Collective Bargaining In India

DR. SHANTI PATEL*

Collective bargaining though difficult to define (more to be

understood) may be described as a method of direct negotiations
adopted by the unions and the employers for settling terms of
employment, working conditions and other issues by appreciat-
ing mutual viewpoints and strength, which results in a written
collective agreement between both the parties for a stipulated
period. The basic tenet of collective bargaining is to meet, dis-
cuss and decide the simple and complicated issues affecting
workers as groups as well as individuals. As it aims at finding
out an agreeable solution, an atmosphere of mutual trust, con-
fidence and fairness has got to be created. Its success depends
on the acceptance of each other by the bargaining parties, their
emphasis on problem-solving approach, awareness of obligations
to basic principles and observance of good faith.
Historically collective bargaining has allowed employers
and workers to be involved in the taking of decisions that affected
them and in the process it has contributed not only to improving
the lot of the worker but also to raising productivity and thus
helped the process of adaptation to the numerous economic and
social changes that have occurred during the past decades.
Internationally, collective bargaining as an important means
of fixing wages and conditions of service and as a means of
regulating the relations between employers and workers and
their organisations has been taken note of by important Organi-
sations like the International Labour Organisation. The Decla-
ration of Philadelphia recognised the solemn obligation of the
International Labour Organisation to further among the nations
of the world, programmes which will achieve the effective recog-
nition of the right of free and voluntary collective bargaining.

* Of Hindu Mazdaor Sabha

154 COCHIN UNIVERSITY LAW REVIEW ‘9S2-

The basic right of collective bargaining has been established

through I.L.O. Conventions:1
Theoretically, collective bargaining is based on the principle
of balance of power. Managements and unions representing the
workers are considered as two separate powers who jointly
negotiate with each other various terms of employment. In actual
practice both the parties bargain to get maximum advantage out
of the other by using, if necessary, threats and counter threats
like strikes, lockouts and other direct actions. Information about
the company, industry and other relevant statistical data are
pressed into service in the process of bargaining. Collective bar-
gaining therefore has been used as an important method of in,.
fluencing managerial decisions over past years. The element of
power does play a part in arriving at an agreement. The method
of horseArading' also is not uncommon

PREREQUISITES OF COLLECTIVE BARGAINING

In the light of the above mentioned basic and historical
considerations the success of collective bargaining could be
judged and should be based on certain prerequisities. They are
in short, freedom of association; existence of democracy; right
to strike; strong, independent, democratic and well-organised
unions; recognition of a union as a bargaining agent; mutual
trust and appreciation of view points by unions and employers;
absence of unfair labour practice; ability, skill and foresighted-
ness of negotiators; faith in the collective bargaining method;
and last but not the least, a favourable political climate where
public opinion is favourably disposed and the government takes
measures to promote collective bargaining. As a precondition,
measures should be taken to facilitate the establishment and
growth on a voluntary basis of free and representative workers'
and employers' organisations. Bodies and procedures for settle-
ment of dispute should be so conceived as to contribute to pro-

1. See Freedom of Association and Protection of Right to Organise

Convntion 1948 (Convention No. 87); Right to Organise and Col-
lective Bargaining Convention 1949 (Convention No. 98); Workers
Representative Convention 1971 (Convention No. 135); Labour Re-
lations (Public Service) Convention 1978 (Convention No. 151).
 DR. SHANTI PATEL 155

motion of collective bargaining. The necessary information

should be provided by employers and the government, which is
essential for its success. Proper training of negotiators and dele-
gation of powers to them also are other requirements.

INDIAN POSITION
Seen from the above angle what is the position of collective
bargaining in India? Why is it not successful to the extent it is
expected? What are the main hindrances? How far are em-
ployers, government and unions, responsible for its failure? Are
there any specific problems of developing countries like India
where collective bargaining cannot be a powerful measure and
the foundation upon which industrial harmony and industrial
democracy could be built? After all, one may ask "Does collec-
tive bargaining exist at all in India?" Let us consider some of
the important factors one by one.
The management in India almost till sixties had been
hereditary, traditional and mostly based on ownership of indi-
viduals, families or groups. The professionalism that is essential
for collective bargaining is the development of recent years.
A professional manager, not belonging to the group of family
and having no personal status in the ownership or capital could
have an independent, studied approach to the problems of
industry as well as workers. The growth of industry in India
has not been regular, natural and continuous and as such the
employers' approach used to be 'trading approach', mainly
profit-oriented and based on the master-servant relationship.
The new industrial culture and the socio-economic changes it
brought forth and the suitable change of attitude that was essen-
tial for creation of new atmosphere has been lacking even to this
date. The whole atmosphere is, therefore, based on mistrust,
concealment of true information, misunderstandings about the
role of workers and their organisations and the use of negative
pressure tactics. Excepting a few progressive and enlightened
managements, trade unions are not allowed to grow strong by
way of not allowing them to function or by creating company
unions or by encouraging rivalary amongst unions or taking
recourse to delaying and frustrating adjudication methods. As
156 COCHIN UNIVERSITY LAW REVIEW

compared to working class organisations, employers' organis-

ations are strong; but their power and strength are misused in
subdueing the employees and their organisations. Non-recog-
nition of unions is mainly responsible for the absence of collect-
ive bargaining in industries and organisations at all levels. Se-
condly due to the absence of atmosphere of mutual trust and
confidence, the managements are reluctant to share information
with the workers. This lack of communication has become the
weakest link, in our whole industrial system. The management,
therefore, has an obligation to 'develop a philosphy and appro-
ach towards collective bargaining which would ultimately pro-
mote the peace and advance the objectives of economy. The
initiative is to come management. Otherwise as Keith
Davis has put it in his 'Human Relations at Work' - "There is
a `mirror effect' in collective bargaining relationship If manage-
ment wants to fight, the union will accommodate them. A mili-
tant management begets a militant union." This is not going
to land us anywhere.

After the Second World War and especially after Inde-

pendence, the Government of India took some half hearted
measures when it was thought by some that collective bargain-
ing can grow and develop. The national trade union centres
were given recognition. Annual Indian Labour Coference was
held. Code of Discipline and Code, of Conduct were framed.
Constitution provided for freedom of association as a funda-
mental right. Directive Principles gave a thought to collective,
bipartite negotiations and agreements. Accepting the principle
of socialistic society, basic industries were set up in public
sector and certain key industries were nationalised. But at the
same time, the controversial Industrial Disputes Act was contin-
ued and compulsory adjudication procedure as the basis for
dispute settlement was forced upon working class. The law
which plays the role of a policeman in industrial disputes is the
corner stone of the industrial relations in the country. The
Government started interfering in day-to-day workings of unions
following partisan approach. With growth of public sector under-
takings, the Government itself became the biggest employer
but,unfortunately opted for the same traditional, authoritarian
and autocratic management approach. The growth of collective
 DR. SHANTI PATEL 157

bargaining thus has been hampered. Last few years have seen
a certain deterioration in this field. Government has taken
measures on grounds of general interest or national interest
that has resulted in limitations on freedom of association and
the right to collective bargaining and trade union and demo-
cratic rights. In the name of poor, down-drodden and under-
privileged, 'Government has taken back the established rights
which the organised working class had gained after years of
struggle and at times after bittter fights. The wage control is
introduced. Even though with the requirement of national eco-
nomic and social development and particularly in the struggle
against inflation and unemployment some consultations and
understandings between the government and unions may be
necessary, it should not abrogate the right of association or
collective Bargaining for determining service conditions.

The. National Commission on Labour accepted the princi-

ple of collective bargaining and gave a major recommendation
regarding setting up of independent Industrial Relations Com-
missions at State sand National levels with the powers to settle
disputes and also to determine recognition of unions. The same
has not been even looked at. The major issues and laws con-
cerning industrial relations such as recognition procedure and
determination of a representative union or collective bargain-
ing agent through a democratic method like secret ballot, are
yet to see the light of the day. Due to such state of affairs, and
especially, due to the lukewarm attitude of Governmeent, the
real collective bargaining has not developed in the country. The
adjudication method has been quite dilatory, frustrating and
unsatisfactory. It is in fact 'justice denied'.

This is not to redeem the unions from the certain de-

mortis they are charged with. It is true that unions have not
been able to organise 'a large majority of workers in their fold.
Free, strong and democratic unions are only some. But, again,
this is partly due to the present. industrial relations system.
Collective bargaining based on the deep studies of efficiency
and productivity is yet to develop. Some research regarding the
issues under it is very much essential. Secondly, the Unions as
organised institutions have to set -up proper internal admini-
15 8 COCHIN UNIVERSITY LAW REVIEW l9'S 2_

stration and a live, dynamic, functioning, administrative ma-

chinery. Thirdly, all the national trade union centres have to
come to a workable understanding regarding the collective bar-
gaining procedure and the recognition of trade union as a col-
lective bargaining agent. Acceptable criteria for the same still
remain to be evolved at national and State levels. But this does
not mean that the government should not go ahead to remodel
the industrial relations system on the basis of collective barga-
ining and the principles thereunder practised elsewhere and
other democratic norms.
The multiplicity and rivalry amongst unions, the cumber-
some, unsatisfactory and undemocratic procedure laid down by
the laws, the organisationally and financially weak trade unions,
all these have weakened collective bargaining in this country.
The unions also have to do a lot in the field. They can't be com-
placent about the small achievements and the little progress
they have made in this area. It is, however, contended that the
change in approach of management and Government as an
employer, along with a proper legal framework aiding collective
bargaining will go a long way in developing it. The unions
through their organised strength, through the understanding
amongst the centres at national levels and through formulation
of a proper type of industrial relations machinery and legis-
lation, could help its proper development.
In a country like ours serious obstacles to the development
of collective bargaining still exist in various areas. This problem
occurs in particular in the informal sector of almost all develop-
ing countries. The basic agrarian character of the country,
weak organisations of workers, unorganised bulk of workers in
agriculture and Iconstruction and contract employment and
similar industries and employments, the staggering unemploy-
ment, the level of rural and urban poverty, the stage of trade-
unionism in the developing countries, the attitude of manage-
ment, too much of dependence on bureaucracy by the Govern-
ments, reliance on compulsory adjudication method, all these
have come in the way of collective bargaining proper.
Absence of industrial democracy leads to industrial strife.
Only collective bargaining through responsible trade unionisim
 DR. SHANTI PATEL 159

can provide industrial democracy. It, therefore, Presupposes

collective strength duly recognised. It is the foundation upon
which industrial peace can, and must be built. History bears
this out. Collective bargaining therefore, should be a process of
growth fostered from the bottom as well as from the above,
aided by the law to the extent possible and promoted through
a spirit of understanding by the government, the employers and
the unions.