Collective BargainingLABOUR & INDUSTRIAL LAW

By ARUN VERMA

Introduction •According to Dale Yoder, “Collective bargaining is the term used to describe a situation in which the essential conditions of employment are determined by bargaining process undertaken by representatives of a group of workers on the one hand and of one or more employers on the other.” •In the words of Flippo, “Collective bargaining is a process in which the representatives of a labour organisation and the representatives of business organisation meet and attempt to negotiate a contract or agreement, which specifies the nature of employee-employer-union relationship.”

• Collective bargaining is actually a struggle for building a democratic and civilized society.

• We can not imagine a civilized society without independent sectional organizations and political parties representing the overall socio-economic-political interests of the masses.

• Whenever capitalist development moved forward at extraordinarily speedy rate, most autocratic regimes ruled the states.

• Seems most of the third world countries have entered in a similar phase.

• Liberalization and Globalisation means- state acting as corporate agent to remove all barriers for capital accumulation and mobility of capital.

• Therefore suddenly in almost all the third world countries, an all-round attack on right to organizes and collective bargaining.

Structure of Work force• > 97 % enterprises in informal sector; 3% formal sector• T. Employment: 396 million in 2000 to 456 million in 2005)• Informal sector: 393.2 million (86 percent)--Agriculture: 251.7

million• self-employed (63%), regular wage workers (17%) and casual

20 %• Formal sector employment increased from 54.9 to 62.6 million;

but formal employment increased only from 33.6 million to 35.0 million

• 70,000 registered unions (politically affiliated and independent) and non-registered organizations

• Total verified membership about 2.5 crore (25.5 million) about 30% of it represented by agricultural workers

• Union density in India only 8 percent

Labour Legislations in India1. Laws for regulating Conditions of Service • The Factories Act, 1948---10 or more workers (Crèche: if 30 or

more women; rest room: if 150 or more workers; canteen: if 250 or more workers; ambulance, dispensary, and medical and para-medical staff: if 500 or more workers).

• Mines Act, 1952; Beedi and Cigar Workers (Conditions of Employment) Act, 1966; Building and Other Construction Workers Act 1995; Motor Transport Workers Act 1961; Plantation Labour Act 1951; Working Journalists (Conditions of Service) and Miscellaneous Provisions Act 1955; Sales promotion Employees (Conditions of Service) Act 1976; Apprentices Act 1961; Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979

• Weekly Holidays Act 1942• Contract Labour (Regulation) Act 1970• Shops and Establishment Acts of various States

(establishments not registered under Factories Act)

Labour Legislations in India 2. Labour Relations Laws• a) Trades Union Act, 1926 (7 or more workers)• b) Industrial Disputes Act, 1947 (Procedural aspects to all workers;

Chapter V B: 100 or more workers, VA: 50 or more workers) • c) Industrial Employment (Standing Orders) Act, 1946: (100 or more

workers----in some states 50 or more, only in UP-10 or more)3. Wage Laws: • Minimum Wage Act 1948 (all workers)• Payment of Wages Act 1936; (10 or more workers, < Rs 1600 pm)• Payment of Bonus Act 1965; (20 or more workers, < Rs 3500 pm) 4. Labour Laws regarding Human Rights: • Child Labour (Prohibition and regulation) Act 1986; The Children

(Pledging of Labour) Act; Bonded Labour System (Abolition) Act 1976

• Equal Remuneration Act 1976.

Labour Legislations in India5. Social Security Laws: • Employees’ Provident and Miscellaneous Provisions

Act 1952: (if 10 or more workers)• Employees’ State Insurance Act 1948: (20 or more

workers)• Maternity Benefit Act 1961 (if 10 or more workers)• Payment Gratuity Act 1972 (if 10 or more workers) • Workmen’s Compensation Act 1923 (all workers)• Unorganized Workers Social Security Act 2008 :

(unorganized workers below poverty line)- (National Old Age Pension Scheme, National Family Benefit Scheme, Scheme for protection during maternity, medical insurance schemes etc.)

Importance of Collective Bargaining Importance to employees• Collective bargaining develops a sense of self respect and

responsibility among the employees.• It increases the strength of the workforce, thereby, increasing

their bargaining capacity as a group.• Collective bargaining increases the morale and productivity of

employees.• It restricts management’s freedom for arbitrary action against

the employees. Moreover, unilateral actions by the employer are also discouraged. Effective collective bargaining machinery strengthens the trade unions movement.

• The workers feel motivated as they can approach the management on various matters and bargain for higher benefits.

• It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the chances for conflicts are reduced.

Importance of Collective BargainingImportance to employers

• It becomes easier for the management to resolve issues at the bargaining level rather than taking up complaints of individual workers.

• Collective bargaining tends to promote a sense of job security among employees and thereby tends to reduce the cost of labor turnover to management.

• Collective bargaining opens up the channel of communication between the workers and the management and increases worker participation in decision making.

• Collective bargaining plays a vital role in settling and preventing industrial disputes.

Importance of Collective BargainingImportance to society

• Collective bargaining leads to industrial peace in the country

• It results in establishment of a harmonious industrial climate which supports which helps the pace of a nation’s efforts towards economic and social development since the obstacles to such a development can be reduced considerably.

• The discrimination and exploitation of workers is constantly being checked.

• It provides a method or the regulation of the conditions of employment of those who are directly concerned about them.

Types Of Bargaining• Distributive bargaining: Under it, the economic issues like wages,

salaries and bonus are discussed. In distributive bargaining, one party’s gain is another party’s loss.

• Integrative bargaining :This involves negotiation of an issue on which both the parties may gain, or at least neither party loses.

• Attitudinal restructuring :This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management.

• Intra-organizational bargaining: It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups.

Pre-requisites for collective bargaining Effective negotiations and enforcement requires a systematic preparation

of the base or ground for bargaining which involves the following three steps:

• Recognition of the Bargaining Agent. The management should give recognition to the trade union for participating in the collective bargaining process. In case there is more than one union, selection could be done through verification of membership by a government agency giving representation to all the major unions through joint consultations. Thus, the bargaining agent of the workers should be properly identified before initiating any action.

• Deciding the Level of Bargaining. Whether the dealings are confined to enterprise level, industry level, regional or national level should be decided as the contents, scope and enforcement agencies differ in each case.

• Determining the Scope and Coverage of Bargaining. It would be better to have a clear understanding of what are the issues to be covered under bargaining. Many a time, bargaining is restricted to wage and working conditions related issues but it would be advantageous for both the management and union to cover as many issues as possible to prevent further friction and disputes. Therefore, all the important and interrelated issues are to be taken for consideration.

Collective Bargaining Process Prepare

Discuss

Propose

Bargain

Settlement

Levels At Which Collective Bargaining Is Undertaken

Sectoral Collective Bargaining At National

Level

Industry-Cum-Region wide Agreements

Enterprise Or Plant Level

Problems of Collective Bargaining • Due to the dominance of outsiders in trade unionism in the country,

there is multiplicity of unions which are weak and unstable, and do not represent majority of the employees. Moreover, there are inter-union rivalries, which further hinder the process of collective bargaining between the labour and the management.

• Since most of the trade unions are having political affiliations, they continue to be dominated by politicians, who use the unions and their members to meet their political ends.

• There is a lack of definite procedure to determine which union is to be recognised to serve as a bargaining agent on behalf of the workers

• In India, the law provides an easy access to adjudication. Under the Industrial Disputes Act, the parties to the dispute may request the Government to refer the matter to adjudication and the Government will constitute the adjudication machinery, i.e., labour court or industrial tribunal. Thus, the faith in the collective bargaining process is discouraged.

• There has been very close association between the trade unions and political parties. As a result, trade union movement has leaned towards political orientations rather than collective bargaining.

Conditions For Successful Collective Bargaining

• Trade Union Recognition• Observance of Agreements• Support of Labour Administration Authorities• Good Faith• Proper Internal Communication

Legal Boundaries for Collective Bargaining

• No ratification of ILO conventions-C-87 and C-98

• Limited scope and coverage of R2A and CB with in legal boundaries of TU Act and ID Act

• TU Act and ID Act silent on the issue of recognition of trade unions

Legal Boundaries for Collective Bargaining

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

• Section 10k: can be imposed to prohibit strikes or Lock-outs;

• section 22 : In Public Utility Services---strike notice of 6 weeks

• Section 23: Prohibition of strikes during the pendency of conciliation, arbitration and court proceedings

• TU activities granted immunity from the applicability of CRPC but not in case of illegal strikes

CTUOs in India • BMS - Bharatiya Mazdoor Sangh (far right political party BJP)-

members: 6 million• INTUC - Indian National Trade Union Congress (Congress Party),

members: 3.8 million• AITUC - All India Trade Union Congress (CPI)- members: 3.3 million• HMS - Hind Mazdoor Sabha (independent-socialist) -members: 3.2

million• CITU - Centre of Indian Trade Unions (CPI-M) members: 2.6 million• UTUC (LS) - United Trade Union Congress (Lenin Sarani) (SUCI) • UTUC - United Trade Union Congress (Revolutionary Socialist Party)• TUCC - Trade Unions co-ordination Centre (All India Forward Block) • SEWA- Self-Employed Women's Association (independent)—recently

listed• LPF- Labour Progressive Front (DMK)—recently listed• ICCTU- All-India Central Council of Trade Unions (CPI-ML-

liberation)-recently listed• INTTUC-Indian National Trinmool Trade Union Congress (All India

Trinmool Congress)-recently listed

Further Shrinking the Space for Collective Bargaining

Amending the Trade union Act • 10% or 100, whichever is less, subject to a minimum of

7 workmen members for registration—limiting no. of outsiders.

• Banning the Strikes by using ESMA• TN-ESMA in 2003: imposed on general strike of

government and public sector employees- 170000 employees were dismissed-lastly reduced to 6074

Judicial Precedents Imposing Further Limitations • General strike in Tamil Nadu (2003) TR Rangarajan vs

Government of Tamil Nadu, AIR 2003 SC 3032): government employees have no fundamental right to strike

• Kerala general strike 1997: Bandhs (general Strikes) are illegal; Order of HC Kerala upheld by SC

• In 2004, Calcutta High Court delivered similar decision.

Making SEZs and NIMZs Immune to Trade Union Actions• All SEZs and NIMZs declared as public utility services• Amendments proposed: applicability of protective sections of ID

Act and CL Act, No outsiders in trade unions etc. Right to join unions in NIMZs – only to low paid workers

**NIMZ - National Investment and Manufacturing Zones**SEZ – Special Economic Zone

Declining wage share in India, 1993–2007 World of Work Report, ILO 2010

New Trends: 1 New wave of labour movement for unionization• A new wave of workers struggle for unionization; • Workers struggle in Graziano Transmissioni in Noida, NCR

Delhi, Rico Auto Ltd and Sunbeam Auto Ltd in Gurgaon, Pricol in Coimbtore, Hyundai motors, Foxconn and Madras Rubber Factory in Chennai, Nestle in Uttarakhand, and Viva Global in Gurgaon etc.

Efforts to develop unity among the CTUOs resulted in Coordination Committee of eight CTUOs and the first joint action was successful all India strike on Nov 7, 2010.

Individualized Bargaining: Spurt in individualised bargaining mainly due to rampant informalisation

Strikes and Lockouts from 2002 to 2005 Labour Bureau, Government of India

ITEM 2002 2003 2004 2005

No. of Strikes 295 255 236 227

No. of Workers Involved

900,386 1,010,976 1,903,054 2,722,784

Man-days lost 9,664,537 3,205,950 4,828,737 10,800,686

No. of Lockouts 284 297 241 229

No. of Workers Involved

179,048 804,969 169,167 190,817

Man-days lost 16,921,382 2,70,49,961 19,037,630 18,864,313

Strikes and Lockouts 2005-09 www.livemint.com/2009/12/.../The-rise-of-the-new-proletaria.html

The case of Viva Global• 400 male workers and 200 females workers in company --- demand

for wage increment in April 2010 after minimum wages revised in January 2010--- stopped the work for two hrs every day April 8-10

• One worker dismissed---protest----15 workers taken in custody • Workers started their efforts to form trade union• Protest ended-demands fulfilled---minimum wage, formal contract-

ESI and PF• But Soon management started throwing out workers one by one• Workers successfully registered union in May 2010; collectively

protested against this move • Aug 21: all contract workers thrown out-protest at the factory gate• Management locked out the factory, regular workers also thrown

out• August 25: 20-25 local goons brutally attacked the factory workers

The case of Viva Global• One worker was caught and abducted by the goons.

• Accounts of Abducted worker: “I was put in backside box of a car. Lastly the car stopped and the goons closed my eyes with some cloth before taking me out of the box. They took me to a house and hit me with whatever they had till they received directions on phone to take me to another place. Thereafter they took me to a jungle and threatened to kill me. But soon after they received directions on phone and therefore they again put me in the same backside box of the car and threw me out at Delhi-Gurgaon Border. As soon as I reached my residence from there, the police also reached there and took me to the Police Station and then to the hospital and from there I again came to the place where sit-in-protest of workers was going on.”

New Trends: 2 Informalisation and New Paradigm of Collective

Bargaining • Emphasis on Community organizing rather than at shop-floor;

Collective Bargaining at Industry or National level rather than factory level; adopting more political forms of struggle than traditional union tactics

• In many industrial sectors, for example in garment-the situation provides only two options: individual bargaining or Industry level/national level bargaining and requires political forms of struggle

New initiatives to organize informal sector workers: Many local level unions of rural workers and also regional platforms of rural workers have started emerging—Particularly around NREGA.

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