1

INTRODUCTION

The conflict between the management and the employee is inherent in an industrial society. One
argues for more investment and profits while the other argues for better standard of living. These
two conflicting interests can be adjusted temporarily through the principle of "give and take"

The principle of give and take has been infused in the principle of collective bargaining. The phrase
"collective bargaining" was coined by British labor reformers Sidney and Beatrice Webb of Great
Britain which was the “home of collective bargaining” in the 1890’s

The idea of collective bargaining emerged as a result of industrial conflict and growth of trade union
movement and was first given currency in the United States by Samuel Crompers. In India the first
collective bargaining agreement was conducted in 1920 at the instance of Mahatma Gandhi to
regulate labour management relation between a group of employers and their workers in the textile
industry in Ahmadabad.1

Advocates of collective bargaining in the early decades of the twentieth century thought it essential
for three reasons.

• First and foremost, a system of peaceful and routine bargaining would eliminate industrial
strife and violence.
• Second, collective bargaining stood for "industrial democracy,"
• Finally, collective bargaining promised to make capitalism work.

In any industrial establishment the friction between employer and the workmen is inevitable. There
are demands by the workmen and if those demands are resisted by the employer, industrial dispute
arises resulting in industrial tension and disturbing the peace and harmony in the industry. Collective
Bargaining is one of the methods wherein the employer and the employees can settle their disputes.2

DEFINITIONS OF COLLECTIVE BARGAINING

There is no precise definition of “Collective bargaining”. In fact, keeping in view the change in the
society with its fast changing social norms the scope and content of collective also varies from

1
Webb, Sydney and Beatrice, Industrial Democracy,1902, p.185
2
Otto Kahn-Freund, Laboar aad the Law, L mdon, Stevens & Sons, (1977). 49
 2

country to country. Nevertheless, Collective bargaining has been defined by different experts in
different ways. It is treated as a method by which problem of wages and conditions of employment
are resolved peacefully and voluntarily between labour and management.

Bargaining in the most general sense refers to any activity whereby parties with conflicting and
common interest determine the terms of their interdependence. Whereas Collective means “for a
group”. A Labour union, or association of employees, is said to bargain collectively when a few
men representing the union meet with the employers to agree on wages and working conditions for
all the members of the union.3

“Collective Bargaining” in industrial law mean bargaining of terms and conditions of employment
between employer himself or his representative on one hand and representative of the worker on the
other. The aim of such bargaining is to enable employer or employees to bargain the terms of
employment so as to reach an agreement, mutually acceptable to both of them without the
intervention of the third party.4

ILO has defined collective bargaining as, “negotiation about working conditions and terms of
employment between an employer and group of employees or one or more employees’
organizations with a view to reaching an agreement wherein the terms serve as a code of defining
the rights and obligations of each party in their employment/industrial relations with one another”.
This definition however 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
exclusive 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."The
best justification for collective bargaining is that it is a system based on bipartite agreements, as
such superior to any agreement involving third party intervention in matters which essentially

3
“The Social psychology of bargaining” by Ian Morley and Geoffery Stephenson, Ed. 1977, p 21
4
“Collective bargaining” by Selwyn H. Torff, 1953, p.3
 3

concern employers and workers.5

In Encyclopedia of Social Sciences, collective Bargaining has been defined a process of discussion
and negotiations between two parties, one or both of whom is a group of personsacting in concert.
The resulting bargain is an understanding as to terms and conditions under which a continuing
service is to be performed. More especially, collective bargaining is the procedure by which an
employer or employers and a group of employees agree upon theconditions of work.

In the words of John T Dunlop, “Collective Bargaining is:

(1) A system which establishes, revises and administers many of the rules which govern the
worker’s place of work;

(2) a procedure which determines the quantum of compensation which employees should receive
and which influences the distribution of economic ills;

(3) a method of settling disputes during the pendency of agreement and of determining, after its
expiry, whether a dispute should be re-opened or whether a strike or a lock-out should be resorted
or not.

In sum collective bargaining, is labor relations, procedure whereby an employer or employers agree
to discuss the conditions of work by bargaining with representatives of the employees, usually a
labor union. Its purpose may be either a discussion of the terms and conditions of employment
(wages, work hours, job safety, or job security) or a consideration of the collective relations between
both sides (the right to organize workers, recognition of a union, or a guarantee of no reprisals
against the workers if a strike has occurred). The merits of collective bargaining have been argued
by both opponents and proponents of the process; the former maintain that it deprives the worker of
his individual liberty to dispose of his service, while the latter point out that without the union's
protection the worker is subject to the dictation of the employer.6

TYPES OF COLLECTIVR BARGAINING

1.) Conjunctive or Distributive Bargaining: It is most common type of bargaining and involves
zero-sum negotiations. In this form of collective bargaining, both the parties viz. The employee and

5
See Eugene V. Schneider, Industrial Sociology, London, Mc GrawHill, (1971), P. 344
6
Meenu Paul, “Labour and Industrial Law, Allahabad Law Agency, Delhi, pg 223
 4

the employer tries to maximize their respective gains. It is based on the principle, “my gain is
your loss, and your gain is my loss” i.e. one party wins over the other.
Both parties try to maximize their gains. The economic issues such as wages, bonus, other
benefits are discussed, where the employee wishes to have an increased wage or bonus for his
work done, whereas the employer wishes to increase the workload and reduce the wages. In
distributive bargaining, unions and management have initial offers or demands, target points
(e.g.: desired wage level), resistance points (e.g.: unacceptable wage levels) & settlement ranges
(e.g.: acceptable wage level). Another name for this type of bargaining is conjunctive bargaining.
2.) Co-operative or Integrative Bargaining: Integrative bargaining is similar to problem
solving sessions in which both sides are trying to reach a mutually beneficial alternative,
i.e. a win-win situation Both the employee and the union sit together and try to resolve the
problems of their common interest and reach to an amicable solution. Both sides share
information about their interests and concerns and they create a list of possible solutions to best
meet everyone’s needs. In the case of economic crisis, such as recession, which is beyond the
control of either party, may enter into a mutual agreement with respect to the working terms.
For Example, when companies are hit by recession, they cannot offer the kind of wages and
benefits demanded by workers. At the same time, they cannot survive without the latter’s
support. Both parties realize the importance of surviving in such difficult times and are willing
to negotiate the terms of employment in a flexible way.
3.) Productivity Bargaining: This type of bargaining is done by the management, where the
workers are given the incentives or the bonus for the increased productivity. The workers get
encouraged and work very hard to reach beyond the standard level of productivity to gain the
additional benefits. Through this form of collective bargaining, both the employer and the
employee enjoy the benefits in the form of increased production and the increased pay
respectively.
4.) Composite Bargaining: In this type of collective bargaining, along with the demand for
increased wages the workers also express their concern over the working conditions, recruitment
and training policies, environmental issues, mergers and amalgamations with other firms,
pricing policies, etc. with the intention to safeguard their interest and protect the dilution of their
powers. In this method, labor bargains for wages as usual, but goes a step further demanding
equity in matters relating to work norms, employment levels, manning standards, environmental
hazards, sub-contracting clauses etc. This works in the favor of the workers.
 5

Thus, the purpose of the Collective Bargaining is to reach a mutual agreement between the employee
and the employer with respect to the employment terms and enjoy a long term relationship with
each other. For e.g., when unions negotiate standards they ensure the workload of workers don’t
exceed.
5.) Concessionary Bargaining: Quite opposite to the other forms of bargaining, where the unions
demanded from the employers, in concessionary bargaining, the objective is to giving back to
management some of what it has gained in previous bargaining.• Why should labor be willing to
give back what it has worked so hard to obtain? A good example is the agreement between General
Motors & the International Union of Electric Workers that granted GM around the- clock operations,
wages and benefits concessions for the new hires, and a two-week mass vacation. The concessions
were made to save over 3,000 jobs. In some cases, despite a financial crisis, the union may not be
willing to concede. This may be because the union doesn’t view management’s arguments as
credible. Thus, the degree of trust and credibility between the management and the union may
influence the extent to which concessionary bargaining occurs.7

Right to Organize and Collective Bargaining Convention, 1949 (No. 98)

One of the most well-known and widely ratified Conventions that relate to collective bargaining is
No. 98 – the Right to Organize and Collective Bargaining Convention, 1949. This fundamental
Convention says that member States should encourage systems of voluntary negotiations in order
to regulate terms and conditions of employment through collective agreements. All the other
Conventions and Recommendations listed above complement Convention No. 98 through clarifying
concepts and supporting the principles that it defines. Right to Organize and Collective Bargaining
Convention, 1949 provides for protection against anti-union discrimination, for protection of
workers’ and employers’ organizations against acts of interference by each other, and for measures
to promote collective bargain

Rights to organize

Article 1 states that workers must be protected against discrimination for joining a union,
particularly conditions of employers to not join a union, dismissal or any other prejudice for having

7
Types of Collective Bargaining, http://businessjargons.com/types-of-collective-bargaining.html, (April 10th , 10:47
PM)
 6

union membership or engaging in union activities. Article 2 requires that both workers and
employers' organisations (i.e. trade unions and business confederations) should not be interfered in
their own establishment, functioning or administration. Article 2(2) prohibits, in particular, unions
being dominated by employers through "financial or other means" (such as a union being given
funding by an employer, or the employer influencing who the officials are). Article 3 requires each
ILO member give effect to articles 1 and 2 through appropriate machinery, such as a government
watchdog.

Article 1

1. Workers shall enjoy adequate protection against acts of anti-union discrimination in respect of
their employment.
2. Such protection shall apply more particularly in respect of acts calculated to--

(a) make the employment of a worker subject to the condition that he shall not join a union or shall
relinquish trade union membership;

(b) cause the dismissal of or otherwise prejudice a worker by reason of union membership or
because of participation in union activities outside working hours or, with the consent of the
employer, within working hours.

Article 2

1. Workers' and employers' organisations shall enjoy adequate protection against any acts of
interference by each other or each other's agents or members in their establishment, functioning or
administration.
2. In particular, acts which are designed to promote the establishment of workers' organisations
under the domination of employers or employers' organisations, or to support workers'
organisations by financial or other means, with the object of placing such organisations under the
control of employers or employers' organisations, shall be deemed to constitute acts of interference
within the meaning of this Article.

Article 3

Machinery appropriate to national conditions shall be established, where necessary, for the purpose
of ensuring respect for the right to organise as defined in the preceding Articles.
 7

Article 4

Measures appropriate to national conditions shall be taken, where necessary, to encourage and
promote the full development and utilization of machinery for voluntary negotiation between
employers or employers' organisations and workers' organisations, with a view to the regulation of
terms and conditions of employment by means of collective agreements.8

Factors affecting Collective Bargaining:

The success of collective bargaining machinery largely depends on the respective attitudes of
workers, in general, and the union, in particular on one hand and the attitude of management of
employer on the other. However, if collective bargaining is to exist in a country successfully the
following factors are essential:

1.) It is necessary for the management to recognize the union and to bargain in more good faith.
This also puts pressure on the union to formulate plans and demands in a systematic manner.
2.) There should be a change in the attitude of employers and employees. They must realize that
collective bargaining approach does not imply litigation as it does under adjudication. Both the
parties should keep this in mind that they have to resolve their differences on their respective claims
quietly and calmly, with their own resources, reducing their dependence on the third-party
intervention.
3.) For the purpose of collective bargaining, employers should be represented by the management
and workers by their union representatives. Careful thought and selection of the negotiating team is
very much essential. For management team, it is better to have a mixed composition, such as
production, finance, industrial relation experts and headed by a personnel expert.
4.) It is also appreciable to have open minds; each party should listen to others’ concern and point
of views and should have some flexibility in making adjustments to the demands
5.) To ensure collective bargaining, unfair labour practices should be avoided and abandoned by
both; otherwise, atmosphere and confidence will be vitiated by malpractice if either side takes
advantage of the other by resorting to unfair practices.
6.) Either side should avoid putting any irrational or unreasonable demand.

8
http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0:::55:P55_TYPE,P55_LANG,P55_DOCUMENT,P55_NO
DE:CON,en,C098,/Document, (April 10th, 11:00 PM)
 11

7.) Negotiations can be successful only when the parties rely on facts and figures to support their
points of view. That is why trade union should be assisted by specialists, viz., economists,
productivity experts, etc.
8.) Trade union should encourage the internal union democracy and periodic consultation with the
general rank and file of the union member
9.) The terms of contract and the results of the negotiation should be in writing and should be
embodied in a document. If no agreement is reached the parties should proceed to conciliation,
mediation or arbitration. If no settlement is arrived, then the workers should be free to go in for
strike and the employers for lockout. However, utmost care should be taken to resolve difference
mutually.
10.) Strikes and lockouts should be the last resort. Periodic discussions may be necessary between
management and unions to interpret the provisions of the contract and clarify doubts.
11.) Trade unions should be equally concerned with quality of work that leads up to a consistent
concern for the viability of the firm and its products and services.
12.) Once the agreement is reached, it must be honored and fairly implemented.9

COLLECTIVE BARGAINING IN INDIA:

Collective Bargaining in India has been the subject-matter of industrial adjudication since longhand
has been defined by our Law Courts. In Kamal Leather Karamchari Sangathan v. Liberty Footwear
Company10, 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. SriramTiwari 11, 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 12the 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.

9
http://www.shareyouressays.com/116927/12-main-factors-which-influence-the-success-of-collective-bargaining
(April 10th, 11:09 pm
 12

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 all other disputes.”
In Bharat Iron Works v. Bhagubhai Balubbai Patel 13it 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.
Article 43-A of the Indian Constitution provides that 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.

Thus, it has become incumbent on the states to work towards the effective participation of workers
in the management.

POSITION OF COLLECTIVE BARGAINING IN INDIA

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

climate. The history of the trade union movement shows that union 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.14

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. 15So, it permits one to be the leader of the union who does

10
AIR 1990 SC 247
11
(1979) Lab I.C. 523 (Cal)]
12
(1961) I LL.J 504
13
(1976) Lab. I.C. 4 [S.C]
 13

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. 16Nevertheless, 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 theindustry 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, employers 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 fund17 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
18
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. Another hurdle in the success of collective bargaining in India, is the
absence of a compulsory ‘recognition’ provision in the Act.

Impact of Recognition as Bargaining Agent in Collective Bargaining

In view of the prevailing multi-trade-unionism in the country, recognition of a bargaining agent has
assumed importance. Unfortunately, no attempt has been made at the national level to either lay
down a procedure for recognition of a trade-union as bargaining agent or work out a procedure. There
is no provision either in the Indian Trade Union Act 1926 or in the Industrial Disputes Act 1947 for

14
S.N. Dhyani, Trade Union and the right to strike, S. Chand & Co. (Pvt.) Ltd, New Delhi, PP. 374-380.
15
See Section 22 of the Trade Unions Act, 1926,
16
See Report of the National Commission on Labour, (1969), P. 288
17
See Section-16 of the Trade Unions Act. 1926
 14

the purpose. The Government of India proposed an amendment in the Trade Union Act in 1950
making recognition of a union compulsory. The measure however, faced serious opposition and
remained unimplemented. The Standing Labour Committee (l8thSession) and National
Commission on Labour favoured a statutory -provision for the purpose but their recommendations
have yet to be accepted.
The National Commission on Labour attached considerable importance to the matter of recognition
of unions and observed as under: “Industrial Democracy implies that the majority union should have
the right to sole representation, i.e., the right to speak and act for all workers and enter into
agreements with the employer."19

In the absence of statutory provision, the matter is regulated by the Code of Discipline which was
evolved at Nainital session of Indian Labour Conference in 1952. The Code of Discipline provides
for verification of trade-union membership by Central Industrial Relations Machinery.
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 (I) 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 center has shifted toward sit leadership whose effectiveness is determined by the
extent of political patronage and the consequent capacity to obtain the benefit.
This shifting center 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

18
id. at P. 291, The Commission has recommended as follows :Where the membership of union is;( i) below 1,000
the number of outsiders should not be more than 10%{ii) between 1,000-10,000 … …. …. ….. ….. ….. ….. ….. 20%(iii)
above l,000 … …. …. ….. ….. ….. ….. ….. …. … …30%(iv) 'the permissible limit for industry -wise unions should be 30 19
Report of the National Commission on Labour, (1969)p. 329
 15

instrumentality of the State, has emerged as the biggest employer in this country, the collective
bargaining -between the union patronized byte 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 and improved conditions of service, there has been no corresponding improvement in
production or the productivity and 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
level 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. There are also not many collective
bargaining agreements which have tried to link wages with productivity. 20

Multi -Unionism

Political orientation of trade unions is the primary reason for multi-unionism. Communal
sentiments, provincial feelings and caste are other major causes for multi-unionism. Presence of too
many unions in an industry destroys the bargaining strength of workers. Our labour legislation also
permits multi-unionism. Multi-unionism adversely affects collective bargaining process. Where
there are too many unions, with whom should management negotiate? Each union may claim
recognition. Each union may present separate charter of demands in a spirit of rivalry. When
conflicting demands are made, it may be impossible to accept any of them. Moreover, if one union
is ready to accept some of the demands, other union may object to them. In this context, it is difficult
to think of any effective collective bargaining process in India.

Types of Collective Bargaining Agreements in India

Collective bargaining as it is practiced in India can be divided into three classes. First is, the bipartite

20
Anirudh Prasad Singh, "New Dimension of Employer-Employee Relations in Progressive Industrial Society,"
9, Lawyer, 164 (1977)
 16

agreement drawn up in voluntary negotiation between management and union. The second type is
known as a settlement, while the third type of collective agreement is consent award. These are
discussed below:

Bipartite Agreements

: These are most important types of collective agreements because they represent a dynamic
relationship that is evolving in establishment concerned without any pressure from outside. The
bipartite agreements are drawn up in voluntary negotiation between management and union. Usually
the agreement reached by the bipartite voluntarily has the same binding force as settlement reached
in conciliation proceedings. The implementations of these types of agreements are also not a
problem because both the parties feel confident of their ability to reach the agreement.

Settlements

: It is tripartite in nature because usually it is reached by conciliation, i.e. it arises out of dispute
referred to the appropriate labour department and the conciliation officer plays an important role in
bringing about conciliation of the differing viewpoints of the parties. And if during the process of
conciliation, the conciliation officer feels that there is possibility of reaching a settlement, he
withdraws himself from the scene. Then the parties are to finalize the terms of the agreement and
should report back to conciliation officer within a specified time. But the forms of settlement are
more limited in nature than bipartite voluntary agreements, because they strictly relate to the issues
referred to the conciliation officer.3.

Consent Award

: Here the negotiation takes place between the parties when the dispute is actually pending before
one of the compulsory ad judicatory authorities and the agreement is incorporated to the authorities,
award. Thus though the agreement is reached voluntarily between the parties, it becomes part of the
binding award pronounced by an authority constituted for the purpose. The idea of national or
industry-wide agreements and that too on a particular pattern may appear to be a more ideal system
to active industrial relation through collective bargaining, but the experience of various countries
shows that it is not possible to be dogmatic about the ideal type of collective bargaining, because it
largely depends upon the background, traditions and local factors of a particular region or country.
 17

LAWS RELATING TO COLLECTIVE BARGAINING IN INDIA

As discussed earlier, collective bargaining is a technique by which disputes of employment are

resolved amicably, peacefully and voluntarily by settlement between labour unions and
managements. The method of collective bargaining in resolving the Industrial dispute, while
maintaining industrial peace has been recognized as the bed rock of the Industrial Disputes
Act,1947. Under the provision of the Act, the settlement arrived at by process of collective
bargaining with the employer has been given a statutory recognition under Section 18 of the Act.
Under the Act two types of settlement have been recognised:

1. Settlement arrived in the course of conciliation proceeding before the authority. Such settlements
not only bind the member of the signatory union but also non-members as well as all the present
and future employees of the management.
2. Settlement not arrived in the course of conciliation proceedings but signed independently by the
parties to the settlement, binds only such members who are signatory or party to the settlement.
Section 19 of the Act prescribes the period of operation inter alia of such a settlement and envisage
the continuation of the validity of such a settlement unless the same is not replaced by another set
of settlement, while Section 29 prescribes the penalty for the breach of such a settlement. The
Industrial Disputes Act, 1947 provides for the appointment of Conciliation Officers, charged with
the duty of mediation in promoting the settlement of industrial disputes. On a reference to the
Conciliation Officer, a Conciliation Board is constituted consisting of representatives of
employees and employer with the conciliation officer as the chairman. The memorandum of
settlement duly signed by the conciliation officer is to go from one camp to the other and find out
greatest common measure of agreement, to investigate the dispute and to do all such things as he
thinks fit to arrive at a fair and amicable settlement of the dispute.

A settlement arrived at by agreement between the employer and the workmen otherwise than in the
course of conciliation proceedings shall be binding on the parties to the agreement. A settlement
comes into operation on such date as is binding on the parties to the agreement, and for such period
as has been agreed upon. Dealing with the binding nature of settlement Chagla, Jhas observed that;
“Industrial Law takes no notice of any private settlement or agreement arrived at between parties in
the course of industrial dispute. Such a private agreement belongs to the realm of contract, it may
give rise to contractual rights; it has no sanctions in industrial law and industrial dispute does not end
until a settlement is arrived at which has been given a binding effect under the provision of S.19 (2)
 18

and such settlement can be only arrived at when conciliation proceedings are held under S.12 of the
Industrial Disputes Act, 1947”.21

From this observation, it would be wrong to infer that a private settlement in respect of an industrial
dispute does not end an industrial dispute. In this respect the following observation of chief Justice
Chagala are relevant, “But when parties do arrive at a settlement, the law gives to it greater sanctity
than it gives to an award and therefore, the industrial law does not contemplate any interference
with the finality of a settlement and it compels the settlement to run on for the period mentioned in
the settlement itself and neither party is permitted to challenge that settlement during its duration.

21
Royal Calcutta Golf Club Mazadoor Union v. State of west Bengal, AIR 1956 Cal 550.
 19

CONCLUSIONS AND SUGGESTIONS:

A lot has been said about the development of collective bargaining in India. But in fact, collective
bargaining which is a two way affair, has been used at present only as a one-way exercise in which
the union, as the aggressive partner, makes the demands, and the management, as the passive
partner, derives satisfaction merely by countering the extent to which it is able to minimize the
additional burdens while meeting the union’s demands.

Strong Trade Union: A strong and stable representative trade union is essential for effective
collective bargaining. For having such a trade union, workers should have freedom to unionize so
that they can exercise their right of unionization and form a trade union for the purpose of electing
their representatives for collective bargaining. The management will not negotiate with such a
union; because mutual agreements are not likely to be honoured by a large section of the labour-
force. Moreover, there is always a danger that non-union members may sabotage it.

Compulsory Recognition of Trade Unions: There must be an acceptable and recognised

bargaining agent. That means that there must be recognised union or unions to negotiate the terms
and conditions of the agreement with the management. Recognition of trade union has to be
determined through verification of fee membership method. The union having more membership
should be recognized as the effective bargaining agent. A strong, stable and the most representative
union should be recognized by the employers for the purpose because any agreement with that union
will be acceptable to majority of workers and it will help in establishing sound industrial relations
in the organization.

Mutual Accommodation: There has to be a greater emphasis on mutual accommodation rather

than conflict or uncompromising attitude. Conflicting attitude does not lead to amicable labour
relations; it may foster union militancy as the union reacts by engaging in pressure tactics. The
approach must be of mutual give and take rather than take or leave. The take or leave philosophy is
followed in America where there is contractual labour. As of now this isnot the case in India. So if
the union and the management have to look for a long-term relationship they have to respect each
other’s rights.

Enactment of Legislation: The State should enact suitable legislation providing for compulsory
recognition of trade union by employers. State has to play a progressive role in removing the
 20

pitfalls which stand in the way of mutual, amicable and voluntary settlement of labor disputes. The
new labour policy must reflect the new approach and new objectives.

Mutual Trust and Confidence: Trade unions and management must accept each other as
responsible parties in the collective bargaining process. There should be mutual trust and
confidence. In fact in any relationship trust is the most important factor. Management must accept
the union as the official representative. The union must accept the management as the primary
planners and controllers of the company’s operations. The union must not feel that management is
working and seeking the opportunity to undermine and eliminate the labour organization. The
company management must not feel that the union is seeking to control every facet of the company’s
operations.

Efficient Bargaining Mechanism: No ad-hoc arrangements are satisfactory for the reason that
bargaining is a continuing process. An agreement is merely a framework for every day working
relationships, the main bargain is carried on daily and for this there is a need to have permanent
machinery. As for machinery being efficient, it has three aspects :(a)Availability of full
information(b)Selection of proper representatives(c)Recognition of natural temperament of each
other.

Emphasis on Problem-solving Attitude: There should be an emphasis upon problem-solving

approach with a de-emphasis upon excessive legalism. Litigation leads to loss of time and energy
and it does not benefit anyone. Therefore the emphasis is to look for mutually acceptable solutions
rather than creating problems for each other. Lastly, the overall political environment should be
congenial. The political environment should support collective bargaining.8.

Political Climate: For effective collective bargaining in a country, it is important to have sound
political climate. The Government must be convinced that the method of arriving at the agreements
through mutual voluntary negotiations is the best for regulating certain conditions of employment.
The provision for political fund by trade unions has to be done away with-since it invariably
encourages the politicians to prey upon the union. Therefore, positive attitude of the political parties
is a must for the promotion of collective bargaining. Such an approach would help and encourage
the development of strong, stable and representative trade unions, growth of mechanism for the
resolution of industrial conflict, recognition of unions, etc.
 21

BIBLIOGRAPHY:

Books Referred:

• Goswami, V.G., Labour and Industrial Law, 2004 Central Law Agency, Allahabad.
• Teller Ludwig, Labour Disputes and Collective Bargaining, Vol I, 1940 Barker
Voorhis&co. INC New York.
• Coutinho,V.B, Strike in Industrial Conflict: A Critical and Comparitive Study,1993, 5th ed.

Articles referred.

• Right to Strike : An Analysis, B.P.Rath and B.B.Das, IJIR 1999,pg 248-259

• Perspectives On Collective Bargaining In India, LLJ, Vol 1, 2005 p.21-34
• “Strikes and Lock outs”, Pankaj and Dharamveer Singh, Lab&IC, Vol 1,2005 pg12-21

Websites referred:

• http://echo.ilo.org/pls/declaris/DECLARATIONWEB.DOWNLOAD_BLOB?Var_Docu
mentID=1655.
http://www.unccr.ch/tbs/doc.nsf/(Symbol)/E.C.12.2002.12.En?Opendocument.(ILO)http
//www.google.co.in/
• www.indialaw.com
• www.lawsofindia.com
• http://www.shareyouressays.com/116927/12-main-factors-which-influence-the-success-
of-collective-bargaining
• http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0::NO::P55_TYPE,P55_LA
NG,P55_DOCUMENT,P55_NODE:CON,en,C098,/Document
22
 23

20
 24

20
 25

21