Final Desertation to Sir

7/31/2019 Final Desertation to Sir

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CHAPTER - 1INTRODUCTION

The primary function of a Union is to promote and protect the interests of its members.

It has to advance the social and economic interests of the members. For the purpose, it

has to undertake welfare activities like organizing mutual benefits sources, games and

cultural programmes and educate its members in all aspects of their working life. In

discharging the basic functions the unions have to operate on many fronts, social,

economic, civic and political.

Unions should pay attention to the basic needs of its members which are:

(a) to secure for workers fair wages;(b) to safeguard security of tenure and improve conditions of service;(c) to enlarge opportunities for promotion and training;(d) to improve working and living conditions;(e) to provide for educational, cultural and recreational facilities;(f) to cooperate in and facilitate technological advance by broadening the

understanding of workers with their industries;

(g) to improve identity of interests of the workers with their industries;(h) to offer responsive cooperation in improving levels of production and

productivity, discipline and high standard of quality; and

(i) to promote individual and collective welfare.


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In addition to the above goals, the Unions are also to discharge some social

responsibility, such as;

(i) Promotion of national integration;(ii) Generally influencing the socio-economic policies of the community

through active participation in their formulation at various levels; and

(iii) Instilling in their members a sense of responsibility towards industry and thecommunity. 1

It may be noted, at this juncture, that the bargaining power of an individual is often

quite weak because of factors like ignorance, illiteracy, poverty, indebtedness,

social, economic and political backwardness, and like so, he is no match for his

economically superior employer when he engages in individual bargaining. Lord

Wedderburn argues rightly that, that the Common Law assumes it is dealing with a

contract made between equals, but in reality, save in exceptional circumstances, the

individual workers bring no equality for bargaining power to the labour market.

Accordingly to Kahn-Freund, this individual relationship, in its inception is an act of

submission, in its operation, it is a condition of subordination, however, much the

submission and subordination may be concealed by that indispensable figments of the

legal mind known as the contract of employment.

So the workers in an industry exposed to exploitation, the consequences of

arbitrary and discriminatory actions, decisions of their employers combine together to

secure and promote their legitimate interests, like security of their jobs, decent working

and living conditions, a reasonable share in the profits earned by the employer on account

1Basudeb Sahoo:Labour Movement in India,Rawat Publication New Delhi-1999,pp 185-186


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of their labour. These combinations are labelled as Trade Unions. Today, Trade

Unions have come to symbolize: workers right to organize; to put their demands

collectively and to resort to strike when their legitimate demands are not conceded by

their employers. This leads us to the Concept and Meaning of Collective Bargaining2

1.1 COLLECTIVE BARGAINING:As stated earlier, very often, the bargaining power of an individual worker is

weak unless he has exceptional skills or professional competence. The individually weak

worker looks for support and sustenance in the industrial environment where he is

disposing of his labour. This support, he assumes, would be available when he along

with other like-minded co-workers forms a combination to protect and promote his and

his fellow-workers interests. Through this combination, known as Trade Union, the

concept, Unity is Strength manifests itself. It is this instrumentality when recognized

by the employer for the purpose of negotiating the terms and

Collective Bargaining is preferable to Compulsory Adjudication. Because, the

disputants involved in the process can themselves iron out their differences to maintain or

restore peace in the industry where they are partners in production. By adopting the

policy of give and take, the disputants can resolve their disputes quickly unlike in this

adjudicatory process where there would be procrastination and a third party imposes the

award which may leave either or both of the parties to the disputes dissatisfied. As V.V.

Giri has pointed out, compulsory adjudication engenders an attitude of suppressed

hostility in one party and unconcealed satisfaction in the other.

2Visheweswariah S S : Effect of New Economic Policy on Trade Unionism Collective Bargaining-IndianBar Review, Vol 29(1)2002 pp125-132


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An agreement arrived after the successful negotiations at the Bargaining Trade

would define the rights and obligations of both of the parties; establish mechanisms for

their enforcement and also the machinery of arbitration to resolve the Rights Disputes.

That is why the collective bargaining process has been depicted as a System of Industrial

Jurisprudence. Further, the Bargaining process may lead to the regulation of many of the

rights of the employer, like hire and fire, right to restructure his undertaking, right to

relocate, etc., and may create new rights in favour of the working class and thus act as a

catalyst to promote social change.

Today, Collective Bargaining Agreements may provide for better protection than

what the relevant Statute guarantees. That is, the statutorily guaranteed rights are, no

doubt implied terms in the contract of employment between the employer and the

workmen/Trade union. But, there is no statutory bar against the Bargaining Agency to

seek and ensure better terms and conditions.

It should be pointed out that it would be a mistake to conclude that the Trade

Unions bargain only over terms and conditions of the employment. Over a period, they

have fought for a greater share for social sovereignty, more welfare and liberty. Further,

the Trade Unions, over the years, have fought for many of the causes, which the Directive

Principles of State Policy enshrine3.

1.2 IMPLICATIONS OF ECONOMIC REFORMS

3Visheweswariah S S : Effect of New Economic Policy on Trade Unionism Collective Bargaining-IndianBar Review, Vol 29(1)2002 pp125-132


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One cannot be oblivious to the fact that computerization, automation as Trade

Unions have contended, and also, restructuring of undertakings, have aggravated the

unemployment problem. Further, no one can brush aside the consequences of

competition leading to lay-off, retrenchment and closure of industries and its debilitating

and, at times, ruinous impact upon the work force. A workman over whose head thee

Democles Sword of Retrenchment hangs may not be in a proper mental state to give out

his best. If, as a consequence, the workers are forced to face moral, mental and health

problems, the causalities would be their skills, capability and human development.

Further, introduction of new technologies in a country like ours where labour is abundant

(a labour surplus economy) may render a host of traditional skills redun dant and the

employers instead of retaining and redeployment prefer to discharge workers with old

skills, and recruit new ones.

Trade Unions have to function in a dynamic environment and interact with

governmental agencies and political parties while striving to promote the interests of their

members. This does not mean they should be hand-maidens or appendages to political

parties.

Political Unionism has bred multiple unions in every industry and this has

hampered the development of Collective Bargaining Process and also rendered the

question of Recognition quite difficult.


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Only around 28.11% of the Indian labour is organised. Consequently the working

class in the unorganised sectors who have constantly suffered exploitation and have never

enjoyed Job Security could not empathise with the elite organized sections. Even in the

organized sectors, the trade union membership, consequent upon the governments

resolve to promote privatisation of all non-strategic units, has been dwindling fast.

Therefore, the workers in the unorganised sector who constitute a mind-bogging

percentage of the Indian Labour force need be organized to provide strength and vitality

to the movement. But, as long as the ideological differences amongst the major central

Trade Union Federations remain strong, no potent panacea would be in sight. The

corrupt Trade Union Bureaucracy has also weakened the movement.

Rationalization, Restructuring, Redeployment, Employment of New-Technology,

Fierce Competition (all co-related) are the salient features of the New Economic Policy.

Industrial Units which are unfit to compete will have to exit eventually. Sick Units will

no longer enjoy the governments patronage. Market forces will decide who shall stay in

the field.

The fundamental tenets of Trade Unionism and Collective Bargaining and many

of the Directive Principle of State Policy demonstrating concern for the well-being of the

working class do seek to promote the constitutional ethos of Social Justice. This can be

accomplished when the Trade Union Movement has both strength and vitality. But, as

already pointed out, only about 28.11% of the Indian work force is organized. Most of

these organized workers are found in the Public Sector Undertakings. These undertaking

may also slowly disappear if the Government pursues its policy of disinvestments

vigorously. Then, the Trade Union Membership, even in the organized sectors, will


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further decline. One of the basic tenets of Trade Unionism is: Shrinkage in membership

would render the Trade Unions weak. Weak Trade Unions are poor collective Bargaining

Agents.

Employers henceforth, would be reluctant to engage a large workforce. They

would prefer to run automated units with a workforce as small as possible in order to

remain competitive in the market. At these units, workers may no doubt form Trade

Unions. But, whether these trade unions would be willing to associate with the national

federations and act as a strong force in the national trade union movement to fight for a

common cause remains to be seen.

4

1.3 RECENT AMENDMENT IN THE TRADE UNIONS ACT 1926

The Indian Trade Unions Bill 1925 was introduced in the central legislative

assembly to provide for the registration of Trade Unions and in certain respects to define

the law relating to registered trade unions in the province of India.

The general scheme of the bill I that a trade union making the necessary

application will, on compliance with certain stated conditions designed to ensure that

adequate safe-guards are provided for the rights of its members, be entitled to

registration. The Union and its members will thereupon receive protection in certain

cases in respect of both civil and criminal liability. No restriction is placed upon the

objects, which a registered trade Union may pursue, but the expenditure of its

4 Visheweswariah S S : Effect of New Economic Policy on Trade Unionism Collective Bargaining-IndianBar Review, Vol 29(1)2002 pp125-13237-138


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funds must be limited to specified Trade Union purposes. The Indian Unions Act-1926

came in to force on 1st June, 1927, since then several amendments have been made in the

Act, latest being The Trade Unions (Amendment) Act, 2001 (31 of 2001)5.

The amendment Act of 2001, has inter-alia introduced several changes in the

original Act, keeping pace with ongoing economic and labour reforms in the country.

To check the multiplicity of trade Unions, a new proviso has been inserted in

Sec.4 of the Act, which deals with the mode of registration. The proviso, reads as under:

Provided that no Trade Union of workmen shall be registered unless at least ten

percent or one hundred of the workmen, whichever is les, engaged or employed in the

establishment or industry with which it is connected are the members of such Trade

Union on the date of making application of registration.

Provided further that no Trade Union of workmen shall be registered unless it has

on the date of making application not less than seven persons as its members, who are

workmen engaged or employed in the establishment or industry with which it is

connected.

Further, making the law more stringent, sub clause (aa) has been added to sec. 5

(1) which mandates that in the case of a Trade Union of Workmen, every application of

registration, made to the Registrar of the trade unions shall be accompanied by a

5The Trade Union Act 1926 (19 of !926) as amended by the Trade Unions(Amendment) Act 2001 (31 of 2001)


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statement of the names, occupations and addresses of the place of work of the members

of the Trade Union making application6.

To ensure the proper functioning of the internal bureaucracy of the trade Unions,

the word appointed has substituted with the word elected in the clause (b) of sec.6. It

anticipates the election of the office bearers of the trade unions instead of their

appointment. Further the newly inserted clause (hh) in this section requires a trade union

to specify in the rules the duration of period being not more than three years, for which

the members of the executive and other office bearers of the trade union shall be elected. 7

Section 9A introduces a minimum requirement about membership of a Trade

Union. According to it, a registered Trade Union of workmen shall at all times continue

to have not less than ten percent or one hundred of the workmen, whichever is less,

subject to a minimum of seven, engaged or employed in an establishment or industry

with which it is connected, as its members. Further clause (c) has been inserted in

Sec.10, which empowers the Registrar of Trade Unions, if he is satisfied, that a registered

Trade Union of workmen ceases to have the requisite number of members.8

With a view of prevent the excess politicisation of Trade Unions, Sec.22 has been

substituted by a new section by the amendment Act. Now this substituted section

provides that not less than one half of the total number of office-bearers of every

registered Trade Union in an un-recognized sector shall be persons actually engaged or

employed in an industry with which the trade union isconnected.

6 The Trade Union Act 1926 (19 of 1926) as amended by the Trade Unions (Amendment) Act 2001(31 of 2001)7 Ibid8 Ibid


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Sub Section (2) of the same Section casts an obligation on the Trade Union with

regard to the office-bearers of the Trade Union. It provides that all the Office-bearers of a

registered Trade Union, except not more than one-third of the total number of the office

bearers or five which ever is less, shall be persons actually engaged or employed in the

establishment or industry which the trade union is

connection with.

Further Sub-section (3) provides that no member of the council of ministers or a person

holding an office of profit (not being an engagement or employment in an establishment

or industry with which the trade union is connected), in the union or state, shall be a

member of the executive or other office-bearers of a registered trade union.9

A new Sub-section (3) has been inserted in Section 29 which deals with the appropriate

Govt.s power to make regulations. Sub-sec requires every notification made by the

Central Govt. under Sub-section (1) of section 22 and every regulation made under Sec.

29 (1) to be laid down before each of the Houses of Parliament.

Thus it is very clear from the foregoing discussion of recent changes brought

about in the Trade Union Act 1926, that the ongoing economic reforms are having

a direct bearing on the trade union movement in India. There is a paradigm shift on the

part of the State with regard to various issues pertaining to trade unionism in India.

Measures that have been undertaken through legislative action are such, which aim at

9 Ibid


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making the law more significant and to check the excessive politicisation of trade unions

which has been ailing the trade union movement in India, for along time. 10

1.4 THE RIGHT TO STRIKE: CHANGING DIMENSIONS

Art. 19(1) C of the Constitution of India provides that All citizens shall have the right to

form associations or unions. However, this right is not an absolute right. The restrictive

clause (4) of Art.19 provides that:-

Nothing in sub-clause (c) of the said clause shall effect the operation of any existing law

in so far as it imposes, or prevent the State from making any law imposing, in the

interests of the sovereignty and integrity of India or public order or morality, reasonable

restrictions on the exercise of the right conferred by the said sub-clause.

In Raghubar Vs. Union of India11 and Kameshwar Vs Sate of Bihar12 the Supreme

Court has however, held that the Constitutional freedom of association does not include

Fundamental Right to strike. In All India Bank Employees Association Vs. Industrial

Tribunal13, the Supreme Court considered that right to form association is guaranteed in

Art. 19 (1) C. In this case it was, contended that the right to form an Union carried with

it as a concomitant right a guarantee that such unions shall achieve the objects for which

they are formed. If these concomitant rights were not conceded, the right guaranteed to

form unions would be an idle right, an empty shadow lacking all substance. The Supreme

Court did not support this argument and observed.

10 Ibid11 Raghubar Vs. Union of India AIR 1962 S.C.26312Kameshwar Vs Sate of Bihar 1962 Supplement 3 SCR 26913 All India Bank Employees Association Vs. Industrial Tribunal AIR 1962 S.C 171


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under our industrial jurisprudence and restrictions have been placed on it.These are to be

found in Sections 10(3),10-A(4-A), 22 and 23 of the Industrial Dispute Act,

1947.14Recently, in T.K.Rangarajan Vs. Government of Tamil Nadu & others15 (The

Tamil Nadu Government Employees Case), Justice M. B. Shah, speaking for a Bench

of the Supreme Court consisting of himself and Justice A.R. Lakshmanan, said Now

coming to the question of right to strike whether fundamental, statutory or equitable

moral right to strikein our view no such right exists with the government employees.

In support of the theory of concomitant right to collective

bargaining, reliance was placed on Romesh Thappars case16 where it was observed,

There can be no doubt that freedom of speech and expression include freedom of

propagation of ideas and tat freedom is ensured by the freedom of circulation. It was

argued if freedom of speech and expression in Article 19 (1) (a) was given the liberal

construction so as to effectuate the object for which the freedom was conferred, a similar

construction should be adopted regarding the freedom of association guaranteed under

the Article 19 (1) (c)..

The Supreme Court in the instant case also referred to Kameswar Prasad Vs. State of

Bihar17 in holding there is no fundamental right to strike. The Supreme Court was

perhaps therefore right in following its earlier judgements that there is no fundamental

14 Dr.Zaheeruddin,Right to Strike & Collective Bargaining,pp138-13915 T.K.Rangarajan Vs. Government of Tamil Nadu & others 2003 (6) SCALE p.8416 1950 SCR 40417 Kameswar Prasad Vs. State of Bihar 1962 Supplement 3 SCR 269


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right to strike. The Supreme Court referred to Tamil Nadu Government Servants Conduct

Rules 1973 where Rule 22 provides that no Government employees shall engage himself

in strike or in incitements thereto or in similar activities. In view of this rule, Supreme

Court was right in holding that he strike was illegal. However, there are statutory

provisions like the industrial disputes Act, which gives the right to strike to certain

categories of employees.

Even if the judgement refers to the absence of statutory provisions in the case of Tamil

Nadu Government employees it is respectfully submitted that no statutory provision is

needed to enable employees to go on strike. If the right of the employees is denied by the

employer or is interfered with, he has the right not to do work, i.e. to go on strike. If it is

denied to a group of employees or all the employees, all of them can refuse to work for

the employer and a union representing the employees may ask them to go on strike. In

B.R. Singhs case18, Justice Ahmadi observed that the right to strike is an important

weapon in the armoury of workers as a mode of redress. Therefore, no statutory

provision is needed to confer on the employees the right to strike:.

Unfortunately, the Supreme Court went further and said that there is no moral or

equitable justification to go on strike.

It is respectfully submitted that the Supreme Court was not right in saying that

Government employees have no right to strike. There may be instances when the

employees may be harassed and all avenues of their rights being recognized are closed, in

which case the employees may have no other courses than to go on strike.Moreover,

18 B.R Singh v Union of India(1989) 2LLJ,591,SC


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destruction or damage of public property is not always the result of strikes. It is true that

in some cases the right to strike is being misused but that is no reason why all strikes

should be condemned as immoral.19

As far as The Tamil Nadu Government is concerned, the Supreme Court, perhaps having

in mind the judgment of justice V.R. Krishna Iyer that even illegal strikes need not attract

dismissal (Vide Gujrat Tube Case)20, directed that all employees who were suspended

except those who resorted violence should be reinstated if they apologized and that

direction has been compiled with. The court disposed of the matter without discharging

its adjudicatory function of examining the central issue under challengethe vires of the

Ordinance over one lakh employee.The public sympathy is generally against government

employees who go on strike. But that is no justification for the Supreme Court to say that

Government employees have no moral justification to go on strike in every case.

The Apex Court observed, In the prevailing situation, apart from being conscious of

rights, we have to be fully aware of our duties, responsibilities and effective methods for

discharging the same. For redressing the grievances, instead of going on strike, if

employee to do some more work honestly, diligently and efficiently, such gesture would

not only be appreciated by the authority but also by people at large. The reason being, in

a democracy even though they are Government employees, they are part and parcel of

19Alladi Kuppiswami: Right to Strike-The Hindu Sep,23,2003

20 Gujarat Steel Tubes Ltd v Mazdoor Sabha (1980)2 SCR 146


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governing body and owe duty to the society.21 In the Gujarat Steel Tube Case,22 the

majority of the Bench held it was a fundamental flaw to equate illegal with unjust strikes.

A strike may be illegal by a technical violation, but need to be necessarily unjustified.

21 2003 (6) SCALE p.84

22 Gujarat Steel Tubes Ltd v Mazdoor Sabha (1980)2 SCR 146


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CHAPTER -2

HISTORICAL PERSPECTIVE

The term collective bargaining originated in the writings of Sydney and Beatrice

Webb, the famous Historians of the British Labour movement towards the end of the

nineteenth century i.e. in 1891. But it is originated in India during the First World War

period. An instance making the introduction of the process in the Indian Industrial field

was the workers demand for an increase in wages in the Ahmedabad Textile Industry

towards the end of 1917, This laid down the foundation for collective bargaining in

India. Later on the growth of trade union movement dealing the post independent period

contributed to the development of the process of collective bargaining. It has developed

to some more extent in India since independence. This inspiration for peaceful settlement

of differences between management and Labour came from Gandhiji. In the past,

collective bargaining was not necessary in India because the production method before

Industrial revolution is different so much from those of modern industry. But now men

are working towards new technique by which agreement, rather than coercion, can

become the core of the needed regulation now a distinct feature of the Modern Industrial

era is collective bargaining. It is the technique for voluntary regulation of Industrial

relations. Further with the development of the process of the collective bargaining

employees began to asset their collective will. Arrangements, based on such negotiations,

were reached on the terms and conditions of employment. Workers organisations tried to

substitute collective bargaining for individual bargaining. Historically collective

bargaining has allowed employers and workers to be involved in the taking of decisions


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that effected than and in the process it has contributed not only to improving the lot of the

workers 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 decade.

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 taking note of by important organisation like

International Labour Organisation. The Declaration of Philadelphia recognised the

solemn obligation of the international labour organisation to further among the nations of

he world, programmes which will achieve the effective recognition of the right of free

and voluntary collective bargaining. The basic right of collective bargaining has been

established through I.L.O conventions.23

Theoretically, collective bargaining is based on the principle of balance of power

managements and unions representing the workers are considered as to separate powers

who jointly negotiate with each other on various terms of employment. In actual practise

both the parties bargain to get maximum advantage out of the other by using, if

necessary, threats and counter threats like strikes, lock-outs and other direct actions.

Information about company, industry and other relevant statistical data are pressed into

service in the process of bargaining. Collective bargaining therefore has been used as an

important method of influencing managerial decisions over past years. The element of

power does play a part in arriving at an agreement. The method of horse trading also is

not uncommon.

23See Freedom of Association and Production of Right to organise Convention 1948(Convention No.87): Right to organise and Collective bargaining Convention 1949,(Convention No.98); Workers Representative Conventions 1971 (Convention no.135);Labour Relations (Public Service Convention 1978, (Convention no.151).


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2.1 COLLECTIVE BARGAINING IN UNITED STATES OF AMERICA

Collective bargaining has been popular in U.S.A. from a very early stage of

industrialisation. But since World War I, it is received National importance, and is

practised in almost all the industries and all groups of workers. Collective bargaining is

today the major method of determining wages and related benefits and conditions of

employment in American industry.

Collective bargaining agreements are prevalent on plant or on crafts basis. About

15% of the total agreement are made on inter-regional scale which over about 1000

workers each. The subject of the agreement differs from industry to industry due to the

nature and size of the parties.

By allowing workers to increase their economic strength with respect to

management, bargaining collectively has enabled workers to raise their wages and to

secure improved conditions of employment. Its economic impact extends for beyond

trade union members. While collective bargaining directly determines wages and

conditions for employees covered by contracts, it sets a pattern for wages and working

conditions throughout the country.

Through collective bargaining employers and workers have been able to

communicate better and have achieved a greater understanding of each others problems.

Improved Labour-management co-operation has been made possible. The introduction of

technological change has been worked out in a more orderly fashion when the interests of

workers are protected through collective bargaining arrangements.

Collective bargaining contracts have grown considerably in scope since the early

days, when they were generally confined to wage rates and hours or work. Contracts


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today-which may range in duration from one ear but rarely beyond five years-

increasingly include provisions for the following:

Recognition of the Union

Rights of management;

Duration of the contract;

Wage rates for each job and level of skill;

Annual increments based on cost of living increased and productivity

improvement;

Hours of work and amount of premium payments for overtime, night shifts work

on holidays, etc.;

Vacation, holiday and sick leave;

Bases for promotions, transfers and lay-offs, generally guided by seniority;

Rest periods;

Arrangement for introducing new methods of production and benefits for workers

who may be retrenched;

Medical and hospital care for the worker and his dependents; and

Pension plans upon retirement which supplements those provided by the

Government.

2.2 COLLECTIVE BARGAINING IN UNITED KINGDOM

Collective bargaining played an important role in maintaining industrial peace in

Great Britain. Since 1871 onwards the collective bargaining has been becoming popular.

The World War I gave an impetus to the system. The growth of trade unionism also

favoured the collective bargaining. Employers organisations were also developed.


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Union and employers organisations recognised the right to negotiate. Due to the rapid

growth of trade unions, greater numbers of workers were being covered by collective

bargaining agreements.

In Great Britain, workers settle their wages and other conditions of employment

with the help of collective bargaining agreements. Workers through their representatives,

discuss various matters concerning to work and employment. Some industries adopt

detailed procedures for dealing with questions at different stages, while in others, there

exist no such formal procedures for negotiation. Some industrial have separate formal

arrangement for joint consultation, while in others, the formal arrangements are not

separable from negotiation arrangements. Negotiations, bargaining process, and joint

consultations are recognised as distinct to each other. Some industries do not have

permanent joint machinery. They deal with questions in conferences or committees.

Questions of ordinary nature are dealt with at factory level through direct negotiation, or

through work councils or joint committees.Thus collective bargaining, in Great Britain,

has improved the industrial relations and ensured high co-operation of labour and

management.

2.3 COLLECTIVE BARGAINING IN INDIA:

Seen from the above angle what is the position of collective bargaining in India?

Why is not successful to the extent it is expected? What are the main hindrances? How

far are employers, Government and Unions, responsible for its failure? Are there any

specific problems of developing countries like India were collective bargaining cannot be

a powerful measure and the foundation upon which industrial harmony and industrial


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democracy could be built? After all, one may ask: Does collective bargaining exist a t 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 individual, families or groups. The professionalism i.e.

essential for collective bargaining is the development of recent years. A professional

manager, not belong to the group of family and having no personal status in the

ownership or capital could have an independent, studies, and 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 use 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 essential 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. Except 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 rivalry amongst unions are taking recourse to

delaying and frustrating adjudication methods. As compared to working class

organisations, employers organisations are strong. But their power and strength are

misused in seducing the employees and their organisations. Non-recognition of unions is

mainly responsible for the absence of collective bargaining in industries and

organisations at all levels. Secondly, due to absence of atmosphere or mutual trust and


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confidence, the management 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 philosophy and approach towards

collective bargaining, which would ultimately promote 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 minor effect in collective

bargaining relationship. If management wants to fight, the union will accommodate

them. A militant management begets a militant union. This is not going to land us

anywhere.

After the Second World War and especially after independence, the

Government of India took some half hearted measures when it was thought by some that

collective bargaining can grow and develop. The national trade union centres were given

recognition Annual Indian Labour Conference was held. Code of discipline and code of

conduct were framed. Constitution provided for freedom of association as a fundamental

right. Directive principle 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 continued and compulsory adjudication

procedure as the basis for dispute settlement were forced upon working class. The law,

which place the role of a policeman in industrial dispute, is the cornerstone of the

industrial relations in the country. The Government started interfering in day-to-day

workings of unions following partition approach. With growth of public sector


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undertakings the Government itself become the biggest employer but unfortunately opted

for the same traditional authoritarian autocratic management approach. The growth of

collective bargaining thus has been hampered. Last few years have been certain

deterioration in this field. Government has taken measures on ground 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 democratic rights. In the name of poor,

downtrodden and under privileged, government has taken back the established right. The

organised working class had gained after years of struggle and at time of after bitter

fights. The wage control is introduced even though with the requirement of national

economic and social development and particularly in the struggle against inflation and

unemployment. Some consultations and understanding 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 principle of collective bargaining

and gave a major recommendation regarding setting up of independent industrial

relations commissions at state and 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 large concerning industrial relation such as recognition procedure and

determination of a representative union or collective bargaining 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 government. The real collective


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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 demerits they are changed 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 researches regarding the issues under

it is very much essential.

Secondly, the unions as organised institutions have to set up proper internal

administration and alive, dynamic, functioning, administrative machinery.

Thirdly, all the national trade union centres have to some to a workable

understanding regarding the collective bargaining procedure and the recognition of trade

union as a collective bargaining agent. Accepted 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

bargaining and the principles there under practised elsewhere and other democratic

norms.

The multiplicity and rivalry amongst unions, the cumbersome,

unsatisfactory and undemocratic procedure laid down by the laws, the organisationally

and financially weak trade unions, all those have weakened collective bargaining in this

country. The unions also have to do a lot in the field. They cannot be complacent about

the small achievement and the little progress they have made in this area. It is, however,


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contended that the change in approach of management and Government as an employer,

along with a proper legal framework adding collective bargaining will go a long way in

developing it the unions through their organised strength, through the understanding

amongst the centres at material level and through formulation of a proper type of

industrial relations machinery and legislation, could held 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 developing countries. There are about 14 lacks factories and 12 cores

workmen in India.

The basic agrarian character of the country, weak of workers unorganised bulk of

workers in agriculture and construction, and contract employment and similar industries

and employments, the staggering unemployment, the level of rural and urban poverty, the

stage of trade unionism in the developing countries, the attitude of management, too

much of dependent on bureaucracy by the governments, relies on compulsory

adjudication method, all these have come in the way of collective bargaining.

Absence of industrial democracy leads to industrial strive only collective

bargaining through responsible trade unionism 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


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from the above, aided by law to the extent possible and prompted through a spirit of

understanding by the Government, the employers and the unions.


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CHAPTER -3

COLLECTIVE BARGAINING: A CONCEPTUAL

FRAME WORK

Today the stand adopted by the government in the matter of collective bargaining

is quite confusing. On one hand it encouraged compulsory adjudication and on the other

hand it prompted direct negotiations between the employer and the workers. However, in

spite of the above problems and of encouragement to the process form the official side.

Collective bargaining has made significant progress in the country.

As stated earlier, very often, the bargaining power of an individual worker is

weak unless he has exceptional skills or professional competence. The individually weak

worker looks for support and sustenance in the industrial environment where he is

disposing of his labour. This support, he assumes, would be available when he along

with other like-minded co-workers forms a combination to protect and promote his and

his fellow-workers interests. Through this combination, known as Trade Union, the

concept, Unity is Strength manifests itself. It is this instrumentality when recognized

by the employer for the purpose of negotiating the terms and conditions of employment

of its members which can infuse a semblance of equilibrium at the bargaining table.

There are few other attributes also which help in understanding the novelty of Collective

Bargaining.


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3.1 ADVANTAGES AND DISADVANTAGES:

Advantages of collective bargaining in comparison to adjudication, are first, that

it is quick and efficient in that the parties do not waste their time in unnecessary

litigation, second that it is more democratic to lead the parties resolve their own dispute,

and third, that it produces more harmonious relationships between employer and

workers.24 Such harmonious relations benefit workers and employer alike. They contrast

sharply, and most favourably, with the bitterness, expense, and delay that work

adjudication and employer alike. They contrast sharply, and most favourably, with the

bitterness, expense, and delay that work adjudication.

Disadvantages of collective bargaining are first that the consumer is not

represented in the bargaining, but yet bears the burdens of settlements rising wages and

the prices he must pay, second that collective bargaining settlements flow more from

power politics there from rational and moral thought, and third, that under the system,

when the bargaining parties fail to agree, intolerable strikes and some consideration there

must be, too, for the consumer whose interest entitle him to be represented at the

bargaining table.

3.2 BARGAINING PROCESS:

The process of reaching agreement by collective bargaining is excessively

complicated, necessitates a protected and complex inter change for Ideas combining, as

24 H.A. Turner-Wage Policies and Collective Bargaining, The Problem for Underdeveloped Countries 35(1965)


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Professor Kennedy Remarks: Argument, Horse trading, Bluff, cajolery and threads.25

by its very nature it is rough, tough, understanding its essence is the reluctant exchange of

commitments; both parties want to yield less and get more.It is not qualitatively different

from a business deal in which both negotiations have something less than hundred

percent trust in one another? Nor is it much different from the practice of diplomacy.26

The job of the negotiator in the collective bargaining process is as difficult. If not

more, then that of a diplomat like a diplomat. He must speak less; convey more, he

must keep his mouth shut and ears open unless the occasion demands speech. He must

lay his cards on the table shrewdly. At the same time, he must continuously prove into

the strength and weaknesses of the positions of his opposite number, he must be able to

change his positions in the light of new information obtained and the attitudes of the

other side, so that if a show down has to come the battle field will be well prepared.

An important element in the bargaining position will be its own internal unity of

purpose and organisational strength.27 another important will be the capacity to help split

the opposition and to weaken it through propaganda, speeches and arguments, the Union

must foster the loyalty of its followers on whose determination the outcome of any strike

would depend. At the same time, it must build up the public image of itself in its own

favour.

The negotiation in a collective bargaining conference depend quite a bit on the

ability, intelligence, and maneuvering capacity of the negotiations must enjoy the full

25 Van. Kennedy, Unions, employees and Government-11526 Neil W. Chamberlains, Source book on Labour 31 (1964)27 Alexander, Collective Bargaining in Industrial Labour in India C.V.B. Singed (1963). Alexander,Collective Bargaining in Industrial Labour in India C.V.B. Singed (1963).


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confidence of their own people. They should be authorised so far as possible, to take

crucial decision on the spot.

Before the actual Conference begin, the parties hold separate meeting of their own

sides to decide their attitude on the various issues, to draft the terms of their demands and

to limit the concessions they are prepared to make. These meetings quite often generate

more heat and controversy than the actual bargaining session. Many demands are put

forwarded by the rank and file. Extreme positions are demanded. Thus, the meetings

usually face a difficult task of boiling down the issues to a reasonable level in the light of

practical possibilities. Judged by experience. Sometimes, however, stronger positions

are taken both to please the rank and file and to allow room for later retreats. This cause

for shrewd judgement on whether such retreats can be explained so as to satisfy the lesser

union officials

During the bargaining sessions, all issues or problems raised by the parties

are debated generally. The Conference will be looking forward to a contract, that contract

consists of many clauses. At first meeting the leaders will submit their claims and make

their statements. A general discussion or exchange of views will follow, and the order

for taking up the various points may be settled. Then, a detailed examination of the

various proposal will start. No records of the decision usually kept. But each issue on

which agreement is reached is carefully noted. If during the deliberations, a new

proposal is introduced, or an existing proposal is changed substantially. Such

adjournments are a common phenomenon in bargaining tactics, on grave issues the rank

and file of the Union are the board of directors of the company may need to be consulted.


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Once an overall agreement is reached a provisional contract will be drafted. The

conference will consider it, and if both the parties are now satisfied, they will adopt it.

3.3 BARGAINING POWER:

The strength of the parties really determined the issues rather than the wordy

deals, which are largely put on for show the strength of the employer depends upon.

(a) the availability of substitute labour;

(b) the markets demand for its goods; and

(c) the effect that a closer would have on the company and its customer

declaring a strike the workers strength depend upon (a) their capacity to undergo hardship

during the strike; (b) the availability of alternate employment for them; and (c) the

financial position of the Union; i.e. whether it can maintain and finance the workers

during an extended strike,28 Any element of strength is one party is by the same token an

element of weakness in the other.29 In addition, an element, frequently overlooked, is the

conviction well known of the righteousness of the cause. As Professor Kennedy puts it:

An important form of strength is conviction. How strongly doe the Union

leaders and the members on one hand and the employer group on the other believe in

their respective positions? Obviously, the most important determinant here will be the

intrinsic merits of those positions. It is hard for people to sustain for very long positions

that are costing them heavily. When they know those positions to be weak or untenable

on grounds of logic, evidence, are equity. The parties are especially influenced by the

strength or weakness or their own case in comparison with settlement are tribunal awards

28Alexander, Collective Bargaining in Industrial Labour in India C.V.B. Singed (1963).

29 Ibid


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in other disputes in their own industry and in the light of the general climate of opinion in

the country generally are in their own case. The importance of conviction as a source of

strength needs to be emphasised because it is often overlook by those who oppose the

test of strength as being based on the principle of might makes rights. The factor of

conviction introduces a right makes might element into the method as well and where

other determination of strength are reasonably balanced between two parties conviction

can easily be decisive.30

Thus, the strength of employer and employee for effective collective

bargaining depends on how far they can bear the cost of lock-out and strike. Collective

bargaining often considered as a power gain. So, if the two contesting parties are not

hearing equal powers, the worker has to surrender. Collective bargaining will be turned in

a mere dictation. Therefore to the national commission on labour Organisational

weakness of Labour cantyet meet the requirement of effective collective bargaining. 31

3.4 STRUCTURE OF BARGAINING:

Collective bargaining can be conducted at three levels, plant, industry and

national. In the United States it takes place at all these levels in the various industries,

the national labour relations board 32 has the power and duty to decide. In contested

cases, what union has a majority and so represents all the workers in any particular unit

of workers appropriate for bargaining. It holds election by secret ballot, and reaches its

decisions economically, quickly and efficiently, frequently it also decides disputes about

what are those units appropriate for bargaining.

30Alexander, Collective Bargaining in Industrial Labour in India C.V.B. Singed (1963).

31 Report of N.o.L (1969), p.32632 A.U.S. Government Agency, established under the National Labour Relations Act, 1935 (Wagner Act) asamended in 1947 (Taft Hartley Act).


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Industry-wide bargaining, both at regional and national level is common in a

Scandinavian countries, France, Germany, Italy, Switzerland, the United Kingdom and

other European countries. As collective bargaining is in its initial stages in India. it is

hard to say what would be the most appropriate level of bargaining here. It depends on

many factors such as the pace of industrialisation, the means of communication, the

scope of industry and the development of the Trade Union movement.

If the scope of Industry is limited to small units for local consumptions, plant-

level, bargaining good normally is the most fruitful 85% of the agreements signed in

India through 1961 were negotiated at the plant level.

33

Bargaining at each level has advantages and disadvantages. In Plant level

bargaining the leaders of the workers line with the workers. They know the economic

position of the industry. They make every effort to resolve the dispute as quickly as

possible. But the problem is that in most of the small industries, unions are weak. So

they may not succeed in the bargaining process. In industry-wide bargaining, a uniform

term prevails for the entire industry, there is no distinction between a smaller unit or a

longer one. Therefore, the small unit needs to pay according to the terms, though

economically it is not sound. As a result there may be a closer or lock-out or

retrenchment in national wide bargaining, one of the advantages is that if the bargaining

fails strikes take place and it provides a chain reaction which may paralyse all industry in

the country.

As the consequences of major strikes grow more an more serious unions and

management come now a days more and more to employee trend economists,

statisticians, accountants and Research worker to compiled data on many such matter as

33 Collective AgreementA Study f Monograph no.4, Employers Federation of India, Bombay (1962)


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cost of living, family budget, economic conditions, movement of wages, costs, and prices

the data collected are analysed and used as ammunition in collective bargaining

negotiations. 34

3.5 DURATION:

The duration of collective bargaining agreements vary from agreement to

agreement. There is a general tendency on the part of Unions to have the contract of

shorts duration. But management on the other hand, prefers agreements of long duration.

The duration of collective bargaining contracts vary widely. Union generally

favour shorter contracts, while managements favour longer ones. In the United States

many of the contracts are for a period of one to three or more yeas, with option to renew.

In the United Kingdom, open end contracts that can be negotiated on notice at

any time, are the rule. In the Scandinavian countries, one year contracts with renewal

clauses are usual.

The position in India is not clear. A study of 114 contracts in 1961 by the

employers federation of India 35 showed that majority of them were for one to five years,

with a strong trend in favour of longer terms. The long term contract has two advantages

for Management over the short term one; (1) It imparts stability to labour-management

relations and (2) It helps in planning production and expansion programme based fixed

Labour costs

34 I.L.O. Collective Bargaining 36-3735 Indian Contracts Act,1961


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3.6 CONTENTS FOR OBJECT MATTER OF COLLECTIVE

BARGAINING:

The subject matter of collective bargaining are determined by the parties in some

countries and by law in others. In Denmark, Germany, Italy, Norway, Sweden,

Switzerland, The United Kingdom and The United States. The parties determine their

subjects freely (of course within legal limits). In Brazil, Colombia, Ecuador, the law

specifies that every contract must include clauses regulating wage, hour, rest periods,

holidays, the duration clauses regulating wages, hour, rest periods, holidays, the duration

of the agreement, and procedure for its extension. In France, every national collective

contract must contain provision on freedom of association, freedom of opinion,

conditions of employment and dismissal of employees (with particular reference to the

prohibition) of discrimination on ground of membership in any particular union), length

of notice, and organisation of apprenticeship and training. In Canada, every contract

must contain a Grievance procedure.36 In India the selection of subject while for the

parties to decide is nevertheless narrowly circumscribes by law. For example, the

negotiators of contracts must always keep in mind the provisions of he Factories Act,

1948. The Minimum Wages Act 1948 and the Payment of Wages Act, 1936. These

deal with many subjects such as safety precautions, health, measures, amenities

conditions of employment, Minimum Wages and Payment of wages. Any contract must

naturally be consistent with these Acts. The decision of courts sometimes interpreting the

Acts, have also laid down principles on such matters as how bonus must be calculated,

36I.L.O Collective Bargaining ,46-47


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retrenchment must be carried out, rationalisation must be undertaken and disciplinary

proceedings must be handled.

Some contracts are short deal with a few matters, while others are elaborate and

deal with many. Usually all contracts in India will contain most or all of the following

clauses: (1) a preamble starting the positions of arties (2) recognition by the employer of

the Union as sole bargaining agent and of its right to organise the workers, (3)

recognition of right of management to carry own its normal activities and met its

responsibilities; (4) Wages, Bonus, and dearness allowance; (5) Grades, Job classification

and job evaluation committee, or a discipline, safety and welfare committee; (10

Grievance procedure, (11) No strike clause, and undertaking that disputes will be settled

through mutual consultation and (12) the duration and termination of the contract.


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CHAPTER 4

COLLECTIVE BARGAINING UNDER LABOUR LAWS

Ever since the formation of trade unions, and their later acceptance as

essential tool to protect and advance the interests of the employees vis--vis their

employers it has been accepted generally that through collective bargaining alone the

workers can be assured of a fair deal with regard to their conditions of service and

security of employment. The stare in democratic countries committed to liberal values of

freedom of association and the like, while intervening in trade disputes had not as a rule,

professed to supplant collective bargaining by compulsion of third party intervention

whether by way of conciliation, arbitration or adjudication. The avowed aim of

legislation and state interference in trade disputes by way of conciliation, mediation,

investigation, arbitration or adjudication, where the parties could not arrive at a

settlement through bilateral negotiations.

India, where industrialisation came rather late the right of bargaining in

the trade unions was recognised without any prolonged struggle. The first legislation on

this subject. The Trade Unions Act of 1926 was intended to remove legal impediments to

collective bargaining because of common Law Doctrine of restraint of trade, tortious

liability, civil conspiracy, and the rest. The workers generally were left to fend for

themselves with the state playing through the Trade Disputes Act 1929, only a minimal

role in the investigation and settlement of trade disputes.

The Industrial Dispute Acts of 1947 imposed on the state a far greater

responsibility than it had previously undertaken. The Labour Minister Shri Jagjiwan


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Ram who piloted bill in the Legislative Assembly which later on became the Industrial

Disputes Act, 1947, emphasised that machinery created under the act was meant to

strengthening collective bargaining and to intervene in trade disputes only where

collective bargaining was unable to deliver the necessary results. He put a lot of trust in

Works Committee, which was rather misplaced because as held by the Supreme Court in

North Brookjute Company Limited V their workmen37 that Work Committees in the

scheme of the act have only a limited role to play. The Labour Minister has also

emphasised in the House that it will be his Ministrys effort that most disputes are settled

through collective bargaining. The conciliation and adjudication machinery under the act

would go into action only where a settlement is not possible through collective

bargaining. The histories of Industrial Disputes Act, 1947 and the judicial

interpretation placed on the provisions of the act, however, have not encouraged

collective bargaining. In the Act, as originally passed, settlement was defined as follows:

Section 2 (p): Settlement means a settlement arrived at in the course of

conciliation proceedings.

Under the Act a settlement arrived at otherwise than in the conciliation

proceedings was not given any legal status at all. Thus, in the Indian Airlines settlement

arrived at through the active intervention and good offices of the Labour Minister, Mr.

Jagjiwan Ram himself were held to be not legally binding.

The Industrial Dispute (Amendment ) Act 1956 sought to remove this lacuna in

the law by redefining settlement as follows:

Settlement means a settlement arrived at in the course of conciliation

proceedings and includes a written agreement between the employer and workmen

37 North Brookjute Company Limited V their workmen [1960] I.L.L.J. 580


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arrived at otherwise than in the course of conciliation proceedings where such agreement

has been signed by the parties thereto in such manner as may be prescribed and a copy

thereof has been sent to an officer authorized in this behalf by the appropriate

government and the Conciliation Officer.

Thus, according to the above definition a written agreement between employer and the

workmen otherwise than in the course of conciliation proceeding has been given legal

status provided there is due compliance with the rules.

The Amendment Act of 1956 provided that a settlement arrived at by agreement between

the employer and the workmen, otherwise than in the course of conciliation proceedings

shall be binding only on the parties to it. Section 18 (1) in the Industrial Dispute Act,

1947, is in sharp contrast with the provisions relating to settlements through conciliation

proceedings shall be binding only on the parties to it. The distinction was very well

brought out in the judgement or the Supreme Court in the case ofRamnagar Sugarcane

V. Jatin Chakravorthy38. Based upon the wordings of Sec. (18) (3) of Industrial

Dispute Act, 1947 as compared with Sec. 18 (1) the Supreme Court held that when a

trade union of the workmen arrives at a settlement through conciliation proceedings, the

said settlements would bind not only the members of the union which have signed the

settlements but all workman employed in the establishment to which the disputes relates

and all workmen who subsequently become employed in the establishment.

38 Ramnagar Sugarcane V. Jatin Chakravorthy A.I.R. 1960 S.C. 1012


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Thus under the law there are only two recognized ways of settling an industrial dispute.

They are:

a) Through bilateral negotiations in which case the settlement binds only the members of

the Union which has signed the settlement; and

b) Through conciliation proceedings in which case the dispute in so far as establishment

is concerned itself stands settled. No reopening of the matter covered by such a

settlement is allowed during the time that the settlement arrived at conciliation

proceeding is in force.

The consequence of the above legal position is that where an employer settles an

Industrial Dispute bilaterally through a union, he can still be dragged into litigation at the

instance of the Union or Unions, which are not parties to the settlement. No wonder, than

in therefore, that an employer who is keen for industrial peace and wants to settle the

dispute on a long term basis, prefers a settlements in conciliation proceedings rather than

through direct negotiations with the Union. This also explains why quite often even after

settlements have been arrived at bilaterally with no role whatsoever played by the

conciliation officer to start formal conciliation proceedings and signed the settlement

under section 12(3) of the Industrial Dispute Act, 1947.

It is to be noted that neither the Act nor the Rules made under the Act contain any

provision laying down the circumstances in which the conciliation officer shall intervene

and being about a settlement during conciliation proceedings under the scheme of the

Act, the discretion vested in the conciliation officer appears to be wide and far reaching.


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There are no rules, guidelines or instructions contained in the Act or the Rules framed

there under to say which he will take up and settle through conciliation and in what

circumstances he will not intervene. He is not duty bound to invite all the unions, which

are in existence in the establishment to participate in the conciliation proceedings. Even

if one or more of the trade unions choose to walk out of the conciliation proceedings and

a settlement is arrived at with one of the Unions in the establishment among many, but

through the conciliation officer that puts an end to the disputes. No further dispute can be

raised while the settlement is in force.

It is my confirmed view based on experience of industrial disputes settlements

and adjudication for more than thirty years that the law on the subject is in a highly

unsatisfactory state. There have been of course attempts made and suggestion mooted

from time to time to remove this lacuna in the Industrial Disputes Act, and provide for

machinery by which the sole bargaining agent on behalf of the workmen may be chosen.

The enactment of the Industrial Dispute Act, 1947, was almost simultaneous with an

Amendment in the Trade Disputes Act, whereby this lacuna was to be closed. But the

Trade Union Amendment Act 1947 was never brought into force. The Industrial

Relations Bill of 1950 which was accompanied by the Trade Unions Bill of 1950 also

rain up against stiff resistance and were allowed to lapse. The Industrial Relations Bill

introduced by the Janata Government incorporating in great measure many of the

suggestions made by National Commission on Labour in 1969 could not be passed by the

legislature. An attempt was made through the code of discipline in industry and the


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criteria for recognition of trade unions as in industry and the criteria for recognition of

trade unions as laid down under the code, to overcome the problem of changing a

bargaining agent but the code had no legal sanctity whatsoever and has not been able to

render much help in dealing with the problems raised due to multiplicity of trade unions.

Whatever help it could have given has been eroded by some of the pronouncements of

the Supreme Court.

The legal difficulties created by wording of section 18 of the Industrial Disputes Act,

1947, and the hurdles placed in a way of a settlement because of Multiplicity of the

unions is illustrated by the judgement of the Supreme Court in the case ofAmalgamated

Coffee Vs .Its Workmen.39 In this case the disputes having been raised n 1952 was

referred for adjudication only in resulted in award in 1956. But that was not the end of

the dispute. The matter reached the Supreme Court, which granted the special leave to

appeal. In the meantime while the appeals were pending, the matter was compromised

upon and an application was made to the court in July 1962 to dispose of the appeals in

terms of the settlement.

The approach of the Supreme Court was very pragmatic and reflects a mature

understanding of the employer employee relationship. As all the workmen did not favour

the settlement, the court could very well have taken the view that once the award was

made and the jurisdiction of the Supreme Court invoked against it, it would decide the

39Amalgamated Coffee Vs .Its Workmen (1956) II, L.L.J. 110


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Industrial Dispute on merits and proceed to deliver the judgement. Avoiding this course

the Supreme Court framed an issue in the following terms:

In view of the fact that admittedly a large number of workman employed by the

appellants have accepted payments consistently with the terms of the agreement set up by

the employers in their present petition, is it shown by the respondents that the said

agreement is not valid and binding on them. The Industrial Tribunal. The finding of the

Tribunal recorded a finding that in every establishment payment had been made in terms

of the settlement and such payments were voluntarily and knowingly accepted by the

workmen. It also came to the conclusion that the settlement was a fair settlement. The

matter having thus determined by the tribunal were remitted to the Supreme Court. The

Supreme Court accepted the settlements and further added the direction that in the

interest of the uniformity and industrial peace, the settlement should bind all the

establishment which were represented before the tribunal.

The same pragmatic view was taken by the court in The workmen of

Government Silk Weaving Factory, Mysore Vs. The Presiding Officer, Industrial

Tribunal, Bangalore and others40. In this case two rival sets of office bearers came to a

settlement regarding the dispute. The settlement was however opposed by the rival group

of office bearers. The tribunal in these circumstances posed to substantial questions for

considerations (a) Whether the workmen or the majority of them, through their accredited

representatives have entered into a settlement of compromise with the management; and

40 [1973] L.L.J. 144


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(b) Whether the terms of such settlement are to be manifest advantages of the workmen.

The tribunals conclusion was that the settlement was a genuine settlement. It recorded, a

finding that the terms of the settlement are very fair and just and the workmen received

considerable benefits under the settlement. The tribunal while emphasising that the main

purpose of industrial adjudication is to establish the peaceful industrial relationship

between the employers and the employees accepted the settlement and passed an award

in terms thereof. High Court dismissed the petition by the rival group of office bearers

against the award the Supreme Court upheld the judgement of the High Court against

which the special leave to appeal was obtained in view of the fact that the settlement was

beneficial to a substantial body of workmen of the company. The Supreme Court refused

to go into the questions as to whether there was a compliance with section 36 and Rule 59

of Industrial Dispute Rules, 1957. These technical points lost all their importance in view

of the finding recorded by the tribunal on issues 1 and 2.

The Supreme Court, therefore, dismissed the appeal. In the above case the

Supreme Court has adopted a pragmatic approach and understanding to industrial

relation, which does not go by technicalities but by the substance of the matter i.e. the

right approach.

In two judgement of the Supreme Court, however, have struck a different

note. In the case of the Jhagra Khan Collieries (P) Ltd., Vs. G.C. Agarwal Presiding

Officer, Central Government Industrial Tribunal-cum-Labour Court, Jabalpur and


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others41 there were three rival unions in the establishment controversy arose by

implementing the award of the Central Wage Board for Coalmines industry. The

Company having refused to accede to the demands of the unions one of the unions made

an application to the Central Labour Court under Sec. 33(2) of the Industrial Disputes Act

for determination of the dispute relating to variable dearness allowance (VDA). The rival

Union, however, choose t give a charter of demands back up with a strike notice

thereupon conciliation proceeding were held and a settlement arrived at before the

Assistant Labour Commissioner. A copy of the settlement was sent to the government as

required by Sec.12 (3) of he Act. Relying on this settlement the company objected to the

application under section 33c(2) being tried on merits and in view of the settlement. The

Labour Court framed an additional issue in the following terms.

Whether the claims stand settled by reasons of the settlement dated 22.10.69, if

any?

On behalf of the workers, it was urged that the settlement was not binding

because the Assistant Labour Commission (Central) was not a duly appointed

conciliation officer on the date on which the settlement arrived at. The order of the

Labour Court was impugned before Supreme Court. It was conceded by the employer

that the settlement was not in conciliation proceedings. The company grievance which

was pressed before the Supreme Court was that they had not been allowed to render

evidence to prove that the settlement had been implemented and that 99%s of the workers

accepted the benefit under the settlement. The Supreme Court, however, did not accept

this contention. Relying on its judgement in the case of Ram Nagar Sugarcane Bills and

the scheme under section 18, the Supreme Court held that in as much as settlement was

41 A.I.R. 1975 S.C. 171, 1975 Lab. I,C. 137


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not in conciliation proceedings it could bind the members of the union which arrived at

the settlement. The applicants under section 33(c)(2) not being persons who were

members of the Unions which signed the settlement, the court upheld that the settlement

did not obstruct computation and merits under section 33(c)(2) of the Act. The argument

of acquiescence and acceptance of the benefits were repelled by the Supreme Court

observing that they were outside the purview of the Act. It was also held that even of the

99% of the workers had impliedly accepted the settlement arrived at on October 22, 1969

by drawing variable dearness allowance under it. It will not whatever its effect in general

law may be put an end to the dispute before the Labour Court and make it functors

officio.

The same legal issues arose before the Supreme Court in the case of Tata

Chemicals Vs. its workmen42. In this case the settlement relied upon as a bar to raising

a dispute was arrived at by the management with the union recognised under the code of

discipline in the Industry as per advice of he Assistant Commissioner of Labour would

appear from the facts stated tin Para 2 of the judgement that the employer depended upon

the verification conducted by the Assistant Commissioner of Labour, Ahmedabad in

deciding whether the union should be recognised or not. It had also all along settled the

demands relating to conditions of service of the workmen only with the recognised union

no mala-fides were alleged against the management for recognising the Tata Chemicals

employees union nevertheless the state government referred the demands raised by the

minority union for adjudication. The management challenged the validity of the

reference. The Supreme Court while disposing of the appeal referred to the distinction

42 Tata Chemicals Vs. its workmen (1978) Lab. I.C. 637


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between settlements arrived at outside conciliation proceeding and settlements arrived at

in conciliation proceeding.

In as much as the settlement in question was arrived at outside conciliation

proceedings; it was held that the settlement only binds the members of the union. The

rival union though it was in a minority could still raise an industrial dispute and have it

adjudicated upon while dealing with the argument that the settlement became binding on

the rest of the workmen who were not the union, by virtue of their having accepted the

benefits under the settlement the court reiterated the proposition, in Jhagra Khan

Collieries case and held that the theory of implied agreement by acquiescence on the

basis of acceptance of benefits flowing from the agreement even by the workman who are

not signatories to the settlement was of no avail to the Company cannot operate as an

estoppel against the workmen raising a dispute on the subject.

Thus, it would be seen that a settlement arrived at even with a recognised union

under the code of discipline in Industry would not put an end to the dispute if settled

bilaterally and not through the officers of the conciliation officer. The fact that the

workmen had accepted benefits under the settlement was held to be of no avail to the

company Collective Bargaining and direct negotiation with recognised union or therefore

off no avail to the management it will be noticed that in this case the bonafide of the

management were not in dispute. As a matter of fact the management dealt with the

union so recognised after verifications of its membership by the labour department this

was considered to be of no consequence by the Supreme Court. This means that a


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settlement arrived at outside conciliation proceedings would virtually become a escape of

paper if there is a rival union still pursuing the dispute and the government is obliging

enough to refer the dispute for adjudication. If this is the state of law it is useless for the

management to settle the demands outside conciliation proceedings. He must get the

settlement signed in conciliation proceedings. Then only we get moksha from the dispute

and can settle down to peaceful production and avoid further litigation.

The judgement of the Supreme Court is Herbert Sons Ltd. Vs the Workmen43,

however, shows a different approach. In the case after a reference had been made there

was a settlement during the pendency of the appeal in the Supreme Court against the

award. The company then filed a petition in the Supreme Court to decide the appeal in

terms of the settlement. The court remembered the matter to the Industrial Tribunal in

similar terms as in the Amalgamated Coffee Estate Vs. their workmen. The tribunal

held that the settlement was not valid and being on the members and it was not also fair

just and reasonable in certain respect. The court did not give much importance to the

finding of the tribunal in as much as the tribunal had not answered the issue as framed by

the Supreme Court. The Labour Court had decided the matter only by the reference to

the legal effect of sec. 18 (1) of the Industrial Dispute, Act 1947. Thus, the Supreme

Court held was not a satisfactory approach. The court emphasised the fact that when a

recognised union negotiates with an employer the workers as individual do not come into

the picture. The recognised union is expected to protect the legitimate interest of workers

and it would be in order to presume that the settlement is in the best interest of the

Labour. This, the Court held, is the normal rule, although it was careful to add that there

may be exceptional cases of malafide, fraud or even of corruption or other inducements.

43Herbert Sons Ltd. Vs the Workmen A.I.R. 1977, S.C. 322


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Nothing of this kind had been suggested against the company. That being the position

the court held that prima facie, the settlement was in the course of collective bargaining

and is, therefore entitled to due consideration. The court also held that such a settlement

would be arrived in the light of the condition that were in force at the time of reference.

It will not be correct to judge the settlement merely in the light of the award, which was

pending appeal before the Supreme Court. It also emphasised the fact uncertainty with

regard to the result of the litigation in court proceeding during the course of negotiation,

there would always be an element of give and take. The mere fact that the pending

litigation was an inducement to the parties who come for a settlement. The court further

observed that the settlement has to be taken as a package deal and when the Labour has

gained in the matter of wages and if there is some education in the matter of dearness

allowance, it could not be said that the settlement as a whole is unfair and unjust. Finally,

the court also made the following observations:

There may be several factor that my influence parties to come to a settlement as a

phased endeavour in the course of collective bargaining once cordiality is established

between the employer and Labour in arriving at a settlement which operates well for the

period that iit is in force, there is always alike like hood of further advances in the safe of

improved emoluments by voluntary settlement avoiding fractioned unhealthy litigation.

This is the quintessence settlement, which courts and tribunals should endeavour to

encourage. It is in that spirit that the settlement has to be judged and not by the yardstick

adopted in scrutinising an award in adjudication. The tribunal fell into an error in


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invoking the principles that should govern in adjudicating a dispute regarding dearness

allowance in judging whether the settlement was just and fair.


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CHAPTER 5

Fundamental Rights and Collective Bargaining

In 1961, in All India bank Employees Association V. National Industrial Tribunal.

44

It

wan argued that Article 19 (1) (c) Guaranteed as Concomitant to its right to form

associations unions, a right to effective collective bargaining and a right to strike. But the

Supreme Court rejected the argument, and held that Even a very liberal interpretation of

sub-clause (c ) of clause (1) of Article 19 cant lead, to the conclusion that the trade

unions have guaranteed right to an effective bargaining. But even the right is one of

social importance in regards Indias Industrial development.

The principal issues before the Supreme Court in above case were whether the right

to form a union guaranteed by article 19 (1) of the constitution were implication confers a

right on the workers or unions to go on strike and a right to undertake collective

bargaining for wages conditions of service and the like. The Supreme Court held that

article 19(1)(c) does not extend its guarantees to those additional rights. Raja Gopala

Ayyanga, J. has formulated the following observations: When sub clause (c) of clause (1)

of article 19 guarantees the right to form association so formed

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