A

REPORT ON

COLLECTIVE BARGAINING IN INDIA

Presented To

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I2IM)

M.B.A PROGRAMME
Constituent of Charotar University of Science and Technology
(CHARUSAT)

Submitted to
SUJATHA MAM

Submitted By
SOLANKI KEYUR
09 MBA 52
THIRD SEMESTER M.B.A

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 INTRODUCTION

The I.L.O. defines collective bargaining:

"As negotiations about working conditions and terms of employment between an

employer, or a group of employers, or one or more employers' organizations, on the one
hand, and one or more representative workers' organization on the other with a view to
reaching agreement."

Collective bargaining is a process of voluntary negotiation between employers and trade

unions) aimed at reaching agreements which regulate working conditions. Collective
agreements usually set out wage scales, working hours, training, health and safety,
overtime, grievance mechanisms and rights to participate in workplace or company
affairs.

FEATURES OF COLLECTIVE BARGAINING-

¬ Collective:
o Workers collectively bargain for their common interests and benefits.
o Workers and management jointly arrive at an amicable solution through negotiations.

¬ Strength:
o With industrial democracy at work, both the parties bargain from the position of equal
strength.

¬ Flexible:
o CB cannot be rigid or inflexible as its’ aim is to arrive at a consensus.

¬ Voluntary:
o Both the parties negotiate voluntarily in order to have a meaningful dialogue.
o Through negotiations, they try to probe each other’s views thoroughly before arriving at
an acceptable solution.
o The implementation of the agreement resulting from such a bargaining process is also
voluntary.

¬ Continuous:
o This process begins with negotiations but does not end with an agreement.
o Implementation of such an agreement, which is an on-going process, is also a part of

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CB.
¬ Dynamic:
o The whole process of CB is influenced by the mental make-up of the parties involved.
o As a result, the concept of CB changes, grows, and expands over time.

¬ Power relationship:
o Each party wants to extract the maximum from the other.
o To reach a consensus, both have to retreat from their original positions and accept less
than what is asked for and give more than what is on offer.
o While doing so, the management tries to retain its control on workplace matters and
unions attempt to strengthen their hold over workers without any serious dilution of their
powers.

¬ Representation:
o The participants in CB do not act for themselves.
o They represent the claims of labor and management while trying to reach an agreement.
o Each participant is an authorized representative of workers and employers.

¬ Bi-partite process:
o This process does not have third party intervention.

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation

team should consist of representatives of both the parties with adequate
knowledge and skills for negotiation. In this phase both the employer’s
representatives and the union examine their own situation in order to develop the
issues that they believe will be most important. The first thing to be done is to
determine whether there is actually any reason to negotiate at all. A correct
understanding of the main issues to be covered and intimate knowledge of
operations, working conditions, production norms and other relevant conditions is
required.

2. Discuss: Here, the parties decide the ground rules that will guide the negotiations.
A process well begun is half done and this is no less true in case of collective
bargaining. An environment of mutual trust and understanding is also created so
that the collective bargaining agreement would be reached.

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3. Propose: This phase involves the initial opening statements and the possible
options that exist to resolve them. In a word, this phase could be described as
‘brainstorming’. The exchange of messages takes place and opinion of both the
parties is sought.

4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage
comprises the time when ‘what ifs’ and ‘supposals’ are set forth and the drafting
of agreements take place.

5. Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision
regarding the problem or the issue. This stage is described as consisting of
effective joint implementation of the agreement through shared visions, strategic
planning and negotiated change.

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POSITION OF COLLECTIVE BARGAINING IN INDIA

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

political climate. The history of the trade union movement shows that union is 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.

THE INDIAN SCENARIO:

o In India, trade unions gained prominence much later – only after 1900.

o In 1918, Gandhiji - as the leader of the Ahmedabad textile workers – advocated the
resolution of conflict through CB agreements.

o But the idea gathered interest only after the Second World War.

♣ The Government of that time took steps like setting up of machinery for negotiations,
conciliation and arbitration.

o The trade union movement and also CB agreements became popular after Indian
independence.

Moving from agreements at the plant level, such agreements spread to industries such as
chemicals, petroleum, tea, coal, oil and aluminum.

♣ In ports and docks, banking and insurance, collective agreements were arrived at, right
at the national level.

¬ Assessment of Collective Bargaining in India:

o Other than in Ahmedabad and Mumbai, so far, collective agreements have not made
much headway in India.

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♣ Reasons:

¬ Lack of statutory recognition of unions by the country as a whole.

¬ Lack of provisions requiring employers and workers to bargain in ‘good faith’.
¬ The historical problem of ‘lack of trust’ between the parties
have all stood in the way of collective agreements contributing towards industrial
harmony.
Proper conditions have to be created for the success of CB for promoting industrial
peace.
♣ Encouragement to strong and powerful trade unions.
♣ Satisfactory arrangements for union recognition by statute.
♣ Creation of conditions in which collective agreements have a chance to succeed.

¬ CAUSES OF LIMITED SUCCESS OF CB IN INDIA:

o Problems with unions:

♣ CB mainly depends on the strength of unions.

♣ Weak trade unions cannot initiate strong arguments during negotiations.
♣ Not many strong unions in India.

Indian unions are bogged down by the problems of: multiplicity, inter and intra-union
rivalry, weak financial position and non-recognition.
¬ So, unanimous decision is unlikely to be presented at the negotiating table.

o Problems from Government:

♣ The Government has not been making any strong efforts for the development of CB.
♣ Imposition of many restrictions regarding strikes and lockouts has removed the `edge`
of the CB process.

o Political interference:

♣ Interference of political leaders in all aspects of union matters has increased over the
years.
♣ Almost all unions are associating themselves with some political party or the other.

o Legal problems:

♣ Now that adjudication is easily accessible, the CB process is losing its importance.

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o Management attitude:

♣ In India, managements have a negative attitude towards unions.

♣ They do not appreciate their workers joining unions.

SUGGESTIONS FOR BETTER FUNCTIONING OF CB:

The Indian Institute of Personnel Management has offered the following suggestions:

♣ A progressive and strong management that is conscious of its obligations and

responsibilities to the various stakeholders.
♣A truly representative – enlightened and strong – trade union should come into being
and should function on strictly constitutional lines.
♣There should be unanimity between labors and management on the basic objectives of
the organization and a mutual recognition of their rights and obligations.
♣ When there are several units of the company, there should be a delegation of authority
to the local management.
♣ A fact-finding approach and a willingness to use new tools should be adopted for the
solution of industrial problems.

PRE-REQUISITES OF SUCCESSFUL BARGAINING:

¬ Employer’s recognition of the trade union.

¬ Bargaining must precede other measures:

o Neither party should take any unilateral action. Results of bargaining should be
awaited.
¬ Employers’ and employees’ attitude calls for a change:

o The workers and the employers should be quite clear that they are not looking for third
party intervention in the form of litigation and adjudication.
o They want to sort out their differences in a peaceful way.

¬ Top priority to plant level bargaining:

o The representatives of the employees must have a firm resolution to have an agreed
solution to their individual matters.

¬ Negotiations on differences:

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o Both the parties should negotiate on their points of differences or demands with the sole
purpose of making an agreement.

¬ Reliance on facts and figures:

o In order to make the negotiations result into success, the workers and the management
agents must rely on facts and figures to substantiate their claims.

¬ Giving up unfair labor practices.

¬ Written agreement:
o The final decisions should be incorporated in a written agreement.
o The agreement should include the validity of the agreed matters as also the frequency
of its review.

¬ Progress review:
o Agreements should not be signed and forgotten.
o During their implementation, regular meetings should be held between the
representatives of both the parties to watch the progress of the implementation.

♣ This way any changes, adjustments and amendments can be effected.

¬ Respect of agreement:
o Both the parties must respect the agreement and see that it is implemented in a fair and
justifiable manner.

¬ Arbitration provision:
o The agreement must include an arbitration clause.
o whenever the parties have any differences pertaining to the interpretation of the terms
and conditions, the arbitration clause can be resorted to.