1. Define Collective Bargaining.

Collective bargaining is a process of negotiations between employers and a group of employees aimed at

reaching agreements that regulate working conditions. The interests of the employees are commonly

presented by representatives of a trade union to which the employees belong. The collective

agreements reached by these negotiations usually set out wage scales, working hours, training, health and

safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.[1]

The union may negotiate with a single employer (who is typically representing a company's shareholders) or

may negotiate with a group of businesses, depending on the country, to reach an industry wide agreement. A

collective agreement functions as a labor contract between an employer and one or more unions. Collective

bargaining consists of the process of negotiation between representatives of a union and employers (generally

represented by management, in some countries[which?] by anemployers' organization) in respect of the terms and

conditions of employment of employees, such as wages, hours of work, working conditions, grievance-

procedures, and about the rights and responsibilities of trade unions. The parties often refer to the result of the

negotiation as a collective bargaining agreement (CBA) or as a collective employment agreement (CEA).

2. Define Bargaining Unit.

A bargaining unit in labor relations is a group of employees with a clear and identifiable community of

interests who are (under U.S. law) represented by a single labor union in collective bargaining and other

dealings with management. Examples would be "non-management professors"; "law enforcement

professionals"; "blue-collar workers"; "clerical and administrative employees"; etc. Geographic location as well

as the number of facilities included in bargaining units can be at issue during representation cases.

The size of a company does not relate to the size of a bargaining unit. Bargaining units must consist of at least

3 employees, and must have the support of a majority of employees in the bargaining unit. However, the

bargaining unit could be a small portion of a large company, where no other employees are members of a

union.

3. Differentiate between Fair Wage and living Wage.Fair wages: ‘Wage levels and wage-fixing mechanisms that provide a living wage floor for workers, while complying with national wage regulations (such as the minimum wage, payment of wages, overtime payments, provision of paid holidays and social insurance payments), ensure proper wage adjustments and lead to balanced wage developments in the company (with regard to wage disparity, skills, individual and collective performance and adequate internal communication and collective bargaining on wage issues).’

Minimum Wage

Minimum wages are set both nationally and statewide. The minimum wage gives employers a guideline as to the legal minimum amount paid to employees. In 1968 the minimum wage served to keep 86% of workers and their families above the poverty line for a family of four. Today that percentage has dropped to 64%, in effect leaving 36% of wage earners living at or below the poverty line. The current minimum wage amounts are roughly half of what the projected living wage is in any given area. Living wage is defined as the estimated amount of income necessary to live comfortably and put a family into the bracket of middle class. 

Living Wage

According to the living wage calculator from the Poverty in America website, the typical two parent, two child family forced to live on a minimum wage income puts them closer to the poverty line than middle class. Living wage for this family in an urban area such as Los Angeles is $34.07. The minimum wage is $8.00 and the poverty wage is $9.83. In a more rural area of California the numbers change to $25.01 for a living wage, $8.00 for the minimum wage and $9.83 for the poverty wage. It certainly proves that a single income family is a thing of the past. According to theUniversal Living Wage Website, 10.1 million people are working at minimum wage jobs and they are staying at these jobs for up to ten years and attempting to raise their families on these

wages. Minimum Wage is Less Than Half the Living Wage.

4. How collective bargaining is beneficial to employers and employees.Collective bargaining includes not only negotiations between the employers and unions but also includes the process of resolving labor-management conflicts. Thus, collective bargaining is, essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method of introducing civil rights in the industry, that is, the management should be conducted by rules rather than arbitrary decision making. It establishes rules which define and restrict the traditional authority exercised by the management.

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 to employers

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

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

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

4. Collective bargaining plays a vital role in settling and preventing industrial disputes.Importance to society

1. Collective bargaining leads to industrial peace in the country2. 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.

3. The discrimination and exploitation of workers is constantly being checked.4. It provides a method or the regulation of the conditions of employment of those who are

directly concerned about them.

5. Define Bargaining Agent.Union or individual certified through a secret ballot process to be the exclusive representative of all the employees in a bargaining unit or group; also called bargaining representative. In order for a bargaining agent to be certified, it must receive a majority of the ballots cast in the bargaining unit.

6. What do you mean by dilemma of Dearness Allowance?

7. When does the company issue bonus issues?If a company is sitting on huge cash reserves and wants to reward its shareholders for their faith and their support, it can do so through bonus shares. Bonus share are issued in a certain proportion to the existing holding. A 3:1 bonus would mean you get three additional shares at no cost for the one share you hold in the company.

Bonus shares are shares allotted to the existing shareholders (as on a certain date) at no cost to them. Since there is a nil purchase cost attached to bonus shares, you are able to reduce the cost of investment to that extent. Suppose you are holding 100 shares of Company ABC. The company issues a bonus of 1:2. This means that for every two shares that you hold, you are allotted one bonus share. This means that post bonus, your holding will rise to 150 shares (100 original shares + 50 bonus shares).Now, assume that your purchase cost was Rs 10,000 for the original 100 shares. Post the bonus your holding has risen to 150 shares. However, your purchase cost remains the same i.e. Rs 10,000. Therefore, your cost of purchase per share from the earlier Rs 100 (Rs 10,000 / 100 shares) stands reduced to Rs 67 (Rs 10,000 / 150 shares).

8. Give the origin of the term Collective bargaining.

The term collective bargaining was coined in 1891 by Beatrice Webb in her work cooperative move in industries.

The employment term according to her can be determined either unilaterally by the state, unilaterally by employees,

unilaterally by workers and by the combined efforts of the employers and their organs, workers and their organs and the

state representatives.

C.I.B study text (1982:258) observed that since the 1960s there have been certain developments in the system of

collective bargaining. It explains that negotiating arrangements have been introduced in many organizations at local or

plant level, i.e. in "domestic" bargaining. For example, a union might negotiate minimum wage rates at a national or

company level and then separate negotiations at plant level might be concerned with extra payments for special

arrangements, such as a productivity agreement in the plant.

Before the advent of collective bargaining, employees bargain individually, through the interview i.e. individual contract.

9. Discuss the Basket approach to collective Bargaining.10. Define Caucus Bargaining.11. Give various Theatrics used in Collective Bargaining.12. Define Wages.13. What do you mean by productivity linked wages?14. What is conciliation machinery?15. What do you mean by duty to bargain in good faith?16. Industrial dispute.17. What are bargaining weapons?18. Breakdown of collective bargaining.19.  Strategies of collective bargaining.20. Tactics of collective Bargaining. 21. Contract Administration.22. Elements of collective bargaining. 23. Concept of Wage.24. Fair Wage.25. Dearness Allowance.26. Differentiate between salary and wages.27. What is piecemeal approach to CB?28. Explain, ìBargaining the impasseî.29. What is Pressure bargaining?

30. Discuss ìTrade offsî.31. What is collective agreement?32. What is conjunctive bargaining?33. What do you mean by Paternalistic attitudes of employees?34. How can bargaining unit be determined?35. Give the purpose of CB.36. Define national wage policy.37. What is living wage?38. What is meant by minimum wages?39. What are the advantages of using negotiation?40. What is the meaning of dearness allowance?41. What is bonus?42. What is meaning of wage differentials?43. What are the functions of a wage board?44. Outline the meaning of contract administration45. Outline the “Principle of Equal Pay for Equal Work”.46. What do you mean by the statement “Collective bargaining is a continuous process”.47. Explain the advantages of offering monetary incentives to the employees.48. What do you mean by relative wages? 49. How technological change affects collective bargaining? 50. What is charter of demands?51. What is wholistic approach to collective bargaining?52. Give the features of collective bargaining?53. How CB is helpful for the workers?54. Give the limitation of CB.55. Give benefits of CB for employers.56. What is productive link wages?57. How collective bargaining is beneficial to employees?58. How can bargaining unit be determined?59. What preparation is required before bargaining?

J-8087[S-9700024] P.T.O.Section - B(9 × 5 = 45)

60. Discuss the techniques of Collective bargaining.

Bargaining Techniques

There is no formula for effective negotiations, but there are many broad issues about which the union bargaining committee should be in agreement with respect to meetings with the management committee.

Control of the agenda

Control of the agenda is an exercise of power. In bargaining sessions with the employer's representatives, the union must not concede control of the agenda to the employer. Control of bargaining sessions may be either explicit or implicit, and the union committee should take care not to lose such control either way. One concrete method for maintaining control of the agenda is to make sure that the union speaks through a single, primary spokesperson. Focusing union power through a single point transmits the appearance of control and power.

Ground rules

One method for assuring some level of control over the agenda of bargaining is to make sure that the parties are in agreement over procedural matters that can affect the substance of bargaining. It is common for bargaining ground rules to be negotiated prior to the substance of the collective bargaining agreement, either in preliminary meetings with the employer or at the earliest bargaining sessions. Some of the matters that should be addressed as part of the procedural ground rules include:

Time, place and frequency of bargaining sessions. Methods of communications between sessions, particularly when the next session is not scheduled. Release time and payment of wages for members of the union bargaining committee. Methods for maintaining an official record of the sessions, if a joint record is to be kept. An agreement that all agreements are contingent upon acceptance of the entire package. Clarification of the authority of the bargaining committee. Procedures for the exchange of proposals. Restrictions on or procedures concerning external communication about the progress of negotiations. Order of negotiations, including the negotiation of non-economic and economic provisions.

Documentation

No matter what procedures exist for maintaining an official record of the negotiations with the employer, the union must have its own mechanisms for the recording of all substantive discussions occurring in bargaining sessions. All committee members, with the possible exception of the chief spokesperson, should take notes during bargaining sessions. One member should be given the primary responsibility for maintaining the union record. One of the values of a caucus is to gain the benefit from multiple records. No matter how effective the official recorder is, there will be confusion in the process of negotiations. If other members have taken notes, those members will be in a position to help assure that the official record for the union is complete and accurate. The committee should periodically review the notes to assure that no significant errors or omissions have crept into the record.

Argumentation

Not everything that takes place in discussions with the employer's committee is necessarily rational, but the union should have solid arguments prepared to explain and justify its position on every issue introduced in negotiations. Techniques of argumentation and logic are useful in negotiations for three distinct purposes. One is the ability to explain the proposals to the management committee. The second is to justify the need for the proposed language. The third is to persuade the employer's representatives of the merits of the union's position.

Explanation, justification and persuasion are different concepts. The explanation of any proposal should be a rational and objective discussion of the problems giving rise to the union's proposals. Any proposal put on the table by the union was placed there for a reason. The union committee should be prepared to define the problem that gave rise to the proposal and the solution for that problem put forward by the union. The justification of that proposal goes one step further. Even if the company understands the issue and the solution addressed by the union's proposal, it is important for the union to justify the need for its proposed change in the status quo. Finally, the union must be prepared to persuade the company that the solution put forward by the union is a superior solution to the identified problem than any other proposed change put forward.

Caucus

An important tactic in the collective bargaining process is the effective use of a caucus, or opportunity for the union to withdraw temporarily from direct negotiations with the employer. A caucus can and should be used in a number of different situations to make sure that negotiations are progressing in an appropriate manner. Some of the major reasons for the union to call a caucus during negotiations are discussed in this section.

One of the most important reasons to call a caucus is to resolve real or apparent conflict within the union bargaining committee. If there are disagreements about issues or tactics within the committee, those disagreements should be resolved away from the bargaining table. Whenever it appears that committee members are advocating conflicting positions, the union committee should call for a caucus. Internal conflict should be resolved away from the bargaining table, not in the presence of management.

A caucus can also be used as a means of regaining control of the bargaining agenda and controlling the pace of negotiations. If emotions get out of hand, a break in the tension may be necessary. If sessions become too chaotic it may be wise to interrupt the flow. A caucus may also be used to increase the pace of negotiations. If a session moves off course into discussions unrelated to the substance of negotiations, a break in the process may be a useful mechanism for refocusing attention.

61. Discuss various Wages Differentials.

Types of Wage DifferentialsEven a cursory glance at any aspect of the wage structure as mentioned earlier with bring to notice a bewildering diversity in wage rates, not in the wages for different jobs but also in the wages for the same job. These differentials can be grouped to facilitate comprehension under the following heads :(i) occuptional/skill wage differentials(ii) industrial wage differentials,(iii) area or geographical wage differentials,(iv) interplant/intra-plant wage differentials,(v) sex wage differentials,(vi) Race/caste/religion wage differentials,(vii) Union/non-union wage differentials,(viii) Age/seniority wage differentials.These are some the types of wage differentials and one could expand the list by adding many more. However, one should be cautious enough in any discussion on wage differentials to take note of the overlapping nature of some of these differentials.

62. Give the issues in Collective Bargaining.

COLLECTIVE BARGAINING ISSUESLabor unions were formed to help workers achieve common goals in the areas of wages, hours, working conditions, and job security. These issues still are the focus of the collective bargaining process, though some new concepts have become the subjects of negotiations. Table 1 lists the issues most often negotiated in union contracts.THE SETTLEMENT PROCESSUnion contracts are usually bargained to remain in effect for two to three years but may cover longer or shorter periods of time. The process of negotiating a union contract, however, may take an extended period of time. Once the management and union members of the negotiating team come to agreement on the terms of the contract, the union members must accept or reject the agreement by a majority vote. If the agreement is accepted, the contract is ratified and becomes a legally binding agreement remaining in effect for the specified period of time.If the union membership rejects the terms of the agreement, the negotiating teams from labor and management return to the bargaining table and continue to negotiate. This cycle can be repeated several times. If no agreement can be reached between the two teams, negotiations are said to have "broken down," and several options become available.Mediation is usually the first alternative when negotiations are at a stalemate. The two parties agree voluntarily to have an impartial third party listen to the proposals of both sides. It is the mediator's job to get the two sides to agree to a settlement. Once the mediator understands where each side stands, he or she makes recommendations for settling their differences. The mediator merely makes suggestions, gives advice, and tries to get labor and management to compromise on a solution. Agreement is still voluntary at this point. The

mediator has no power to force either of the parties to settle the contract, though often labor and management do come to agreement by using mediation.If mediation fails to bring about a settlement, the next step can be arbitration, which can be either compulsory or voluntary. Compulsory arbitration is not often used in labor-management negotiations in the United States. Occasionally, however, the federal government requires union and management to submit to compulsory arbitration. In voluntary arbitration, both sides agree to use the arbitration process and agree that it will be binding. As in mediation, an impartial third party serves in the arbitration process. The arbitrator acts as a judge, listening to both sides and then making a decision on the terms of the settlement, which becomes legally binding on labor and management. Ninety percent of all union contracts use arbitration if the union and management can't come to agreement (Boone and Kurtz, 1999).SOURCES OF POWERIf the collective bargaining process is not working as a way to settle the differences between labor and management, both sides have weapons they can use to bolster their positions. One of the most effective union tactics is the strike or walkout. While on strike, employees do not report to work and, of course, are not paid. Strikes usually shut down operations, thus pressuring management to give in to the union's demands. Some employees, even though allowed to belong to unions, are not allowed to strike. Federal employees fall into this category. The law also prohibits some state and municipal employees from striking.During a strike, workers often picket at the entrance to their place of employment. This involves marching, carrying signs, and talking to the media about their demands. The right to picket is protected by the U.S. Constitution as long as it does not involve violence or intimidation. Problems sometimes arise during strikes and picketing when management hires replacement workers, called scabs or strikebreakers, whoCollective Bargaining Issues

Wages Hours Working Conditions Job Security

Regular Compensation Regular Work Hours Rest Periods Seniority

Overtime Compensation Overtime Work Hours Grievance Procedures Evaluation

Incentives Vacations Union Membership Promotion

Insurance Holidays Dues Collection Layoffs

Pensions Recalls

need to cross the picket line in order to do the jobs of the striking workers.The boycott is another union strategy to put pressure on management to give in to the union's demands. During a primary boycott, not only union members but also members of the general public are encouraged to refuse to conduct business with the firm in dispute with the union.Though it is rarely done, management may use the lockout as a tactic to obtain its bargaining objectives. In this situation, management closes down the business, thus keeping union members from working. This puts pressure on the union to settle the contract so employees can get back to their jobs and receive their wages.Management sometimes uses the injunction as a strategy to put pressure on the union to give in to its demands. An injunction is a court order prohibiting something from being done, such as picketing, or requiring something to be done, such as workers being ordered to return to work.GRIEVANCE PROCEDURESOnce a collective bargaining agreement is settled and a union contract is signed, it is binding on both the union and management. However, disagreements with contract implementation can arise and violations of the contract terms can occur. In these cases, a grievance, or complaint, can be filed. The differences that must be resolved are usually handled through a step-by-step process that is outlined in the collective bargaining agreement. The grievance procedure begins with a complaint to the worker's immediate supervisor and, if unresolved at that level, moves upward, step by step, to higher levels of management. If no resolution is found at any of these levels, the two parties can agree to have the grievance submitted to an impartial outside arbitrator for a decision binding to the union and management.

Collective bargaining is a successful way for workers to reach their goals concerning accept able wages, hours, and working conditions. It al lows workers to bargain as a team to satisfy their needs. Collective bargaining also allows management to negotiate efficiently with workers by bar gaining with them as a group instead of with each one individually. Though traditional bargaining can be negative and adversarial, it does produce collective bargaining agreements between labor and management. Partnership bargaining can lead to increased understanding and trust between labor and management. It is a positive, cooperative approach to collective bargaining that also culminates in contracts between labor and management.

63. Discuss the role of Collective Bargaining in India.

COLLECTIVE BARGANING IN INDIA

Collective Bargaining in India has been the subject-matter of industrial adjudication since long and has been defined by our Law Courts. In Kamal Leather Karamchari Sangathan v. LibertyFootwear Company1 the Supreme Court observed that, "Collective bargaining is a technique by which dispute as to conditions of employment is resolved amicably by agreement rather than coercion".

According to the Court, the Industrial Disputes Act, 1947, seeks to achieve social justice on the basis of colIective bargaining. In an earlier judgment in Titagarh Jute Co. Ltd. v. Sriram Tiwari2 the Calcutta High Court clarified that this policy of the legislature is also implicit in the definition of 'industrial dispute'.

In Ram Prasad Viswakarma v. Industrial Tribunal3 the Court observed that, "it is well known how before the days of 'collective bargaining', labour was at a great disadvantage in obtaining reasonable terms for contracts of service from its employer. As trade unions developed in the country and collective bargaining became the rule, the employers found it necessary and convenient to deal with the representatives of workmen, instead of individual workmen, not only for the making or modification of contracts but in the matter of taking disciplinary action against one or more workmen and as regards all other disputes.” In Bharat Iron Works v. Bhagubhai Balubbai Patel4 it was held that 'Collective bargaining, being the order of the day in the democratic social welfare State, legitimate trade union activities, which must shun all kinds of physical threats, coercion or violence, must march with a spirit of tolerance, understanding and grace in dealings on the part of the employer. Such activities can flow in healthy channel only on mutual cooperation between the employer and the employees and cannot be considered as irksome by the management in the best interests of its business. Dialogue with representatives of a union help striking a delicate balance in adjustments and settlement of various contentious claims and issues."

These definitions only bring out the basic element in the concept i.e., civilized confrontation between employers and employees and the whole process is regulated by statutory provisions.

64. Discuss the national wage policy.

Main objectives of national wage policy in India are discussed below:One of the objectives of economic planning is the raising of the standard of living of the people. This means that the benefits of planned economic development should be distributed among the different sections of the society.Therefore, in achieving a socialistic pattern of society, the needs for proper rewards to the working class of the countryman never is over emphasised.

1

2

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A national wage policy, thus aims at establishing wages at the highest possible level, which the economic conditions of the country permit and ensuring that the wage earner gets a fair share of the increased prosperity of the country as a whole resulting from the economic development.The term “wage policy” here refers to legislation or government action calculated to affect the level or structure of wages or both, for the purpose of attaining specific objectives of social and economic policy.1. To eliminate malpractices in the payment of wages.2. To set minimum wages for workers, whose bargaining position is weak due to the fact that they are either un-organised or inefficiently organised. In other words, to reduce wage differential between the organised and unorganised sectors.3. To rationalise inter-occupational, inter-industrial and inter-regional wage differentials in such a way that disparities are reduced in a phased manner.4. To ensure reduction of disparities of wages and salaries between the private sector and public sector in a phased manner.5. To compensate workers for the raise in the cost of living in such a manner that in the process, the ratio of disparity between the highest paid and the lowest paid worker is reduced.6. To provide for the promotion and growth of trade unions and collective bargaining.7. To obtain for the workers a just share in the fruits of economic development.8. To avoid following a policy of high wages to such an extent that it results in substitution of capital for labour thereby reducing employment.9. To prevent high profitability units with better capacity to pay a level of wages far in excess of the prevailing level of wages in other sectors.10.To permit bilateral collective bargaining within national framework so that high wage islands are not created.11.To encourage the development of incentive systems of payment with a view to raising productivity and the real wages of workers.12.To bring about a more efficient allocation and utilisation of man-power through wage differentials and appropriate systems of payments. In order to achieve the above objectives under the national wage policy, the following regulations have been adopted by the state:1. Prescribing minimum rates of wages.2. Compulsory conciliation and arbitration.3. Wage boards.1. Minimum Wages:In order to prescribe the minimum rate of wages, the Minimum Wages Act, 1948 was passed. The Act empowers the government to fix minimum rates of wages in respect of certain sweated and unorganised employments. It also provides for the review of these wages at intervals not exceeding 5 years.2. Compulsory Conciliation and Arbitration:With the object of providing for conciliation and arbitration, the Industrial Disputes Act 1947 was passed. It provides for the appointment of Industrial Tribunals and National Industrial Tribunals for settlement of industrial disputes including those relating to wages.3. Wage Boards:A wage board is a tripartite body with representatives of management and workers, presided over by a government nominated chairman who can act as an umpire in the event of disagreement among the parties.Technically, a wage board can make only recommendations, since there is no legal sanction for it, but for all practical purposes, they are awards which if made unanimously, are considered binding upon employers.

65. Give various Collective Bargaining Exercises.66. Discuss Contract Administration.

Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.[1]

Common commercial contracts include employment letters, sales invoices, purchase orders, and utility contracts. Complex contracts are often necessary for construction projects, goods or services that are highly regulated, goods or services with detailed technical specifications, intellectual property (IP) agreements, and international trade.

A study has found that for "42% of enterprises...the top driver for improvements in the management of contracts is the pressure to better assess and mitigate risks" and additionally,"nearly 65% of enterprises report that contract lifecycle management (CLM) has improved exposure to financial and legal risk."[2]

Contracts

A contract is a written or oral legally-binding agreement between the parties identified in the agreement to fulfill the terms and conditions outlined in the agreement. A prerequisite requirement for the enforcement of a contract, amongst other things, is the condition that the parties to the contract accept the terms of the claimed contract. Historically, this was most commonly achieved through signature or performance, but in many jurisdictions - especially with the advance of electronic commerce - the forms of acceptance have expanded to include various forms of electronic signature.

Contracts can be of many types, e.g. sales contracts (including leases), purchasing contracts, partnership agreements, trade agreements, and intellectual property agreements.

A sales contract is a contract between a company (the seller) and a customer that where the company agrees to sell products and/or services. The customer in return is obligated to pay for the product/services bought.

A purchasing contract is a contract between a company (the buyer) and a supplier who is promising to sell products and/or services within agreed terms and conditions. The company (buyer) in return is obligated to acknowledge the goods / or service and pay for liability created.

A partnership agreement may be a contract which formally establishes the terms of a partnership between two legal entities such that they regard each other as 'partners' in a commercial arrangement. However, such expressions may also be merely a means to reflect the desire of the contracting parties to act 'as if' both are in a partnership with common goals. Therefore, it might not be the common law arrangement of a partnership which by definition creates fiduciary duties and which also has 'joint and several' liabilities

67. What is breakdown of Collective Bargaining.

ImpasseCollective bargaining situation that occurs when the parties are not able to move further toward settlement usually because one party is demanding more than the other will offer.MediationIntervention in which a neutral third party tries to assist the principals in reaching agreementFact finderA neutral party who studies the issues in a dispute and makes a public recommendation for reasonable settlementArbitrationThe most definitive type of third party intervention in which the power to determine and dictate the settlement terms:In collective bargaining an impasse occurs when the parities are not able to move further toward settlement. An impasse usually occurs because one party is demanding more than the other will offer. Sometimes an impasse can be resolved through a third party is a disinterested person such as a mediator or arbitrator. If the

impasse is not resolved in this way the union may call a work stoppage or strike to put pressure in management.Third party involvementNegotiators use three types of third party interventions to overcome an impasse mediation fact finding and arbitration with mediation a neutral third party tries to assist the principals in reaching agreement. The mediator usually holds meetings with each party to determine where each stands regarding its position, and then uses this information to find common ground for further bargaining. The mediator is always a go between and does not have the authority to dictate terms or make concessions. He or she communicates assessments of the likelihood of a strike, the possible settlement packages available and the like.In certain situations as in a national emergency dispute a fact finder may be appointed. A fact finder is a neutral party who studies the issues in a dispute and makes a public recommendation for reasonable settlement. Presidential emergency fact finding boards have successfully resolved impasse in certain critical transportation disputes.Arbitration is the most definitive type of third party intervention, because the arbitrator often has the power to determine and dictate the settlement terms. Unlike mediation and fact finding arbitration can guarantees to an impasse. With binding arbitration both the parties are committed to accepting the arbitrator’s award. With nonbinding arbitration they are not. Arbitration may also be voluntary or compulsory (In other words, imposed by a government agency) In the United States voluntary binding arbitration is the most prevalent.There are two main topics of arbitration. Interest arbitration always centers on working out a labor agreement; the parties use it when such agreements do not yet exist or when one or both parties are seeking to change the agreement. Rights arbitration really means contract interpretation arbitration. It usually involves interpreting existing contract terms for instance when an employee’s questions the employer’s right to have taken some disciplinary action.Sources of Third Party assistanceVarious public and professional agencies make arbitrators and mediators available. For example, the American Arbitration association (AAA) represents and provides the services of thousand of arbitrators and mediators to employers and union requesting their services. The US government’s Federal mediation and Conciliation Service provides both arbitrators and mediators. For example, its office of arbitration Services maintains a roster of arbitrators qualified to hear and decide disputes over the interpretation or application of collective bargaining agreements and provides the parties involved with lists and panels of arbitrators In fiscal year 2006, its arbitration panels decided about 2,400 cases. In addition most states provide arbitrators and mediation services, For example New York State’s Employment Relations Board provides mediation services to assist in settling grievance disputes and in the collective bargaining process.StrikesA strike is a withdrawal of labor, and there are four main types of strikes. An economic strike results for a failure to agree on the terms of a contract. Unions call unfair labor practice strikes to protest illegal conduct by the employer. A wild cat strike is an unauthorized strike occurring during the term of a contract. A sympathy strike occurs when one union strikes in support of the strike of another union. For example in sympathy with employees of the Detroit News, Detroit Free press and USA Today The United auto workers enforced a nearly six year boycott that prevented the papers from being sold at Detroit area auto plants cutting sales by about 20,000 to 30,000 copies a day.The number of major work stoppages (those involving 1,000 workers or more) peaked at about 400 per year between 1965 and 1975 ad today average around 20.

68. Discuss the theories of wages.There are mainly three types of theories of wage:

Economic Theories: These theories can be broadly classified into two categories: The theories that explain wages predominantly in terms of factors that influence the supply price of labour. The theories that consider wages as being determined primarily by factors which influence the demand price of labour.Though the wage theories important policy implications some relevance for certain occupations or in certain regions , none of them are adequate as general theory having universal applicability.

Subsistence Theory This theory is based on assumption that labour, like any other commodity is purchased & sold in the market, & in the long run, the value of labour trends to be equal to the cost of production.

The labour cost is equal to the amount which is necessary for the maintenance of the worker & his family at the subsistence level. Conversely, if the wages fall below the subsistence level, children will die or some workers might decide to have fewer children, would eventually bring down the birth rate. This would result in decreased labour supply, which would ultimately be equal to the demand for it. Therefore, in the long run, the wage rate gets adjusted at the subsistence level. This theory is also known as Iron Law of Wages.

The Surplus Value Theory This theory is associated with Karl Marx. According to his view, the supply of labour always tended to be kept in excess of the demand for it by a special feature of the capitalist wage system. Also, the worker did not get full compensation for the time spent on the job. The rate of surplus value , which is the ratio of surplus labour to necessary labour, is also referred as “rate of exploitation” under the capitalist for of production.

The Wages-Fund Theory John Stuart Mill tried to explain the movement of wages in a changing world. He observed that there was changing “natural rate” defined by the changing ratio of capital to population. Thus, according to this theory, wages are determined by:

1. The wage fund which has been expended for obtaining the services of labour.2. The number of workers seeking employment.

It was assumed that a wage-fund is fixed & does not change. Any change in the wage rate, therefore, would be due to a change in the number of workers seeking employment. This theory was rigid in its own way. It demonstrated that bargaining power or trade union cannot raise the wage level & that efforts to discourage the accumulation of capital the wages were bound to lower wages by reducing them the wages-fund. This theory showed that productivity of labour was determined by the level of wages. If the rise in wages could augment the efficiency of labour as well, stimulating to set out more funds in the purchase of labour. The Marginal Productivity TheoryJ.B Clark was the first to develop this theory. Later on, Marshall had made some amendments in the shape of refinements added to this theory. According to this theory, both demand & supply together determine the factor price, which in a perfectly competitive market, is equal to the marginal revenue productivity of the factor. This theory assumed that there was a certain quantity of labour seeking employment & the wage rate at which this labour could secure employment in a competitive labour market was equal to the addition to total production that resulted from employing the marginal unit of the labour force. It was also assumed that production was carried out under the conditions of diminishing returns to labour.The Bargaining TheoryJohn Davidson, an American economist, was the first exponent of the Bargaining Theory of Wages. He argued that the wages & hours of work were ultimately determined by the relative bargaining strength of the employers & the workers. According to this theory, there is an upper limit & a lower limit on wage rates & the actual rates between these limits are determined by the bargaining power of the employers & the workers. The upper limit marks the highest wages the employers would be willing to pay, whereas, the lower limit indicates the minimum wages prescribed under the strength of resistance of the workers at the subsistence wages below which they will not available for workDemand & Supply TheoryAlfred Marshall, the chief exponent to this theory, explained the complexity of the economic world tried to provide a less rigid & deterministic theory. According to him, the determination of wages is affected by the whole set of actors which govern demand for & supply of labour. The demand price of labour, however, determined by the marginal productivity of the individual worker. The term “supply & labour” can be expressed in a number of senses. First, it refers to the number of workers seeking employment; these are the workers who have no alternative livelihood & join the labour market seeking

employment for wages. Secondly, “supply & labour” may refer to the number of hours each worker is available for work. The supply of labour in this sense increases with any increase in the number of working hours. The Purchasing Power TheoryKeynes applied a new theory to the economy as a whole & not to an individual firm or industry. According to him, wages are not only the cost of production for an employer but also incomes for the wage earners who constitute a majority in the total working population. A major part of the products of an industry is consumed by the same workers & their families. Hence, if the wage rates are high they will have more purchasing power, which would increase the aggregate demand for goods & the level of output. Conversely, if the wage rates are low, their purchasing power would be less, which would bring about a fail in the aggregate demand. Therefore, according to him, a cut in the wage rate instead of removing unemployment & depression will further add to the problem. Behavioural Theories of MotivationEquity Theory Equity can be external or external. Internal equity refers to the pay differential between & among the various skills & levels of responsibility. External equity refers to concerns regarding how wage levels for similar skill levels in one firm compare with those in other firms in similar or the same industry & location. Expectancy theory It suggests that motivation depends on individuals’ expectations about their ability to perform tasks & receive the desired rewards. An employer’s responsibility is to help employees meet their needs &, at the same time, attain organizational goals. Employers must try to find out match between employees’ skills & abilities & the job demands.

69. Discuss the feature of Collective Bargaining.

Features of Collective Bargaining

The features of collective bargaining are as under:

It is a group process, wherein one group, representing the employers, and the other, representing the employees, sit together to negotiate terms of employment;

Negotiations form an important aspect of the process of collective bargaining i.e., there is considerable scope for discussion, compromise or mutual give and take in collective bargaining;

Collective bargaining is a formalized process by which employers and independent trade unions negotiate terms and conditions of employment and the ways in which certain employment-related issues are to be regulated at national, organizational and workplace levels;

Collective bargaining is a process in the sense that it consists of a number of steps. It begins with the presentation of the charter of demands and ends with reaching an agreement, which would serve as the basic law governing labor management relations over a period of time in an enterprise. Moreover, it is flexible process and not fixed or static. Mutual trust and understanding serve as the by products of harmonious relations between the two parties;

It a bipartite process. This means there are always two parties involved in the process of collective bargaining. The negotiations generally take place between the employees and the management. It is a form of participation;

Collective bargaining is a complementary process i.e. each party needs something that the other party has; labor can increase productivity and management can pay better for their efforts;

Collective bargaining tends to improve the relations between workers and the union on the one hand and the employer on the other;

Collective Bargaining is continuous process. It enables industrial democracy to be effective. It uses cooperation and consensus for settling disputes rather than conflict and confrontation;

Collective bargaining takes into account day to day changes, policies, potentialities, capacities and interests;

It is a political activity frequently undertaken by professional negotiators.

70. What preparations are to be made for CB.

Pre-requisites for collective bargaining

Effective negotiations and enforcement requires a systematic preparation of the base or ground for bargaining which involves the following steps:

1. 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.

2. 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.

3. 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.

4. Spirit of Give and Take: When there is a spirit of give and take between the management and union, collective bargaining can be an effective technique of settling industrial disputes.

5. Good Faith and Mutual Agreement: The parties to collective bargaining should act in good faith and do the things on the basis of mutual agreement as there is no legal sanction behind the terms and conditions agreed upon by the parties.

71. Discuss Relative Wages.72. Explain various approaches of collective bargaining/negotiation.

An Eight (8) Step Approach to Collective Bargaining or Negotiating

With the proposals submitted, and the team selected, the chief negotiator/ leader may recognize the importance of the following phases of negotiations:

1. PREPARATION

Preparation for any serious negotiations would be incomplete without a thorough examination of factors external and internal to the workplace which has a bearing on the negotiations.

Examining external factors - the macro-economic environment

Preparation for negotiations will include an examination of macro-economic factors such as employment levels, the rate of inflation, the foreign reserves, investment, interest rates, and growth in the economy, among other things. Where the macro-economic situation appears stable and there are signs of prosperity, employers are more likely to make reasonable settlements. A major difficulty in the Caribbean is that there is a great divergence in macro-economic performance. Some countries have also performed in such a way that even in years of solid growth, the benefits have not accrued to the mass of workers.

Examining internal factors - enterprise performance

An examination of the internal performance of the business enterprise is even more important than information on the

macro-economic environment. The sharing of business information is critically important for effective negotiations. In too many instances management refuses to provide vital information to trade unions. This is especially so where there are single owner proprietorships, partnership, and private limited liability companies. Branch plant operations of foreign-owned companies also often refuse to share information.

2. ARGUING

Negotiators are expected to argue effectively in support of their submissions. Negotiations are not discussions, and they are not consultations. They are about persuasive arguments that can win over a case. Negotiators are expected to argue rationally, reasonably, and to use reliable information in support of a claim. Negotiators use a blend of logic, emotional appeals, persuasion, humour, analogies and pleadings in furtherance of their claims. Argument can become heated, and may even become acrimonious and hostile. This is usually a clear sign of the need for a break or for conciliation.

3. SIGNALLING

Negotiating is interactive and dynamic. Active listening is a skill which has to be developed. Also, negotiators have to be able to ask questions to elicit useful responses. Negotiators send signals through words, some plain and easily apprehended, others are more obtuse. Negotiators also send signals through body language. For those who are adept at receiving signals, the process of moving negotiations onward becomes less onerous. It is through signals that a negotiator begins to perceive:

proposals that will meet with little resistance; those that can be accepted with some modification; and those that have low chances of success in the current round of negotiations.

4. PROPOSING

Armed with the reading of signals, a negotiator will then know which proposals can be prioritized with almost certain chances of success. 

5. PACKAGING

The negotiator may then decide to package proposals, making concessions and linking strong winners with others with less chances of success. A total package proposal is placed on the table with an agreement of all elements crucial for settlement. 

6. BARGAINING

At this stage, it is likely that both sides will be proposing packages, each with a core that signifies ‘the irreducible’ that is required by each for settlement. At this stage, negotiators might be suggesting that their proposals are the ‘last, last’ that they will be making.

At this stage, each negotiator is searching for an advantage, while helping the opponent to feel a winner. It is often wise to break out of formal negotiations and engage in creative scenario building on a menu of options that may provide a settlement. Negotiators talk about taking “pens off the table”, instructing the takers of minutes not be record the creative exercise in problem-solving. In case the creative efforts fail, the negotiators can return to formal discussions at the level of their last formal submissions. Bargaining in earnest can be a painstaking and lengthy exercise with all of the features of an Olympic exercise between formidable contestants.

7. CLOSING

Expert negotiators develop a sense of when it is best to close negotiations. Closing too early or too late can lead to the loss of the strategic moment when greatest success can be reached. In assessing the best time to close, consideration must be given to issues such as the mood of the workers and the prevailing economic climate. 

At the end of the bargaining session, negotiators should be able to walk back over the negotiations and summarize all of the positions. They should note the agreements reached, issues that are withdrawn and others that are deferred.

Ambiguities should be cleared up and joint language discussed.

8. AGREEING

The final stage in the formal negotiation process is reached when the draft agreement has been vetted, and has been produced in a formal form by the negotiators.

Discussions are then held about issues such as the starting date for the payment of new salaries/wages; issues related to retroactive pay, where relevant; the timing of the introduction of new benefits; and indeed, areas of housekeeping and tidying up the business of the table. The discussions are then closed with appropriate addresses, bringing a  civilized end to a round of negotiations.

73. Explain process of collective bargaining/negotiation.

All Caribbean countries have developed a legislative and institutional framework supportive of collective bargaining.

Stages in Collective Bargaining

The first step in the collective bargaining process is that of organizing a group of workers, gaining recognition and developing a body of proposals to submit to the employer as the basis of a collective agreement. The development of proposals to be submitted on behalf of workers is a delicate process over which great care has to be taken.

Trade union leaders are required to meet with the general membership and seek a clear understanding of the changes in their contracts which they require. Such a meeting may demonstrate differences among the members on serious issues, such as levels of remuneration. The submission of many issues, including levels of compensation and conditions, will have to be examined against market considerations. The role of a research facility within a union is thus very important.

Elements of submissions

Negotiators recognize that the submission must encompass various elements. Industrial relations existed at the workplace before the entry of the union. A pattern of benefits, conditions, rules and regulations is usually in place. The negotiator must make an assessment of those provisions that are already adequate and those where improvements can be made.

In terms of wages/salaries and other areas of remuneration, the first agreement is for setting a schedule in place, and must not be confused with a revision. In a situation where wages/salaries are very far below the market value in circumstances that cannot be justified, trade unions can sometimes achieve significant improvements for workers. In some cases, wages/salaries may already be competitive in the market and the union may focus on conditions and other benefits.

Traditionally, the trade union submits a list of changes which forms the agenda for negotiations. In recent times, the list may be enclosed in a draft collective agreement which helps to ensure that a collective agreement is signed early after the closure of negotiations.

With recognition agreed, and proposals submitted, the union will usually inform the employer of the names of the shop stewards at the workplace, and request the extension of courtesies in the performance of their functions.

Composition of negotiating team

In some instances, union negotiations are led by paid professional staff members and in others, by shop stewards from the workplace. In many instances, the manager, the human resources manager, and the financial officer or accountant may lead the management’s team.

Many trade union negotiating teams are led by generalists who have to develop expertise on a wide area of subjects such as compensation practices, benefit schemes, pensions and safety and health conditions. They must also have some legal training for drafting language in agreements.

There is a growing tendency for specialists to sit on negotiating teams. Thus one person will deal with pension issues, another with health care and so on.

In large companies with Human Resource Management Structures, there are officers who specialize in different areas of industrial relations such as counselling, training, safety and health, negotiations, benefits, management and personnel matters.

An Eight (8) Step Approach to Collective Bargaining or Negotiating

With the proposals submitted, and the team selected, the chief negotiator/ leader may recognize the importance of the following phases of negotiations:

1. Preparing2. Arguing3. Signalling4. Proposing

5. Packaging6. Bargaining7. Closing8. Agreeing.

Negotiation has already been described as a process involving diplomacy. Some claim that the negotiations forum is a ‘contested terrain’, that the process is akin to an act of war, where words, wit and logic take the place of lethal weapons.

Communicating with the union membership

Mention has already been made of the fact that negotiation leaders must always keep their principals informed and seek their support in reaching acceptable settlements. To this end, they should hold a general meeting to get workers to vote for the settlement they propose to close on.

A negotiator can receive a shock if his tentative agreement at the table is met by a refusal from his principals, and this can happen if they have not been included throughout the various stages of the process.

Meetings, circulation of minutes and the use of position summaries can all help to ensure the smooth process of collective bargaining. 

A skilled negotiator has little difficulty in having a vote at the end of the negotiation process and getting majority support for his agreement. He should not however, be unduly concerned if support is not unanimous. He should be wary, nevertheless, if there is resistance from a substantial minority of his principals.

Breakdown in Collective Bargaining

Trade unions have traditionally recognized the value and importance of industrial action when there is a failure to reach agreement through the established procedures. Industrial action can take many forms:

1. work-to-rule2. go slow3. strike

In some countries the strike is highly regulated through statutory provisions.

In most countries Essential Services are clearly defined and industrial action in these areas is circumscribed.

74. Discuss position of collective bargaining in India.

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

Outsiders in the Process of Collective BargainingThe Trade Unions Act, 1926, permits outsiders to be the office bearers of a union to the extent of half the total number of office bearers.ii So, it permits one to be the leader of the union who does not actually work in the industry. Sometimes a dismissed employee working as a union leader may create difficulties in the relationship between the union and the employer.iii Nevertheless, experience shows that outsiders who have little knowledge of the background of labour problems, history of labour movement, fundamentals of trade unionism and the technique of the industry and with even little general education assume the charge of labour union and become the self-appointed custodian of the welfare of workers. The employers, therefore, have been reluctant to discuss and negotiate industrial matters with outsiders, who have no personal or direct knowledge of day to day affairs of the industry.Accordingly employers refuse recognition to the unions which are either controlled by the politicians or affiliated to a particular political party or controlled by a particular individual. Government cannot morally compel employers to accord recognition to unions without driving out the politicians from them. The State must outright ban "outsiders" from the trade union body. Further, provision for political fund iv by trade unions should

be eliminated, since it invariably encourages the politicians to prey upon them. The National Commission on Labour has overlooked this aspect. The Commission does not favour a legal ban on non-employees for holding the union office. It says that without creating conditions for building up the internal leadership, a complete banning of outsiders would only make unions weaker. The Commission hopes that internal leadership would develop through their education and training. Accordinglythe Commission suggests proportion of the outsiders and the workers in a union executive.v On realizing the problems of outsiders in the union, the Industrial Relations Bill, 1988 proposes to reduce the number of outsiders to two only. Another hurdle in the success of collective bargaining in India, is the absence of a compulsory ‘recognition’ provision in the Act.Impact of Recognition as Bargaining Agent in Collective BargainingIn view of the prevailing multi-trade-unionism in the country, recognition of a bargaining agent has assumed importance. Unfortunately, no attempt has been made at the national level to either lay down a procedure for recognition of a trade-union as bargaining agent or work out a procedure. There is no provision either in the Indian Trade Union Act 1926 or in the Industrial Disputes Act 1947 for the purpose. The Government of India proposed an amendment in theTrade Union Act in 1950 making recognition of a union compulsory. The measure however, faced serious opposition and remained unimplemented. The Standing Labour Committee (l8th Session) and National Commission on Labour favoured a statutory -provision for the purpose but their recommendations have yet to be accepted. The National Commission on Labour attached considerable importance to the matter of recognition of unions and observed as under:

"Industrial Democracy implies that the majority union should have the right to sole representation, i.e., the right to speak and act for all workers and enter into agreements with the employer."vi

In the absence of statutory provision, the matter is regulated by the Code of Discipline which was evolved at Nainital session of Indian Labour Conference in 1952. The Code of Discipline provides for verification of trade-union membership by Central Industrial Relations Machinery of the Government. Its voluntary character has however, made it ineffective and it has been found difficult to implement it in view of statutory provisions in the Industrial Disputes Act.At the present not even public sector undertakings are following the Code of Discipline and are bargaining with more than one union.

States like Bombay and Madhya Pradesh have, however, given statutory recognition to the procedure for determination of bargaining agent. Both, Bombay Industrial Relations Act 1946 and Madhya Pradesh Industrial Relations Act, 1960, provide for the determination of represent- tative union by the Registrar of Representative Unions. Special provisions have been made for agreements signed by representative unions. In spite of it, the experience shows that there had been serious opposition to statutory recognition of a union as sole bargaining agent of the workers of the establishment. Indeed the experience is that wherever there is a union recognition, representative of rival unions have come together to force the employer to bargain with them." The fear of retaliation by unrecognized unions has proved to be the biggest stumbling block in the success of statutory recognition system.

Multi -Unionism

Political orientation of trade unions is the primary reason for multi-unionism. Communal sentiments, provincial feelings and caste are other major causes for multi-unionism.vii Presence of too many unions in an industry destroys the bargaining strength of workers. Our labour legislation also permits multi-unionism.viii

Multi-unionism adversely affects collective bargaining process. Where there are too many unions, with whom should management negotiate? Each union may claim recognition. Each union may present separate charter of demands in a spirit of rivalry. When conflicting demands are made, it may be impossible to accept any of them.

Moreover, if one union is ready to accept some of the demands, other union may object to them. In this context, it is difficult to think of any effective collective bargaining process in India.

Politicization of Trade-Union Movement in India

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

"If our experience is any guide, it reveals that level of increase in wages etc., (in public sector undertaking ) is now decided by the Bureau of Public Enterprises which takes into consideration only the 'Political impact' and 'Consumer resistance' as two dominant factors. This is the reason why the prices of almost all products of necessity like coal, iron and steel, cement, sugar etc. have been constantly increasing. A survey of pending and decided industrial disputes of the last 10 years reveals that there was virtually no industrial dispute regarding wage structure or bonus in any industry of some significance. There are also not many collective bargaining agreementswhich have tried to link wages with productivity. Clearly, therefore, the basic idea of 'sharing the prosperity' which developed because of our commitment to the cause of 'social justice' is no longer current and the expected end-product of the process of 'social justice" is no longer expected."ix

Critical Evaluation

In Indian labour arena we see, multiplicity of unions and inter-union rivalry. Statutory provisions for recognising unions as bargaining agents are absent. It is believed that the institution of collective bargaining is still in its preliminary and organizational stage.x State, therefore, must play a progressive and positive role in removing the pitfalls which have stood in the way of mutual, amicable and voluntary settlement of labour disputes. The labour' policy must reflect a new approach.

Hitherto the State has been playing a dominant role in controlling and guiding labour-management relation through its lopsided adjudication machinery. The role of the industrial adjudicator virtually differs from that of a judge of ordinary civil court. The judge of a civil court has to apply the law to the case before him and decide rights and liabilities according to its established laws. Whereas industrial adjudicator has to adjust and reconcile the conflicting claims of disputants and evolve "socially desirable" rights and obligations of the disputants. 5 In deciding industrial disputes the adjudicator is free to apply the principle of equity and good conscience.

5

However, it is said that the impact of the attitude of the judiciary towards workers has not proved conducive to the peaceful industrial relations.6 It is accepted that the end of judicial proceeding is pain and penalties. It cannot solve the problems of industries. Accordingly it is said that:

"While statutes, rules, regulations, pains and penalties have their place in the ordering of industry, they do not touch the core of the problems of industrial relations."7

Moreover, advocates of adjudication contend that as the collective bargaining procedure might end in a strike or lockout, which implies a great loss to the parties concerned and the country, if for the sake of industrial peace, the adjudication becomes necessary. But has there been industrial peace and satisfactory progress since adjudication was adopted after world-war-II? We do agree that industrial peace can be established by the adjudication for the time being. But the conflicts are driven deeper and it will retard industrial production. In the absence of effective collective bargaining the anti – productivity tendencies are bound to appear.

75. What is wage? Distinguish between money wage and real wage.

Cost of using labor as opposed to cost of using capital or land. As a price of labor, it is subject to the forces of demand and supply in the labor market, which in turn is affected by productivity levels and ability of the employers to substitute labor with other factors of production such as machinery

The real wage, however, is not the same as the money wage. The real wage is the access to goods and services given to a worker in exchange for their labour. A change in the level of money wages is one determinant of a change in the level of real wages. A change in the overall throughput rate is another determinant.

Real wages always change as the direct result of movements in other variables. Money wages always change as the result of conscious, deliberate human decision, taken as a human response to changes in other variables.

A change in money wages must effect some change in real wages because of its effect on the determinants of real wages. But a change in real wages does not change the money wage; only human responsive action can do that.

The change in real wages affected by a change in money wages may be in the same or the opposite direction to the money-wage change, and may be a greater or smaller percent change than that in the money wage.

76. Explain wage and salary administration.

Employee compensation may be classified into two types – base compensation and supplementary compensation. Base compensation refers to monetary payments to employees in the form of wages and salaries. The term ‘wages’ implies remuneration to workers doing manual work. The term ‘salaries’ is usually defined to mean compensation to office, managerial, technical and professional staff. The distinction, however, is rarely observed in actual practice. Base compensation, it should be noted here, is a fixed and non-incentive payment on the basis of time spent by an employee on the job. Supplementary compensation signifies incentive payments based on actual performance of an employee or a group of employees. The term ‘compensation administration’ or wage and salary administration denotes the process of managing a company’s compensation programme.The goals of compensation administration are to design a cost-effective pay structure that will attract, motivate and retain competent employees’.

77. Discuss National Wage Policy.

6

7

National Wage Policy For India.

In Indian Democracy, the entire citizen is equal, whether he/she is a SCAVENGER OF THE VILLAGE PANCHYAT or the PRESIDENT OF THE NATION.

For example, the SCAVENGER EARNS Rs: 5000=00 & the PRESIDENT EARNS Rs: 50,000=00, per month. For both, 1 kg Rice costs Rs: 20=00.For the PRESIDENT Rs: 20=00 is like just 2 Paisa. But, for the SCAVENGER, Rs: 20=00 is more than Rs: 200=00.Both have to live. The PRESIDENT lives easily. But, the SCAVENGER, he has to struggle hard "Every Moment".

My Humble appeal to the Government of India is:

For example, in the field of Education,For both the employees of the State and Center, there must be equal salary for:

1. Scavengers2. Attenders3. S.D.C., F.D.C., & other higher categories4. Teachers of Primary, Secondary,5. Lecturers of P.U.C., College, Post-Graduate University Departments.6. Readers of P.U.C., College, Post-Graduate University Departments.7. Professors of P.U.C., College, Post-Graduate University Departments.

I. Equal wage for Teachers with the same qualifications, working in State and Central Schools.

II. Equal wage for Lecturers with the same qualification, working in Aided & govt.Colleges. Similarly for Readers & Professors.

III. Equal wage for Lecturer, Reader, & Professor - working in the Aided College, in the Govt. College, Post-graduate University Departments.

IV. Equal wage for Lecturer-Reader-Professor working in the State University and Central University, with the same Qualification.

V. In this way, Equality must be maintained among all the different types of employees, without making the distinction as STATE AND CENTER GOVERNMENT EMPLOYEES.

78. Discuss the strategies to CB.-Book-Page-25

79. Give the tactics used in CB.

TACTICS USED IN COLLECTIVE BARGAINING1.ANTICIPATE --- THE PROPOSALS / DEMANDS, THE INTENTION OF THEDEMANDS, & ALSO THE DIRECTION IN WHICH THESE WILL BEPRESENTED OR PLACED.2. TEAM SPIRIT --- SHOULD BE MAINTAINED THROUGHOUT THENEGOTIATIONS. IT REQUIRES SYNCHRONIZATION OF THE TEAMMEMBERS’ VIEWS DURING THE DISCUSSION. A REHEARSALBEFOREHAND MAY CLEAR THE ROLE & RESPONSIBILITY OF EACH OF THE MEMBER.3.SEPARATE RESPONSIBILITIES FROM PROBLEMS ---THIS WILL PROVIDE APLATFORM TO GIVE IMPORTANCE ON ISSUES & NOT THE PEOPLEBEHIND THE ISSUES.4.COUNTER PROPOSAL--- THE MANAGEMENT SHOULD PRESENT ACOUNTER PROPOSAL AGAINST THE DEMAND RAISED BY THE UNION.e. g. IF A DEMAND IS ON WAGE HIKE, THE MANAGEMENT SHOULDRAISE THE ISSUE OF PRODUCTIVITY, WORKLOAD etc.5.EMOTIONAL MATURITY ---- MUST BE MAINTAINED BY BOTH MEMBERSOF UNION T THE REPRESENTATIVES OF MANAGEMENT. PATIENTLISTENING & MUTUAL UNDERSTANDING WILL FACILITATE THEPROCESS OF DECISION-MAKING.6.PROPER MANAGEMENT REPRESENTATIVES -----PERSONS WITH PROPERAUTHORITY TO COMMIT & STANDBY SHOULD BE DEPUTED BY THEMANAGEMENT AT THE NEGOTIATION TABLE. PRESENCE OF A Jr

RANK PERSON WILL SEND A WRONG SIGNAL TO THE UNION REGARDING THE SERIOUSNESS OF THE MANAGEMENT.7.PHASE OUT THE ISSUES --- IT IS DESIRABLE TO TAKE UP THE ISSUESWHICH DO NOT COST OR COST LESS TO THE MANAGEMENTINITIALLY & THEN SWITCH OVER TO HIGH COST INVOLVEMENTITEMS. THIS WILL CREATE A GOOD ENVIRONMENT FORNEGOTIATIONS.8.SAFETY VALVE -----EVEN IF THE NEGOTIATION IS DIFFICULT, THERESHOULD BE SAFETY VALVE WHICH SHOULD NOT BE CROSSED BY THE NEGOTIATING TEAMS EXCEPT IN EXCEPTIONAL CIRCUMSTANCES.9.BE GOOD LISTENER ----IT IS NOT DESIRABLE TO TALK MUCHWITHOUT ALLOWING THE OTHER PARTY TO SPEAK. IT GIVES THEOTHER PARTY YOUR POSITION BUT LEAVES YOU WITH LITTLEKNOWLEDGE OF HIS POSITION & POTENTIAL TRADE-OFF.10.DO NOT GIVE-UP ---THE PARTIES INVOLVED IN THE NEGOTIATIONSSHOULD NOT GIVE UP TOO SOON OR BACK OFF TOO QUICKLY.SANMAN KULKARNI11. JUDGE THE PARTIES ---IT IS NOT DESIRABLE TO UNDERESTIMATE OROVERESTIMATE THE OTHER PARTY.12.GOOD END —THE RESULT OF A COLLECTIVE BARGAINING STRATEGYSHOULD END IN A GOOD AGREEMENT OR SETTLEMENT

80. Explain CB and technological change.-Book-Page-7081. Discuss the problems of CB.

PROBLEMS RELATING TO COLLECTIVE BARGAINING IN INDIAThe collective bargaining scene in India is not very encouraging. The major emphasis of both union and employers is to settle the disputes through adjudication rather than sorting out the issues among themselves. Whatever bargaining takes place, it is limited to large plants only. Smaller organisations generally do not prefer this form of handling the issues. As discussed in the previous chapter, several factors are responsible for this state of affairs. These are listed below:

I. 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.

II. 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.

III. 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

IV. 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.

V. 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.

82. Give the historical introduction to collective bargaining.

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

The phrase "collective bargaining" was coined by British labor reformers Sidney and Beatrice Webb of Great Britain which was the “home of collective bargaining” in the 1890’sxii. The idea of collective bargaining emerged as a result of industrial conflict and growth of trade union movement and was first given currency in

the United States by Samuel Crompers. In India the first collective bargaining agreement was conducted in 1920 at the instance of Mahatma Gandhi to regulate labour management relation between a group of employers and their workers in the textile industry in Ahmadabadxiii.

Advocates of collective bargaining in the early decades of the twentieth century thought it essential for three reasons. First and foremost, a system of peaceful and routine bargaining would eliminate industrial strife and violence. Second, collective bargaining stood for "industrial democracy," and finally, collective bargaining promised to make capitalism work.

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

There was always a need of a legislation which could ensure industrial justice pre-empt the industrial tensions and provide the mechanics of dispute resolution. When Industrial Disputes Act, 1947 was passed in India, it was passed to provide machinery and form for the investigation of industrial disputes and for the settlement thereof and for the purposes analogous and incidental thereto. As is evident from the Act itself that it is piece of legislation which mainly provides for investigation and settlement of Industrial disputes.

In the words of Justice Desai the emergence of the concept of welfare state implies an end to exploitation of workmen and as a corollary to that collective bargaining came into its own and lest the conflicting interests of the workmen and the employer disturb the industrial peace and harmony, a machinery for adjustment of such conflicting interests became the need of the time. The Act therefore was enacted to provide machinery and Forum for adjustment of such conflicting and seemingly irreconcilable interests without disturbing the peace and harmony in the industry assuring the industrial growth which was the prerequisite of for a welfare state.

Collective bargaining is one of the methods wherein the employer and the employees can settle their disputes. This method of settling disputes was adopted with the emergence and stabilization of the trade union Government. Before the adoption of the collective bargaining the labour was at a great disadvantage in obtaining reasonable terms for contract of service from its employer. With the development of the trade unions in the country and the collective bargaining becoming the rule it was equally found by the employers that instead of dealing with individual workmen it is convenient and necessary to deal with the representatives of the workmen not only for the making or modification contracts but also in the matter of taking disciplinary action against the workmen and regarding other disputes. So, collective bargaining has come to stay having regard to modern conditions of the society where capital and labour have organized themselves into groups for the purpose of fighting and settling their disputes.

83. Give the types of wages.Type of wagesThe main types of wages are:1. Subsistence wage;2. Minimum wage;3. Fair Wage; and4. Living WageSubsistence Wage: - The wage that can meet only bare physical needs of a worker and his family is called subsistence wage.Minimum Wage: - Minimum wage is the wage that is able to provide not only for bare physical needs but also for preservation of efficiency of worker plus some measure of education, health and other things.Fair Wage:- Fair wages is an adjustable step that moves up according to the capacity of the industry to pay, and the prevailing rates of wages in the area of industry.

Living Wage:- Living wage is that which workers can maintain the health and decency, a measure of comfort and some insurance against the more important misfortune of lie.In any even the minimum wage must be paid irrespective of the extent of profits, the financial condition of the establishment or the availability of workmen at lower wages.The wages must be fair, i.e. sufficiently high to provide standard family with ,food, shelter, clothing, medical care and education of children appropriate to the workmen.A fair wage lies between the minimum wage and the living wage which is the goal.Wages must be paid on an industry wise and region basis having due regard to the financial capacity of the unit.

84. Explain different types of bargaining.

Types of Collective Bargaining

Conjunctive / Distributive Bargaining :Distributive bargaining is the most common type of bargaining & involves zero-sum negotiations, in other words, one side wins and the other loses.Both parties try to maximize their respective gains.They try to settle economic issues such as wages, benefits, bonus, etc. For Example, Unions negotiate for maximum wages & the management wants to yield as little as possible – while getting things done through workers.

• In distributive bargaining, unions and management have initial offers or demands, target points (e.g.: desired wage level), resistance points (e.g.: unacceptable wage levels) & settlement ranges (e.g.: acceptable wage level). Another name for this type of bargaining is conjunctive bargaining.

Cooperative /Integrative Bargaining: Integrative bargaining is similar to problem solving sessions in which both sides are trying to reach a mutually beneficial alternative, i.e. a win-win situation.• Both the employer & the union try to resolve the conflict to the benefit of both parties. Both sides share

information about their interests and concerns and they create a list of possible solutions to best meet everyone’s needs.

• For Example, when companies are hit by recession, they cannot offer the kind of wages and benefits demanded by workers. At the same time they cannot survive without the latter’s support. Both parties realize the importance of surviving in such difficult times and are willing to negotiate the terms of employment in a flexible way.

Productivity Bargaining: • The concept of productivity bargain involves a good understanding of the following concepts. Based on

these concepts both the parties must develop a productivity linked scheme. • Difference between productivity & work intensity• How to conduct work study• ILO guidelines for work study – Personal needs allowance, Fatigue allowance, hazardous allowance ,

etc.• Other Methods like MOST (Maynard Operational Sequence Techniques)• Systems improvement and method improvement• Required Skills and Knowledge for productivity settlement

Composite Bargaining: • Workers believed that productivity bargaining agreements increased their workloads. Rationalization,

introduction of new technology, tight productivity norms have added to this burden and made the life of a worker some what uneasy. As an answer to such problems, labor has come in favor of composite bargaining.

• In this method, labor bargains for wages as usual, but goes a step further demanding equity in matters relating to work norms, employment levels, manning standards, environnemental hagards , sub-

contracting clauses etc. This works in the favor of the workers, for e.g., when unions negotiate standards they ensure the workload of workers don’t exceed .

Concessionary Bargaining: • Quite opposite to the other forms of bargaining, where the unions demanded from the employers, in

concessionary bargaining, the objective is to giving back to management some of what it has gained in previous bargaining.

• Why should labor be willing to give back what it has worked so hard to obtain? • A good example is the agreement between General Motors & the International Union of Electric

Workers that granted GM around the-clock operations, wages and benefits concessions for the new hires, and a two-week mass vacation. The concessions were made to save over 3,000 jobs.

• In some cases, despite a financial crisis, the union may not be willing to concede. This may be because the union doesn’t view management’s arguments as credible. Thus, the degree of trust and credibility between the management and the union may influence the extent to which concessionary bargaining occurs.

85. Give the calculation of bonus.

How to Calculate Employee BonusesBonuses are extra pay above and beyond the set pay rate.

Bonuses are extra pay provided to employees above and beyond their regular salary, hourly wages, or commissions. Used correctly, bonuses can improve employee performance and loyalty. Set too low, employee bonuses become demoralizing or devalued. Employee bonuses can be calculated based on an even distribution to all employees, a reward to star performers, or be given as a percentage of each employee's salary.

Instructions1. Calculation

1. Determine how bonuses are to be decided. Bonuses can be based on a percentage of the employee's salary, sales generated, or as a reward to stellar employees.

2. Create a list of all employees who are eligible for bonuses or are named by management as deserving of bonuses. If bonuses are to be based on their current salary, include the salary of each nominated employee.

3. Review the company budget to determine how much money is available for employee bonuses. Determine the employee bonus budget upon which individual employee bonuses will be calculated.

4. Divide the budgeted amount for bonuses among the employees. If an equal amount is to be given to each employee, divide the bonus budget by the number of employees eligible or nominated. If bonuses are to be based as a percentage of each employee's salary, first total the salaries of the nominated employees. Then divide the bonus budget by the salary total. This provides a percentage to apply to each employee's salary to provide bonuses to each with an equal weight to their individual salaries.

5. List the bonus amount to be given to each employee, whether it is a lump sum equally divided among employees or set as a percentage of each employee's pay.

Provide this list to the payroll department so that the calculated employee bonuses can be paid to each eligible individual.

OR

Bonus to be paid under Payment of Bonus Act,1965 is to be calculated as under :

1. It depends upon the percentage on which your company wants to give bonus to its employees. Minimum bonus is 8.33% of basic salary earned during the accounting year and Maximum is 20% under the payment of Bonus Act,1965.

2. Eligibility : Bonus under Payment of Bonus Act,1965 is required to be to employees whose salary ( Basic) is of less than Rs.10000.00 per month during the accounting year for which bonus is to be paid.

3. Bonus is to be calculated for eligible employees assuming salary ( Basic) as Rs.3500.00 per month or less, if, it is less then Rs.3500.00

4.Multiply the yearly sum of salary thus worked out as per above clause 3 with rate of bonus. The figure is bonus payable to employee under the act.

5.Payment is to be made on Register prescribed under the act.

6. Return of payment of bonus is to be submitted with ALC or other designated authority under the act , within 30 days of payment of bonus to employees.

86. Describe the concept of collective bargaining, with suitable illustrations.87. Outline the historical developments in the area of collective bargaining by citing examples.88. Explain the salient features of various techniques of collective bargaining.89. Highlight important issues involved in collective bargaining. Explain with examples.90. What are important reasons for the breakdown in the collective bargaining process?91. Critically examine the developments in the area of collective bargaining in India92. Highlight features of important theories of wages.93. Explain salient features of National Wage Policy of India.94. Should wages be linked with the productivity? Give arguments in support of your answer.95. What are the merits and demerits of having a policy of wage differential in an organization?96. Outline the rationale for giving dearness allowance to the employees.97. What are the important factors to be kept in mind while conducting negotiations? Illustrate with

examples

Collective Bargaining Vs. Joint Consultation • There is a lot of differences between the two processes.• Collective bargaining The object is to arrive at an agreement on wages and other conditions of

employment about which the parties start with divergent viewpoints but ultimately attempt to make compromise. As soon as the bargain is made, the terms of the agreement are put into action.

• Joint consultation such as joint councils refers to the sharing of information and suggestions with regard to issues of common interest including health, safety, welfare and productive efficiency. Although the results differ, course of activities may be in the form of recommendations, the ultimate decisions lies with the management.

Scope of Collective Bargaining

Scope of collective bargaining is based on the following guide lines(in India)• A preamble stating why the parties had met together, usually making reference to the union’s

charter of demands which formed the starting point for discussions.• A statement of principles such as rights and responsibilities of both parties. • Recognition of union by management and acceptance of the union’s right to organize the

workers and to carry out all the normal activities of a trade union.• A section dealing with remuneration, including basic pay scales, grades and job classification,

dearness allowance and other allowances, incentives schemes and annual bonus.• A section on working conditions such as hours of work, overtime, recruitment, transfer,

promotion, etc.• A section on service benefits and amenities such as leave, public holidays, medical benefits,

sick pay, retirement age, pension or gratuity scheme, provident fund etc.• Clauses relating to special joint machinery may be included. These include joint production

committees, joint labour relations, job evaluation, discipline, safety and welfare committees as well as workers’ committees.

• Grievance procedure of two kinds may be incorporated in an agreement.

First the procedure for dealing with individual grievances as they arise day to day within the establishment. This may follow to a lesser or greater degree the model drawn up by the Indian labour conference.

Second is the method of settling any dispute over interpretation of any part of agreement. This procedure includes voluntary arbitration.

LAWS RELATING TO COLLECTIVE BARGAINING IN INDIA

As discussed earlier, collective bargaining is a technique by which disputes of employment are resolved amicably, peacefully and voluntarily by settlement between labour unions and managements. The method of collective bargaining in resolving the Industrial dispute, while maintaining industrial peace has been recognized as the bed rock of the Industrial Disputes Act, 1947. Under the provision of the Act, the settlement arrived at by process of collective bargaining with the employer has been given a statutory recognition under Section 18 of the Act.

Under the Act two types of settlement have been recognised:

1. Settlement arrived in the course of conciliation proceeding before the authority. Such settlements not only bind the member of the signatory union but also non-members as well as all the present and future employees of the management.

2. Settlement not arrived in the course of conciliation proceedings but signed independently by the parties to the settlement, binds only such members who are signatory or party to the settlement.

Section 19 of the Act prescribes the period of operation inter alia of such a settlement and envisage the continuation of the validity of such a settlement unless the same is not replaced by another set of settlement, while Section 29 prescribes the penalty for the breach of such a settlement.

The Industrial Disputes Act, 1947 provides for the appointment of Conciliation Officers, charged with the duty of mediation in promoting the settlement of industrial disputes. On a reference to the Conciliation Officer, a Conciliation Board is constituted consisting of representatives of employees and employer with the conciliation officer as the chairman. The memorandum of settlement duly signed by the conciliation officer is to go from one camp to the other and find out greatest common measure of agreement, to investigate the dispute and to do all such things as he thinks fit to arrive at a fair and amicable settlement of the dispute.xiv

A settlement arrived at by agreement between the employer and the workmen otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement. A settlement comes into operation on such date as is binding on the parties to the agreement, and for such period as has been agreed upon. Dealing with the binding nature of settlement Chagla, J has observed that; “Industrial Law takes no notice of any private settlement or agreement arrived at between parties in the course of industrial dispute. Such a private agreement belongs to the realm of contract, it may give rise to contractual rights; it has no sanctions in industrial law and industrial dispute does not end until a settlement is arrived at which has been given a binding effect under the provision of S.19 (2) and such settlement can be only arrived at when conciliation proceedings are held under S.12 of the Industrial Disputes Act, 1947”.xv From this observation, it would be wrong to infer that a private settlement in respect of an industrial dispute does not end an industrial dispute. In this respect the following observation of chief Justice Chagala are relevant, “But when parties do arrive at a settlement, the law gives to it a greater sanctity than it gives to an award and therefore , the industrial law does not contemplate any interference with the finality of a settlement and it compels the settlement to run on for the period mentioned in the settlement itself and neither party is permitted to challenge that settlement during its duration.”xvi

Types of Collective Bargaining Agreements in India

Collective bargaining as it is practiced in India can be divided into three classes. First is, the bipartite agreement drawn up in voluntary negotiation between management and union. The second type is known as a settlement, while the third type of collective agreement is consent award. These are discussed below:

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

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

3. Consent Award: Here the negotiation takes place between the parties when the dispute is actually pending before one of the compulsory ad judicatory authorities and the agreement is incorporated to the authorities, award. Thus though the agreement is reached voluntarily between the parties, it becomes part of the binding award pronounced by an authority constituted for the purpose.

The idea of national or industry-wide agreements and that too on a particular pattern may appear to be a more ideal system to active industrial relation through collective bargaining, but the experience of various countries shows that it is not possible to be dogmatic about the ideal type of collective bargaining, because it largely depends upon the background, traditions and local factors of a particular region or country.

Levels of Collective Bargaining

Collective bargaining operates at three levels:1. National level2. Sector or industry level3. Company/enterprise level

Economy-wide (national) bargaining is a bipartite or tripartite form of negotiation between union confederations, central employer associations and government agencies. It aims at providing a floor for lower-level bargaining on the terms of employment, often taking into account macroeconomic goals

Sectoral bargaining, which aims at the standardization of the terms of employment in one industry, includes a range of bargaining patterns. Bargaining may be either broadly or narrowly defined in terms of the industrial activities covered and may be either split up according to territorial subunits or conducted nationally.

Company/enterprise level, this bargaining level involves the company and/or establishment. As a supplementary type of bargaining, it emphasizes the point that bargaining levels need not be mutually exclusive.

Advantages and Disadvantages of Collective Bargaining

Advantages of Collective Bargaining

According to National Commission Report on labour collective bargaining has been preferred over compulsory

adjudication system for several reasons:

(a) It is a system based on bipartite agreements, and as such, superior to any arrangement involving third

party intervention in matters which essentially concern employees and workers;

(b) It is quick and efficient method of settlement of industrial disputes; and

(c) It is democratic method of settlement of industrial disputes;

Disadvantages of Collective Bargaining

Two vital defects in collective bargaining have been pointed out by Willcox. These defects are:

(a) There are situations in which a serious strike and prolonged strike simply cannot be tolerated.

(b) The second great flaw in collective bargaining as a solvent for labour disputes is the lack of

representation of the public interest at the bargaining table. Whether prices can be raised without

strangling and ability to sell goods or services, unions and companies are in a position to agree on wage

increase that will cause higher prices, then the consumer must shoulder the full burden of their

agreementxvii.

Principles of Collective Bargaining

As mentioned before that the collective bargaining has succeeded in introducing industrial democracy in industrial and labour managements. Industrial democracy implies that the majority union should have the right

to sole representation i.e. the right to speak and act for all workers and to enter into agreements with the employer. There are certain principles which have to be followed by both the management and workers for collective bargaining. These principles are as follows:

1. There should be a realization on the part of both unions and managements that for taking wiser an more expedient decisions, collective bargaining is a proper method.

2. An opportunity should be provided to trade union leaders for putting their complaints, demands, needs, etc. before the managements and the management should explain to them the circumstances and make efforts to redress the grievances/complaints of the workers.

3. The presence of genuine spirit of mutual trust, goodwill and bargaining should be there on the part of both the parties;

4. Competence for bargaining with mutual respect and implementation of the agreement arrive at should be possessed by both the parties.

5. The parties to collective bargaining should be honest and the agreement should be conducted by these honest, competent and reasonable leaders;

6. Keeping in view the changing circumstances, it is desirable that the management should change their policies and should keep in view the dignity of the workers. Appropriate labour policy should be adopted by the management and this policy to be followed by all employees. Necessary precautions must be taken.

7. If there are more than one union the management should enter into negotiation with union having majority representation.

8. It is equally desirable on the part of the union to raise reasonable demands. They should not put up such demands as are beyond the paying capacity of the establishment or may be against the national policies.

Scope of Collective Bargaining

The growth of collective bargaining is associated with the recognition of trade unionism. With the growth of trade unions and industrialization the scope of collective bargaining is expanding. Initially collective bargaining was used for determining hours of work, wages and terms of employment, but now within its purview are included the issues like leave with pay, regulation of forced leave, pension, seniority promotions, sickness and maternity benefits, etc. Since in the field of bargaining collective action is now common, collective bargaining has assumed an institutional form. In the words of C.W. Randle:

“The subject matter of collective bargaining had broadened until it has virtually eliminated the field of the management prerogatives. The area pattern of bargaining has moved from simple style plant bargaining to region-wise and finally to dynamic nature of the scope of collective bargaining. At the same time, they show how important negotiation has become as an institution. And the future holds promise of an even greater role for collective”.

Importance of Collective Bargaining

Collective bargaining is an important method of regulating relations between employers and employees. It involves negotiation, administration and enforcement of the written contracts between the employees and the employers. It also includes the process of resolving labour-management conflicts.

Healthy collective bargaining generates a spirit of self-confidence and self-reliance among the workers. It is based on a ‘give and take’ policy on both sides. Collective bargaining leads to increased goodwill and understanding between labour and management. This in turn helps to create peaceful and comfortable atmosphere in industrial relations.

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;

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 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 dispute

Importance to society

Collective bargaining leads to industrial peace in the country; It results in establishment of a harmonious industrial climate 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.

Functions of Collective Bargaining

The functions of the collective bargaining are as under:1. Adjustment and balance of power between the management and union when they are in conflict with

each other. This function of the system of collective bargaining is one of the methods of effecting social change.

2. When two parties are in a state of continuous conflict, it helps in bringing about compromise, truce or agreement for establishing peace between the parties. Industrial truce results when two parties to a

dispute arrive at a compromise or agreement without resorting to strike or lock-out. Such truce may be stable or temporary. It depends upon the parties as to what extent one party is willing to sacrifice and the other party is willing to accept the demands, or terms. Both the parties are morally bound to implement the agreement once it is signed.

3. For establishing industrial jurisprudence it analyses the rights and duties of conflicting parties.4. It also adjusts labour management disputes apart from performing functions like negotiation,

administration and enforcement of agreements by which union management relationship is governed.

Significance of Collective Bargaining

In an Industrial Establishment to solve the problems arising at the plant or industry level the need of the collective bargaining is eagerly felt. Through negotiations the solution to the common problems can be directly found out between the management and workers and here the collective bargaining plays significant role and its scope is very great. In so far the determination of terms and conditions of employment are concerned, one important consequence of collective bargaining has been that it has enabled trade unions to participate in the decision making process regarding hours of work, wages, working conditions etc. Earlier the employer used to decide these issues unilaterally, but now they have become subjects of bilateral negotiations with the advent of collective bargaining. Thus an element of industrial democracy has been introduced by collective bargaining in the field of industrial and labour management.

Collective bargaining is really useful from the stand point of management, trade unions and workers. Among workers it develops a sense of responsibility and self respect if it works well and thus contributes to a great extent to employee’s morale and productivity. It opens up channels of communication between top and bottom of an undertaking which is difficult otherwise. Further the management’s freedom of action is restricted because the establishment loses its unilateral discretion regarding bargainable issues even when management’s security is intact and thereby learns a new code of behavior by conceiving of the union as a method of dealing with the employees not an obstacle to such dealing.

The significance of collective bargaining from the national stand point is that it helps in creating peaceful industrial climate if properly conducted, thereby increases the pace of the country’s efforts towards social and economic development. Collective bargaining as an instrument of industrial peace has no parallel. It extends the democratic principle from the political to the industrial field and is an important aspect so far as the labour and management relations are concerned.

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xi Otto Kahn-Freund, Laboar aad the Law, L mdon, Stevens & Sons, (1977\ .). 49xii Webb, Sydney and Beatrice, Industrial Democracy,1902,p.185xiii Report of Royal Commission on Labour in India, 1931; p. 336-337xiv

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xviiFactors influencing Collective Bargaining

According to the N.U.T study circle materials (1992: 68), some of the factors that influence collective bargaining

are itemized below:

(i) The ability to pay

(ii) The mandate of the employers representative

(iii) The relative strength of the union and management

(iv) The sensitive nature of the job and the importance society attaches to it.

(v) Strategies adopted by the union officials

(vi) The quality of work.

(vii) Influence of international financial institution e.g. I.M.F.

(viii) Statistics, which are generally economic in nature, collective, collated and interpreted by the union officials.

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