CONCEPT OF COLLECTIVE BARGAINING

A DOCTRINAL PROJECT

SUBMITTED BY
MS. SHIVANGI RANA
(Roll No. 20)
Semester IV
LL. M. (Business Law)

Submitted to

SIR L. A. SHAH LAW COLLEGE

GUJARAT UNIVERSITY, AHMEDABAD

ACADEMIC YEAR (2013-14)

TABLE OF CONTENTS

Content

Sr. No.

Pg. No.

1.

DECLARATION

2.

ACKNOWLEDGEMENT

3.

CERTIFICATE

4.

INTRODUCTION AND CONCEPT OF COLLECTIVE

BARGAINING

5.

POSITION OF COLLECTIVE BARGAINING IN INDIA

12

6.

LEGAL REGIME

16

7.

JUDICIAL TREND

23

8.

CONCLUSION AND SUGGESTIONS

26

9.

BIBLIOGRAPHY

27

DECLARATION
I do hereby declare that this Project work entitled COLLECTIVE BARGAINING has
been prepared by me as a partial fulfillment of the requirement of LL. M. SEM IV. I also
declare that I have acknowledged the sources / authorities in my Doctrinal Project work
accordingly.

_________________________________
Name & Signature of Researcher

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ACKNOWLEDGEMENT
A successful accomplishment of doctrinal research project can only be achieved with the
help of primary and secondary sources of research data. The present research project is
also made possible on account of primary and secondary research data. The researcher
acknowledges the contribution of primary sources such as www.judis.nic.in,
www.indiankanoon.org and www.legalserviceindia.com from where researcher could
obtain primary data in form of case laws and legal provisions connected with the project.
Besides this, the researcher also acknowledges the support and guidance offered by
faculty members of Sir L. A. Shah Law College from time to time. Without their
guidance this research project would not have been accomplished successfully and
efficiently. Last but not the least researcher would like to thank Sir L. A. Shah Law
College and Gujarat University for providing such opportunity in the form of project
whereby our knowledge is enhanced in this area.
Besides the researcher wish to express her gratitude towards those who may have
contributed to this work even though anonymously. The researcher extends her sincere
thanks to all.

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CERTIFICATE

This is to certify that the project entitled: Concept of Collective Bargaining has
been carried out by Shivangi Rana under my supervision and guidance, as a part of
continuous evaluation scheme.

Date:-______________

___________________
Name & Signature of the Course Co-ordinator

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CHAPTER 1
INTRODUCTION AND CONCEPT OF COLLECTIVE BARGAINING

Collective bargaining is a technique that has been adopted by union and the management to
reconcile their disputes in an amicable way. It is called collective bargaining because in the
process, employees select representatives from amongst them to discuss their conflicts with
the employer.
Collective Bargaining is a process through which normative system is created for resolving
industrial conflicts. It is a means to bring a systematic social change in the working conditions
and the management relationship in an establishment.
In the words of Harrinon, collective bargaining is a process of accommodation between two
institutions which have both common and conflicting interests.
Collective bargaining is a process of shared decision making and on the whole represents a
democratic way of settling dispute in an industry. It is the process of negotiation between
management 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. It is a process of
negotiation between employers and employees which is aimed at reaching harmony that
would regulate the working conditions in an industry.
The term collective bargaining was first used in the year 1891 though the concept existed
since the rise of trade unions in the 18 th century.
The right to collective bargaining is recognized and protected through international human
rights conventions. 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

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a code of defining the rights and obligations of each party in their employment/ industrial
relations with one another 1.
Collective bargaining involves discussions and negotiations between two groups regarding 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 2. Collective bargaining is thus, a process of negotiation between
employees and employer for the purpose of ascertaining mutually working conditions in an
establishment.
There are several essential features of collective bargaining, all of which cannot be reflected in
a single definition or description of the process 3:
1.

It is not equivalent to collective agreements because collective bargaining

refers to the process or means, and collective agreements to the possible result,
of bargaining. Collective bargaining may not always lead to a collective
agreement.

2. It is a method used by trade unions to improve the terms and conditions of

employment of their members.
3. It seeks to restore the unequal bargaining position between employer and
employee.
4. Where it leads to an agreement, it modifies, rather than replaces, the individual
contract of employment, because it does not create the employer-employee
relationship.
5. The process is bipartite, but in some developing countries the State plays a role
in the form of a conciliator where disagreements occur, or where collective
bargaining impinges on government policy.
Perlman aptly stated, "Collective bargaining is not just a means of raising wages and
improving conditions of employment. Nor is it merely democratic government in industry. It
is above all technique, collective bargaining as a technique of the rise of a new class is quite
different from the desire to displace or abolish" the "old ruling class" to gain equal rights as a
class to acquire an excessive jurisdiction in that sphere where the most immediate interests,
1

www.industrialrelations.com, last visited on 01.03.2014

www.industrialrelations.com, last visited on 6th March 2014
3
www.ilo.org, last visited on 1st March 2014
2

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both material and spiritual, are determined, and a shared jurisdiction with the older class or
classes in all other spheres 4.
Thematically, collective bargaining is based on the principle of balance of power. Compromise
or co-operation is based only on the relative power of each side. Even peaceful collective
bargaining relationships or even those marked by friendliness and a spirit of give and take are
the outer shell, underneath a constant testing and matching of rival power is going on5.
Collective Bargaining is particularly a tool which is applicable to employment relationship in
an industrial unit.
The ILO Right to Organize and Collective Bargaining Convention (No. 98), 1949 describes
collective bargaining as 6:
"Voluntary negotiation between employers or employers' organizations and workers'
organizations, with a view to the regulation of terms and conditions of employment by
collective agreements."
Collective Bargaining is based on mutual co-operation and faith. Collective bargaining
process is a wheel for smooth functioning of an industrial establishment. It is a method which
aims at resolving disputes in an amicable manner. It is a technique which brings about social
justice. Basically, collective bargaining is a process of negotiation between the employers and
employees to determine their wages, working hours, working conditions, rules, etc.

Objectives of the study

The research project has been carried out with the following objectives:
1. To study the concept of Collective Bargaining.
2. To know about the position and development of collective bargaining in
India.
3. To know what role The Bombay industrial relations Act and Industrial
disputes Act has played.
4

Eugene V. Schneider, Industrial Sociology, London, Mc Graw-Hill, (1971)

www.indiankanoon.org, last visited on 07th March 2014
6
www.ilo.org, last visited on 3rd March 2014
5

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4. To know the importance of trade unions in collective bargaining.

5. To study the legal provisions relating to concept of collective
bargaining.
6. To analyze observations of Supreme Court with regard to collective
bargaining process.

Hypothesis
In order to conduct a research work, some important hypotheses are to be formulated. The
focal points and assumptions are normally available through the formulation of hypothesis.
The major hypothesis developed on the basis of study of available literature and evaluation of
primary as well as secondary data and work done earlier including related studies is that:
1. The researcher assumes that Collective bargaining is excessively dependent on
monetary benefits.
2. The researcher assumes that Collective bargaining acts as a bridge between the
employer and employee.
3. The researcher assumes that Collective bargaining process has to an extent failed in
India.
4. The researcher assumes that Collective bargaining is a tool of negotiation applicable to
employment relationship.

Research Methodology
The present research study is mainly a doctrinal and analytical. Keeping this in view, the
researcher utilized the conventional method of using libraries consisting of primary sources.
As the study is doctrinal in nature, historical and doctrinal methods are adopted because it is
not possible to study purely by experimental method.
The relevant material is collected from the secondary sources. Materials and information are
collected by legal sources like books on Labour law by eminent authors like Ratna Sen,
Nirmal Singh, S.K.Bhatia, Eugene V. Schneider is also collected from print and electronic
media like www.industrialrelations.com, www.articlesbase.com, www.indiankanoon.org,
www.vakilno1.com, www.legalserviceindia.com, etc.

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From the collected material and information, researcher proposes to critically analyze the
topic of the study and tries to reach the core aspects of the study.

Scope of the research project:

The nature of the present research project is a doctrinal one. The subject matter of the study
being Collective Bargaining it would have been impracticable to carry out a non doctrinal
research project. Therefore researcher has opted for doctrinal research project. i.e. along with
referring the case laws the researcher has referred different sources such as net, newspaper,
journals reports, and articles. The scope of my study is limited to India. The study is carried
out to find out about the development of Collective Bargaining in India.

The scope of the present research is confined to study of concept of Collective Bargaining. In
this research project the researcher will critically analyse the meaning and concept of
Collective Bargaining. Thereafter the researcher will examine the position of collective
bargaining in India. Besides this the researcher will understand the legal framework and
judicial trend with regard to collective bargaining in India.

Scheme of research:
With such wanton hypothesis, aims and object and the doctrinaire approach of study, the work
has been preceded with the following five Chapters.
Chapter 1: Introduction
Chapter 2: Position of Collective Bargaining in India
Chapter 3: Legal Regime
Chapter 4: Judicial Trend
Chapter 5: Conclusion

Research Methodology:
The quality and value of research depends upon the proper and particular methodology
adopted for the completion of research work. Looking at the vastness of the research topic
doctrinal legal research methodology has been adopted. To make an authenticated study of the
research topic Collective Bargaining enormous amount of study material is required. The
relevant information and data necessary for its completion has been gathered from both
primary as well as secondary sources available in the report, books, journals, periodicals,
research articles and websites.
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From the collected material and information, researcher proposes to critically analyse the topic
of the study and tries to reach the core aspects of the study.

Review of Literature:
This is a doctrinal research project and for the purpose of the said research project the relevant
material has been collected from the primary as well as secondary sources. At this point of
time it is pertinent to review the literature form where the relevant material has been collected.
For the purpose of said research project the researcher has collected the relevant material from
the report and other texts. The material has also been collected from the articles on this topic
available in journals, periodicals, websites etc.
In addition to this the researcher has also collected research articles form Electronic Database
on this topic. These articles have substantially helped the researcher in understanding and
conducting the research project. The researcher has heavily relied on these articles for the
purpose of this research project. Besides, the researcher has also analyzed articles on
collective Bargaining on websites like www.industrialrelations.com, www.indiankanoon.org,
www.legalserviceindia.com.

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CHAPTER 2
POSITION OF COLLECTIVE BARGAINING IN INDIA

The scope of collective bargaining has remained limited in India by a well defined legal
framework.
Collective Bargaining machinery fundamentally, is a reflection of a particular social and
political climate. The history of the trade union movement shows that union are affiliated to
one or the other political parties. As a result most of the trade unions are controlled by
outsiders. The presence of outsiders, is one of the important reasons for the failure of
collective bargaining in India.
The Trade Unions Act, 1926 permits outsiders to be the office bearers of a union to the extent
of half the total number of office bearers. So, it permits one to be the leader of the union who
does not actually work in the industry. Sometimes a dismissed employee working as a union
leader may create difficulties in the relationship between the union and the employer.
Nevertheless, experience shows that outsiders who have little knowledge of the background of
labour problems, history of labour movement, fundamentals of trade unionism and the
technique of the industry and with even little general education assume the charge of labour
union and become the self-appointed custodian of the welfare of workers. The employers,
therefore have been reluctant to discuss and negotiate industrial matters with outsiders, who
have no personal or direct knowledge of day to day affairs of the industry 7. Generally, the
employees repudiate recognition to the unions which are not directly connected with the
affairs of the industry.
Accordingly employees refuse recognition to the unions which are either controlled by the
politicians or affiliated to a particular political party or controlled by a particular individual.
Government cannot morally compel employers to accord recognition to unions without
driving out the politicians from them. The State must outright ban "outsiders" from the trade
union body. Further, provision for political funds by trade unions should be eliminated, since
it invariably encourages the politicians to prey upon them. The National Commission on
7

www.articlesbase.com, last visited on 05.03.2014

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Labour has overlooked this aspect. The Commission does not favour a legal ban on nonemployees for holding the union office. It says that without creating conditions for building up
the internal leadership, a complete banning of outsiders would only make unions weaker. The
Commission hopes that Internal leadership would develop through their education and
training. Accordingly the Commission suggests proportion of the outsiders and the workers in
a union executive. On realizing the problems of outsiders in the Union, the Industrial
Relations Bill, 1988 proposes to reduce the number of outsiders to two only 8.
The major emphasis of both union and employers is to settle the disputes through adjudication
rather than sorting out the issues among themselves. Whatever bargaining takes place, it is
limited to large plants only. Smaller organizations do not prefer this form of handling the
issues. There are several factors which are responsible for this state of affairs 9.
Most of the trade unions are having political affiliations; they continue to be dominated by the
politicians who in the end use them to meet their political ends. Besides, there are rivalries
between the unions which thwart the process of collective bargaining. However, there is a
close association between the trade unions and political parties which has resulted into trade
unions leaning towards political directions thereby obstructing the process of collective
bargaining. The reason for failure of collective bargaining process in India is the major
dominance of the political parties on the trade unions resulting into disturbance in the working
conditions of the industrial unit. A strong trade union is vital for effective collective
bargaining. Another vital aspect for effective collective bargaining is mutual accommodation
and mutual trust. A problem solving attitude would help in effective collective bargaining and
would also reduce the unnecessary litigation.

Obstacles in the growth of Collective Bargaining

The progress of collective bargaining in India is not very encouraging but it has achieved
some amount of success. Some of the obstacles in growth of collective bargaining are:
Multiplicity of Unions 10:
There is a problem of multiplicity of unions in most of the industrial establishments. No union
enjoys the support of the majority of workers in the plant. Moreover, rivalry among the trade
unions does not allow to create the proper atmosphere for collective bargaining.

www.articlesbase.com, last visited on 05.03.2014

www.legalserviceindia.com, last visited on 05.03.2014
10
Industrial Relations and Collective Bargaining: Nirmal Singh & S.K.Bhatia (2006)
9

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 Non-Recognition:
There is a lack of definite procedure to determine which union is to be recognized to serve as
a bargaining on behalf of the workers.

Political Interference in Trade unions:

There has been very close association between the trade unions and political parties. As a
result trade union movement has not encouraged collective bargaining. Most of the trade
unions are controlled by the political parties which results into a failure of collective
bargaining process. The presence of outsiders results in the failure of successful collective
bargaining. Generally, political parties provide fund to the trade unions and therefore, the
trade unions are controlled by political parties. Employees normally do not permit affiliations
with the political parties.
Defective laws11:
The law provides an easy access to adjudication. Under the Industrial Disputes Act, the parties
to the dispute may request the government to refer the matter to adjudication which
government agrees. Thus, faith in bargaining process is reduced.

Process of Collective Bargaining

Indian Institute of Personnel Management has suggested the following process for collective
bargaining:
Composition of the Negotiating Team 12:
The negotiating team should consist of representatives of both workers and employers, with
adequate qualities, job knowledge and skill for negotiation. They should not only represent the
two parties but also have full authority to speak for them and make decisions. A correct
understanding of the main issues to be covered and intimate knowledge of operations, working
conditions, production norms and other relevant factors in addition to the basic qualities of
balanced views even temper, analytical mind and objective outlook are highly desirable in the
11

Industrial Relations and Collective Bargaining: Nirmal Singh & S.K.Bhatia (2006), Deep & Deep Publications
Pvt
Ltd.
12
Constructive Industrial Relations and Labour laws: S.K.Bhatia (2007)

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members of the negotiating team. It is essential to include in the management team, executives
who can talk authoritatively on personnel and production matters.

Make a Good Beginning:

It will be good to stress the need for mutual co-operation and for putting the members in the
right frame of mind before the talk start. Mutual trust and co-operation is essential for a
successful bargaining or negotiating process. With a proper climate for mutual understanding
and a common desire to reach agreement by objective assessment of facts, with a true spirit of
give and take, the process of negotiation has every chance of success.
Maintain Continuity of Talks 13:
Collective bargaining is like any other negotiation and, there will on occasions be emotional
outbursts and road blocks. The important thing is never to reach a dead end but to keep talks
continuing. Under the worst situations, breaking off temporarily for cooling down and
rethinking may be necessary. When the main issue gets confused in the dust and storm raised,
bringing things to fundamentals will often help. It may at times be necessary to leave
controversial points alone for the time being and leap over to the next issue. As long as talk
continue, a solution will be possible ultimately.
Develop Problem Solving Attitude:
The attitude of problem solving on both the sides will help in reaching an agreement. With a
view to improve the working conditions of an establishment, a problem solving attitude must
be adopted by both employers and employees. This would resolve the conflicts between the
parties and would bring friendliness in the employer-employee relationship.
Right type of Leadership:
Right type of leadership on part of trade union is important and management team may also
join together members from production and other related departments. A composite team is
important. An efficient and independent leader would be necessary in order to bring about
smooth reconciliation between employer and employees.

13

Constructive Industrial Relations and Labour laws: S.K.Bhatia (2007)

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CHAPTER 3
LEGAL REGIME

Collective Bargaining process is encouraged by various legislations in India. Provisions are

laid down with regard to settling the disputes through collective bargaining. The provisions
aim at settling the conflicts through an amicable arrangement. The statutory framework in
India governs the settlement process and thereby encouraging collective bargaining.
Enumerated below are some of the legislations which specifically deal with the provisions of
settlement of disputes and rights of trade unions and workers in an establishment.
The Constitution of India lays down provisions for the benefit of trade unions and
workers which are as under:
Article 19. Protection of certain rights regarding freedom of speech etc 14.(1) All citizens shall have the right(a) to freedom of speech and expression;
(b) to assemble peaceably and without arms;
(c) to form associations or unions;
(d) to move freely throughout the territory of India;
(e) to reside and settle in any part of the territory of India; and
(f) omitted
(g) to practice any profession, or to carry on any occupation, trade or business.
(2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or
prevent the State from making any law, in so far as such law imposes reasonable restrictions
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on the exercise of the right conferred by the said sub-clause in the interests of the sovereignty
and integrity of India, the security of the State, friendly relations with foreign States, public
order, decency or morality or in relation to contempt of court, defamation or incitement to an
offence.
(3) Nothing in sub-clause (b) of the said clause shall affect the operation of any existing law in
so far as it imposes, or prevent the State from making any law imposing, in the interests of the
sovereignty and integrity of India or public order, reasonable restrictions on the exercise of the
right conferred by the said sub-clause.
(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in
so far as it imposes, or prevent the State from making any law imposing, in the interests of the
sovereignty and integrity of India or public order or morality, reasonable restrictions on the
exercise of the right conferred by the said sub-clause.
(5) Nothing in sub-clauses (d) and (e) of the said clause shall affect the operation of any
existing law in so far as it imposes, or prevent the State from making any law imposing,
reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses
either in the interests of the general public or for the protection of the interests of any
Scheduled Tribe.
(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in
so far as it imposes, or prevent the State from making any law imposing, in the interests of the
general public, reasonable restrictions on the exercise of the right conferred by the said subclause, and, in particular, nothing in the said sub-clause shall affect the operation of any
existing law in so far as it relates to, or prevent the State from making any law relating to,(i) the professional or technical qualifications necessary for practicing any profession
or carrying on any occupation, trade or business, or
(ii) the carrying on by the State, or by a corporation owned or controlled by the State,
of any trade, business, industry or service, whether to the exclusion, complete or
partial, of citizens or otherwise.

Article 43: Living wage, etc., for workers 15.The State shall endeavor to secure, by suitable legislation or economic organization or in any
other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions
of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural
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opportunities and, in particular, the State shall endeavor to promote cottage industries on an
individual or co-operative basis in rural areas.

Article 43.A: Participation of workers in management of industries 16.The State shall take steps, by suitable legislation or in any other way, to secure the
participation of workers in the management of undertakings, establishments or other
organizations engaged in any industry.
The Industrial Disputes Act,1947 lays down certain provisions to protect the interest of
workers which are:
Section 11 Procedure and powers of conciliation officers, Board, courts and Tribunals
and National Tribunals 17:(1) Subject to any rules that may be made in this behalf, an arbitrator, a Board, Court, Labour
Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other
authority concerned may think fit.
(2) A conciliation officer or a member of a Board, or Court or she presiding officer of a
Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing
or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied
by any establishment to which the dispute relates.
(3) Every Board, Court, Labour Court, Tribunal or National Tribunal shall have the same
powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908),
when trying a suit, in respect of the following matters, namely :- (a) enforcing the attendance
of any person and examining him on oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witness;
(d) in respect of such other matters as may be prescribed; and every inquiry or investigation
by a Board, Court, Labour Court, Tribunal or National Tribunal shall be deemed to be a
judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45
of 1860).

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(4) A conciliation officer may enforce the attendance of any person for the purpose of
examination of such person or call for and inspect any document which he has ground for
considering to be relevant to the industrial dispute or to be necessary for the purpose of
verifying the implementation of any award or carrying out any other duty imposed on him
under this Act, and for the aforesaid purposes, the conciliation officer shall have the same
powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), in
respect of enforcing the attendance of any person and examining him or of compelling the
production of documents.
(5) A Court, Labour Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one
or more persons having special knowledge of the matter under consideration as assessor or
assessors to advise it in the proceeding before it.
(6) All conciliation officers, members of a Board or Court and the presiding officers of a
Labour Court, Tribunal or National Tribunal shall be deemed to be public servants within
the meaning of section 21 of the Indian Penal Code (45 of 1860).
(7) Subject to any rules made under this Act, the costs of, and incidental to, any
proceeding before a Labour Court, Tribunal or National Tribunal shall be in the discretion
of that Labour Court, Tribunal or National Tribunal, and the Labour Court, Tribunal or
National Tribunal, as the case may be, shall have full power to determine by and to whom
and to what extent and subject to what conditions, if any, such costs are to be paid, and to
give all necessary directions for the purposes aforesaid and such costs may, on application
made to the appropriate Government by the person entitled, be recovered by that
Government in the same manner as an arrear of land revenue.
(8) Every Labour Court, Tribunal or National Tribunal shall be deemed to be a Civil Court
for the purposes of sections 345, 346 and 348 of the Code of Criminal Procedure, 1973 (2
of 1974).
Section 18: Persons on whom settlements and awards are binding 18
[(1) A settlement arrived at by agreement between the employer and workman otherwise
than in the course of conciliation proceeding shall be binding on the parties to the
agreement.
(2) [Subject to the provisions of sub-section (3), an arbitration award] which has become
enforceable shall be binding on the parties to the agreement who referred the dispute to
arbitration.]
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[(3)] A settlement arrived at in the course of conciliation proceedings under this Act [or an
arbitration award in a case where a notification has been issued under sub-section (3A) of
section 10A] or [an award [of a Labor Court, Tribunal or National Tribunal] which has
become enforceable] shall be binding on(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the
dispute, unless the Board [arbitrator] [Labor Court, Tribunal or National Tribunal,]
as the case may be, records the opinion that they were so summoned without
proper cause;
(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs,
successors or assigns in respect of the establishment to which the dispute relates;
(d)where a party referred to in clause (a) or clause (b) is composed of workmen, all
persons who were employed in the establishment or part of the establishment., as
the case may be, to which the dispute relates on the date of the dispute and all
persons who subsequently become employed in that establishment or part.
The Trade Unions Act, 1926 provides for certain provisions to protect the interest of
trade unions which are as under:
Section 17: Criminal Conspiracy in trade Unions 19
No [office-bearer] or member of a Registered Trade Union shall be liable to punishment
under sub-section (2) of section 120B of the Indian Penal Code, 1860 (45 of 1860) in
respect of any agreement made between the members for the purpose of furthering any
such object of the Trade Union as is specified in section 15, unless the agreement is an
agreement to commit an offence.
Section 18: Immunity from civil suit in certain cases
(1) No suit or other legal proceeding shall be maintainable in any Civil Court against
any registered Trade Union or any 4[office-bearer] or member thereof in respect of
any act done in contemplation or furtherance of a trade dispute to which a member
of the Trade Union is a party on the ground only that such act induces some other
person to break a contract of employment, or that it is in interference with the
trade, business or employment of some other person or with the right of some other
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person to dispose of his capital or of his labour as he wills.

(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in
any civil court in respect of any tortious act done in contemplation or furtherance
of a trade dispute by an agent of the Trade Union if it is proved that such person
acted without the knowledge of, or contrary to express instructions given by, the
executive of the Trade Unions.

The Bombay Industrial Relations Act,1946 lays down certain provisions to protect
the interest of workers which are as under:
Section 55: Commencement of conciliation proceedings 20
On receipt of the statement of the case under section 54 of the Conciliator shall, except in
a case in which by reason of the provisions of section 64 a conciliation proceeding can not
be commended, 66[within a week enter the industrial dispute in the register kept for the
purpose and thereupon the conciliation proceeding shall he deemed to have commenced
from 66[the date of such entry ii the register, which date shall be communicated by him to
the parties concerned]
Section 56: Conciliation Proceeding
(1) The Conciliator shall hold the conciliation proceeding in the prescribed manner.
(2) It shall he the duty of the Conciliator to endeavour to bring about the settlement of the
industrial dispute and for this purpose the Conciliator shall enquire into the dispute and all
matters affecting the merits thereof and may do all such thing as he thinks fit for the
purpose of inducing the parties to come to a fair and amicable settlement of the dispute
may adjourn the conciliation proceeding for any period sufficient in his opinion to allow
the parties to arrive at a settlement or for any other reason

Section 63: Completion Of Conciliation Proceeding 21

A conciliation proceeding shall be deemed to have been completed(i) when a memorandum of the settlement arrived at in such proceeding is signed by the
parties under sub-section (1) of section 58, or
(ii) when the parties agree in writing to submit the dispute to arbitration, or
20
21

www.vakilno1.com, last visited on 6th March 2014

www.vakilno1.com, last visited on 6th March 2014

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(iii) if no settlement is arrived at when the report of the Conciliator or the Board is
published by the [State Government, or
(iv) when the time fixed for the completion of such proceeding under section 62 has
expired.
Various legislations in India have been introduced which give encouragement to collective
bargaining. These legal provisions provide for settling the disputes between employer and
employees through reconciliation. Moreover, the Constitution of India gives right to form
trade unions or associations for the purpose of settlement of disputes in an amicable way. It is
also interesting that the Industrial Disputes Act lays down the procedure for the settlement of
industrial disputes. The Industrial Disputes Act seeks to achieve social justice through
collective bargaining. Labour Laws in India govern the rights of employees as well as provide
for settlement of disputes through collective bargaining.

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CHAPTER 4
JUDICIAL TREND

Lately, the trend in the Supreme Court judgments has been in favour of collective bargaining
and settlement of disputes through conciliation. However, no guidelines or framework have
been laid down by the Supreme Court. The Supreme Court has upheld the sanctity of settling
the disputes through conciliation between management and union. The Supreme Court has
time and again through its various decisions encouraged collective bargaining. There is delay
and ambiguity in the litigation process and therefore, the Supreme Court has observed that
settlement through collective bargaining would strengthen the relations between employees
and employers. Following are some of the landmark judgments which has contributed in the
growth and development of Collective Bargaining in India :

1. Ram Prasad Viswakarma v. Industrial Tribunal 22:The Court in this case observed that "It is well known how before the days of collective
bargaining', labour was at a great disadvantage in obtaining reasonable terms for contracts of
service from its employer. As trade unions developed in the country and Collective bargaining
became the rule, the employers found it necessary and convenient to deal with the
representatives of workmen, instead of individual workmen, not only for the making or
modification of contracts but in the matter of taking disciplinary action against one or more
workmen and as regards of other disputes."

2. Karol Leather Karamchari Sangathan v. Liberty Footwear Company23:The Supreme court in this case observed that, Collective bargaining is a technique by which
dispute as to conditions of employment is resolved amicably by agreement rather than
coercion. According to the Court, the Industrial Disputes Act, 1947 seeks to achieve social
justice on the basis of collective bargaining.

3. Bharat Iron Works v. Bhagubhai Balubhai Patel 24:22

(1961) I LLJ. 504

AIR 1990 SC 247
24
(1976) Lab. 1.C:4 [S.C.]
23

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In this case it was held that Collective bargaining, is being the order of the day in the
democratic, social welfare State, legitimate trade union activities, must shun all kinds of
physical threats, coercion or violence, and must march with a spirit of tolerance,
understanding and grace in dealings on the part of the employer. Such activities can flow in
healthy channel only on mutual cooperation between the employer and the employees and
cannot be considered as irksome by the management in the best interests of its business.

4. The Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai and Ors 25:The court in this case held that when the Union files a petition it represents the workmen as
collective noun, the numerous humans whose presence is definite in the contest, though
formally invisible on the party array. These observations were made in the context pertaining
to bonus which was espoused by the Union. It is in this context that the Court said that it is
enough from the facts of the case for the Court to take the Union as an akin for the totality of
the workmen involved in the dispute.

5. National Engineering Industries Limited v. State of Rajasthan and Ors 26:In this case the court held that a settlement in the course of conciliation proceeding under
Section 18(3) of the Industrial Disputes Act is enforceable and binding even against a
minority of the workmen who are opposing the collective bargaining power of the recognized
Union with the Management. However, it is clear that settlement arrived at under Section
18(1) of the Industrial Disputes Act refers to settlement arrived outside the conciliation
proceedings and the same has a limited application and it binds only the parties to the
agreement.

6. Herbertsons Ltd. v. The Workmen of Herbertsons Ltd. and Ors 27:In this case the Supreme Court held that when a recognised Union negotiates with an
employer the workers as individuals do not come into the picture. It is not necessary that each
individual worker should know the implications of the settlement since a recognised union,
which is expected to protect the legitimate interests of labour, enters into a settlement in the
best interests of labour. This is the normal rule. There may be exceptional cases where there
may be allegations of mala fides, fraud or even corruption or other inducements. But, in the

25

AIR 1996 SC 1455

(2000) ILLJ 247 SC
27
AIR 1977 SC 322
26

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absence of such allegations a settlement in the course of collective bargaining is entitled to

due weight and consideration.
Thus, it can be seen that Supreme Court has encouraged the process of collective bargaining.
In its various decisions the Supreme Court has observed that in order to improve the working
conditions of an industrial establishment, collective bargaining method should be adopted.
Supreme Court has also observed that collective bargaining is the need of the day in a
democratic set up which seeks to achieve social welfare and justice. It has also held that
discussions between the representatives of trade union and employers would help in adjusting
and settling various conflicts and would help in brining striking balance in settlement of
disputes in an establishment.

1.
2.

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CHAPTER 5
CONCLUSIONS AND SUGGESTIONS

Lately there is a definite shift in emphasis and reliance on collective bargaining. Collective
bargaining has got a foothold as a primary method of settling industrial disputes. Conditions
have to be created to promote collective bargaining. The most important thing is recognition
of a representative union as the sole bargaining agent.
Collective bargaining is an indispensable element of industrial relations. It is the paramount
method of working out employer-employee relationship. It is also one of the best method to
effectively integrate the interests of unions with the interest of the company. This is due to the
fact that the process of bargaining often leads to better mutual understanding and flexibility in
approach. Collective bargaining agreements provide a method for regulation of conditions of
employment by those directly concerned. Collective bargaining helps the parties to adjust the
abrupt and unanticipated change in the environment without disrupting either the existing
arrangements or the production activity.
Though several reasons have contributed in failure of process of collective bargaining in
India, yet Supreme Court through its various judgments following legislations have
encouraged the process of collective bargaining thereby settling the disputes in an amicable
manner. Time and again the Apex Court has rendered decision to the effect that settling the
disputes through reconciliation would help in improving the working conditions of an
establishment.
However, it can be suggested that there is a need to frame laws or labour policy which would
govern the process of collective bargaining. The State should also play a progressive role in
eradicating the hindrances that stand in the way of mutual and amicable settlement of
industrial disputes. Moreover, policies should be framed for compulsory recognition to the
trade unions in order to avoid any political dominance. Driving out the political parties from
controlling the trade unions is necessary. The practice of providing fund to the trade unions by
the political parties should be completely eradicated.

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BIBLIOGRAPHY

Books:1. Eugene V. Schneider, Industrial Sociology, London, Mc Graw-Hill, (1971)

2. Ratna Sen, Industrial Relations, (2 nd ed: 2009), Macmillan Publishers India Ltd.
3. S.K.Bhatia, Constructive Industrial Relations and Labour Laws, (2007) Deep &
Deep Publications Pvt Ltd
4. Nirmal Singh & S.K.Bhatia, Industrial Relations and Collective Bargaining (2006)
Deep & Deep Publications Pvt Ltd.
Web References:.
1. www.industrialrelations.com, last visited on 6th March 2014
2. www.articlesbase.com, last visited on 5th March 2014
3. www.indiankanoon.org, last visited on 7th March 2014
4. www.vakilno1.com, last visited on 6th March 2014
5. www.advocatekhoj.com, last visited on 6th March 2014
Case Laws:1. Ram Prasad Viswakarma v. Industrial Tribunal, (1961) I LLJ. 504
2. Karol Leather Karamchari Sangathan v. Liberty Footwear Company, AIR 1990
SC 247
3. Bharat Iron Works v. Bhagubhai Balubhai Patel, (1976) Lab. 1.C:4 [S.C.]

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4. The Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai and Ors, AIR 1996 SC
1455
5. National Engineering Industries Limited v. State of Rajasthan and Ors, (2000)
ILLJ 247 SC
6. Herbertsons Ltd. v. The Workmen of Herbertsons Ltd. and Ors, AIR 1977 SC 322

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