterprise. It is a use by the labour of their economic
power to bring the employer to see and meet their point of view over the dispute between them.
The cessation or stoppage of works whether by the employee or the employer is detrimental to
the production and economy and the well being of the society as a whole. It is for this reason that
the industrial legislation while not denying the right of workmen to strike, has tried to regulate it
along with the right of the employer to lock out and has also provided a machinery for peaceful
investigation, settlement, arbitration, adjudication of the disputes between them. The strike or
lock-out is not to be resorted to because the concerned party has a superior bargaining power or
the requisite economic muscle to compel the other party to accept its demand. Such
indiscriminate use of power is nothing but assertion of the rule of ‘might is right’. Its
consequences are lawlessness, anarchy and chaos in the economic activities, which are most vital
and fundamental to the survival of the society. Such action, when the legal machinery is
available to resolve the dispute, may be hard to justify. This will be particularly so when it is
resorted to by the section of the society, which can well await resolution of the dispute by the
machinery provided by the same. The strike or lock-out, as a weapon, has to be used sparingly.
For redressal of urgent and pressing grievances when no means are available or when available
means have failed to resolve it. It has to resort to, compelling the other party to the dispute to see
the justness of the demand. It is for this reason that the industrial legislation such as the Act
places additional restriction on strikes and lock outs in public utility services.”

The strike is a recognized mode of agitation to press home the demands of the workers in the
process of collective bargaining, but strike cannot be resorted to pressurize the management to
accede to the demands which they cannot get lawfully. For instance the weapon of strike cannot
be used to pressurize the management to pay additional amount of bonus apart from the bonus
permissible under the Payment of Bonus Act.

Lockouts as Weapon of Collective Bargaining

Lockout can be described as the antithesis of a strike. Just as strike is a weapon available to the
employee for enforcing their industrial demand, a lock out is a weapon available to the employer
to persuade by a coercive process the employee to see his point of view and to accept his
demands. In the struggle between the capital and labour the weapon of strike is available to
labour and is often used by it, so is the weapon of lock out available to the employer and can be
used by him.

Lock out was comprehensively defined in the repealed Trade Disputes Act, 1929 as “closing of
place of employment or suspension of work or refusal by an employer to continue to employ any
number of persons employed by him in consequence of a dispute done with a view to compelling
those persons or to aid another employer in compelling persons employed by him to accept terms
or conditions of or affecting employment”. This definition was based on the definition of lock
out in the English statute. The present definition omits the words “when such closing, suspension
or refusal occurs in consequence of a dispute and is intended for the purpose of compelling those
persons or to aid another employer in compelling persons employed by him employed by him to
accept terms or conditions of or affecting employment” from the old definition. The deletion of
these words has left the definition only a mutilated and truncated version of the concept of
lockout. The Court has described the consequences of construing the definition of lock out as it
stands without reading the effect of the deleted words in it. “If an employer closes the place of
employment or suspends work on his premises, lock out would come into existence. A flood may
have swept away the factory; a fire may have gutted the premises ; a convulsion of nature may
have sucked the whole place underground, still if the place of employment is closed or the work
is suspended or the employer refuses to continue to employ his previous workers, there would be
a ‘lock out’ and the employer would find himself exposed to the penalties laid sown in the
Act.”12. The High Court then read the effect of the deleted words into the definition and observed
that where the shut down, suspension or refusal is used a weapon corresponding to a strike, then
only it will be a lock out.

Section 2(1) of the Industrial Disputes Act, 1947 defines a “lock out” as meaning the closing of a
place of employment, or the suspension of work, or the refusal by an employer to continue to
employ any number of persons employed by him. A lockout is the closure of an industrial
undertaking because of the existence of or apprehension of an industrial dispute, violence and
Sri Ram Chandra Spinning Mills v Province of Madras AIR 1956 Madras 241.
damage to property. It is the suspension of employment in so far as the employer refuses to give
work to the workmen until they yield to his demand or withdraw the demands made on him; or
because of closing down of a place of employment and the suspension of the work.

A lock out is used with some intention, i.e., to coerce or force workmen to come to terms. The
lockouts, thus necessarily involve an overt act on the part of the employer and an element of
motive ill-will. In the absence of this overt act, the temporary suspension of work would not
amount to a lock out and the workmen cannot claim wages for the period of closure. 13 The
consequences of strikes and lock outs are detrimental to industry as a whole and to the economy
of the country because they lead to loss of production.

The Indian Law recognizes strike and lockout as methods of collective bargaining.

Critique of Supreme Court’s ruling on strike as a collective bargaining weapon

The right to strike is organically linked with the right to collective bargaining and will continue
to remain an inalienable part of various modes of response/expression by the working people,
wherever the employer-employee relationship exists, whether recognized or not.

As the Supreme Court has declared in Gujarat Steel Tubes v. G. S. T. Mazdoor Sabha14:

"The right to union, the right to strike is part of collective bargaining and, ….. the right of the
labour to pressure ...... the capital, to negotiate and render justice are processes recognised by
Industrial Jurisprudence ........ Industry, represented by intransigent managements, may well be
made to reel into reason by the strike weapon and cannot then squeal or well (sic) and complain
of loss of profits or other ill effects but must negotiate or get a reference made.15

The Court said that part IV of the Constitution read with Art. 19, "sows the seeds of this
bargaining Jurisprudence."16
Shree Narayana Steel Rolling Mills v Their Workmen, 52 FJR 1978, 169
(1980) 1L.L.J. 137 (S.C.)
Id. at 168
If the Directive Principles of State Policy enumerated under part IV of the Constitution when
read with Art.19 (which guarantees to the Indian citizens fundamental rights like freedom of
speech and expression, freedom of association, etc.)" "sow the seeds of ....... bargaining
Jurisprudence" then, the relative questions would be: Does the Constitution recognize the right to
strike? Does the right to form unions17 guaranteed under the Constitution carry with it the
concomitant right to achieve the purpose for which the union is formed? In other words, if the
workers are guaranteed the right to form trade unions, should such trade unions be entitled to
engage in collective bargaining and to exercise, if necessary, the right to strike so that the raison'
d' etre for the establishment of trade unions serves its purpose. The very object of a trade union
is to substitute collective bargaining for individual bargaining and collective bargaining may be
meaningless without the right to strike. A trade union without the right to strike is a "poor" and
"weak" trade union indeed. According to G. D. H. Cole:

Workers are required to resort to strike because without a strike they cannot secure a rectification
of the terms of employment imposed upon them because basically there is no equality between
them and their employers. They always appear to be in the wrong in the sense of committing a
breach of contract. But that is inevitable in the situation in which they are p1aced.18

However, when the Supreme Court was presented with the same question (formulated slightly
differently)-whether the right to form a union would carry with it the concomitant right to
collective bargaining and strike, the Supreme Court answered in the negative, in All India Bank
Employee's Association v National Industrial Tribunal19 by ruling: "on the consideration of the
Articles (19(1) (c))…….. we have reached the conclusion that even a very liberal interpretation
of Sub- clause (c) of clause (1) of Article 19 cannot lead to the conclusion that the trade unions
have a guaranteed right to an effective collective bargaining or to strike either as a part of
collective bargaining or otherwise."20

Art. 19(1) (c)
Cole, G.D.H., British Trade Unionism Today 86.
A.I.R. 1962 S.C. 171.
Id. at 181. See Radhe Shyam Sharma v. P.M.G. Nagpur, AI.A. 1965S.C.311 at 313; Ghosh v. Joseph, ALA. 1963
S.C. 813 (No fundamental right to strike); Kameshwar Prasad v. State of Bihar. ALA. 1962S.C. 1166at 1172(No
fundamental right to strike)
It is not clear whether the Supreme Court by observing in Gujarat Steel Tubes21 that the
Directive Principles when read with Art.19 (which guarantees, inter alia, to the citizens the
fundamental right to form an association) "sow the seeds of…….. bargaining Jurisprudence" has
sought to elevate the right to strike to the level of a fundamental right in the face of the decisions
to the contrary rendered by the same Court earlier.22 There is however, a categorical observation
by the Supreme Court in B.R. Singh and others v. Union of India23 that right to strike is not a
fundamental right. The Court has said: "Though (right to strike) is not raised to the high pedestal
of a fundamental right, it is recognised as a mode of redress for resolving the grievances of

Supra Note 14
Supra Note 19
(1989)2 L.L.J. 591, 597

The agreement arrived at between the representatives of a trade union and the employer is called
as collective bargaining agreement. Ludwig Teller has broadly defined collective bargaining
agreement as “an agreement between a single employer or an association of employers on the
one hand and a labour union upon the other, which regulates the terms and conditions of
employment.” The term ‘collective’ as applied to collective bargaining agreement will be seen to
reflect the plurality not of the employers who may be parties thereto, but of the employees
therein involved. Again the term collective bargaining is reserved to mean bargaining between an
employer or group of employers and a bona fide labour union. Bargaining which involves a
company dominated union is assumed to be merely a disguised form of individual bargaining. As
per Teller the Collective Bargaining agreement bears in its many provisions the imprints of
decades of activity contending for labour equality through recognition of the notions underlying
collective negotiation. Indeed, in the collective bargaining agreement is to be found a
culminating purpose of labour activity24.

Collective agreements may be written or unwritten. Whatever be the form of agreements these
may be looked upon as legislative acts setting forth the rules governing employment relationship
for a specified period of time. However, these laws are private in nature. Despite many of the
laws passed by the legislature, these agreements are of greater importance to the workers in
majority of cases. The economic strength of the parties is supposed to be the main sanction
behind a collective agreement. If a party under the agreement does not agree to abide by and
fulfill the commitments, the other party in order to meet its obligations can force him by
resorting to economic pressures to do so.

Validity of Collective Bargaining Agreements

The collective bargaining agreements may have been made subjects of litigation regarding their
validity, enforceability and interpretation. The usual case involves where an employee files a suit
in pursuant to the agreement to recover damages or assets his seniority rights guaranteed to him

Teller, 476
in the agreement. But there are other ways also whereby the problem is raised. For example, a
suit may be filed by the labour organization, an employer or employer’s association for specific
performance or to claim damages or to seek the enforcement of an arbitration clause stipulated in
the agreement. If there is an alleged violation of the agreement it is sometimes sought to enjoin a
strike or lock-out called for the purpose or sometimes the labour organization is the plaintiff
seeking to enjoin a lock-out in breach of the agreement or failure to hire union employees etc.
Where the legality of the agreement is designed to be destroyed, the validity of collective
bargaining agreement is also tested in this proceedings. As for example, to secure a closed shop
or to regulate an entire industry by prescribing rules governing competition etc.

Duration of Collective Bargaining Agreements

The durations of collective bargaining agreements vary widely. Unions generally favour shorter
contracts, while managements favour longer ones. In the United States many of the contracts are
for a period of one to three or more years, with options to renew. In the United Kingdom, “open
end” contracts, which can be negotiated on notice at any time, are the rule. In the Scandinavian
countries, one year contracts with renewal clauses are usual.

The position in India is not clear. A study of 114 contracts in 1961 by the Employers Federation
of India showed that a majority of them were for one to five years, with a strong trend in favour
of longer terms. (This may perhaps be evidence of control by employer or of employer’s superior
bargaining power or both). The long-term contract has two advantages for management over the
short-term one:
(1) It imparts stability to labour-management relations, and
(2) It helps in planning production and expansion programmes based on fixed labour costs
(one of the highest items in the budgets of many industries).

Contents or Subject Matter of Collective Bargaining Agreements

The subjects for collective bargaining are determined by the parties in some countries and by law
in others. In Denmark, Germany, Italy, Norway, Sweden, Switzerland, the United Kingdom and
the United States, the parties determine their subjects freely (of course within legal limits). In
Brazil, Columbia, Equador and some other Latin American Countries the law specifies that every
contract must include clauses regulating wages, hours, rest periods, holidays, the duration of the
agreement, the procedure for its extension. In France, every national collective contract must
contain provisions on freedom of employees (with particular reference to the prohibition of
discrimination on grounds of membership in any particular union), length of notice, and
organization of apprenticeship and training. In Canada, every contract must contain a grievance

In India the selection of subjects, while it is for the parties to decide, is nevertheless rather
narrowly circumstanced by law. For example, the negotiators of a contact must always keep in
mind the provisions of the Factories Act, 1948, the Industrial Employment (Standing Orders)
Act, 1946, the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936. These deal
with many subjects such as safety precautions, health measures, amenities, conditions of
employment, retrenchment must be carried out, rationalization must be undertaken, and
disciplinary proceedings must be handled.

Some contracts are short and deal with a few matters, while others are elaborate and deal with
many. Usually all contracts in India contain most or all of the following clauses:
(1) A preamble stating the positions of the parties;
(2) Recognition by the employer of the union as sole bargaining agent and of its right to
organize the workers;
(3) Recognition of the right of management to carry on its normal activities and meet its
(4) Wages, bonus and dearness allowance;
(5) Grades, job classification and job evaluation;
(6) Hours of work, holidays, leave and overtime;
(7) Dismissal, discharge, termination and retirement from service in so far it is not covered by
the company’s standing orders;
(8) Medical benefits, provident fund, pension and gratuity;

ILO, Collective Bargaining 46-47
(9) Joint machinery for the efficient and smooth functioning of the industry, such as a joint
production committee, a joint labour relations committee, a job evaluation committee, or a
discipline, safety and welfare committee;
(10) Grievance procedure;
(11) No-strike clause, and an undertaking that disputes will be settled through mutual
consultation; and
(12) The duration and termination of the contract.

The signing of the contract makes a great impression on the rank and file of the union. “ Its
formal language is the mark of its significance and…a guarantee that the management will carry
out its pledged word. It strengthens the position of the union in the eyes of the members, and it
provides basis for a continuing and dignified relationship between the management and the

Enforcement of Collective Bargaining Agreements

The enforcement of bargaining contracts depends in some countries on the good faith of the
parties and in others, on that, plus the law. In the United Kingdom, such contracts are called
“gentlemen’s agreements”. To enforce them in a court of law, workers must rely on their
individual contracts with their employer, which may in some cases incorporate the larger
agreement. In a great many countries of Europe, Latin America and Asia, the effects of the
contract are regulated by special legislation. They can then be enforced in a court of law, either
by the union or by the individual worker, through an action for damages for breach of contract.
Scandinavian countries, Germany, Ireland and some Latin American countries have established
special courts to enforce the contracts on the grounds that procedure in ordinary courts is long
and costly, that delay may result in a strike and to secure a quick remedy. The actions here must
usually be brought by the unions; but in some cases individuals may be allowed to start

Mary Sur, Supra Note 1 at 107
ILO, Collective Bargaining 71-72
In India, the collective bargaining agreements can be enforced under section 18 of the Industrial
Disputes Act, 1947, as a settlement arrived at between the workers and the employers. The
appropriate government may refer the dispute over a breach of contract to a labour court or to an
industrial tribunal.

India is a founder member of the International Labour Organization, which came into existence
in 1919. A unique feature of the ILO is its tripartite character. The membership of the ILO
ensures the growth of tripartite system in the Member countries. At every level in the
Organization, Governments are associated with the two other social partners, namely the workers
and employers. All the three groups are represented on almost all the deliberative organs of the
ILO and share responsibility in conducting its work.

The principal means of action in the ILO is the setting up the International Labour Standards in
the form of Conventions and Recommendations. Conventions are international treaties and are
instruments, which create legally binding obligations on the countries that ratify them.
Recommendations are non-binding and set out guidelines orienting national policies and actions.

Specific features of Conventions

Conventions have a number of specific features, which can be grouped under four main ideas:

1. Conventions are adopted within an institutional framework. Thus, the adoption of Conventions
does not follow the type of diplomatic negotiation which is usual in the case of treaties. They are
rather prepared in discussions in an assembly that has many points in common with
parliamentary assemblies. This also partly explains the fact that unanimity is not necessary for
the adoption of Conventions. For the same reason, only the International Court of Justice can
interpret the Conventions. The revision of Conventions is made only by the General Conference,
which is the legislative body of the Organization.

2. The International Labour Conference, which adopts Conventions, is constituted by

representatives of governments, employers and workers, each delegate being entitled to vote
3. A two-thirds majority is sufficient for the adoption of a Convention, and governments should
submit the Convention to their competent authorities for ratification, i.e. as a rule to their
parliaments. Also, the governments have the obligation, when requested, to supply reports on
various issues related to Conventions.

4. Some Conventions include flexibility clauses, because they are generally directed towards
countries with very different economic, social and political conditions, as well as different
constitutional and legal systems. The flexibility clauses comprise options regarding the

(a) Obligations: possibility of choosing, at the time of ratification, by means of formal declaration,
the extent of the obligations undertaken. (for .e.g. Social Security Convention, No. 102)

(b) Scope: Governments may decide for themselves, subject to certain consultations, what the scope
of the Convention shall be (for. e.g. Conventions of minimum wage fixing machinery, Nos. 26
and 29), or they may be permitted to exclude certain categories of persons or undertakings (for
e.g. Conventions on night work, Nos.41 and 89), or the definitions of persons covered may be
based on a specified percentage of the wage earners or population of the country concerned (for
e.g. many social security Conventions), or exceptions are allowed for a certain part of the
country (Various types of Conventions, for e.g. Nos. 24, 25, 62, 63, 77, 78, 81, 88, 94, 95, 96
etc.), or governments may themselves define a certain branch, industry or sector (for e.g. Weekly
rest Convention, No. 106);

(c) Methods: State which ratifies a Convention shall take such action as may be necessary to make
effective the provisions of such Convention, custom, administrative measures or, in certain
circumstances, collective agreements.

Core Conventions of the ILO

The eight Core Conventions of the ILO (also called fundamental/human rights conventions) are:
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)
(The above four have been 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)
(These four are yet to be ratified by India)

ILO Conventions on Collective Bargaining

There are several other ILO Conventions and Recommendations that relate to collective
bargaining. These are:
1. the Right to Organise and Collective Bargaining Convention, 1949 (No. 98);
2. the Collective Agreements Recommendation, 1951 (No. 91);
3. the Voluntary Conciliation and Arbitration Recommendation, 1951 (No. 92);
4. the Labour Administration Convention, 1978 (No. 150);
5. the Labour Administration Recommendation, 1978 (No. 158);
6. the Labour Relations (Public Service) Convention, 1978 (No. 151);
7. the Labour Relations (Public Service) Recommendation, 1978 (No. 159); and
8. the Collective Bargaining Recommendation, 1981 (No. 163).

In this chapter, we will discuss three main conventions on collective bargaining. Which are as

Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87)
This Convention establishes the right of all workers and employers to form and join
organizations of their own choosing without prior authorization, and lays down a series of
guarantees for the free functioning of organizations without interference by the public

Right to Organize and Collective Bargaining Convention, 1949 (No. 98)

One of the most well-known and widely ratified Conventions that relate to collective bargaining
is No. 98 – the Right to Organise and Collective Bargaining Convention, 1949. This fundamental
Convention says that member States should encourage systems of voluntary negotiations in order
to regulate terms and conditions of employment through collective agreements. All the other
Conventions and Recommendations listed above complement Convention No. 98 through
clarifying concepts and supporting the principles that it defines.

Right to Organize and Collective Bargaining Convention, 1949 provides for protection against
anti-union discrimination, for protection of workers’ and employers’ organizations against acts
of interference by each other, and for measures to promote collective bargaining.

Collective Bargaining Convention, 1981 (No. 154)

The Collective Bargaining Convention (No. 154) was adopted by the International Labour
Conference in 1981. It promotes free and voluntary collective bargaining. This Convention
encourages collective bargaining in both the private sector and the public sector (with the
exception of armed forces and the police), with the only reservation that national laws or
Regulations or national practice may fix “special modalities of application” of the convention as
regards the public service. Member States which ratify the convention may no longer confine
themselves to consultations. They are bound to promote collective bargaining for
determining working conditions and terms of employment, among other objectives. The
extension of the scope of the Convention No. 154 to the public service was facilitated by the fact
that, in contrast with convention No. 98, this instrument does not refer to the determination of
terms and conditions of employment by means of “collective agreements”. Other indications of
flexibility are also to be found in Convention 154 in its provision that “collective bargaining
should be progressively extended to all matters covered” by the convention or that its provisions
shall, in so far as they are not otherwise made effective by means of collective agreements,
arbitration awards or in such other manner as may be consistent with the national practice, be
given effect by national laws or regulations.

The definition of collective bargaining and scope are contained in Article 1 and 2 of the
convention, Article 4 contains method of application and reads as follows;

“the provisions of this convention shall, in so far as they are not otherwise made effective by
means of collective agreements, arbitration awards or in such other manner as may be consistent
with national practice, be given effect by national laws or regulations.”

Promotion of Collective Bargaining

Article 5

1. Measures adapted to national conditions shall be taken to promote collective bargaining.

2. The aims of the measures referred to in paragraph 1 of this Article shall be the following:
(a) Collective Bargaining should be made possible for all employers and all groups of
workers in the branches of activity covered by this convention;
(b) Collective bargaining should be progressively extended to all matters covered by
subparagraphs (b) and (c) of Article 2 of is Convention;
(c) Establishment of rules of procedure agreed between employer’s and worker’s
organizations should be encouraged;
(d) Collective bargaining should not e hampered by the absence of rules governing
the procedure to be used or b the inadequacy or inappropriateness of such rules;
(e) Bodies and procedures for the settlement labour disputes should be so conceived
as to contribute to promotion of collective bargaining.
Article 6: The provisions of this convention do not preclude the operation of industrial relations
systems in which collective bargaining takes place within the framework of conciliation and or
arbitration machinery or institutions, in which machinery or institutions, the parties to the
collective bargaining process voluntarily participate.

Article 7: Measures taken by public authorities to encourage and promote the development of
collective bargaining shall be the subject of prior consultation and whenever possible, agreement
between public authorities and employer’s and workers organizations.

Article 8: The measures taken with a view to promoting collective bargaining shall not be so
conceived or applied as to hamper the freedom of collective bargaining.

Article 9: This convention does not revise any existing convention or recommendation.

Collective Bargaining Recommendation, 1981 (No. 163) - concerning the promotion of

Collective Bargaining

Recommendation No. 163 outlines in more detail measures the Government and the parties
might take to promote collective bargaining. The general conference of International Labour
Organization, having been convened at Geneva by the Governing Body of the International
Labour Office, and having met in its sixty-seventh session on 3 June 1981, and having decided
upon the adoption of certain proposals with regard to the promotion of collective bargaining,
which is the fourth item on agenda of the session, and having determined that these proposals
shall take the form of recommendation supplementing the collective bargaining convention,
1981, adopts the following recommendation, which may be cited as Collective Bargaining
Recommendation, 1981:

1. The provisions of this recommendation may be applied by national laws or regulations,

collective agreements, arbitration awards or in any other manner consistent with national
2. In so far as necessary, measures adapted to national conditions should be taken to
facilitate the establishment and growth, on a voluntary basis, of free, independent and
representative employer’s and worker’s organizations.

3. In so far as necessary, measures adapted to national conditions should be taken so that -

(a) representative employer’s and worker’s organizations are recognized for the purposes
of collective bargaining; (b) in countries in which the competent authorities apply
procedures for recognition with a view to determining the organizations to be granted the
right to bargain collectively, such determination is based on pre-established and objective
criteria with regard to the organizations representatives character, established in
consultation with representative employer’s and worker’s organizations.

4. (1) Measures adapted to national conditions should be taken, if necessary, so that

collective bargaining is possible at any level whatsoever, including that of the
establishment, the undertaking, the branch of activity, the industry, or the regional or
national levels. (2) In countries where collective bargaining takes place at several levels,
the parties to negotiations should seek to ensure that there is co-ordination among these

5. (1) Measures should be taken by the parties to collective bargaining so that their
negotiators, at all levels, have the opportunity to obtain appropriate training. (2) Public
authorities may provide assistance to worker’s and employers’ organizations, at their
request, for such training. (3) The content and supervision of the programmes of such
training should be determined by the appropriate worker’s or employer’s organization
concerned. (4) Such training should be without prejudice to the right of worker’s and
employer’s organizations to choose their own representatives for the purpose of
collective bargaining.

6. Parties to collective bargaining should provide their respective negotiators, so that the
necessary mandate to conduct and conclude negotiations, subject to any provisions for
consultations within their respective organizations.
7. (1) Measures adapted to national conditions should be taken, if necessary, so that the
parties have access to the information required for meaningful negotiations. (2) ZFor this
purpose – (a) public and private employees should, at the request of worker’s
organizations, make available such information on the economic and social situation of
the negotiating unit and the undertaking as a whole, as is necessary for meaningful
negotiations; where the disclosure of some of this information could be prejudicial to the
undertaking, its communication may be made conditional upon a commitment that it
would be regarded as confidential to the extent required; the information to be made
available may be agreed upon between the parties to collective bargaining; (b) the public
authorities should make available such information as is necessary on the over-all
economic and social situation of the country and the branch of activity concerned, to the
extent to which the disclosure of this information is not prejudicial to the national

8. Measures adapted to national conditions should be taken, if necessary, so that the

procedures for the settlement of labour disputes assist the parties to find a solution to the
dispute themselves, whether the dispute is one which arose during the negotiation of
agreements, one which arose in connection with the interpretation and application of
agreements or one covered by the examination of grievances recommendation, 1967.

9. This recommendation does not revise any existing recommendation.

Conclusion: To promote Collective bargaining in our country what is needed is firstly, a bold
realistic Government approach with full commitment to it and secondly, a favorable environment
to promote competence on the part of the employers and trade union to negotiate with each other,
Collective bargaining has made considerable headway in our country which is recently
characterized by signing of agreements, settlements between the parties. It has resulted in
considerable signing economic gains to both blue collared and white collared workers.
Summary of the Principles by the Committee of Experts - Concerning the Right to
Collective Bargaining

The standards and the principles concerning the right to collective bargaining emerging from
ILO’s Conventions, Recommendations and other relevant instruments, and the principles
established by the Committee of Experts on the basis of these instruments, may be summarized
as follows:

(a) The right to collective bargaining is a fundamental right endorsed by the members of the
ILO by the very fact of their membership of the organization, which they have an
obligation to respect, to promote and to realize in good faith (ILO Declaration on
Fundamental Principles Rights at Work and its follow-up);

(b) Collective Bargaining is a right of employers and their organizations, on the one hand,
and organizations of workers, on the other hand (first-level trade unions, federations and
confederations); only in the absence of these latter organizations may representatives of
the workers concerned engage in collective bargaining;

(c) The right to collective bargaining should be recognized throughout the private and public
sectors, and its only the armed forces, the police and public servants engaged in
administration the State who may be excluded from the exercise thereof(Convention 98);

(d) The purpose of the collective bargaining is the regulation of terms and conditions of
employment, in a broad sense, and the relations between the parties;

(e) Collective agreements are binding on the parties and are intended to determine terms and
conditions of employment which are more favourable than those established by law.
Preference must not be given to individual contracts over collective agreements, except
where more favourable provisions are contained in individual contracts;
(f) To be effective, the exercise of the right to collective bargaining requires that workers
organizations are independent and not under the control of employers or employer’s
organizations, and that the process of collective bargaining can proceed without undue
interference by the authorities;

(g) A trade union which represents the majority or high percentage of workers in a
bargaining unit may enjoy preferential or exclusive bargaining rights. However, in cases
where no trade union fulfils these conditions or such exclusive rights are not recognized,
worker’s organizations should nevertheless be able to conclude a collective agreement on
behalf of their own members;

(h) The principle of good faith in collective bargaining implies genuine and persistent efforts
by both parties;

(i) In view of the fact that the voluntary nature of collective bargaining is a fundamental
aspect of the principles of freedom of associations, collective bargaining may not be
imposed upon the parties and procedures to support bargaining must, in principle, take
into account its voluntary nature. Moreover, the level of bargaining must not be imposed
unilaterally by law or by the authorities, and must be possible for bargaining to take place
at any level;

(j) It is acceptable for conciliation and mediation to be imposed by law within the frame
work of the process of collective bargaining, provided that reasonable time limits are
established. However, the imposition of compulsory arbitration in cases where the parties
do not reach agreement in generally contrary to the principle of voluntary collective
bargaining and is only admissible: (1) in essential services in the strict sense of the term
(those whose interruption would endanger the life, personal safety or health of the whole
or part of the population); (2) with regard to public servants engaged in the administration
of the State; (3) where, after prolonged and fruitless negotiations, it is clear that the
deadlock will not be overcome without an initiative by the authorities, and (4) in the
event of an acute national crises. Arbitration which is accepted by both parties (voluntary
arbitration) is always legitimate;

(k) Interventions by the legislative or administrative authorities which have the effect of
annulling or modifying the content of freely concluded collective agreements, including
wage clauses, are contrary to the principle of voluntary collective bargaining;

(l) Restrictions on the content of future collective agreements, particularly in relation to

wages, which are imposed by the authorities as part of economic stabilization or
structural adjustment policies for imperative reasons of economic interest, are admissible
only in so far as such restrictions are preceded by consultations with the organizations of
workers and Employers and fulfill the following conditions: they are applied as an
exceptional measure, and only to the extent necessary, they do not exceed a reasonable
period, and they are accompanied by adequate guarantees designed to protect effectively
the standards of living of the workers concerned, and particularly those who are likely to
be most affected.

The observations made by the Committee of Experts concerning the application of the Right to
Organize and Collective Bargaining Convention (No. 98), shows that the great majority of
States which have ratified the convention apply it in a satisfactory manner. This demonstrates
that it is a right which enjoys almost universal recognition in law and practice.

Collective bargaining and social dialogue

Collective bargaining is an important form of social dialogue. Institutions for social dialogue and
collective bargaining help protect the fundamental rights of workers, help provide social
protection and promote sound industrial relations. Social dialogue, in turn, is an important part of
good governance. Because social dialogue involves the social partners (employers’ and workers’
organizations) it further encourages accountability and participation in decisions that affect the
lives of all society. These factors directly contribute to better government.
The ILO defines social dialogue to include “all types of negotiation, consultation or simply
exchange of information between representatives of governments, employers and workers”, and
involves “issues of common interest relating to economic and social policy.” This definition
brings together the elements of various understandings of social dialogue into one inclusive
concept. Convention No. 154 and Recommendation No. 163 acknowledge that information,
consultation and negotiation are inter-linked and reinforce each other. While focusing on
negotiations, both highlight the importance of a common information base for meaningful
negotiations, and the role of consultation in deciding measures to encourage and promote
collective bargaining.

From the ILO perspective, collective bargaining is an important way for workers, employers and
their organizations to reach agreement on issues affecting the world of work. While collective
bargaining can often be an adversarial process, it should better be used to build trust between the
parties. This trust can be reinforced through dialogue which can continue after bargaining ends.
Solutions that are built on trust and enjoy the genuine support of both sides are more likely to be
respected. This is due to the sense of participation and ownership inherent in the process. As a
result, unnecessary disputes, and disruptions through industrial action, can more easily be

The practical means that can be used to develop effective collective bargaining as set out in
Convention No. 154 and Recommendation No. 163 necessarily promote social dialogue. In so
doing they help to develop a broader culture of dialogue, reinforcing better governance,
participation and accountability.

The evolution of Industrial Jurisprudence in India can be traced back to the period of post
Independence. Before the Independence, the industrial jurisprudence existed in a rudimentary
form. The paramount concern of the Pre-independence industrial jurisprudence was the
amelioration of the working condition of the workers at the factories. There was hardly any deal
with the social justice to the working class. It was only after the commencement of our
Constitution, that the adequate provisions for the social justice to the workers were inserted.

The aspect of industrialization in India was based on the program of planning, which was
accepted after thirties. It is important to take into consideration that the plantation industry of
Assam was the first to attract the industrial legislation. The situation there was that the employers
exercised hard practices against the employees. The employees were not allowed to leave the tea
gardens. A number of Acts were passed from 1863 onward, but they only protected the interests
of the employers. Some other Acts were also passed to regulate the condition. But the
Workmen’s Compensation Act, 1923 was the landmark Act.

Indian Constitution and Social Justice

Industrial Jurisprudence was not in a much developed form before the commencement of the
Constitution of India. Before the Independence, the paramount concern of the Government was
to ameliorate the condition of the factory workers. It was after the commencement of the
Constitution that the paramount concern of the Government shifted towards the social justice for
the labourers, who constituted the bulk of the population. Bhagwati J., in a landmark case
opined that concept of justice does not emanate from the fanciful notions of any particular
adjudication but must be founded on a more solid foundation 28. Justice Gajendragadkar opined
that “the concept of social and economic justice is a living concept of revolutionary import; it
gives sustenance to the rule of law and meaning and significance to the idea of welfare state”29.
The Indian Constitution also enshrines the idea of social justice as one of the objectives of the
Muir Mills Ltd. v. Suti Mill Mazdoor Union, (1955 1 LJJ 1 (SC)
State of Mysore v. Workers of Gold Mines, AIR 1958 SC 923
Collective Bargaining in India has been the subject-matter of industrial adjudication since long
and has been defined by our Law Courts. In Kamal Leather Karamchari Sangathan v. Liberty
Footwear Company30 the Supreme Court observed that, "Collective bargaining is a technique by
which dispute as to conditions of employment is resolved amicably by agreement rather than

According to the Court, the Industrial Disputes Act, 1947, seeks to achieve social justice on the
basis of colIective bargaining. In an earlier judgment in Titagarh Jute Co. Ltd. v. Sriram
Tiwari31 the Calcutta High Court clarified that this policy of the legislature is also implicit in the
definition of 'industrial dispute'.

In Ram Prasad Viswakarma v. Industrial Tribunal32 the Court observed that, "it is well known
how before the days of 'collective bargaining', labour was at a great disadvantage in obtaining
reasonable terms for contracts of service from its employer. As trade unions developed in the
country and collective bargaining became the rule, the employers found it necessary and
convenient to deal with the representatives of workmen, instead of individual workmen, not only
for the making or modification of contracts but in the matter of taking disciplinary action against
one or more workmen and as regards all other disputes.”

In Bharat Iron Works v. Bhagubhai Balubbai Patel33 it was held that 'Collective bargaining,
being the order of the day in the democratic social welfare State, legitimate trade union activities,
which must shun all kinds of physical threats, coercion or violence, must march with a spirit of
tolerance, understanding and grace in dealings on the part of the employer. Such activities can
flow in healthy channel only on mutual cooperation between the employer and the employees
and cannot be considered as irksome by the management in the best interests of its business.
Dialogue with representatives of a union help striking a delicate balance in adjustments and
settlement of various contentious claims and issues."

AIR 1990 SC 247
(1979) Lab I.C. 523 (Cal)]
(1961) I LL.J 504
(1976) Lab. I.C. 4 [S.C]
These definitions only bring out the basic element in the concept i.e., civilized confrontation
between employers and employees and the whole process is regulated by statutory provisions.

Types of Collective Bargaining Agreements in India

Collective bargaining as it is practiced in India can be divided into three classes. First is, the
bipartite agreement drawn up in voluntary negotiation between management and union. The
second type is known as a settlement, while the third type of collective agreement is consent
award. These are discussed below:

1. Bipartite Agreements: These are most important types of collective agreements because
they represent a dynamic relationship that is evolving in establishment concerned without
any pressure from outside. The bipartite agreements are drawn up in voluntary
negotiation between management and union. Usually the agreement reached by the
bipartite voluntarily has the same binding force as settlement reached in conciliation
proceedings. The implementations of these types of agreements are also not a problem
because both the parties feel confident of their ability to reach the agreement.

2. Settlements: It is tripartite in nature because usually it is reached by conciliation, i.e. it

arises out of dispute referred to the appropriate labour department and the conciliation
officer plays an important role in bringing about conciliation of the differing view points
of the parties. And if during the process of conciliation, the conciliation officer feels that
there is possibility of reaching a settlement, he withdraws himself from the scene. Then
the parties are to finalise the terms of the agreement and should report back to
conciliation officer within a specified time. But the forms of settlement are more limited
in nature than bipartite voluntary agreements, because they strictly relate to the issues
referred to the conciliation officer.

3. Consent Award: Here the negotiation takes place between the parties when the dispute is
actually pending before one of the compulsory ad judicatory authorities and the
agreement is incorporated to the authorities, award. Thus though the agreement is reached
voluntarily between the parties, it becomes part of the binding award pronounced by an
authority constituted for the purpose.

The idea of national or industry-wide agreements and that too on a particular pattern may appear
to be a more ideal system to active industrial relation through collective bargaining, but the
experience of various countries shows that it is not possible to be dogmatic about the ideal type
of collective bargaining, because it largely depends upon the background, traditions and local
factors of a particular region or country.

Collective Bargaining machinery essentially is a reflection of a particular social and political

climate. The history of the trade union movement shows that union are 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.34

Outsiders in the Process of Collective Bargaining

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.35 So, it permits one to be the leader of the union who does
not actually 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. 36 Nevertheless,
experience shows that outsiders who have little knowledge of the background of labour
problems, history of labour movement, fundamentals of trade unionism and the technique of the
industry and with even little general education assume the charge of labour 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.

Accordingly employers refuse recognition to the unions which are either controlled by the
politicians or affiliated to a particular political party or controlled by a particular individual.
Government cannot morally compel employers to accord recognition to unions without driving
out the politicians from them. The State must outright ban "outsiders" from the trade union body.
Further, provision for political fund37 by trade unions should be eliminated, since it invariably
encourages the politicians to prey upon them. The National Commission on Labour has
overlooked this aspect. The Commission does not favour a legal ban on non-employees for
holding the union office. It says that without creating conditions for building up the internal
S.N. Dhyani, Trade Union and the right to strike, S. Chand & Co. (Pvt.) Ltd, New Delhi, PP. 374-380.
See Section 22 of the Trade Unions Act, 1926,
See Report of the National Commission on Labour, (1969), P. 288
See Section-16 of the Trade Unions Act. 1926.
leadership, a complete banning of outsiders would only make unions weaker. The Commission
hopes that internal leadership would develop through their education and training. Accordingly
the Commission suggests proportion of the outsiders and the workers in a union executive. 38 On
realizing the problems of outsiders in the union, the Industrial Relations Bill, 1988 proposes to
reduce the number of outsiders to two only. Another hurdle in the success of collective
bargaining in India, is the absence of a compulsory ‘recognition’ provision in the Act.

Impact of Recognition as Bargaining Agent in Collective Bargaining

In view of the prevailing multi-trade-unionism in the country, recognition of a bargaining agent

has assumed importance. Unfortunately, no attempt has been made at the national level to either
lay down a procedure for recognition of a trade-union as bargaining agent or work out a
procedure. There is no provision either in the Indian Trade Union Act 1926 or in the Industrial
Disputes Act 1947 for the purpose. The Government of India proposed an amendment in the
Trade Union Act in 1950 making recognition of a union compulsory. The measure however,
faced serious opposition and remained unimplemented. The Standing Labour Committee (l8th
Session) and National Commission on Labour favoured a statutory -provision for the purpose but
their recommendations have yet to be accepted. The National Commission on Labour attached
considerable importance to the matter of recognition of unions and observed as under:

"Industrial Democracy implies that the majority union should have the right to sole
representation, i.e., the right to speak and act for all workers and enter into agreements with the

In the absence of statutory provision, the matter is regulated by the Code of Discipline which
was evolved at Nainital session of Indian Labour Conference in 1952. The Code of Discipline
provides for verification of trade-union membership by Central Industrial Relations Machinery
id. at P. 291, The Commission has recommended as follows :
Where the membership of union is;
( i) below 1,000 the number of outsiders should not be more than 10%
{ii) between 1,000-10,000 … …. …. ….. ….. ….. ….. ….. 20%
(iii) above l,000 … …. …. ….. ….. ….. ….. ….. …. … …30%
(iv) 'the permissible limit for industry -wise unions should be 30%
Report of the National Commission on Labour, (1969)p. 329
of the Government. Its voluntary character has however, made it ineffective and it has been
found difficult to implement it in view of statutory provisions in the Industrial Disputes Act.
At the present not even public sector undertakings are following the Code of Discipline and are
bargaining with more than one union.

States like Bombay and Madhya Pradesh have, however, given statutory recognition to the
procedure for determination of bargaining agent. Both, Bombay Industrial Relations Act 1946
and Madhya Pradesh Industrial Relations Act, 1960, provide for the determination of represent-
tative union by the Registrar of Representative Unions. Special provisions have been made for
agreements signed by representative unions. In spite of it, the experience shows that there had
been serious opposition to statutory recognition of a union as sole bargaining agent of the
workers of the establishment. Indeed the experience is that wherever there is a union recognition,
representative of rival unions have come together to force the employer to bargain with them."
The fear of retaliation by unrecognized unions has proved to be the biggest stumbling block in
the success of statutory recognition system.

Multi -Unionism

Political orientation of trade unions is the primary reason for multi-unionism. Communal
sentiments, provincial feelings and caste are other major causes for multi-unionism.40 Presence of
too many unions in an industry destroys the bargaining strength of workers. Our labour
legislation also permits multi-unionism.41

Multi-unionism adversely affects collective bargaining process. Where there are too many
unions, with whom should management negotiate? Each union may claim recognition. Each
union may present separate charter of demands in a spirit of rivalry. When conflicting demands
are made, it may be impossible to accept any of them. Moreover, if one union is ready to accept
some of the demands, other union may object to them. In this context, it is difficult to think of
any effective collective bargaining process in India.

Mrs. P. Chakravarthy, Strike and Morale in Industry, Calcutta. Navana Printing Works, Pvt. Ltd. (1969) PP. 37-
See Section-4 of the Trade Unions Act, 1926, permits any seven members to form a union and get registered.
Politicization of Trade-Union Movement in India

It is well known that the trade-union movement in India is divided on political lines and exists on
patronage of various political parties. Most of the trade-union organizations have aligned
themselves with a political party with whom they find themselves philosophically close. It is
because of this that the Indian National Trade Union Congress is considered to be the labour
wing of congress (I) whereas H.M.S. is considered to be the labour wing of Socialist party.
Bhartiya Majdoor Sangh pledges its allegiance to B.J.P. and C.I.T.U has the support of C.P.I.
(M). It is also the case with the . AITUC which had started as a national organization of workers
but subsequently came to be controlled by the Communist Party of India and is now it's official
labour wing. Political patronage of trade-unions has given a new direction to the movement
whose centre of gravity is no longer the employees or workmen. The centre has shifted towards
it leadership whose effectiveness is determined by the extent of political patronage and the
consequent capacity to obtain the benefit. This shifting centre of power is the necessary
consequence of political parties search for workers votes, which they seek by conferring benefits
on them. Since the public sector which is really the instrumentality of the State, has emerged as
the biggest employer in this country, the collective bargaining -between the union patronized by
the party-in-power and the employer has become an important methodology. It is because of this
process that agreements conferring benefits are signed even in those units where financial losses
are mounting. It is also our experience that inspite of wage increase and improved conditions of
service, there has been no corresponding improvement in production or the productivity and
most of the losses are being passed on to the consumers by increasing prices of the products. It is
in this context that Justice Gupta has, in his, "Our Industrial Jurisprudence" made the following

"If our experience is any guide, it reveals that level of increase in wages etc., (in public sector
undertaking ) is now decided by the Bureau of Public Enterprises which takes into consideration
only the 'Political impact' and 'Consumer resistance' as two dominant factors. This is the reason
why the prices of almost all products of necessity like coal, iron and steel, cement, sugar etc.
have been constantly increasing. A survey of pending and decided industrial disputes of the last
10 years reveals that there was virtually no industrial dispute regarding wage structure or bonus
in any industry of some significance. There are also not many collective bargaining agreements
which have tried to link wages with productivity. Clearly, therefore, the basic idea of 'sharing the
prosperity' which developed because of our commitment to the cause of 'social justice' is no
longer current and the expected end-product of the process of 'social justice" is no longer

Critical Evaluation

In Indian labour arena we see, multiplicity of unions and inter-union rivalry. Statutory provisions
for recognising unions as bargaining agents are absent. It is believed that the institution of
collective bargaining is still in its preliminary and organizational stage. 43 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 labour disputes. The labour' policy must reflect a
new approach.

Hitherto the State has been playing a dominant role in controlling and guiding labour-
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 evolve "socially desirable" rights and obligations of the disputants.44 In
deciding industrial disputes the adjudicator is free to apply the principle of equity and good

Justice Gulab Gupta, Our Industrial Jurisprudence, 1987, p.133
Dr, B.R. Patil, "Collective Bargaining and Conciliation in India," 12, I.J.I.R. 41 (1976).
Anirudh Prasad Singh, "New Dimension of Employer-Employee Relations in Progressive Industrial Society," 9,
Lawyer, 164 (1977).
However, it is said that the impact of the attitude of the judiciary towards workers has not proved
conducive to the peaceful industrial relations.45 It is accepted that the end of judicial proceeding
is pain and penalties. It cannot solve the problems of industries. Accordingly it is said that:

"While statutes, rules, regulations, pains and penalties have their place in the ordering of
industry, they do not touch the core of the problems of industrial relations."46

Moreover, advocates of adjudication contend that as the collective bargaining procedure might
end in a strike or lockout, which implies a great loss to the parties concerned and the country, if
for the sake of industrial peace, the adjudication becomes necessary. But has there been
industrial peace and satisfactory progress since adjudication was adopted after world-war-II? We
do agree that industrial peace can be established by the adjudication for the time being. But the
conflicts are driven deeper and it will retard industrial production. In the absence of effective
collective bargaining the anti – productivity tendencies are bound to appear.

See Dr. Ahmedullah Khan, "Judicial Regulation of Industrial Relations" 9, Awards Digest, 177 (Where the author
emphatically discussed the defects of judiciary as far as labour-management relation is concerned.)
Kir Kaldy, The spirit of Industrial Relations (1974) P. 58, cited in S.N. Dhyani's op. cit., P.396.

As discussed earlier, collective bargaining is a technique by which disputes of employment are

resolved amicably, peacefully and voluntarily by settlement between labour unions and
managements. The method of collective bargaining in resolving the Industrial dispute, while
maintaining industrial peace has been recognized as the bed rock of the Industrial Disputes Act,
1947. Under the provision of the Act, the settlement arrived at by process of collective
bargaining with the employer has been given a statutory recognition under Section 18 of the Act.

Under the Act two types of settlement have been recognised:

1. Settlement arrived in the course of conciliation proceeding before the authority. Such settlements
not only bind the member of the signatory union but also non-members as well as all the present
and future employees of the management.
2. Settlement not arrived in the course of conciliation proceedings but signed independently by the
parties to the settlement, binds only such members who are signatory or party to the settlement.

Section 19 of the Act prescribes the period of operation inter alia of such a settlement and
envisage the continuation of the validity of such a settlement unless the same is not replaced by
another set of settlement, while Section 29 prescribes the penalty for the breach of such a

The Industrial Disputes Act, 1947 provides for the appointment of Conciliation Officers, charged
with the duty of mediation in promoting the settlement of industrial disputes. On a reference to
the Conciliation Officer, a Conciliation Board is constituted consisting of representatives of
employees and employer with the conciliation officer as the chairman. The memorandum of
settlement duly signed by the conciliation officer is to go from one camp to the other and find out
greatest common measure of agreement, to investigate the dispute and to do all such things as he
thinks fit to arrive at a fair and amicable settlement of the dispute.47

Royal Calcutta Golf Club Mazadoor Union v. State of west Bengal, AIR 1956 Cal 550.
A settlement arrived at by agreement between the employer and the workmen otherwise than in
the course of conciliation proceedings shall be binding on the parties to the agreement. A
settlement comes into operation on such date as is binding on the parties to the agreement, and
for such period as has been agreed upon. Dealing with the binding nature of settlement Chagla, J
has observed that; “Industrial Law takes no notice of any private settlement or agreement arrived
at between parties in the course of industrial dispute. Such a private agreement belongs to the
realm of contract, it may give rise to contractual rights; it has no sanctions in industrial law and
industrial dispute does not end until a settlement is arrived at which has been given a binding
effect under the provision of S.19 (2) and such settlement can be only arrived at when
conciliation proceedings are held under S.12 of the Industrial Disputes Act, 1947”.48 From this
observation, it would be wrong to infer that a private settlement in respect of an industrial
dispute does not end an industrial dispute. In this respect the following observation of chief
Justice Chagala are relevant, “But when parties do arrive at a settlement, the law gives to it a
greater sanctity than it gives to an award and therefore , the industrial law does not contemplate
any interference with the finality of a settlement and it compels the settlement to run on for the
period mentioned in the settlement itself and neither party is permitted to challenge that
settlement during its duration.”49

Poona Mazdoor Sabha v. G.K.Dhuta, AIR b1956. Bom. 743.

The collective bargaining scene in India is not very encouraging. The major emphasis of both
union and employers is to settle the disputes through adjudication rather than sorting out the
issues among themselves.

Whatever bargaining takes place, it is limited to large plants only. Smaller organisations
generally do not prefer this form of handling the issues.

As discussed in the previous chapter, several factors are responsible for this state of affairs.
These are listed below:

I. Due to the dominance of outsiders in trade unionism in the country, there is multiplicity
of unions which are weak and unstable, and do not represent majority of the employees.
Moreover, there are inter-union rivalries, which further hinder the process of collective
bargaining between the labour and the management.

II. Since most of the trade unions are having political affiliations, they continue to be
dominated by politicians, who use the unions and their members to meet their political

III. There is a lack of definite procedure to determine which union is to be recognised to

serve as a bargaining agent on behalf of the workers

IV. In India, the law provides an easy access to adjudication. Under the Industrial Disputes
Act, the parties to the dispute may request the Government to refer the matter to
adjudication and the Government will constitute the adjudication machinery, i.e., labour
court or industrial tribunal. Thus, the faith in the collective bargaining process is
V. There has been very close association between the trade unions and political parties. As a
result, trade union movement has leaned towards political orientations rather than
collective bargaining.

A lot has been said about the development of collective bargaining in India. But in fact,
collective bargaining which is a two way affair, has been used at present only as a one-way
exercise in which the union, as the aggressive partner, makes the demands, and the management ,
as the passive partner, derives satisfaction merely by countering the extent to which it is able to
minimize the additional burdens while meeting the union’s demands. There are not many
examples even now where union as well as the management, as equal partners, have approached
the process of collective bargaining with the objective and spirit that collective bargaining must
bring concrete benefit to both the parties.

The following steps should be taken for the success of collective bargaining.

1. Strong Trade Union: A strong and stable representative trade union is essential for effective
collective bargaining. For having such a trade union, workers should have freedom to unionize
so that they can exercise their right of unionization and form a trade union for the purpose of
electing their representatives for collective bargaining.

A weak union not enjoying the support of majority of workers is not likely to be
effective. The management will not negotiate with such a union; because mutual
agreements are not likely to be honoured by a large section of the labour-force.
Moreover, there is always a danger that non-union members may sabotage it.

2. Compulsory Recognition of Trade Unions: There must be an acceptable and recognised

bargaining agent. That means that there must be recognised union or unions to negotiate the
terms and conditions of the agreement with the management.

Recognition of trade union has to be determined through verification of fee membership

method. The union having more membership should be recognised as the effective
bargaining agent. A strong, stable and the most representative union should be recognised
by the employers for the purpose because any agreement with that union will be
acceptable to majority of workers and it will help in establishing sound industrial
relations in the organisation.

3. Mutual Accommodation: There has to be a greater emphasis on mutual accommodation rather

than conflict or uncompromising attitude. Conflicting attitude does not lead to amicable labour
relations; it may foster union militancy as the union reacts by engaging in pressure tactics.

The approach must be of mutual give and take rather than take or leave. The take or leave
philosophy is followed in America where there is contractual labour. As of now this is
not the case in India. So if the union and the management have to look for a long-term
relationship they have to respect each other’s rights.

4. Enactment of Legislation: The State should enact suitable legislation providing for compulsory
recognition of trade union by employers. State has to play a progressive role in removing the
pitfalls which stand in the way of mutual, amicable and voluntary settlement of labour disputes.
The new labour policy must reflect the new approach and new objectives.

5. Mutual Trust and Confidence: Trade unions and management must accept each other as
responsible parties in the collective bargaining process. There should be mutual trust and
confidence. In fact in any relationship trust is the most important factor.

Management must accept the union as the official representative. The union must accept
the management as the primary planners and controllers of the company’s operations.
The union must not feel that management is working and seeking the opportunity to
undermine and eliminate the labour organisation. The company management must not
feel that the union is seeking to control every facet of the company’s operations.

6. Efficient Bargaining Mechanism: No ad-hoc arrangements are satisfactory for the reason that
bargaining is a continuing process. An agreement is merely a framework for every day working
relationships, the main bargain is carried on daily and for this there is a need to have permanent
As for machinery being efficient, it has three aspects:
(a) Availability of full information
(b) Selection of proper representatives
(c) Recognition of natural temperament of each other.

7. Emphasis on Problem-solving Attitude: There should be an emphasis upon problem-solving

approach with a de-emphasis upon excessive legalism. Litigation leads to loss of time and energy
and it does not benefit anyone. Therefore the emphasis is to look for mutually acceptable
solutions rather than creating problems for each other.

Lastly, the overall political environment should be congenial. The political environment
should support collective bargaining.

8. Political Climate: For effective collective bargaining in a country, it is important to have sound
political climate. The Government must be convinced that the method of arriving at the
agreements through mutual voluntary negotiations is the best for regulating certain conditions of
employment. The provision for political fund by trade unions has to be
done away with-since it unvariably encourages the politicians to prey upon the union.
Therefore, positive attitude of the political parties is a must for the promotion of
collective bargaining.

Such an approach would help and encourage the development of strong, stable and
representative trade unions, growth of mechanism for the resolution of industrial conflict,
recognition of unions, etc.

Books referred..
1) Bhagoliwal, T.N., Economics of Labour& Industrial Relations, 1989, Sahitya
Bhawan, Agra.
2) Goswami, V.G., Labour and Industrial Law, 2004 Central Law Agency, Allahabad.
3) Teller Ludwig, Labour Disputes and Collective Bargaining, Vol I, 1940 Barker Voorhis&
co. INC New York.
4) Coutinho,V.B, Strike in Industrial Conflict: A Critical and Comparitive Study,
1993, 5th edn.
5) Fred Witney et al; Labour Relations Law, 7th edn 1990.
6) Boone, Louis E., and Kurtz, David L. (1999). Contemporary Business. Fort Worth, TX:
Dryden Press.
7)Davey, Harold W. (1972). Contemporary Collective Bargaining. Englewood Cliffs, NJ:
8)Miernyk, William H. (1965). The Economics of Labor and Collective Bargaining. Boston:
9)Voos, Paula B., ed. (1994). Contemporary Collective Bargaining in the Private Sector.
Madison, WI: Industrial Relations Research Association.
9)Wray, Ralph D., Luft, Roger L., and Highland, Patrick J. (1996). Fundamentals of Human
Relations. Cincinnati, OH: South-Western Educational Publishing.
[Article by: PAULA DEA LEE]

Articles referred.
1) Right to Strike : An Analysis, B.P.Rath and B.B.Das, IJIR 1999,pg 248-259.
2) Perspectives On Collective Bargaining In India, LLJ, Vol 1, 2005 p.21-34
3) “Strikes and Lock outs”, Pankaj and Dharamveer Singh, Lab&IC, Vol 1,2005
Var_DocumentID=1655. )
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International Labour Review, Vol. 139 (2000), No.1.

G. B. Pai , Labour Law in India, Vol. I.

Indian Bar Review, Vol.29, (2002),pp 1-4

Labour Law Journal, Vol I (2005).