Legal Provisions of Collective Bargaining: Contrasting India with Canada, China & Finland.

AuthorBudhiraja, Sunil

Technical Framework

Collective bargaining is one of the most important aspects of employer employee relation. It is a process of negotiation between employers and a group of employees aimed to achieve industrial democracy. The fundamental objective of collective bargaining is to regulate wages and salaries, working conditions, benefits and other aspects of workers' welfare and rights (Hayter, 2010). It is the most practicable and constructive approach to avoid disputes and achieve peace at workplace. ILO has defined collective bargaining as "the negotiations about working conditions and terms of employment between an employer, a group of employers or one or more employers' organization on the one hand, and one or more representative workers organizations on the other hand, with a view to reaching an agreement"

The term "collective bargaining" was coined in 1891 by Beatrice Webb, a founder of the field of industrial relations in Britain. Webb describes collective bargaining as an economic institution, with trade unionism acting as a labor cartel by controlling entry into the trade. There are other labor economists who claim that the collective bargaining is a political process rather than economic. Although the major actors in collective bargaining process are workers and management, it certainly depends upon several external forces including the political, social and economic environment of the country. Even the internal factors including organizational leadership, size and technological advances in the organizations contribute to the success or failure of collective bargaining.

Collective Bargaining in India

In India, the right to collective bargaining is not provided to all trade unions that exist, but is confined to those trade unions which are recognized. Registration of trade union is one thing and the recognition of trade union as a sole bargaining agent for the purpose of collective bargaining is quite another. Many industrial strikes took place on the question of recognition of unions including the Maruti Suzuki unrest in 2011 (Prasad, 2012). In majority of the industries, management allows only the recognized trade union for negotiations and collective bargaining. As such, recognition of trade union serves as a backbone of collective bargaining. It has been debated time and again whether a trade union should be recognized or not. This is because there is, till-date, no central legislation on this subject, i.e., recognition of trade union.

In Kalindi and Others v. Tata Locomotive and Engineering Co. Ltd Case (1960) the Supreme Court held that there is no right to representation as such unless the company, by its standing orders, recognizes such a right. The decision was reiterated in Bharat Petroleum Corporation Ltd. v. Maharashtra General Kamgar Union & Others Case (1998).

Labor being a concurrent subject, certain states of India including Maharastra, Gujarat, Uttar Pradesh and Madhya Pradesh, for example, have separate legislations relating to recognition and certain voluntary codes. All these are buried in practical aspects though. These legislations are named as:

* Maharashtra Recognition of Trade Unions and Prevention of Unfair Labor Practices Act, 1971

* West Bengal Trade Unions Rules, 1998

* Kerala Recognition of Trade Unions Act, 2010

* Orissa Verification of Membership and Recognition of Trade Union Rules, 1994

Generally, these rules provide that a union shall be recognized by the employer as the sole bargaining agent of a group of workers if it receives a specified minimum percentage (usually a majority) of these workers' votes via secret ballot, organized by the Registrar. However, every trade union receiving a smaller minimum percentage of votes (fifteen or ten percent, depending on the type of industry) shall also be recognized as constituents of a joint bargaining council as in the case of Kerala trade unions.

There are two major problems in trade union recognition in India:

  1. All registered unions in India seem to have been enjoying industrial relations rights though they happen to be craft, caste or category based unions.

  2. Politicization of trade unions is one of the basic reasons why one political party supports secret ballot system whereas others support check off system due to which there is the problem of following a uniform standard so far as recognition of trade union is concerned.

Several states have refused to recognize a trade union mainly on the following five grounds:

(a) Most of the office bearers of the union were outsiders,

(b) Sometimes, those disapproved by management, particularly politicians and ex-employees.

(c) The union consisted of only minimum number of employees.

(d) There were many rival unions in existence.

(e) The trade union was not registered under the Trade Unions Act, 1926

In India, there are no laws about recognition of trade unions and no laws have been made by the parliament to regulate collective bargaining process in different industries between employers and employees. Trade Unions Act, 1926 talks only about registration of trade unions and rights and responsibilities of registered trade unions (though registration is not compulsory). Industrial Disputes Act, 1947 explains various provisions of settling the industrial disputes including conciliation, voluntary arbitration and adjudication between employers and employees. Some state governments (Maharashtra, West Bengal, Madhya Pradesh, Bihar, Kerala and Odisha) have tried to pass laws to guide the process of recognition of trade unions. But no uniform mandatory central legislation exists in India to regulate collective bargaining and its process. Hence it totally depends on the sweet will of the employers to recognize a trade union as a sole bargaining agent.

Recognition of trade unions functioning in factories is regulated under the provisions of the voluntary 'Code of Discipline' and the 'Criteria for Recognition of Unions' appended to the Code adopted by the Standing Labor Committee in its 16th Session in 1957 and subsequently ratified by the representatives of employers and employees at the 16th Session of the Indian Labor Conference, held in 1958. Main provisions of this code are given below.

To maintain discipline in the industry (both in public and private sectors) both employers and employees will recognize the rights and responsibilities of either party. Both the parties will willingly discharge their obligations consequent on such recognition. The central and state governments will arrange to examine and set right any shortcomings in the machinery they constitute for the administration of labor laws. Further, as per Code of Discipline, the management and unions should agree that they will not take any unilateral decision with respect to any company matter and existing machinery for settlement would be utilized. They should not go on lockout and strike respectively without notice. They should bind themselves to all future disputes by negotiations, conciliations and voluntary arbitrations. Further, they should promote constructive cooperation and they will educate the management and workers regarding their obligations to each other. As per the Code, management should agree not to increase the workload of employees unless they agree upon it and not to interfere in trade union related matters. It should take prompt action for settlement of grievances. Besides, the...

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