Collective Bargaining

Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firms and workers representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation.

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 employee, organization 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.

Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment. It is called collective because both the employer and the employee act as a group rather than as individuals. It is known as bargaining because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations.

Thus collective bargaining:

is a collective process in which representatives of both the management and employees participate.

is a continuous process which aims at establishing stable relationships between the parties involved.

not only involves the bargaining agreement, but also involves the implementation of such an agreement.

attempts in achieving discipline in the industry

is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

jectives Of Trade Unions

Trade unions are formed to protect and promote the interests of their members. Their primary function is to protect the interests of workers against discrimination and unfair labor practices. Trade unions are formed to achieve the following objectives:

Representation

Trade unions represent individual workers when they have a problem at work. If an employee feels he is being unfairly treated, he can ask the union representative to help sort out the difficulty with the manager or employer. Unions also offer their members legal representation. Normally this is to help people get financial compensation for workrelated injuries or to assist people who have to take their employer to court.

Negotiation Negotiation is where union representatives, discuss with management, the issues which affect people working in an organization. There may be a difference of opinion between management and union members. Trade unions negotiate with the employers to find out a solution to these differences. Pay, working hours, holidays and changes to working practices are the sorts of issues that are negotiated. In many workplaces there is a formal agreement between the union and the company which states that the union has the right to negotiate with the employer. In these organizations, unions are said to be recognized for collective bargaining purposes.

Voice in decisions affecting workers The economic security of employees is determined not only by the level of wages and duration of their employment, but also by the managements personal policies which include selection of employees for layoffs, retrenchment, promotion and transfer. These policies directly affect workers. The evaluation criteria for such decisions may not be fair. So, the intervention of unions in such decision making is a way through which workers can have their say in the decision making to safeguard their interests.

Member

services

During the last few years, trade unions have increased the range of services they offer their members. These include:

Education and training - Most unions run training courses for their members on employment rights, health and safety and other issues. Some unions also help members who have left school with little education by offering courses on basic skills and courses leading to professional qualifications.

Legal assistance - As well as offering legal advice on employment issues, some unions give help with personal matters, like housing, wills and debt.

Financial discounts - People can get discounts on mortgages, insurance

and loans from unions.

Welfare benefits - One of the earliest functions of trade unions was to look after members who hit hard times. Some of the older unions offer financial help to their members when they are sick or unemployed.

Functions Of Trade Unions Trade unions perform a number of functions in order to achieve the objectives. These functions can be broadly classified into three categories: (i) (ii) Militant Militant Fraternal functions, functions Functions

One set of activities performed by trade unions leads to the betterment of the position of their members in relation to their employment. The aim of such activities is to ensure adequate wages, secure better conditions of work and employment, get better treatment from employers, etc. When the unions fail to accomplish these aims by the method of collective bargaining and negotiations, they adopt an approach and put up a fight with the management in the form of go-slow tactics, strike, boycott, gherao, etc. Hence, these functions of the trade unions are known as militant or fighting functions. Thus, the militant functions of trade unions can be summed up as:

To achieve higher wages and better working conditions

To raise the status of workers as a part of industry

To protect labors against victimization and injustice Functions

Fraternal

Another set of activities performed by trade unions aims at rendering help to its members in times of need, and improving their efficiency. Trade unions try to foster a spirit of cooperation and promote friendly industrial relations and diffuse education and culture among their members. They take up welfare measures for improving the morale of workers and generate self confidence among them. They also arrange for legal assistance to its members, if necessary. Besides, these, they undertake many welfare measures for their members, e.g., school for the education of children, library, reading-rooms, in-door and out-door games, and other recreational facilities. Some trade unions even undertake publication of some magazine or journal. These activities, which may be called fraternal functions, depend on the availability of funds, which the unions raise by subscription from members and donations from outsiders, and also on their competent and enlightened leadership. Thus, the fraternal functions of trade unions can be summed up as:

To take up welfare measures for improving the morale of workers

To generate self confidence among workers

To encourage sincerity and discipline among workers

To provide opportunities for promotion and growth

To protect women workers against discrimination

Importance Of Trade Unions

The existence of a strong and recognized trade union is a pre-requisite to industrial peace. Decisions taken through the process of collective bargaining and negotiations between employer and unions are more influential. Trade unions play an important role and are helpful in effective communication between the workers and the management. They provide the advice and support to ensure that the differences of opinion do not turn into major conflicts. The central function of a trade union is to represent people at work. But they also have a wider role in protecting their interests. They also play an important educational role, organizing courses for their members on a wide range of matters. Seeking a healthy and safe working environment is also prominent feature of union activity.

Trade unions help in accelerated pace of economic development in many ways as follows:

by helping in the recruitment and selection of workers.

by inculcating discipline among the workforce

by enabling settlement of industrial disputes in a rational manner

by helping social adjustments. Workers have to adjust themselves to the new working conditions, the new rules and policies. Workers coming from different backgrounds may become disorganized, unsatisfied and frustrated. Unions help

them in such adjustment. Trade unions are a part of society and as such, have to take into consideration the national integration as well. Some important social responsibilities of trade unions include:

promoting and maintaining national integration by reducing the number of industrial disputes

incorporating a sense of corporate social responsibility in workers

achieving industrial peace

Reasons For Joining Trade Unions

The important forces that make the employees join a union are as follows: 1. Greater Bargaining Power The individual employee possesses very little bargaining power as compared to that of his employer. If he is not satisfied with the wage and other conditions of employment, he can leave the job. It is not practicable to continually resign from one job after another when he is dissatisfied. This imposes a great financial and emotional burden upon the worker. The better course for him is to join a union that can take concerted action against the employer. The threat or actuality of a strike by a union is a powerful tool that often causes the employer to accept the demands of the workers for better conditions of employment.

2. Minimize Discrimination The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in nature. The personal relationships existing between the supervisor and each of his subordinates may influence the management. Thus, there are chances of favoritisms and discriminations. A trade union can compel the management to formulate personnel policies that press for equality of treatment to the workers. All the labor decisions of the management are under close scrutiny of the labor union. This has the effect of minimizing favoritism and discrimination. 3. Sense of Security

The employees may join the unions because of their belief that it is an effective way to secure adequate protection from various types of hazards and income insecurity such as accident, injury, illness, unemployment, etc. The trade union secure retirement benefits of the workers and compel the management to invest in welfare services for the benefit of the workers. 4. Sense of Participation The employees can participate in management of matters affecting their interests only if they join trade unions. They can influence the decisions that are taken as a result of

collective 5.

bargaining

between Sense

the

union of

and

the

management. Belongingness

Many employees join a union because their co-workers are the members of the union. At times, an employee joins a union under group pressure; if he does not, he often has a very difficult time at work. On the other hand, those who are members of a union feel that they gain respect in the eyes of their fellow workers. They can also discuss their problem with the trade union leaders.

6. Platform for self expression The desire for self-expression is a fundamental human drive for most people. All of us wish to share our feelings, ideas and opinions with others. Similarly the workers also want the management to listen to them. A trade union provides such a forum where the feelings, ideas and opinions of the workers could be discussed. It can also transmit the feelings, ideas, opinions and complaints of the workers to the management. The collective voice of the workers is heard by the management and give due consideration while taking policy decisions by the management. 7. Betterment of relationships

Another reason for employees joining unions is that employees feel that unions can fulfill the important need for adequate machinery for proper maintenance of employer-employee relations. Unions help in betterment of industrial relations among management and workers by solving the problems peacefully.

Trade Unionism In India

The trade unionism in India developed quite slowly as compared to the western nations. Indian trade union movement can be divided into three phases.

The first phase (1850 to1900) During this phase the inception of trade unions took place. During this period, the working and living conditions of the labor were poor and their working hours were long. Capitalists were only interested in their productivity and profitability. In addition, the wages were also low and general economic conditions were poor in industries. In order to regulate the working hours and other service conditions of the Indian textile laborers, the Indian Factories Act was enacted in 1881. As a result, employment of child labor was prohibited. The growth of trade union movement was slow in this phase and later on the Indian Factory Act of 1881 was amended in 1891. Many strikes took place in the two decades following 1880 in all industrial cities. These strikes taught workers to understand the power of united action even though there was no union in real terms. Small associations like Bombay Mill-Hands Association came up by this time. The second phase (1900 to 1946)

This phase was characterized by the development of organized trade unions and political movements of the working class. Between 1918 and 1923, many unions came into existence in the country. At Ahmedabad, under the guidance of Mahatma Gandhi, occupational unions like spinners unions and weavers unions were formed. A strike was launched by these unions under the leadership of Mahatma Gandhi who turned it into a

satyagrah. These unions federated into industrial union known as Textile Labor Association in 1920.In 1920, the First National Trade union organization (The All India Trade Union Congress (AITUC)) was established. Many of the leaders of this organization were leaders of the national Movement. In 1926, Trade union law came up with the efforts of Mr. N N Joshi that became operative from 1927. During 1928, All India Trade Union Federation (AITUF) was formed.

The third phase began with the emergence of independent India (in 1947). The partition of country affected the trade union movement particularly Bengal and Punjab. By 1949, four central trade union organizations were functioning in the country: 1. The All India Trade Union Congress,

2. The Indian National Trade Union Congress,

3. The Hindu Mazdoor Sangh, and

4. The United Trade Union Congress The working class movement was also politicized along the lines of political parties. For instance Indian national trade Union Congress (INTUC) is the trade union arm of the Congress Party. The AITUC is the trade union arm of the Communist Party of India. Besides workers, white-collar employees, supervisors and managers are also organized by the trade unions, as for example in the Banking, Insurance and Petroleum industries.

Trade unions in India The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor markets consist of three sectors: 1. The rural workers, who constitute about 60 per cent of the workforce.

2. Organized sector, which employs 8 per cent of workforce, and

3. The urban informal sector (which includes the growing software industry and other services, not included in the formal sector) which constitutes the rest 32 per cent of the workforce.

At present there are twelve Central Trade Union Organizations in India: 1. All India Trade Union Congress (AITUC)

2. Bharatiya Mazdoor Sangh (BMS)

3. Centre of Indian Trade Unions (CITU)

4. Hind Mazdoor Kisan Panchayat (HMKP)

5. Hind Mazdoor Sabha (HMS)

6. Indian Federation of Free Trade Unions (IFFTU)

7. Indian National Trade Union Congress (INTUC)

8. National Front of Indian Trade Unions (NFITU)

9. National Labor Organization (NLO)

10. Trade Unions Co-ordination Centre (TUCC)

11. United Trade Union Congress (UTUC) and

12. United Trade Union Congress - Lenin Sarani (UTUC - LS) Industrial Relation Policy Prior to 1991, the industrial relations system in India sought to control conflicts and disputes through excessive labor legislations. These labor laws were protective in nature and covered a wide range of aspects of workplace industrial relations like laws on health and safety of labors, layoffs and retrenchment policies, industrial disputes and the like.

The basic purpose of these laws was to protect labors. However, these protectionist policies created an atmosphere that led to increased inefficiency in firms, over employment and inability to introduce efficacy. With the coming of globalization, the 40 year old policy of protectionism proved inadequate for Indian industry to remain competitive as the lack of flexibility posed a serious threat to manufacturers because they had to compete in the international market.

With the advent of liberalization in1992, the industrial relations policy began to change. Now, the policy was tilted towards employers. Employers opted for workforce reduction, introduced policies of voluntary retirement schemes and flexibility in workplace also increased. Thus, globalization brought major changes in industrial relations policy in India. The changes can be summarized as follows:

Collective bargaining in India has mostly been decentralized, but now in sectors where it was not so, are also facing pressures to follow decentralization.

Some industries are cutting employment to a significant extent to cope with the domestic and foreign competition e.g. pharmaceuticals. On the other hand, in other industries where the demand for employment is increasing are experiencing employment growths.

In the expansionary economy there is a clear shortage of managers and skilled labor.

The number of local and enterprise level unions has increased and there is a significant reduction in the influence of the unions.

Under pressure some unions and federations are putting up a united front e.g. banking.

Another trend is that the employers have started to push for internal unions i.e. no outside affiliation.

HR policies and forms of work are emerging that include, especially in multinational companies, multi-skills, variable compensation, job rotation etc. These new policies are difficult to implement in place of old practices as the institutional set up still needs to be changed.

HRM is seen as a key component of business strategy.

Training and skill development is also receiving attention in a number of industries, especially banking and information technology.

Causes Of Industrial Disputes

The causes of industrial disputes can be broadly classified into two categories: economic and noneconomic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc. Wages and allowances: Since the cost of living index is increasing, workers generally

bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes. Personnel and retrenchment: The personnel and retrenchment have also been an

important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4% were caused by retrenchment. Indiscipline and violence: From the given table, it is evident that the number of disputes caused by indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline, which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes were caused due to indiscipline respectively. During the year 2003, indiscipline accounted for the highest percentage (36.9%) of the total time-loss of all disputes, followed by cause-groups wage and allowance and personnel with 20.4% and11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of disputes. Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the

disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005 respectively. Leave and working hours:Leaves and working hours have not been so important causes

of industrial disputes. During 2002, 0.5% of the disputes were because of leave and hours of work while this percentage increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and working hours. Standing Miscellaneous: The Inter/Intra Charter Work orders/rules/service miscellaneous Union of conditions/safety factors include Rivalry Demands Load measures

Non-implementation of agreements and awards etc.

Analysis Of Industrial Disputes

The number of industrial disputes in country has shown slow but steady fall over the past ten years. In 1998, the total number of disputes was 1097 which fell by more than half to 440 in 2006.It is being estimated that this trend will continue in 2007 as well. To support this, only 45 cases of disputes have been recorded during the first four months of 2007. This significant decline is attributed to the serious attempts made by industries to improve industrial relationswith their workers. However, a deeper look at the data reveals that the number of mandays (i.e., the industrial unit of production equal to the work one person can produce in a day) lost due to disputes has not come down as significantly. The country, on an average, lost 25.4 million mandays of work annually between 1998 and 2006, which might have affected its industrial output.

More than 2.14 lakh mandays were lost due to work stoppages in 23 industrial disputes during January to March 2007. Though there has been a decline in the number of strikes, the country still witnessed some major strikes between 2004 and 2006, like those in Honda, Escorts, Apollo, and Skumars factories and in SBI bank.

On analyzing the data sector wise, it is clear that the private sector has witnessed greater number of disputes as compared to the public sector. In 2005, only 57 disputes were recorded in public sector which resulted in a wage loss of 79 Crores. In contrast to this, 399 disputes were recorded in the private sector. In the recent past, maximum number of disputes has been recorded in the manufacturing, agriculture and mining and quarrying industries.

Strikes

A strike is a very powerful weapon used by trade unions and other labor associations to

get their demands accepted. It generally involves quitting of work by a group of workers for the purpose of bringing the pressure on their employer so that their demands get accepted. When workers collectively cease to work in a particular industry, they are said to be on strike. According to Industrial Disputes Act 1947, a strike is a cessation of work by a body of persons employed in an industry acting in combination; or a concerted refusal of any number of persons who are or have been so employed to continue to work or to accept employment; or a refusal under a common understanding of any number of such persons to continue to work or to accept employment. This definition throws light on a few aspects of a strike. Firstly, a strike is a referred to as stoppage of work by a group of workers employed in a particular industry. Secondly, it also includes the refusal of a number of employees to continue work under their employer. In a strike, a group of workers agree to stop working to protest against something they think is unfair where they work. Labors withhold their services in order to pressurize their employment or government to meet their demands. Demands made by strikers can range from asking for higher wages or better benefits to seeking changes in the workplace environment. Strikes sometimes occur so that employers listen more carefully to the workers and address their problems. Causes of strikes:

Strikes can occur because of the following reasons:

Dissatisfaction with company policy

Salary and incentive problems

Increment not up to the mark

Wrongful discharge or dismissal of workmen

Withdrawal of any concession or privilege

Hours of work and rest intervals

Leaves with wages and holidays

Bonus, profit sharing, Provident fund and gratuity

Retrenchment of workmen and closure of establishment

Dispute connected with minimum wages

TYPES OF STRIKE 1. Economic Strike: Under this type of strike, labors stop their work to enforce their economic demands such as wages and bonus. In these kinds of strikes, workers ask for increase in wages, allowances like traveling allowance, house rent allowance, dearness allowance, bonus and other facilities such as increase in privilege leave and casual leave.

2. Sympathetic Strike: When workers of one unit or industry go on strike in sympathy with workers of another unit or industry who are already on strike, it is called a sympathetic strike. The members of other unions involve themselves in a strike to support or express their sympathy with the members of unions who are on strike in other undertakings. The workers of sugar industry may go on strike in sympathy with their fellow workers of the textile industry who may already be on strike.

3. General Strike: It means a strike by members of all or most of the unions in a region or an industry. It may be a strike of all the workers in a particular region of industry to force demands common to all the workers. These strikes are usually intended to create political pressure on the ruling government, rather than on any one employer. It may also be an extension of the sympathetic strike to express generalized protest by the workers.

4. Sit down Strike: In this case, workers do not absent themselves from their place of work when they are on strike. They keep control over production facilities. But do not work. Such a strike is also known as 'pen down' or 'tool down' strike. Workers show up to their place of employment, but they refuse to work. They also refuse to leave, which makes it very difficult for employer to defy the union and take the workers' places. In June 1998, all the Municipal Corporation employees in Punjab observed a pen down strike to protest against the non-acceptance of their demands by the state government.

5. Slow Down Strike: Employees remain on their jobs under this type of strike. They do not stop work, but restrict the rate of output in an organized manner. They adopt goslow tactics to put pressure on the employers.

6. Sick-out (or sick-in): In this strike, all or a significant number of union members call in sick on the same day. They dont break any rules, because they just use their sick leave that was allotted to them on the same day. However, the sudden loss of so many employees all on one day can show the employer just what it would be like if they really went on strike.

7. Wild cat strikes: These strikes are conducted by workers or employees without the authority and consent of unions. In 2004, a significant number of advocated went on wildcat strike at the City Civil Court premises in Bangalore. They were protesting against some remarks allegedly made against them by an Assistant Commissioner Lockouts

A lockout is a work stoppage in which an employer prevents employees from working. It is declared by employers to put pressure on their workers. This is different from a strike, in which employees refuse to work. Thus, a lockout is employers weapon while a strike is raised on part of employees. Acc to Industrial Disputes Act 1947, lock-out means the temporary 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 may happen for several reasons. When only part of a trade union votes to strike, the purpose of a lockout is to put pressure on a union by reducing the number of members who are able to work. For example, if a group of the workers strike so that the work of the rest of the workers becomes impossible or less productive, the employer may declare a lockout until the workers end the strike. Another case in which an employer may impose a lockout is to avoid slowdowns or intermittent work-stoppages. Occupation of factories has been the traditional method of response to lock-outs by the workers' movement. PICKETING When workers are dissuaded from work by stationing certain men at the factory gates, such a step is known as picketing. If picketing does not involve any violence, it is perfectly legal. Pickets are workers who are on strike that stand at the entrance to their workplace. It is basically a method of drawing public attention towards the fact that there is a dispute between the management and employees.

The purpose of picketing is:

to stop or persuade workers not to go to work

to tell the public about the strike

to persuade workers to take their union's side

GHERAO Gherao in Hindi means to surround. It denotes a collective action initiated by a group of workers under which members of the management are prohibited from leaving the industrial establishment premises by workers who block the exit gates by forming human barricades. The workers may gherao the members of the management by blocking their exits and forcing them to stay inside their cabins. The main object of gherao is to inflict physical and mental torture to the person being gheraoed and hence this weapon disturbs the industrial peace to a great extent. Analysis Of Strikes and Lockouts

In 1990, 1,825 strikes and lockouts were recorded. As a result, 24.1 million workdays were lost, from which 10.6 million were lost to strikes and 13.5 million to lockouts. More than 1.3 million workers were involved in these labor disputes. The number and seriousness of strikes and lockouts have varied from year to year. As can be seen from the below chart, there has been a steep decline in the number of strikes and lockouts. This continuous decline in strikes and lockouts indicates that theindustrial relations in India are improving. There were 227 strikes in 2005, resulting in the loss of 10.81 million man-days, while the number of lockouts stood at 229 with a loss of 18.86 million man-days. In JanuarySeptember 2006, there were only 154 strikes and 192 lockouts across the country, as compared to the statistics of 2005, which resulted in the time loss of 3.16 million man-days and 10.60 million man-days respectively.

The number of strikes and lockouts, taken together, was down by 4.4 per cent in 2005. During 2005, West Bengal experienced the maximum instances of strikes and lockouts (19216) followed by Kerala (3619) and Rajasthan (19247). Industrial disturbances were concentrated mainly in manufacturing (textile), financial intermediation, agriculture and mining and quarrying industries during 2005.

During 2000, 426 strikes and 325 lockouts were observed which resulted in total time-loss of 28.76 million mandays. Maximum time-loss was caused by 297 lockouts during 2003 which

resulted in a time-loss of 27.05 million mandays. As compared to previous years, in 2006 only 13.76 million mandays were lost due to strikes and lockouts.

Prohibition of Strikes and Lock-Outs

Employees are prohibited from striking according to the section 22 of Industrial Disputes Act 1947. Employees, who are working in a public utility service, cannot go on a strike without giving a notice of strike within the six weeks before striking. They can not go on strike either within fourteen days of providing the strike notice or before the expiry of the date of strike specified in any such notice. The same rule applies to the employers. Employers who are carrying on a public utility service can not lockout any of their employees without giving them a prior notice within six weeks before the lock out or within the fourteen days of giving such a notice. Moreover, the notice of strike or lockout is to be given in a prescribed manner showing the number of persons involved in the strike/lockout.

The notice of strike or lockout is not necessary when there is already a strike or lockout going on in the company. However, a notice should be issued on the day on which the lockout is declared just to intimate the appropriate authorities about the lockout. The employer is supposed to report the number of notices of strikes received by him to the appropriate Government or the authority prescribed by the government within the five days of receiving such notices. Illegal Strikes and Lock-Outs

A strike or a lock-out is illegal if it is declared in noncompliance with the section 22 (as defined above) of Industrial Disputes Act 1947, that is, if the notice period is not served or if the strike is held within the fourteen days of issuing the notice of strike. If a strike or lockout has already taken place and is being referred to a Board, the continuance of such a strike or lock out is not illegal provided it is in compliance with the provisions of act. Moreover, a lockout declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be illegal. Penalty for Illegal Strikes and Lock-outs

A workman who is involved in an illegal strike can be penalized with imprisonment for a term extendable to a month or with a fine or fifty rupees or both. In similar way, an employer who initiates and continues a lockout is punishable with imprisonment extendable to a month or with a fine of one thousand rupees or both. According to Section 25 of Industrial Disputes Act 1947, no person should provide any sort of financial aid to any illegal strike or lock-out. Any person who knowingly provides such a help in support of any illegal strike or lock-out is punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

Measures For Improving Industrial Relations

The following measures should be taken to achieve good industrial relations:

 Strong and Stable Union: A strong and stable union in each industrial enterprise is essential for good industrial relations. The employers can easily ignore a weak union on the plea that it hardly represents the workers. The agreement with such a union will hardly be honored by a large section of workforce. Therefore, there must be strong and stable unions in every enterprise to represent the majority of workers and negotiate with the management about the terms and conditions of service. Mutual Trust: Both management and labor should help in the development of an atmosphere of mutual cooperation, confidence and respect. Management should adopt a progressive outlook and should recognize the rights of workers. Similarly, labor unions should persuade their members to work for the common objectives of the organization. Both the management and the unions should have faith in collective bargaining and other peaceful methods of settling disputes.

Workers Participation in Management: The participation of workers in the management of the industrial unit should be encouraged by making effective use of works committees, joint consultation and other methods. This will improve communication between managers and workers, increase productivity and lead to greater effectiveness.

Mutual Accommodation. The employers must recognize the right of collective bargaining of the trade unions. In any organization, there must be a great emphasis on mutual accommodation rather than conflict or uncompromising attitude. One must clearly understand that conflicting attitude does not lead to amicable labor 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 management should be willing to co -operate rather than blackmail the workers.

Sincere Implementation of Agreements. The management should sincerely implement the settlements reached with the trade unions. The agreements between the management and the unions should be enforced both in letter and spirit. If the agreements are not implemented then both the union and management stop trusting each other. An environment of uncertainty is created. To avoid this, efforts should be made at both ends to ensure the follow up of the agreements.

Sound Personnel Policies: The following points should be noted regarding the personnel policies. The policies should be:

Formulated in consultation with the workers and their representatives if they are to be implemented effectively.

Clearly stated so that there is no confusion in the mind of anybody.

Implementation of the policies should be uniform organization to ensure fair treatment to each worker.

throughout

the

Governments Role: The Government should play an active role for promoting industrial peace. It should make law for the compulsory recognition of a representative union in each industrial unit. It should intervene to settle disputes if the management and the workers are unable to settle their disputes. This will restore industrial harmony.

Progressive Outlook: There should be progressive outlook of the management of each industrial enterprise. It should be conscious of its obligations and responsibilities to the owners of the business, the employees, the consumers and the nation. The management must recognize the rights of workers to organize unions to protect their economic and social interests.

7 important prerequisites for a successful collective bargaining

by Mithun Shetty

Important Prerequisites for a Successful Collective Bargaining are listed below: (1) The parties must attain a sufficient degree of organisation. If the workers organisation is weak, employers can say that it does not represent the workers and will refuse to negotiate with it. Unless the workers are able to form strong and stable unions, collective bargaining will not be successful. (2) Freedom of association is essential for collective bargaining. Where there is no freedom of association, there can be no collective bargaining. Freedom of association implies that the workers as well as the employers will have the right to form an organisation of their own to protect their interests. (3) There should be mutual recognition between both the groups. Collective bargaining cannot begin if the employers do not recognise the workers organisation. The conflict of interests makes the two groups hostile to each other. They must recognise each other and realise that adjustment and understanding is essential for the achievement of organisational goals. (4) There must exist a favourable political climate, essential for successful collective bargaining. If the government encourages collective bargaining as the best method of regulating conditions of employment, it will be successful. Where the governments restrict trade union activities, there can be no collective bargaining.

(5) Agreement must be observed by those to whom they apply. The workers organisation must be strong enough to exercise its authority over its members. If the trade union has no power over its members, collective bargaining will not be effectively implemented. (6) A give and take policy must prevail in the organisation. The difference between two parties can be adjusted only by compromise so that an agreement can be reached. Neither side should be too rigid on its demand. Their attitudes should be flexible and both sides should be ready to give up some of its demands. Unions should not rigidly insist upon unreasonable demands and should be ready to reduce its demands to come to an agreement. (7) Sometimes unfair labour practices are resorted to by both the employers and the trade unions. These will restrict the development of collective bargaining. Unfair labour practices should be avoided by both the sides, as this will create an atmosphere of goodwill.

What do you understand by Collective Bargaining? Write down the bargaining process. What are its benefits?
Collective Bargaining is a term adopted for the negotiation process between workers, represent by a Union such as a Trade Union, and their employer, represented by the management, for issues related to the terms and conditions of their employment.such as wages, working hours, benefits, and workload. An agreement arrived at by this negotiation process is called as Collective Bargaining Agreement (CBA) or Collective Employment Agreement (CEA). Practically, a worker and his employer are not on an equal footing because of the financial power of the employer and as such, it is extremely difficult, if not impossible, for a single worker to pressure his employer to provide equitable benefits for his work. Historically, this has proven to be the main cause of dissatisfaction among workers, resulting in decreased productivity, and poor condition of workers. The objective of collective bargaining is to mitigate the disadvantage of economic disparity between the worker and the employer by bargaining with the employer collectively instead of individually.

Approaches to Collective Bargaining

1. Traditional or Positional or Adversarial or Distributional or Win-Lose Bargaining - In this type of bargaining both the parties, i.e. the union and the management, come out with their own agenda with little or no understanding of each others problems. The process mostly involves a give and take type of negotiation. This is the most common type of collective bargaining and is used all over the world. 2. Principled or Mutual Gains or Integrative or Win-Win Bargaining - In this type of bargaining both the parties understand the issues involved and they approach it to solve the problems jointly. Thus, an equitable solution without any acrimony can be found. This process works when there is not much disparity between the education level of both the parties, such as in IT industry. The principle of collective bargaining is recognized by International Labor Organization (ILO) as well.

Bargaining Process
1. The process starts with the workers uniting to form an association in the form of a Trade Union. In the case of Workers of B and C Co vs Labour Commissioner, AIR 1964 Mad it was held that a

2.

3. 4. 5. 6. 7.

Trade Union can raise or sponsor a trade dispute and represent on behalf of its members in legal proceedings arising out of a trade dispute. Trade Union of registered and gets the power to represent the issues of the workers. Though it is not necessary for a TU to be registered. In the same case mentioned above, it was also held that an unregistered Trade Union that has the support of the majority of the workers has a better claim to negotiation than a recognized trade union that does not have majority support. The members of the trade union adopt a resolution to authorize the Trade Union to represent them and put their issues across to the management. Employer recognizes the Trade Union and gets ready to discuss the issues with the Trade Union representatives. The union representatives put their list of demands to the management and the management discusses those with the representatives. After a give and take either a mutually agreeable solution is found or pressurizing tactics such as strike or lock-out are adopted. If no solution is found, the matter could be referred to arbitration. If the solution is found, it is implemented and the process ends.

Benefits of Collective Bargaining

Benefits for Workers

1. 2. 3. 4. 5. 6. 7.

It provides uniformity and equality in conditions of labor for all laborers. It ensures progress of workers and increases their importance and respect. It prevents arbitrariness by owners regarding working conditions. It preserves personal interest of workers. It promotes welfare of workers. A worker does not feel alone and helpless, on the contrary, he feels powerful. It provides a check on employers and inspectors.

Benefits for Employers

1. 2. 3. 4. 5.

It is cheaper, easier, and safer option. It saves time and it benefits all the parties equally. Compromises reached by this process are not only applicable to the parties but also to those who are not a party. Upon success of collective bargaining, industrial peace prevails and mutual understanding and production increases. Compromises done through collective bargaining are binding on all the parties.

Benefits in General 1. 2. 3. 4. 5. Helps in satisfactory solution of problems and allows old customs and traditions. It reduces tension in parties and establishes a tradition of industrial peace. It has been proved helpful in bringing social change. Upon failure of the process, no party is insulted or hurt. In the case of Virundhachalam vs Management, Lotus Ltd, Lord Roland said that it ends the arbitrariness of inspectors by preventing them from becoming legal kings.

Collective bargaining

Collective bargaining is the process of negotiation between unions and employers regarding the terms and conditions of employment of employees, and about the rights and responsibilities of trade unions. It is a process of rule making, leading to joint regulation. The central role of collective bargaining between workers and employers and their organisations in industrial relations in the Member States is recognised by the EU in Article 28 of the Charter of Fundamental Rights of the European Union of December 2000 (Right of Collective Bargaining and Action) and in Article 12 of the Community Charter of the Fundamental Social Rights of Workers of 1989. The Right to Bargain Collectively was also declared a fundamental right in the 1961 European Social Charter of the Council of Europe (Article 6). The interpretation by the European Court of Human Rights in Strasbourg of the right to freedom of association in Article 11 of the European Convention for the Protection of Human Rights and Fundamental Freedoms has extended some protection also to collective bargaining (Wilson and the National Union of Journalists; Palmer, Wyeth and the National Union of Rail, Maritime and Transport Workers; Doolan and others v. United Kingdom, decided 2 July 2002). Just as collective bargaining receives legal support in the Member States, this array of European legal guarantees provides the background for the EUs recognition of the centrality of collective bargaining. The operation of collective bargaining in EU industrial relations is multi-faceted, as evident in the various functions attributed to collective agreements by EU Directives and the growing role ofEuropean collective agreements. At EU level, collective bargaining takes place at inter-confederal/inter-sectoral, multi-sectoral, industry/sectoral, enterprise and inter-regional level. Collective bargaining is a means of implementing EU directives in the field of employment and industrial relations. Therefore, one specific process of collective bargaining takes place when negotiations develop in the shadow of the law. This is exemplified by Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council, or a procedure in Community-scale undertakings and Community-scale groups of undertakings, for the purposes of informing employees and consulting with them the European Works Councils (EWC) Directive. The directive is characterised by a strategy, which is apparently assuming greater prominence in the EU system: the delegation to the social partners, management and labour, of the competence to negotiate the relevant European labour standards . The EWC is to be negotiated by the central management of the multinational enterprise and the representatives of the workforce; they must negotiate in a spirit of cooperation with a view to reaching an agreement on the detailed arrangements for implementing the information and consultation of employees (Article 6). However, the Directive shapes the negotiating process by explicitly providing that, if agreement is not reached, minimum (subsidiary) requirements laid down in an Annex to the Directive will apply (Article 7(1)). In practice, therefore, the structure of negotiations between the parties is influenced by the subsidiary requirements. Also in the case of the establishment of a European company or a European Cooperative Society , management has to negotiate at European level with a special negotiating body composed of representatives from various Member States. The increasing number of transnational enterprise undergoing restructuring represents another driver for collective bargaining at European level. There are already cases in which European industry federations and/or European Works Councils have signed framework agreements concerning the social regulation of restructuring processes. Other framework agreements that were negotiated at European level deal with labour policies and labour standards. As part of its Social Agenda for the period 2005-2010, the European Commission initiated a discussion on setting up an optional legal framework for transnational collective bargaining. With the growth of transnational enterprises, the continuing pressure of takeovers and mergers and the extension and development of European Works Councils, transnational collective bargaining is expected to become more common. Therefore, the European

Commission believes that a legal framework might become necessary to regulate such issues as defining the actors entitled to negotiate, the form and content of agreements, the legal effect of agreements, links to national and sectoral agreements as well as the right to collective action. Such an approach is anchored in the partnership for change priority advocated by the Lisbon Strategy . See also: coordination of collective bargaining; derogation; European social dialogue; horizontal subsidiarity; multi-sector agreement ; pacts for employment and competitiveness ; right of collective bargaining; social dialogue.