Collective Bargaining

LABOUR & INDUSTRIAL LAW

By ARUN VERMA

Introduction
According to Dale Yoder, Collective bargaining is the
term used to describe a situation in which the essential
conditions of employment are determined by bargaining
process undertaken by representatives of a group of
workers on the one hand and of one or more employers on
the other.
In the words of Flippo, Collective bargaining is a
process in which the representatives of a labour
organisation and the representatives of business
organisation meet and attempt to negotiate a contract or
agreement, which specifies the nature of employee-
employer-union relationship.

Collective bargaining is actually a struggle for building a
democratic and civilized society.
We can not imagine a civilized society without independent
sectional organizations and political parties representing the
overall socio-economic-political interests of the masses.
Whenever capitalist development moved forward at
extraordinarily speedy rate, most autocratic regimes ruled the
states.
Seems most of the third world countries have entered in a
similar phase.
Liberalization and Globalisation means- state acting as
corporate agent to remove all barriers for capital accumulation
and mobility of capital.
Therefore suddenly in almost all the third world countries, an
all-round attack on right to organizes and collective bargaining.

Structure of Work force

> 97 % enterprises in informal sector; 3% formal sector
T. Employment: 396 million in 2000 to 456 million in 2005)
Informal sector: 393.2 million (86 percent)--Agriculture: 251.7
million
self-employed (63%), regular wage workers (17%) and casual
20 %
Formal sector employment increased from 54.9 to 62.6 million;
but formal employment increased only from 33.6 million to 35.0
million
70,000 registered unions (politically affiliated and independent)
and non-registered organizations
Total verified membership about 2.5 crore (25.5 million) about
30% of it represented by agricultural workers
Union density in India only 8 percent

Labour Legislations in India
1. Laws for regulating Conditions of Service
The Factories Act, 1948---10 or more workers (Crche: if 30 or
more women; rest room: if 150 or more workers; canteen: if
250 or more workers; ambulance, dispensary, and medical
and para-medical staff: if 500 or more workers).
Mines Act, 1952; Beedi and Cigar Workers (Conditions of
Employment) Act, 1966; Building and Other Construction
Workers Act 1995; Motor Transport Workers Act 1961;
Plantation Labour Act 1951; Working Journalists (Conditions of
Service) and Miscellaneous Provisions Act 1955; Sales
promotion Employees (Conditions of Service) Act 1976;
Apprentices Act 1961; Inter State Migrant Workmen
(Regulation of Employment and Conditions of Service) Act
1979
Weekly Holidays Act 1942
Contract Labour (Regulation) Act 1970
Shops and Establishment Acts of various States
(establishments not registered under Factories Act)
Labour Legislations in India
2. Labour Relations Laws
a) Trades Union Act, 1926 (7 or more workers)
b) Industrial Disputes Act, 1947 (Procedural aspects to all workers;
Chapter V B: 100 or more workers, VA: 50 or more workers)
c) Industrial Employment (Standing Orders) Act, 1946: (100 or more
workers----in some states 50 or more, only in UP-10 or more)
3. Wage Laws:
Minimum Wage Act 1948 (all workers)
Payment of Wages Act 1936; (10 or more workers, < Rs 1600 pm)
Payment of Bonus Act 1965; (20 or more workers, < Rs 3500 pm)
4. Labour Laws regarding Human Rights:
Child Labour (Prohibition and regulation) Act 1986; The Children
(Pledging of Labour) Act; Bonded Labour System (Abolition) Act
1976
Equal Remuneration Act 1976.

Labour Legislations in India
5. Social Security Laws:
Employees Provident and Miscellaneous Provisions
Act 1952: (if 10 or more workers)
Employees State Insurance Act 1948: (20 or more
workers)
Maternity Benefit Act 1961 (if 10 or more workers)
Payment Gratuity Act 1972 (if 10 or more workers)
Workmens Compensation Act 1923 (all workers)
Unorganized Workers Social Security Act 2008 :
(unorganized workers below poverty line)-
(National Old Age Pension Scheme, National Family
Benefit Scheme, Scheme for protection during
maternity, medical insurance schemes etc.)

Importance of Collective Bargaining
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 group.
Collective bargaining increases the morale and productivity of
employees.
It restricts managements 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.

Importance of Collective Bargaining
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 disputes.

Importance of Collective Bargaining
Importance to society

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

Types Of Bargaining
Distributive bargaining: Under it, the economic issues like wages,
salaries and bonus are discussed. In distributive bargaining, one
partys gain is another partys loss.
Integrative bargaining :This involves negotiation of an issue on
which both the parties may gain, or at least neither party loses.
Attitudinal restructuring :This involves shaping and reshaping some
attitudes like trust or distrust, friendliness or hostility between labor
and management.
Intra-organizational bargaining: It generally aims at resolving
internal conflicts. This is a type of maneuvering to achieve consensus
with the workers and management. Even within the union, there may
be differences between groups.





Pre-requisites for collective bargaining
Effective negotiations and enforcement requires a systematic preparation
of the base or ground for bargaining which involves the following three
steps:
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.
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.
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.

Collective Bargaining Process
Prepare

Discuss

Propose

Bargain

Settlement
Levels At Which Collective Bargaining Is
Undertaken
Sectoral
Collective
Bargaining At
National Level

Industry-
Cum-Region
wide
Agreements

Enterprise
Or Plant
Level
Problems of Collective Bargaining
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.
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 ends.
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
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 discouraged.
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.
Conditions For Successful Collective
Bargaining
Trade Union Recognition
Observance of Agreements
Support of Labour Administration Authorities
Good Faith
Proper Internal Communication

Legal Boundaries for Collective
Bargaining
No ratification of ILO conventions-C-87 and C-98

Limited scope and coverage of R2A and CB with in
legal boundaries of TU Act and ID Act

TU Act and ID Act silent on the issue of recognition
of trade unions
Legal Boundaries for Collective
Bargaining
Right to strike is not a fundamental right but a legal
right governed by Industrial Disputes Act 1947.
Section 10k: can be imposed to prohibit strikes or
Lock-outs;
section 22 : In Public Utility Services---strike notice of
6 weeks
Section 23: Prohibition of strikes during the pendency
of conciliation, arbitration and court proceedings
TU activities granted immunity from the applicability
of CRPC but not in case of illegal strikes

CTUOs in India
BMS - Bharatiya Mazdoor Sangh (far right political party BJP)-
members: 6 million
INTUC - Indian National Trade Union Congress (Congress Party),
members: 3.8 million
AITUC - All India Trade Union Congress (CPI)- members: 3.3 million
HMS - Hind Mazdoor Sabha (independent-socialist) -members: 3.2
million
CITU - Centre of Indian Trade Unions (CPI-M) members: 2.6 million
UTUC (LS) - United Trade Union Congress (Lenin Sarani) (SUCI)
UTUC - United Trade Union Congress (Revolutionary Socialist Party)
TUCC - Trade Unions co-ordination Centre (All India Forward Block)
SEWA- Self-Employed Women's Association (independent)recently
listed
LPF- Labour Progressive Front (DMK)recently listed
ICCTU- All-India Central Council of Trade Unions (CPI-ML-
liberation)-recently listed
INTTUC-Indian National Trinmool Trade Union Congress (All India
Trinmool Congress)-recently listed
Further Shrinking the Space for
Collective Bargaining
Amending the Trade union Act
10% or 100, whichever is less, subject to a minimum of
7 workmen members for registrationlimiting no. of
outsiders.
Banning the Strikes by using ESMA
TN-ESMA in 2003: imposed on general strike of
government and public sector employees- 170000
employees were dismissed-lastly reduced to 6074
Judicial Precedents Imposing Further Limitations
General strike in Tamil Nadu (2003) TR Rangarajan vs
Government of Tamil Nadu, AIR 2003 SC 3032): government
employees have no fundamental right to strike
Kerala general strike 1997: Bandhs (general Strikes) are illegal;
Order of HC Kerala upheld by SC
In 2004, Calcutta High Court delivered similar decision.

Making SEZs and NIMZs Immune to Trade Union Actions
All SEZs and NIMZs declared as public utility services
Amendments proposed: applicability of protective sections of ID
Act and CL Act, No outsiders in trade unions etc. Right to join
unions in NIMZs only to low paid workers
**NIMZ - National Investment and Manufacturing Zones
**SEZ Special Economic Zone
Declining wage share in India, 19932007
World of Work Report, ILO 2010
New Trends: 1
New wave of labour movement for unionization
A new wave of workers struggle for unionization;
Workers struggle in Graziano Transmissioni in Noida, NCR
Delhi, Rico Auto Ltd and Sunbeam Auto Ltd in Gurgaon, Pricol
in Coimbtore, Hyundai motors, Foxconn and Madras Rubber
Factory in Chennai, Nestle in Uttarakhand, and Viva Global in
Gurgaon etc.

Efforts to develop unity among the CTUOs resulted in
Coordination Committee of eight CTUOs and the first joint
action was successful all India strike on Nov 7, 2010.

Individualized Bargaining: Spurt in individualised bargaining
mainly due to rampant informalisation
Strikes and Lockouts from 2002 to 2005
Labour Bureau, Government of India
ITEM 2002 2003 2004 2005
No. of Strikes 295 255 236 227
No. of Workers
Involved
900,386 1,010,976 1,903,054 2,722,784
Man-days lost 9,664,537 3,205,950 4,828,737 10,800,686
No. of Lockouts 284 297 241 229
No. of Workers
Involved
179,048 804,969 169,167 190,817
Man-days lost 16,921,382 2,70,49,961 19,037,630 18,864,313

Strikes and Lockouts 2005-09
www.livemint.com/2009/12/.../The-rise-of-the-new-proletaria.html
The case of Viva Global
400 male workers and 200 females workers in company --- demand
for wage increment in April 2010 after minimum wages revised in
January 2010--- stopped the work for two hrs every day April 8-10
One worker dismissed---protest----15 workers taken in custody
Workers started their efforts to form trade union
Protest ended-demands fulfilled---minimum wage, formal contract-
ESI and PF
But Soon management started throwing out workers one by one
Workers successfully registered union in May 2010; collectively
protested against this move
Aug 21: all contract workers thrown out-protest at the factory gate
Management locked out the factory, regular workers also thrown
out
August 25: 20-25 local goons brutally attacked the factory workers
The case of Viva Global
One worker was caught and abducted by the goons.

Accounts of Abducted worker: I was put in backside box of
a car. Lastly the car stopped and the goons closed my eyes
with some cloth before taking me out of the box. They took
me to a house and hit me with whatever they had till they
received directions on phone to take me to another place.
Thereafter they took me to a jungle and threatened to kill me.
But soon after they received directions on phone and
therefore they again put me in the same backside box of the
car and threw me out at Delhi-Gurgaon Border. As soon as I
reached my residence from there, the police also reached
there and took me to the Police Station and then to the
hospital and from there I again came to the place where sit-
in-protest of workers was going on.

New Trends: 2
I nformalisation and New Paradigm of Collective
Bargaining
Emphasis on Community organizing rather than at shop-floor;
Collective Bargaining at Industry or National level rather than
factory level; adopting more political forms of struggle than
traditional union tactics
In many industrial sectors, for example in garment-the situation
provides only two options: individual bargaining or Industry
level/national level bargaining and requires political forms of
struggle
New initiatives to organize informal sector workers:
Many local level unions of rural workers and also regional
platforms of rural workers have started emergingParticularly
around NREGA.

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