MEANING OF COLLECTIVE BARGAINING

An individual is free to bargain for himself and safeguard his own interest. If an
individual workman seeks employment he stands in a weaker position before his master,
who having command over wealth stands in a better position to dictate his own terms and
the individual has to accept offer without any reserves for he has to earn something to
feed his family. However the position becomes different if a bargain is made by a body
or association of workmen. They can negotiate and settle their terms with the employer
in a better way and secure better wages, better terms of employment and greater security.
The object of collective bargaining is to harmonize labour relations, promote industrial
peace by creating equality of bargaining power between the labour and capital.
Collective bargaining can exist only in an atmosphere of political freedom. Any
condition of service like, wages, hours of work, leave, gratuity, bonus, allowances and
other like privileges can all be settled by negotiation between the body of workmen and
employer. Thus “collective bargaining” is that arrangement whereby the wages and
conditions of employment of workmen are settled through a bargain between the
employer and the workmen collectively whether represented through their Union or by
some of them on behalf of all of them. 1
The phrase “Collective Bargaining” is coined by famous authors Sydney and
Beatrice Webb in their celebrated treaties on ‘History of Trade Unions’. In India no
legislation has provided for collective bargaining, except a strag provision in the
Bombay Industrial Relations Act, 1946. Therefore there is no legislative definition of the
term collective bargaining. 2 In All India Bank Employers v. National Industrial
Tribunal3, it was argued that Article 19(1)(c) of the Constitution of India guaranteed to
all citizens, as a concomitant to its right to form associations or unions, a right to
effective collective bargaining and a right to strike. But the Supreme Court rejected the
argument and said that even a liberal interpretation of sub-clause (c) of clause (1) of Art
19 cannot lead the conclusion that the trade unions have a guaranteed right to an
effective bargaining.
The Encyclopedia Britannica defined collective bargaining as a process of
discussion and negotiation between an employer or group of employees and a group of
1
Misra S.N., Labour & Industrial Laws, Central Law Publications, 21 st Ed., Allahabad, 2005, pg 303
2
Prof. Khan Ahmedullah, Commentary on Labour and Industrial Law, Asia Law House, 1 st Ed.,
Hyderabad, Reprint 2006, pg 72
3
AIR 1962 SC 171

1
work people, to reach agreement on working conditions. If negotiations are between an
employer and group of work people, the dependence of work people on the employer for
their job weakens their bargaining power, and therefore, collective bargaining is more
usually understood to be a negotiation between one or more trade unions and the
employer or group or association of employers. 4
The Encyclopedia of Social Sciences defined collective bargaining as “a process of
discussion and negotiation between two parties, one or both of whom is a group of
persons acting in concert.... More specifically, collective bargaining is that process by
which an employer or employers and a group of employees agree upon the conditions of
work. The institution is both a device used by wage workers to safeguard their interests
and an instrument of industrial organization.... The use of collective bargaining and the
maintenance of labour unions are now most inspirable... the extent of effective
employment of collective bargaining is the extent of successful unions; the history of
collective bargaining is inseparable from the history of organized labour.” 5
On one side of the bargaining table are union representatives, and on the opposite
side are the employers, who to an extent are themselves becoming organized for
collective bargaining, although their organizations are not nearly so well integrated as
are those of labour. Collective bargaining under industrial law aims at mutually
acceptable bipartite agreement between employer and employees arrived at after
discussions and negotiations between them about terms and conditions of employment. 6
All collective bargaining aims at the formulation of norms for the guidance of
individual employers and individual workers. This ‘rule-making’ character is inherent in
the collective bargaining process, quite irrespective of the degree of legal effect which
state attaches to the rules made in the autonomous sphere. 7

SCOPE OF COLLECTIVE BARGAINING

4
Prof. Khan, Supra note 2, at 72
5
Ibid, at 72 & 73
6
Paul Meenu, Labour and Industrial Law, Allahabad Law Agency, 8 th Ed., Faridabad, Reprint 2012, pg
222
7
Ibid, at 222

2
The common law emphasis to individual contract of employment is shifted to collective
agreement negotiated by and with representative groups. The application and
interpretation of such agreements are also in the collective manner. The subject-matter of
such collective activity ranges from the establishment of basic wage rate for thousands of
workers throughout the country to the settlement of one man’s grievances in respect of
one object in one factory. 8
Two important purposes are achieved generally by collective bargaining agreements.
The parties undertake towards one another certain obligations and create a code for
trade. Whether the collective bargaining agreement expresses this or not, the trade union
and employer or employer’s association by signing the agreement undertake to keep the
peace and not to resort to strikes or lock-outs for changing the agreed terms during the
currency of agreement. There is the implied undertaking also to do their best to see that
the terms agreed are applied by the employers and the employees concerned. Thus, they
act as parties to an agreement imposing natural obligations upon each other. At the same
time they also act as joint legislators for the trade to which the agreement applies. They
seek to determine the content of the contract of employment which individual employees
have concluded in the past or will conclude in the future. 9
Collective bargaining has the effect of imposing a limit on the freedom of the
employers to run their business as they think fit. It is highlighted as “ Self Protection” to
workers from two angles; firstly, that in the presence of a reserve army of unemployed, it
eliminated the competition which would otherwise exist among them to offer their
services at a lower price than their fellow workers for getting employment; secondly, it
enables the workers in favorable conditions to compel their employers to consider wage
improvements and other emoluments and finally collective bargaining protects labour
against victimization and favouritism of employers. Hence, it is something like a ‘ rule of
law’ in industrial relations. 10

SIGNIFICANCE OF COLLECTIVE BARGAINING

8
Prof. Pillai K. Madhavan, Labour and Industrial Laws, Allahabad Law Agency, 20 th Ed., Faridabad,
2005, pg 43
9
Ibid, at 43
10
Id, at 43

3
Collective bargaining gained significance in the beginning of twentieth century with the
realization that collective bargaining has an important role to play in resolving the
matters which concern the workers collectively such as wages, dearness allowance,
bonus, hours of work, etc. Underlying the significance of collective bargaining, V.V. Giri
writes as follows:
“An agreement arrived at after negotiation will always be more conscientiously
observed and regarded as more binding by both parties than any statutory regulation, for
the enforcement of which cumbersome legal procedure has to be adopted. Collective
agreements are the results of give and take. The employer, in signing an agreement,
recognizes the justified demands of the workers and pledges himself personally, or
through his representative, to abide by rules and regulations. The union negotiator gives
personally the same pledge on behalf of the workers. Both sides acknowledge the
agreement, signed mostly after detailed negotiations, as the best possible under the
prevailing circumstances at the time of concluding it.” 11
The courts also prefer settlement of industrial dispute mutually by the management
and workers through collective bargaining. In National Engineering Industries Ltd. v.
State of Rajasthan 12, the Supreme Court observed as follows:
“A settlement of dispute between the parties themselves is preferred to industrial
adjudication, as the settlement is likely to lead to a more lasting peace than award.
Settlement is arrived at by the free will of the parties and is pointer to the fact that is
goodwill between them.”
Collective bargaining plays an important role in raising productivity by maintaining
peaceful industrial relations between management and workers. As collective bargaining
aims at resolving industrial matters between management and workers through
discussions and negotiations, this instills in the workers a sense of involvement in the
decision making in the industrial relations as they feel involved in settling the terms and
conditions of employment through their representatives in the process of collective
bargaining. This enables the workers to work with co-operative attitude and maintain
cordial relations with employer and give better output. 13
ESSENTIALS OF COLLECTIVE BARGAINING

11
Paul, Supra note 6, at 223
12
AIR 2000 SC 469
13
Paul, Supra note 6, at 223

4
The essentials of effective collective bargaining between labour and management are as
follows:
1. Strong united stable trade union: Success of collective bargaining between two
parties lies in the achievement of an agreement which is mutually acceptable to
both the parties. As collective bargaining aims at general agreements about the
terms and conditions of employment arrived at between the representative of
workers and management through mutual negotiations without the intervention of
third party, a fair and just agreement between the two parties can be achieved if
both the parties are of equal strength. Only a strongly united trade union can act
as an effective partner in the process of collective bargaining as the strength of
their unity enables the worker to negotiate with their wealthy and powerful
employer with more confidence. It is therefore necessary that the trade union
leaders should acquaint the members of their union about the demands that they
are going to take up with their employer on behalf of the whole of union, so that
the members of the trade union do not feel betrayed by their leaders. The demands
taken up by the leaders of the trade union on behalf of the member of the union
should be genuine and for the common benefit of all the workers and should not
serve the vested interest of the trade union leaders only. For effective collective
bargaining the trade union should also ensure that there should also ensure that
there should not be any interference in the bargaining process by such members of
the trade union who are outsiders and have ulterior political motive to achieve.
However, the trade unions may take the assistance of the experts in the matters
under discussion and negotiation to present their case to the management on the
facts and figures with more clarity and effectively. 14
2. Responsible management: If strong and stable trade union is an essential for the
success of collective bargaining, a genuine desire on the part of the employer to
co-operate with the trade unions as the representatives of the workers in
understanding the point of view of the workers is another essential requirement of
effective collective bargaining. The employer is represented at the collective
bargaining table by certain management officials, who are charged with the
successful operations of various aspects of the employer’s business. The primary
responsibility for successful conduction of employer and employee relation,
including collective bargaining relations, rests upon a management official. For
14
Paul, Supra note 6, at 227

5
 effective collective bargaining management is to recognize the fact that the
workers are the partners in the industries and play an equally important role for
development of the industry. Therefore any investment made for the welfare of
the worker goes to increase the efficiency of the worker. As a satisfied worker
develops a sense of belongingness to the establishment for which he works and
gives better output. The First Five Year Plan of India records that “the worker’s
right of association, organization and collective bargaining is to be accepted
without reservation as the fundamental basis of mutually satisfactory
relationship. 15
3. Mutual faith and trust between trade union and management: Mutual faith
and trust between the workers and the employer is another essential of effective
bargaining. As successful negotiations depends to some extent on the attitudes
prevailing on both sides of the bargaining table. Howsoever a strongly united
workers or employers may be, they cannot negotiate fairly and reach a mutually
agreeable agreement unless they have trust and faith in each other. Mutual faith
and trust requires such a mental state of both the parties to the collective
bargaining that they come to negotiate with each other without any intention to
take the advantage of the other and with an attitude to resolve the clash of their
interests and find out the ways of adjusting their conflicting interest by
identifying the areas of their common interest. The trade union should make every
worker understand his duties before making demand for his rights and privileges.
The trade union should aim at instilling in the workers a spirit of self-reliance,
toleration and co-operation. Good faith, open mindedness, mutual understanding,
trust and confidence and goodwill are the indispensable ingredients of all the
harmonious relationships. 16
4. Workers participation in management: Almost all the economically advanced
nations have worked out their variants of industrial co-operation and co-
determination,- Germany, Japan and now the countries of European Union. All of
them have found systems of participatory management useful and beneficial for
efficiency, and for creating ate atmosphere necessary to meet the demands of
competitiveness. They have expanded the rights of workers and increased
managerial efficiency. They have reduced distance between workers and

15
Paul, Supra note 6, at 228
16
Ibid, at 229

6
 managerial personnel. They have improved human relations, and improved human
relations lead to improved industrial relations. With the revolutionary means of
communication, it has become possible for workers to keep track of information
relating to processes, balance sheets and the like. In its report the Second
Commission on Labour records that “there is no evidence that to show that
workers participation in the management has in no way weakened an enterprise
financially or otherwise. Workers participation in the management is means to
achieve industrial democracy which leads to effective collective bargaining. The
Industrial Policy Resolution adopted by the Government of India in 1956,
declared that in a socialist democracy, labour is a partner in the common task of
development, and should be asked to participate in it with enthusiasm. 17

TYPES OF COLLECTIVE BARGAINING

There are five types of collective bargaining:

17
Paul, Supra note 6, at 230

7
 1. Conjunctive or Distributive Bargaining: The parties try to maximize their
respective gains. They try to settle economic issues such as wages, benefits,
bonus, etc., through a zero-sum game (where my gain is your loss and your gain
is my loss). Unions negotiate for maximum wages. Management wants to yield as
little as possible – while getting things done through workers. 18 It is the most
common type of bargaining in which one side wins and other side losses. Union
and management have initial offer or demands, target points (example desired
wage level), resistance point (example unacceptable wage levels) and settlement
ranges (example acceptable wage level). 19
2. Cooperative or Integrative Bargaining: When companies are hit by recession,

they cannot offer the kind of wages and benefits demanded by workers. At the

same time they cannot survive without the latter’s  support. Both parties realize

the importance of surviving in such difficult times and are willing to negotiate the

terms   of   employment   in   a   flexible   way.   Labour   may   accept   a   cut   in   wages in

return   for   job   security   and   higher   wages   when   things   improve.   Management

agrees to modernize and bring in new technology and invest in marketing efforts

in a phased manner. In India, companies like TELCO, Ashok Leyland resorted to

cooperative bargaining  in  recent   times  with  a view   to  survive  the  recessionary

trends   in   the   automobile sector. 20  It   is   similar   to   problem   solving   situation   in

which both sides are trying to reach a mutually beneficial alternative i.e. a win

win situation. 21

3. Productivity Bargaining: Productivity bargaining is a process that employers

and employees enter into in order to increase the overall EFFICIENCY and
productivity of the business. This type of negotiation is almost always seen in
factory or CONSTRUCTION work, although it may also be present in the FILM

INDUSTRY and other heavily regulated workforce areas. It is rarely used in service
18
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%2F WWW.INFO2 MYFRIENDS .BLOG .COM %2FFILES%2F2010%2F11%2FL ESSON-17 (last seen on 17 th March
2014 at 11:28 AM)
19
HTTP :// WWW . SLIDESHARE . NET /MAHASHMI /TYPES - OF - COLLECTIVE -BARGAINING (last seen today on 17 th
march 2014 at 11:52 AM)
20
Supra note 18
21
Supra note 19

8
 industries where specific types of employee labour are not required. The goal of
management in this case is to increase the productivity of the workers without
having to hire more labor. In return, management agrees to raise the wages of the

workers22. In this method, workers’ wages and benefits are linked to productivity.

A standard productivity index is finalized through negotiations initially. Workers

do not have to perform at exceptionally high levels to beat the index. If they are

able   to   exceed   the   standard productivity   norms   workers   will   get   substantial

benefits.   Management   gains   control   over workplace   relations   and   is   able   to

tighten  the norms still further in future negotiations. Without  such productivity

bargaining   agreements,   workers   may   not   realize   the   importance of   raising

productivity   for   organizational   survival   and   growth.   Backed   up   by   powerful

unions,   they   may   fail   to   read   the   danger   signals   from   the   market   and   respond

quickly. 23

4. Composite Bargaining: It   is   alleged   by   workers   that   productivity   bargaining

agreements have increased their workload. Rationalization, introduction of high

technology,   and   tight   productivity   norms have   made   the   life   of   a   worker

somewhat   uneasy.   All   these   steps   have   started   hitting   the unions   and   workers

below   the   belt.   As   an   answer   to   such   problems,   labour   has   come   to favour

composite bargaining. In this method, labour bargains for wages as usual but goes

a step further demanding equity in matters relating to work norms, employment

levels,   manning   standards,   environmental   hazards,   sub­contracting   clauses,   etc.

When unions negotiate manning standards they ensure the workload of workers

does not increase, this helps to maintain the status quo as far as employment level

is concerned. By negotiating sub­contracting clauses, unions prevent management

from farming out business to ancillaries. If permitted, such an action may result in

lower employment in some other plant diluting the bargaining powers of unions

substantially.   Workers   are   no longer   interested   in   monetary   aspects   to   the

22
HTTP :// WWW .EHOW . COM /ABOUT_6510206_ MEANING - PRODUCTIVITY - BARGAINING _.HTML (Last seen on
17th March 2014 at 12:14 PM)
23
Supra note 18

9
 exclusion of work related matters. There is no doubt that wages, bonus and other

monetary aspects continue to occupy the centre­ stage in bargaining sessions. But

there is a definite shift towards composite bargaining. Without such a proactive

stand,   workers   may   not   be   able   to   withstand   the   forces   of liberalization,

automation,   farming   out   business   to   outsiders   and   survive.   Through   composite

bargaining   unions   are   able   to   prevent   the   dilution   of   their   powers   and   ensure

justice to workers by putting certain limits on the freedom of employers. For the

employer this is a lesser evil when compared to strikes and lockouts. Apart from

periodic   wage   hikes   and day­to­day   tussles   over   productivity   norms   and   other

related issues there is at least no danger of workers striking work every now and

then. Of course, even this situation may not continue for long. In companies like

SAIL, Philips, Bata, GKW and even TISCO, workforce reductions have to come

if they have to survive in a high­tech  environment. The compulsions  of a  free

market economy cannot be put aside just for the sake of maintaining the labour

force. It is small wonder despite serious warnings from unions, companies in the

recession­hit automobile sector (Hindustan Motors, Premier Automobiles, Maruti,

TVS Suzuki, Hero Honda) have either reduced the work force or cut down their

benefits. 24

5. Concessionary Bargaining: Concession BARGAINING is a term used in LABOR

LAW . It is a kind of collective bargaining in which the trade unions surrender or

give back previously gained improvements in pay and conditions in exchange for
some form of job security. For example, the employees may agree to surrender
improvements in wages or benefits in exchange for protection against lay offs.
The term was coined in the U.S. It is also termed as union givebacks or employee
givebacks. 25

24
Supra note 18
25
http://definitions.uslegal.com/c/concession-bargaining/ (last seen today on 17 th March 2014 at 12:46
PM)

10
 ADVANTAGES AND DISADVANTAGES OF COLLECTIVE
BARGAINING

ADVANTAGES:

Following are the advantages of collective bargaining: 26

1. Harmonious labour-management relations: In collective bargaining during the
process of negotiation the representative of employees and workers get a chance
to see the areas of difference as well as of agreements between them which can be
discussed and negotiated and a way is paved for an amicable solution to any
dispute between them. Amicable settlement of dispute prepares ground for the
harmonious relation between the parties. Labour-management relations that
develop through the process of collective bargaining, give rise to body of norms
designed by the parties themselves that regulates the conduct of members of both
the parties.
2. Stabilizing effect on society: Collective bargaining, as a technique for the
accommodation of the frequently divergent and conflicting desires and objectives
of the employers and employees is an integral component of industrial society.
The achievements of collective bargaining, the results of its functioning, and its
ramifications extend far beyond the employer employee relationship and present
both bright promise and grave problems to the entire national community. As
resolution of conflicts between labour and management at the collective
bargaining table leads to industrial peace which is a key to the industrial growth
of any nation.

26
Paul, Supra note 6, at 230 & 231

11
 3. Feeling of belongingness in the workers: An alienated worker the feeling of
belongingness to an establishment retards the growth of any industry with
reduced output. This gives rise to industrial unrest and disturbs harmony in the
industrial relations between the employer and the employees. Whereas in
collective bargaining the terms and conditions of employment are not imposed
unilaterally upon the employees by the employer but are discussed with the
workers through their representatives and are settled through the negotiation with
the representatives of employees. Thus in collective bargaining the employer
involves workers in the process of settling the terms and conditions of
employment and creates a democratic setup in his establishment in which a
worker also has to say through his representative in the settlement of terms and
conditions of his employment.

DISADVANTAGES:

Following are the disadvantages of collective bargaining: 27

1. Freedom of the individual workmen to contract: The collective bargaining
does not result into labour contracts, but results in a general agreement between
the employer and the representatives of the workers about the terms and
conditions of employment. The process of collective bargaining results not in a
labour contract, but in a trade agreement. This imposes no obligation upon the
employer to offer or upon the labourer to accept work; it guarantees neither to
employers workmen nor to the labourers jobs. It is nothing more than a statement
of the conditions upon which such work as is offered and accepted to be done.
The contract of employment is still between the individual employer and the
individual employee. In Tamil Nadu Electricity Work Federation v. Madras
State Electricity Board 28, the court held that “Collective bargaining is the
foundation of the movement and it is in the interest of the labour that the statutory
recognition has been accorded to trade union and their capacity to represent
workmen, who are members of such bodies. But of course there are limits to such
doctrine, for otherwise, it may become a tyranny stifling the freedom of
individual worker. It is not then that every workman must be necessarily the

27
Paul, Supra note 6, at 224 & 225
28
AIR 1956 Mad. 111

12
 member of trade union, and that, outside its fold, he cannot exercise any volition
or choice in matter affecting his welfare. The representative powers of
organization of labour, with regard to enactments, such as the Industrial Dispute
Act, 1947, will have to be interpreted in the light of individual freedom
guaranteed in the Constitution, and not as though such freedom did not
independently exist, as far as organized labour is concerned.

2. Statutory provisions under the labour laws determining the terms and
conditions of employment of workers: Collective bargaining means negotiation
of terms and conditions of employment agreed upon between the employer and
the representatives of his employees. But these agreements cannot override the
statutory provisions about such terms and conditions of employment which have
been provided under statutes enacted and enforced by the State. For example, the
Factories Act, 1948 of India limits working hours for adults and children,
adolescents and women in a day and in a week. The Factories Act, 1948 of India
also provides for the intervals for rest and weekly holiday. No mutually
acceptable agreement that has arrived at between the employer and the
representatives of workers after negotiation between them can take effect if it
provides for more working hours than those which are provided for the workers in
the factories under the Factories Act, 1948. Similarly, under the Minimum Wages
Act, 1948 the State fixes the minimum wages which the employer must pay to the
worker. Thus, no agreement that is reached between the employer and the
employees after collective bargaining can provide for wages which fall below the
minimum wages provided under the Minimum Wages Act, 1948. Therefore so far
as the legal status of collective bargaining is concerned, it can be said that
agreements that are reached between management and workers due to collective
bargaining are not legally enforceable if they are in conflict with statutory
provisions which are legally enforceable under the labour laws enacted by labour
laws.

13
 COLLECTIVE BARGAINING IN INDIA

Collective bargaining in India is of late development, for obvious reason that trade union
movement in an organized form took place only recently. Unlike many other western
countries, India was not fortunate to witness an industrial revolution. The imperial
government wanted to retain India as a colony for getting raw materials and as a market
for selling finished products from England. So their misguided policy was to avoid
industrialization in our country. The few industries existed mainly related to textile and
jute. But a country depended upon foreign rule naturally gave more importance to its
freedom movement over the trade union movement. Finally, it was only in 1926 the trade
unionism was recognized in India recognizing certain immunities and privileges. 29
The post independent India witnesses a spate of labour welfare legislations
corresponding to the late 19 th century collectivist legislations or the western countries.
These legislations introduced sweeping changes to the socio economic conditions of the
working class. In recent years collective bargaining in India has attained importance not
only in the Industrial Sector but in agriculture areas as well. The agricultural labour
organizations dealing collectively with the employers as to terms and conditions of
employment have become a common feature. The modern trends in some States like
Kerala and West Bengal, exemplify this. 30
A reflection of collective bargaining is found in Section 3 of the Industrial Dispute
Act, 1947. Section 3 of the Industrial Dispute Act provides that, in case of any industrial
establishment in which 100 or more workmen are employed on any day in the previous
twelve months, the appropriate government may by general or special order require the
employer to constitute a Works Committee consisting of the representatives of employers
29
Prof Pillai, Supra note 8 at 44
30
Ibid, at 45

14
and workmen engaged in the establishment. The number of representatives of the
workers shall not be less than the number of representatives of employer. Sub Section (2)
of Section 3 of the Industrial Act, 1947 provides that “it shall be the duty of the Works
Committee to promote measures for securing and preserving amity and good relations
between the employer and the workmen and, to the end, to comment upon matters of
their common interest or concern and endeavour to compose any material difference of
opinion in such matters”. 31
Significance of collective bargaining is found in the five year plans of India also. In
the first five year plan it has been mentioned that the State should make efforts to
promote collective bargaining to settle the disputes mutually than through the
adjudication through the intervention of the Government. Similarly in the fourth five
year plan the significance of mutual agreements was underlined as in this plan also
settlement of industrial disputes by mutual agreements was held to be the best settlement
of disputes. 32
The Industrial Policy Resolution adopted by the Government of India in 1956,
declared that in a socialist democracy, labour is a partner in a common task of
development, and should be asked to participate in it with enthusiasm. To raise
productivity, promote industrial peace and create a sense of involvement amongst the
workers, Article 43-A was inserted in the Indian Constitution which formed the part of
the Directive Principle of State Policy. 33
Article 43-A of Indian Constitution provides that “the State shall take steps by
suitable legislations or in any other way to secure participation of workers in the
management of undertakings or other organizations engaged in the industry.” 34 Thus it
has become incumbent upon the State to work towards the effective participation of
workers in the management. It is further pertinent to note that India has ratified
International Labour Organization Convention No.11 of 1921 dealing with the Right of
Association (Agriculture) Convention and ILO Convention No. 141 of 1975 dealing with
Rural Workers Organization and therefore granted rights to form association in the Art
19(1)(c). 35 Art 19(1)(c) guarantees to the citizens of India “the freedom to form
associations or unions”. 36
31
Paul, Supra note 6, at 232
32
Paul, Supra note 6, at 232
33
Ibid, at 232
34
Constitution of India
35
Prof. Khan, Supra note 2, at74
36
Ibid

15
ROLE OF INDIAN JUDICIARY: 37

In Mumbai Kamgar Sabha v. Abdul Bhai,38 the Supreme Court held that it was an
accepted doctrine that labour was the backbone of the Nation, particularly in the areas of
economic self reliance.
In Hindustan Tin Works v. Its employees,39 it was observed that since Art 43-A had
made labour a partner in industry, industry being regarded as the common venture of
capital and labour, it would follow that if a sacrifice became necessary in the interest of
industry or an undertaking, such a sacrifice would be equally shared by both.
In National Textile Workers Union v. P.R. Ramakrishnan,40 the Supreme Court,
drawing support from Art 43-A upheld the right of workers to be heard in the winding up
proceedings of a company.

CAUSES FOR SLOW DEVELOPMENT OF COLLECTIVE BARGAINING IN

INDIA:

But collective bargaining has not developed as desired in India. Causes of slow
development of collective bargaining are as follows: 41
1. Inter-Union rivalry due to multiplicity of trade unions in India.
2. Political interference by outsiders
3. Illiteracy and poverty of workers
4. Inter union rivalry due to multiplicity of trade unions in India.

37
Prof Kumar Narender, Constitutional Law of India, Allahabad Law Agency, 7 th Ed., Faridabad, 2008,
pg 471
38
AIR 1976 SC 1455
39
AIR 1979 SC 75
40
AIR 1983 SC 75
41
Paul, Supra note 6, at 233

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 PRACTICES IN OTHER COUNTRIES 42

U.S.A: In USA there are laws ensuring the workers the right to organize and bargain
collectively. An independent authority is set up to administer and interpret legal
provisions and to decide complaint regarding unfair labour practices. Intervention of the
State in individual dispute is limited to the actual or threatened work stoppages which
could imperil the national economy, health or safety.

ENGLAND: In England, free collective bargaining between parties is given priority in

their industrial relations except in cases where total freedom to parties to the dispute may
imperil the community at large. In such extreme situation collective bargaining gives
state intervention in England.

JAPAN: In Japan, the right to collective bargaining is guaranteed under their

Constitution. There are legislations to promote collective bargaining and State directly
intervenes only in case of strike which may jeopardize the national economy and public
life.

U.S.S.R: In former U.S.S.R., three important factors regulate industrial relation system.
The first is the formation of socialist societies which has replaced private ownership of
basic means of production by public ownership. Thus, occasions for active conflict in
industrial relations are eliminated. Secondly, the operation of a centrally planned and
controlled economy introduces certain restrictions of labour and management and lastly,
the influence of a single political party in running the Government and in organizing
unions make it necessary for the unions to perform a double role.

42
Prof Pillai, Supra note 8 at 44

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 CRITICAL EVALUATION OF COLLECTIVE BARGAINING

Collective bargaining involves legislative, executive and judicial functions. The broad
principles, standards, and norms that are to govern employer employee relations are
involved. These are observed and implemented by the parties concerned. They involve
the interpretation of collective agreement. This process stretches through out the period
of the agreement. Even, though of late origin, the concept of collective bargaining is
gaining importance in India. But its prospects in the future will be bleak unless sweeping
changes are effected to the existing system of settlement under the Industrial Dispute
Act, which gives predominance to compulsory adjudication. This saps the foundation of
self reliance of labour. The recommendations of the National Commission on Labour in
this matter, if implemented will mitigate the mischief at least to a certain extent.
However the labour also should not be unmindful of the fact that collective bargaining is
not to be substituted by coercive bargaining in which case the practice of collective
bargaining will become unpopular, ill reputed and oppressive. 43
Now new concept of Tripartism has been introduced. Tripartism means reliance
upon the advice of three parties to industrial relation and disputes. Trade unions,
employers and Government are three parties. Under this the parties do not decide
anything, but they try to debate and advice about everything. Their representatives sit
together in one kind of meeting or another and strive to reach consensus and on that
basis make recommendations. The Government is the most active party, even though it
decides nothing as one participant, it does take the initiate in calling the management and
labour together. This arrangement became popular during the Nanda period from 1957. 44

43
Prof Pillai, Supra note 8 at 47 & 48
44
Ibid, at 49

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 BIBLIOGRAPHY

PRIMARY SOURCE:

1. Constitution of India

SECONDARY SOURCE:

Books:
Following books have been referred:
1. Misra S.N., Labour & Industrial Laws, Central Law Publications, 21 st Ed.,
Allahabad, 2005.
2. Paul Meenu, Labour and Industrial Law, Allahabad Law Agency, 8 th Ed.,
Faridabad, Reprint 2012.
3. Prof. Khan Ahmedullah, Commentary on Labour and Industrial Law, Asia
Law House, 1st Ed., Hyderabad, Reprint 2006.
4. Prof Kumar Narender, Constitutional Law of India, Allahabad Law Agency, 7 th
Ed., Faridabad, 2008.
5. Prof. Pillai K. Madhavan, Labour and Industrial Laws, Allahabad Law Agency,
20th Ed., Faridabad, 2005.

Websites:
Following websites have been referred:
1. HTTP ://DEFINITIONS .USLEGAL .COM/C /CONCESSION -BARGAINING /

2. HTTP ://WWW .EHOW. COM/ABOUT_6510206_ MEANING- PRODUCTIVITY -

BARGAINING _. HTML

3. HTTP ://WWW .GOOGLE. CO.IN/URL?

SA= T&RCT =J&Q=& ESRC =S&SOURCE= WEB &CD=7&VED =0CFMQF JAG&URL =HTT

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 P%3A%2F%2F WWW .INFO2 MYFRIENDS .BLOG.COM%2FFILES

%2F2010%2F11%2FL ESSON-17
4. HTTP ://WWW .SLIDESHARE . NET /MAHASHMI/TYPES- OF-COLLECTIVE - BARGAINING

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