Collective bargaining is a process of negotiation between employers and a group of employees

aimed at reaching agreements to regulate working conditions. The interests of the employees are
commonly presented by representatives of a trade union to which the employees belong.
The collective agreements reached by these negotiations usually set out wage scales, working
hours, training, health and safety,overtime, grievance mechanisms, and rights to participate in
workplace or company affairs.[1]
The union may negotiate with a single employer (who is typically representing a company's
shareholders) or may negotiate with a group of businesses, depending on the country, to reach
an industry wide agreement. A collective agreement functions as a labor contract between an
employer and one or more unions. Collective bargaining consists of the process of negotiation
between representatives of a union and employers (generally represented by management, or, in
some countries such as Austria, Sweden and the Netherlands, by an employers' organization) in
respect of the terms and conditions of employment of employees, such as wages, hours of work,
working conditions, grievance procedures, and about the rights and responsibilities of trade
unions. The parties often refer to the result of the negotiation as acollective bargaining
agreement (CBA) or as a collective employment agreement (CEA).

International protection[edit]
The right to collectively bargain is recognized through international human rights conventions.
Article 23 of the Universal Declaration of Human Rights identifies the ability to organize trade
unions as a fundamental human right.[3] Item 2(a) of the International Labour
Organization's Declaration on Fundamental Principles and Rights at Work defines the "freedom
of association and the effective recognition of the right to collective bargaining" as an essential
right of workers.[4] The Freedom of Association and Protection of the Right to Organize
Convention, 1948 (C087) and several other conventions specifically protect collective bargaining
through the creation ofinternational labour standards that discourages countries from violating
worker's rights to associate and collectively bargain.

[5]

In June 2007 the Supreme Court of Canada extensively reviewed the rationale for regarding
collective bargaining as a human right. In the case of Facilities Subsector Bargaining Association
v. British Columbia, the Court made the following observations:
The right to bargain collectively with an employer enhances the human dignity, liberty and
autonomy of workers by giving them the opportunity to influence the establishment of workplace
rules and thereby gain some control over a major aspect of their lives, namely their work...
Collective bargaining is not simply an instrument for pursuing external endsrather [it] is
intrinsically valuable as an experience in self-government... Collective bargaining permits
workers to achieve a form of workplace democracy and to ensure the rule of law in the

workplace. Workers gain a voice to influence the establishment of rules that control a major
aspect of their lives.[6]

Collective Bargaining in India:

An Overview
by Smriti Chand HRM

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The expression collective bargaining, was coined by Sydney and

Beartrice. This was widely accepted and used in the United States of
America for settling industrial disputes. Thus, the USA is considered as the
motherland of collective bargaining. Collective bargaining as a method of
settling industrial disputes is comparatively of recent origin in India.
Though attention was paid to, adopt collective bargaining as a method to
resolve industrial disputes since, the dawn of planning era in India; it
received increasing emphasis since the days of the National Commission
of Labour. The origin and development of collective bargaining in India can
be delineated as follows:

Plans and Collective Bargaining:

The First Five-Year Plan duly recognized the need for collective bargaining
to resolve labour disputes and maintain peaceful industrial relations in the
country. It clearly stated that collective bargaining can derive reality only
from the organised strength of workers on the one hand, and a genuine
desire on the part of the employer to co-operate with employees
representatives on the other.

The state wishes to encourage collective bargaining for peaceful settlement

of industrial disputes in order to minimize and avoid, to the extent possible,
its intervention in union-management relations.
Increasing emphasis was given to collective bargaining in the subsequent
Second Five-Year Plan It noted that for the development of an undertaking
or an industry, industrial peace is indispensable. Obviously this can best be
achieved by the parties themselves. The best solution to the common
problems, however, can be found by mutual agreement or collective
bargaining.
The concern for collective bargaining continued in the Third Five-Year Plan
also. The main emphasis was given to the adoption of voluntary arbitration
in the place of compulsory adjudication. Similarly, the Fourth Five-Year Plan
stressed the need for greater emphasis on collective bargaining as also a
strong trade union to ensure better relations between the employer and the
employees.

National Commission on Labour and Collective

Bargaining:
The emergence of the National Commission on Labour in 1966 was a
epoch-making in the history of collective bargaining in India. The
Commission made comprehensive investigations into almost all the
problems relating to labour. The role of collective bargaining in solving
labour problems was duly appreciated by making a series of
recommendations to make collective bargaining more effective in future.
The important among several recommendations it made are:
(i) Collective bargaining as it has developed in the West may not be quite
suitable for India given its different socio-industrial background.

(ii) There is a need to evolve satisfactory arrangements for union

recognition by statute as also to create favourable conditions to make such
arrangements succeed.
(iii) No collective bargaining can exist and succeed without the right to
strike or lockout.
However, in spite of all these, collective bargaining in India could not make
much headway due to various reasons.
Important among them are:
(i) There has been lack of strong trade unions and employers organisations
to represent the national interests.
(ii) There has been increasing inclination to compulsory adjudication for the
settlement of industrial disputes.
(iii) Multiplicity of trade unions have resulted in union-rivalry in solving
labour problems.
(iv) The Government has shown its lukewarm attitude towards promotion of
collective bargaining culture in the country.
(v) The Governments initiatives to encourage collective bargaining are only
in letters, not in spirit and practice.

Collective Bargaining in India: Laws and

Realities

This article was written by Madhurima Dutta, a student of RMLNLU, Lucknow.

Collective bargaining is a procedure by which employment related disputes are

resolved cordially, peacefully and voluntarily by settlement between labour unions
and managements.
The collective bargaining in India remained limited in its scope and restricted in its
coverage by a well defined legal structure. In reality, the labour laws systematically
promoted and keep in existence a duality of labour-formal sector workers enjoying
better space for collective bargaining and informal ones with no scope for collective
bargaining. To understand this, I will discuss about the labour legislations in India
and their scope and coverage.

The Factories Act, 1948 provides for the health, safety, welfare and other aspects of
workers while at work in the factories. Under this Act, an establishment where the
manufacturing process is carried on with the help of power and employs 10 workers or an
establishment where the manufacturing process runs without power and employs 20
workers is considered to be a factory. However, the following provisions of the Act are not
applicable to all factories; provision of a rest room will be applicable only if there are 150 or
more workers. Provision of canteen will be applicable only if there are 250 or more
workers; provisions for ambulance, dispensary, and medical and para-medical staff:
applicable only if there are 500 or more workers.

Employees Provident and Miscellaneous Provisions Act, Maternity Benefit

Act andPayment of Gratuity Act apply to all establishments with 10 or more workers.
ThoughEmployees State Insurance Act applies to only those establishments with 20 or
more workers. Minimum Wages Act applies to all establishments and all workers, but
thePayment of Wages Act applies only to those establishments with 10 or more workers,
and also only to those workers getting wages less than Rs 1600 per month. On the other
hand, the Payment of Bonus Act is applicable to only those enterprises employing 20 or
more workers and only to those workers getting wages less than Rs 3500 per month.

Industrial Disputes Act, 1947 lays down the procedures for the settlement of
industrial disputes. Its procedural aspects are applicable to all enterprises for the
settlement of industrial disputes. However, actually protective clauses for the workers
pertaining to closures, layoffs and retrenchment are contained in Chapter VA and Chapter
VB, having limited applicability. Chapter V B does not apply to any establishment

employing less than one hundred workers, and Chapter VA does not apply to any
establishment employing less than 50 workers. Industrial Employment (Standing Orders)
Act makes it compulsory to have Standing Orders in each enterprise to describe
misconducts and other service conditions, and also entails that for any misconduct no
worker will be punished without due process of law using the principles of natural justice.
But this law does not apply to those enterprises employing less than 100 workers (only in
few states like Uttar Pradesh, it is made applicable to all factories (i.e. employing 10 or
more workers). Trade Union Actapplies to all establishments with 7 or more workers, since
a minimum of 7 members are necessary in order to register a trade union.

Precisely, if we have a look at the general picture, only a small section of workforce is
protected by the labour laws and has assured space for collective bargaining in well
defined legal boundaries. Therefore, protective labour laws apply to only less than
three percent of the enterprises; and in rest of the 97 percent enterprises only
Industrial Disputes Act (minus its protective sections like section V-A, V-B),
Minimum Wages Act, the Workmens Compensation Act, Equal remuneration Act,
and the Shops and Establishments Act (enacted by each state separately) and some
pieces of labour legislation enacted for specific occupations are applicable.
Trade Union Act of India provides right to association only with a very limited scope
and limited coverage. The Trade Union Act 1926 was amended in 2001 and
subsequent to the amendment it became more difficult to form the trade unions. In
the Act of 1926, only seven members were required to register a trade union, but
after amendment at least 10% or 100, whichever is less, subject to a minimum of 7
workmen engaged or employed in the establishment are required to be the members
of the union prior to its registration. The amendment moreover introduces a
limitation on the number of outsiders among the office bearers. Collective bargaining
is limited within the scope provided in Industrial Disputes Act 1947.
It is also important to mention that only when the unions are recognized by the
management then only they get the full-fledged rights as bargaining agent on behalf
of workers. But there is no legal obligation on employers to recognize a union or
engage in collective bargaining. The statutes of only few states of India like
Maharashtra, Gujarat, Madhya Pradesh and Rajasthan have made some provisions
for recognition of unions with a definite percentage of the workforce.

Legal Boundaries for Collective Bargaining:

No ratification of ILO Convention C-87 and C-98.

Limited scope and coverage of collective bargaining within legal boundaries of Trade
Union Act and Industrial Dispute Act.

Trade Union Act and Industrial Dispute Act are silent on recognition of trade unions.

Right to strike is not a fundamental right but a legal right governed by Industrial
Dispute Act, 1947.

Section 10K: can be imposed to prohibit strikes or lock outs.

Section 22: In public utility services there must be a notice atleast 6 weeks before
strike.

Section 23: Prohibition of strikes during the pendency of conciliation, arbitration

and court proceedings.

Trade Union activities are granted immunity from the applicability of CRPC but nor
in case of illegal strikes.

New Trends in Collective Bargaining

Decentralised and Individualized Bargaining
The collective bargaining in India remained mostly decentralized, i.e. company or
unit level bargaining rather than Industry level bargaining. But in few sectors
(mainly public sector industries) the industry level bargaining was dominant.
However, privatization of public sector changed the industry level bargaining to
company level bargaining. On the other hand, due to severe infomalisation of
workforce and downsizing in the industries, the strength and power of the trade
unions have been heavily reduced. The trade unions mainly represented the interests
of formal workers. Increasing number of informal workers in the companies soon
changed the structure of the workforce in such a way that the formal workers became
a minority. As a result of various reasons informal workers could not form their own
trade unions, and on the other hand they are not represented by the trade unions of
the formal workers. These situations resulted in spurt of individualized bargaining.

Advancing of informalisation of workforce combined with the individualized

bargaining in fact changed the character of the trade unions also. In related sectors
and industrial regions, it converted many trade unions (particularly in sector
dominated by informal workers) in to legal consultants (pursuing individual cases
and charging fees for their services) rather than collective bargaining agents.
Declining Wage Share
Declining strength of collective bargaining is also reflected in sharply increasing
share of profit and considerably declining the wage share (since 2001-02), resulting
in depressing purchasing power.
New Wave of Labour Movement for Unionisation

A new wave of workers struggle for unionization is rising from below by and large
independent from the central trade unions. This is generally emerging in the formal
sector. The workers are realizing by their own experiences that they cannot change
their fate without organizing themselves in a trade union. In numerous cases the
workers do not get even the legal benefits like minimum wages, premium rate of
overtime and holidays and casual leaves. Once the union is formed, at least the
minimum benefits guaranteed by law are easily available to all workers. Actually
large numbers of informal workers are illegally put in the category of informal, and
they can convert their status in to formal workers only by organizing themselves in a
trade union. On the other hand, the industrialists are not at all ready to accept trade
unions in their factories at any cost. They are unleashing unimaginable suppression
on workers and trade union leaders when there are efforts to form trade unions in
their factories. Even after the trade unions are created, managements are not ready
to recognize them and therefore deny them space for collective bargaining.
There are also new initiatives to organize informal sector workers particularly the
agriculture workers. After the implementation of National Rural Employment
Guarantee Act, the new possibilities emerged to unionize the rural workers around
the NREGA. But, the system of collective bargaining in this sector is very different it
is mostly on general issues like appropriate implementation of the act itself, ensuring
minimum wages, employment guarantee and workplace facilities. There are also

initiatives to organize other informal sector workers also like forest workers, fish
workers and other self employed categories. But the movement is still very weak and
informal sector workers are by and large not able to realize the right of collective
bargaining.

Collective Bargaining in India:

Recent Trends
2011-06-01

Issue No : 79 April-June 2011

By Surendra Pratap
The collective bargaining in India remained limited in its scope and
restricted in its coverage by a well defined legal structure. Actually, the
labour laws systematically promoted and perpetuated a duality of labourformal sector workers enjoying better space for collective bargaining and
informal ones with no scope for collective bargaining. To understand this,
we can discuss in brief about the labour legislations in India and their
scope and coverage.
It is interesting to note that the applicability of different sections of labour
laws is limited by number of workers engaged in an establishment. The
limitations put in applicability of labour laws is haphazard and there is no
logic behind it, but in overall terms it systematically denies any protection
and any social security to those employed in smaller factories with less
than ten workers. The Factories Act provides for the health, safety,
welfare and other aspects of workers while at work in the factories. Under
this Act, an establishment with power employing 10 workers and 20
workers in case of no power connection is a factory, but following
provisions of the act are not applicable to all factories: Provision for
crche: applicable only if 30 or more women are employed; Provisions of a
rest room: applicable only if there are 150 or more workers; Provisions of
canteen: applicable only if there are 250 or more workers; Provisions for

ambulance, dispensary, and medical and para-medical staff: applicable

only if there are 500 or more workers.
Employees Provident and Miscellaneous Provisions Act, Maternity Benefit
Act and Payment of Gratuity Act apply to all establishments with 10 or
more workers. But Employees State Insurance Act applies to only those
establishments with 20 or more workers. Minimum Wages Act applies to
all establishments and all workers, but the Payment of Wages Act applies
only to those establishments with 10 or more workers, and also only to
those workers getting wages less than Rs 1600 per month. On the other
hand, the Payment of Bonus Act is applicable to only those enterprises
employing 20 or more workers and only to those workers getting wages
less than Rs 3500 per month.
Industrial Disputes Act, 1947 lays down the procedures for the settlement
of industrial disputes. Its procedural aspects are applicable to all
enterprises for the settlement of industrial disputes. However, really
protective clauses for the workers pertaining to layoffs, retrenchments and
closures are contained in Chapter VAand Chapter VB, which have limited
applicability. Chapter VB does not apply to any establishment employing
less than one hundred workers, and Chapter VA does not apply to any
establishment employing less than 50 workers. Industrial Employment
(Standing Orders) Act makes it compulsory to have Standing Orders in
each enterprise to define misconducts and other service conditions, and
also entails that for any misconduct no worker will be punished without
due process of law using the principles of natural justice. But this law does
not apply to those enterprises employing less than 100 workers (only in
few states like Uttar Pradesh, it is made applicable to all factories (i.e.
employing 10 or more workers). Trade Union Act applies to all
establishments with 7 or more workers, since a minimum of 7 members
are necessary in order to register a trade union.
To sum up, if we look at the general picture, only a tiny section of
workforce is protected by the labour laws and has guaranteed space for
collective bargaining in well defined legal boundaries. According to the
Fifth Economic Census (1999) more than 97 percent of the enterprises
employ less than ten workers, and most of these employ less than five
workers.[1] Therefore, protective labour laws apply to only less than three
percent of the enterprises; and in rest of the 97 percent enterprises only

Industrial Disputes Act (minus its protective sections like section V-A, V-B),
Minimum Wages Act, the Workmens Compensation Act, Equal
remuneration Act, and the Shops and Establishments Act (enacted by
each state separately) and some pieces of labour legislation enacted for
specific occupations are applicable. Generally these 97 percent
enterprises are said to represent industrial informal sector (those not
covered under Factories Act) and the three percent as formal sector (those
covered under Factories Act). Total workforce employed in different sectors
in India (principal plus subsidiary employment) is about 456 million, of
which informal sector accounts for about 393.2 million (86 percent).[2]
It is also to be noted that informalization of the workforce that was
accelerated with the advent of liberalization, has transformed the formal
sector also in terms of shifting the jobs from formal to informal sector and
also by informalisation of jobs with in the formal sector units. Now, in the
formal sector, number of formal workers is about 33.7 million and informal
workers about 28.9 million (2004-05). Increase in the employment (in
whatever amount) in the formal sector has largely been of informal in
nature.[3].
India has neither ratified ILO convention on Freedom of Association and
Protection of the Right to Organize 1948 (C. 87), nor the Right to Organize
and Collective Bargaining Convention, 1949 (C. 98). Trade Union Act of
India provides right to association only with a limited scope ad limited
coverage. The Trade Union Act 1926 was amended in 2001 and after the
amendment it became more difficult to form the trade unions. In the Act
of 1926, only seven members were required to register a trade union, but
after amendment at least 10% or 100, whichever is less, subject to a
minimum of 7 workmen engaged or employed in the establishment are
required to be the members of the union before its registration. The
amendment also introduces a limitation on the number of outsiders
among the office bearers. Collective bargaining is limited with in the scope
provided in Industrial Disputes Act 1947.
It is worth mentioning that only when the unions are recognized by the
management then only they have the full-fledged rights as bargaining
agent on behalf of workers. But there is no legal obligation on employers
to recognize a union or engage in collective bargaining. The statutes of
only few states of India like Maharashtra, Gujarat, Madhya Pradesh and

Rajasthan have made some provisions for recognition of unions with a

specific percentage of the workforce.
In India, right to protest is a fundamental right under Article 19 of the
Constitution of India; but right to strike is not a fundamental right. Right to
strike as also the right to lock-out is a legal right governed by Industrial
Disputes Act 1947. Under the law, all strikes needed due notices and in
this period if management requests for a conciliation, then strike is not
legal until the conciliation continues. Even if conciliation fails, the
government may refer the dispute for compulsory arbitration or to a labor
court for a final decision, and during this period the strike is considered to
be illegal. The State Governments, may also for securing the public safety
or convenience or the maintenance of public order or supplies and
services essential to the life of the community or for maintaining
employment or maintaining industrial peace, make provisions for
prohibiting strikes or lock-outs. Large number of special economic zones
(SEZs) and proposed National Manufacturing Investment Zones are
already declared public utility services and therefore the legal strike
becomes almost impossible in the zones.
Moreover, in recent decades, a number of judgments came from the
Supreme Court setting precedents against the right to strike.
The trade union movement in India comprises of over 70,000 registered
unions (politically affiliated and independent) and an unaccountable
number of non-registered organizations engaged on the issue of
promoting and protecting workers' interests. Trade unions in India largely
represent only formal sector workers. There are now 12 Central Trade
Unions[4] in India:
1. BMS- Bharatiya Mazdoor Sangh (linked with far right political party BJP)members: 6 million
2. INTUC - Indian National Trade Union Congress (linked with centrist
Congress Party), members: 3.8 million
3. AITUC - All India Trade Union Congress (linked with Communist party of
India)- members: 3.3 million
4. HMS - Hind Mazdoor Sabha (independent-socialist) -members: 3.2 million

5. CITU - Centre of Indian Trade Unions (linked with Communist Party of India
(Marxist) members: 2.6 million
6. UTUC (LS) - United Trade Union Congress (Lenin Sarani) (linked with the
party named Socialist Unity Center of India)
7. UTUC - United Trade Union Congress (linked with political partyRevolutionary Socialist Party)
8. TUCC - Trade Unions Co-ordination Centre (linked with political party-All
India Forward Bloc)
9. SEWA-Self-Employed Women's Association (independent)recently
included in the list
10.LPF-Labour Progressive Front (linked with political party-Dravida Munnetra
Kazhagam)---recently included in the list
11.ICCTU- All-India Central Council of Trade Unions (linked with Communist
Party of India (Marxist-Leninist)-Liberationgroup)- recently included in the
list
12.INTTUC-Indian National Trinamool Trade Union Congress (linked to the
political party-All India Trinamool Congress)- recently included in the list

Union density in India is only 8 percent and in this regard it ranks at

48th position in the world. In the new verification of membership in 2001,
the growth in trade union membership is very visible, but largely this
growth is from informal sector or most importantly from rural labour.

Recent Trends in Collective Bargaining

1.

Decentralised and Individualized Bargaining

The collective bargaining in India remained largely decentralized, i.e.

company or unit level bargaining rather than Industry level bargaining.
But in some sectors (mostly public sector industries) the industry level
bargaining was dominant. However, privatization of public sector
transformed the industry level bargaining to company level bargaining. On
the other hand, due to drastic infomalisation of workforce and downsizing
in the industries, the strength and power of the trade unions is heavily

reduced. The trade unions mainly represented the interests of formal

workers. Increasing number of informal workers in the companies soon
transformed the structure of the workforce in such a way that the formal
workers became a minority. Moreover, in some sectors like garment, there
is almost complete informalisation of the work force with only a tiny
section of formal workers. It happened in almost all sectors. Due to
various reasons informal workers are not able to form their own trade
unions, and on the other hand they are not represented by the trade
unions of the formal workers. These situations resulted in spurt of
individualized bargaining.
High level of informalisation of workforce combined with the individualized
bargaining actually changed the character of the trade unions also. In
relevant sectors and industrial regions, it converted many trade unions
(particularly in sector dominated by informal workers) in to legal
consultants (pursuing individual cases and charging fees for their
services) rather than collective bargaining agents.
2.

Declining Wage Share

Declining strength of collective bargaining is also reflected in sharply

increasing share of profit and drastically declining the wage share (since
2001-02), resulting in depressing purchasing power. Approximately
73 million out of 173 million wage earners throughout India do not receive
minimum wages[5]. About 3040 per cent of these low-paid wage earners
belong to poor families.[6]
We call look in to following figure provided by the ILOs World of Work
Report to get an idea about how seriously the conditions are worsening:
Declining Wage Share in India, 19932007

Source: World of Work Report, ILO 2010.[7]

3.

New Wave of Labour Movement for Unionisation

A new wave of workers struggle for unionization is emerging from below

by and large independent from the central trade unions. This is mainly
emerging in the formal sector. The workers are realizing by their own
experiences that they can not change their fate without organizing
themselves in a trade union. In many cases the workers do not get even
the legal benefits like minimum wages, premium rate of overtime and
holidays and casual leaves. Once the union is formed, at least the
minimum benefits guaranteed by law are easily available to all workers.
Actually large numbers of informal workers are illegally put in the category
of informal, and they can convert their status in to formal workers only by
organizing themselves in a trade union. It is in this background that even
when the workers are facing unimaginable repression for their attempts to
form a union, they are fighting for it and more and more workers in new
factories are also choosing the same.
In 2009-10, most of the well known workers struggles were on the issue of
formation or for recognition of the trade union for collective bargaining,
e.g. Hyundai Workers Struggle for Recognition of the Union, Nokia Workers
Struggle for Wage Hike and Against Victimization, MRF Workers Struggle
for Recognition of Union, Pricol Workers Struggle for Recognition of Union,
Graziano Workers struggle for Unionization, The Case of Trade Union
Repression in Nestle, Vivva Global Workers Struggle for Minimum Wages
and Unionization, Rico Auto Workers Struggle for Unionization and
Sunbeam Workers Struggle for Democratisation of the union.[8]
It is also interesting to note that in almost all the above cases both formal
and informal workers came together in these struggles. It explains that
the conditions have already entered in a new phase when the numbers of
informal workers in factories are either equal to or more than formal
workers and generally with same competence levels. Therefore the enmity
of formal workers with informal workers has gone. Now rather than trying
to oust informal workers, the formals are uniting with informals and
demanding regularization of their jobs so that they get the same status

and benefits as formal workers. Unionizing all the formal and informal
workers under the same union is actually one major step in this direction.
On the other hand, the industrialists are not ready to accept trade unions
in their factories at any cost. They are unleashing unimaginable repression
on workers and trade union leaders when there are efforts to form trade
unions in their factories. Even after the trade unions are formed,
managements are not ready to recognize them and therefore deny them
space for collective bargaining.
According the data of Government of India on strikes and lockouts (Indian
Labour Statistics 2010), causal factor of 34.8 percent cases of industrial
disputes is recorded as indiscipline. 22 percent cases of industrial disputes
are around demands for wages and allowances (in many cases demanding
only minimum wages fixed by the government). Actually these two
categories of industrial disputes largely reflect on the sufferings of
informal workers and repression unleashed by factory managements on
unionization efforts of the workers. Moreover, after the liberalization, man
days lost in the lockouts are far more than the strikes by the workers. This
is a consistent trend.[9]
In the meantime, the central trade unions are also increasingly realizing
the importance of unity among trade unions. This is reflected in formation
of a Coordination Committee of eight Central Trade Unions on the other.
First joint action of this coordination committee was the one day All India
General Strike on 7th Nov 2010, which is said to be the biggest strike in
India since independence with participation of about 100 million workers
from all over the country.
There are also new initiatives to organize informal sector workers
particularly the agriculture workers. After the implementation of National
Rural Employment Guarantee Act, the new possibilities emerged to
unionize the rural workers around the NREGA. Many local level unions of
rural workers and also regional platforms of rural workers have started
emerging. However, the system of collective bargaining in this sector is
very different; it is mostly on general issues like proper implementation of
the act itself, ensuring minimum wages, employment guarantee and
workplace facilities. Since the wages (minimum wages) and facilities are
fixed by law, the struggle is actually for implementation of the NREGA.

There are also initiatives to organize other informal sector workers also
like forest workers, fish workers and other self employed categories. But
the movement is still very weak and informal sector workers are by and
large not able to realize the right of collective bargaining.

Endnotes:

[1]Provisional Results of Fifth Economic Census 2005; Government of

India, Ministry of Statistics and
http://mospi.nic.in/economic_census_prov_results_2005.pdf
[2]The Challenge of Employment in India: An Informal Economy
Perspective; Volume I - Main Report; National Commission for Enterprises
in the Unorganized Sector;
2009;http://nceus.gov.in/The_Challenge_of_Employment_in_India.pdf
[3]The Challenge of Employment in India: An Informal Economy
Perspective; Volume I - Main Report; National Commission for Enterprises
in the Unorganized Sector;
2009;http://nceus.gov.in/The_Challenge_of_Employment_in_India.pdf
[4]Any federation of trade unions, with at least 500,000 members spread
over at least four states and in four industries is eligible to be considered
as a National Federation or Central Trade Union Organization. But it does
not mean that there are only these national level federations. There are
some more national level federations but because they do not have
required membership and therefore they do not qualify to be put in the list
[5]Minimum wage is fixed by the government and it is different in different
regions and sectors of the economy. Presently it is around Rs 100 (USD 2)
per day.
[6]http://www.ilo.org/public/portugue/region/eurpro/lisbon/pdf/worldwork_2
010.pdf

[7]http://www.ilo.org/public/portugue/region/eurpro/lisbon/pdf/worldwork_2
010.pdf
[8]Surendra Pratap, Trade Union Repression in India, AMRC Working Paper
2011
[9]Labour Bureau, Government of
India; http://labourbureau.nic.in/idtab.htm; and Maitreyee Handique 2009:
The Rise of New Proletariat; www.livemint.com/2009/12/.../The-rise-of-thenew-proletaria.html

Collective Bargaining: Concept & Impact in India

OCTOBER 20, 2012 LEAVE A COMMENT

Collective bargaining has been defined by different experts in different ways. Nevertheless, it is treated as a
method by which problem of wages and conditions of employment are resolved peacefully and voluntarily
between labor and management. However, the term collective bargaining is opposed to individual bargaining.
Sometimes, it is described as a process of accommodation between two conflicting interests Here, power stands
against power.
The International Labour .Organization defines collective bargaining:
As negotiations about working conditions and terms of employment between an employer, or a group of
employers, or one or more employers organizations, on the one hand, and one or more representative workers
organization on the other with a view to reaching agreement.
This definition confines the term collective bargaining as a means of improving conditions of employment. But in
fact, collective bargaining serves something more.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, both material and spiritual, are determined, and a
shared jurisdiction with the older class or classes in all other spheres
COLLECTIVE BARGANING in India has been the subject matter of industrial adjudication since long and has
been defined by our Law Courts. In Karol Leather Karamchari Sangathan v. Liberty FootwearCompany(1961 I
LLJ. 504) the Supreme Court 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. In an earlier judgment in Titagarh Jute Co. Ltd. v. Sriram Tiwari(1982 II LLJ 491) , the Calcutta High
Court clarified that this policy of the legislature is also implicit in the definition of industrial dispute.

In Ram Prasad Viswakarma v. Industrial Tribunal (1972, LLJ. 212) the Court 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.
In Bharat Iron Works v. Bhagubhai Balubhai Patel(AIR 1990 SC 247), it was held that Collective bargaining,
being the order of the day in the democratic,social welfare State, legitimate trade union activities, which must
shun all kinds of physical threats, coercion or violence, 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.Dialogue with representatives of a union help striking a delicate balance in
adjustments and settlement of various contentious claims and issues.
These definitions only bring out the basic element in the concept i.e., civilized confrontation between employers
and employees and the whole process is regulated by statutory provisions.

Position of Collective Bargaining in India:

Collective Bargaining machinery essentially is a reflection of a particular social and political climate. The history
of the trade union movement shows that unions are affiliated to one or the other political parties. As a result most
of the trade unions are controlled by outsiders. Critic says that the presence of outsiders, is one of the important
reasons for the failure of collective bargaining in India.

Outsiders in the process of Collective Bargaining:

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
relationshipbetween 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.
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 Labour
has overlooked this aspect. The Commission does not favour a legal ban on non-employees 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.
Politicization of Trade Union movement in India:
It is well known that the trade-union movement in India is divided on political lines and exists on patronage of
various political Parties. Most of the trade-union organizations have aligned themselves with a political party with
whom they find themselves philosophically close. It is because of this that the Indian National Trade
Union Congress is considered to be the labour wing of congress, whereas H.M.S. is considered to be the labour
wing of Socialist party. Bhartiya Majdoor Sangh pledges its allegiance to B.J.P. and C.I.T.U. has the support of
C.P.I. (M). It is also the case with the AITUC which had started as a national organization of workers but
subsequently came to be controlled by the Communist Party of India and is now its official labour wing. Political
patronage of trade-unions has given a new direction to the movement whose center of gravity is no longer the
employees or workmen. The centre has shifted towards it leadership whose effectiveness is determined by the
extent of political patronage and the consequent capacity to obtain the benefit. This shifting centre of power is the
necessary consequence of political parties search for workers votes, which they seek by conferring benefits on
them. Since the public sector which is really the instrumentality of the State, has emerged as the biggest
employer in this country, the collective bargaining -between the union patronized by the party-in-power and the
employer has become an important methodology. It is because of this process that agreements conferring
benefits are signed even in those units where financial losses are mounting. It is also our experience that in spite
of wage increase end improved conditions of service; there has been no corresponding improvement in
production or the productivity. Also,most of the losses are being passed on to the consumers by increasing prices
of the products. It is in this context that Justice Gupta has, in his, Our Industrial Jurisprudence made the
following observations:If our experience is any guide, it reveals that Ievel of increase in wages etc., (in public
sector undertaking)is now decided by the Bureau of Public Enterprises which takes into consideration only the

Political impact and Consumer resistance as two dominant factors. This is the reason why the prices of almost
all products of necessity like coal, iron and steel, cement, sugar etc. have been constantly increasing. A survey of
pending and decided industrial disputes of the last 10 years reveals that there was virtually no industrial dispute
regarding wage structure or bonus in any industry of some significance.