This article is written by Akshada Vishnudas, 5th semester B.Com LL.B. , Bharata Mata School of Legal Studies, Aluva during her internship with LeDroit India
KEYWORDS
Freedom of association- business- wages-labour relations- workmen
ABSTRACT
The ability to engage in cooperative rather than adversarial discourse is made possible by the freedom of association and collective bargaining, which concentrates energy on finding solutions that will benefit the business, its stakeholders, and society at large. Collective bargaining provides a means of voicing the interests of both employers and employees, identifying shared interests, weighing disparate interests against one another, and negotiating trade-offs.
Businesses stand to gain from this in terms of employee loyalty, stability, and productivity; employees stand to gain from better pay and working conditions. Workers typically obtain a higher wage share of productivity improvements through collective bargaining. In turn, this may encourage collaboration, boost output inside the company, and support increased demand throughout the economy. Collective bargaining offers an institutionalised and accepted method of handling conflict, which enhances the atmosphere around labour relations.
Through collective bargaining, the parties can customise a collective agreement that governs the employment relationship to fit the needs of their specific business or industry. Parties can resolve issues that could be unique to their line of business or industry. The International Labour Organization’s (ILO) Convention No. 98 places a high value on collective bargaining rights.
INTRODUCTION
Collective bargaining is a voluntary process used to determine terms and conditions of work and regulate relations between employers, workers and their organizations, leading to the conclusion of a collective agreement[1]. One benefit of collective bargaining is that, as opposed to conflict and confrontation, disputes are resolved via discussion and agreement. ILO Convention No. 154 [2]defines collective bargaining as referring to:
“All negotiations which take place between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more workers’ organisations, on the other, for:
(a) determining working conditions and terms of employment; and/or
(b) regulating relations between employers and workers; and/or
(c) regulating relations between employers or their organisations and a workers’ organisation or workers’ organisations.”
The ability to engage in cooperative rather than adversarial discourse is made possible by the freedom of association and collective bargaining, which concentrates energy on finding solutions that will benefit the business, its stakeholders, and society at large. One of the fundamental liberties of labourers in India is the ability to engage in collective bargaining governed by the Industrial Dispute Act, 1947.
The freedom to organise trade unions and participate in collective bargaining with employers is granted under this statute. Additionally, the Act contains provisions for trade union registration, which enables them to bargain on behalf of all of their members’ collective interests with employers. Collective bargaining in India typically includes discussions about the following subjects- wages, salaries and benefits, the working hours limit, and the working environment, in addition to other employment-related issues.
Trade unions that represent employees, employers, or their representatives often start the collective bargaining process. Either party may send the dispute to a conciliation officer, who will be appointed by the government, if trade union negotiators are unable to reach a mutually agreeable solution. In addition, the disagreement may be brought before an industrial tribunal or labour court for dispute resolution if the conciliation fails.
INDIAN CONCEPT OF COLLECTIVE BARGAINING
The Dunlop Rubber Company in West Bengal established the idea of a collective bargaining agreement for the first time in 1947. The West Bengal-based Bata Shoe Company followed. The Indian Aluminium Company later signed a five-year contract with the Belur workers union in 1951. Subsequently, the Imperial Tobacco Company embraced this idea in 1952, and by 1955, a number of well-known businesses had also begun utilising collective bargaining, including Tata Iron and Steel Company, Hindustan Lever, and other minor businesses. Collective bargaining was first used by about 49 enterprises, employing about 4.5 lakh people, before the year 1962. It was intended to be a means of resolving labour issues and preserving unity within industrial organisations.
The Supreme Court established collective bargaining as a legal procedure in the seminal decision of Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company (Regd.) and Ors. (1990)[3]. The Industrial Disputes Act, 1947 was established, according to the Apex Court’s ruling in this case, with the intention of achieving social justice through collective bargaining.
IMPORTANCE OF COLLECTIVE BARGAINING
In order to improve working conditions, terms of employment, and relations between employers and employees, or their respective organisations, collective bargaining is a useful venue. In many cases, it is more adaptable and efficient than state control. Anticipating future issues and developing peaceful means to address them, along with coming up with solutions that balance the interests and goals of both employers and employees, may all be beneficial. Good collective bargaining improves society as a whole by promoting peace and stability, which in turn benefits management and employees. By allowing the governed to participate more actively in choices that directly impact them, collective bargaining may be a valuable tool for enhancing their consent.
Collective bargaining provides a means of voicing the interests of both employers and employees, identifying shared interests, weighing disparate interests against one another, and negotiating trade-offs. For instance, in certain nations, collective bargaining has been utilised to strike a compromise between company and worker interests regarding flexible work schedules and lower overtime costs, as well as worker interests about work/life balance. The outcomes of collective negotiations are more likely to be viewed as fair and equitable than those reached through individual bargaining or unilateral contracting when a procedure of good faith bargaining is followed. For the term of the agreement, collective bargaining agreements may contain peace clauses that outline grievance procedures and how to resolve grievances. Stronger and more stable labour relations may result from this. The laws governing work relations are given legitimacy through collective bargaining. There is a higher likelihood of compliance when job and employment terms and conditions are discussed.
EFFECTIVE RECOGNITION TO THE RIGHT
If the employer refuses to recognise the trade union or to participate in collective bargaining, workers’ rights to create or join organisations in order to engage in collective bargaining cannot be achieved. Providing facilities as needed to support the drafting of collective bargaining agreements is also beneficial. One way to do this would be to provide workers’ representatives with the time off they need to attend union meetings or perform their representative duties, all without sacrificing their income or benefits.
Ram Prasad Viswakarma v. Industrial Tribunal[4] (1961) observed that collective bargaining helped workers get a better work environment. It also noted that before collective bargaining, laborers had difficulty negotiating their contracts.
Effective collective bargaining requires that all sides engage in it with sincerity. This includes giving the information required for fruitful discussions to the workers’ representatives. Workers’ representatives should be able to get a true and fair picture of the performance of the enterprise. Companies can act on multiple fronts for effective recognition of rights:
At work:
- Giving worker representatives the resources they need to help create a successful collective bargaining agreement. One way to do this would be to provide workers’ representatives with the time off they need to attend union meetings or perform their representative duties, all without sacrificing their income or benefits.
- Acknowledge representative groups in order to engage in collective bargaining. If the employer refuses to recognise the trade union or to participate in collective bargaining, workers’ rights to create or join organisations in order to engage in collective bargaining cannot be achieved.
- Give the information required for fruitful negotiations. Workers’ representatives need to be able to get an accurate and impartial picture of the company’s performance with the use of this information.
- Give union representatives access to actual decision-makers so they may engage in collective bargaining. Make a sincere deal. Effective collective bargaining requires that both parties engage in it with sincerity.
- Restructuring and training, redundancy processes, safety and health concerns, grievance and dispute resolution procedures, and disciplinary rules are just a few of the issues that need to be addressed in order to meet the demands of both management and employees.
- Take action to enhance labor-management relations, particularly in nations lacking sufficient institutional and legal frameworks for collective bargaining and trade union recognition.
PROCESS OF COLLECTIVE BARGAINING
The International Labour Organisation (ILO) asserts that the process of collective bargaining is a basic right that all employees of any organisation are entitled to. This means that every employee in a company has the right to file grievances with their employers and to engage in negotiations regarding those grievances. Additionally, the ILO states that collective bargaining gives workers labour protection and contributes to the reduction of workplace inequality.
Collective bargaining typically takes place between labour union officials and employees of a corporation. These union leaders are typically chosen by their fellow employees to voice their concerns and advocate on their behalf. When an employee’s contract is up for renewal or when an employer modifies any conditions of the contract or the workplace, collective bargaining is triggered. These adjustments consist of, but are not restricted to:
- Workplace conditions
- working conditions
- Rules and regulations pertaining to the workplace
- Issues with base pay, earnings, and overtime compensation
- Vacations, sick days, and holidays
- Benefits pertaining to matters like health care and retirement
FREEDOM OF ASSOCIATION
One crucial prerequisite for effective collective bargaining is the ability to organise and represent oneself as a trade union. The likelihood of collective bargaining succeeding is nil if employers and employees are not granted such freedoms. Successful collective bargaining requires a spirit of fair play and “give and take” from all sides. Only if the process is built on mutual respect and both sides take the other’s perspective into consideration rather than being obstinate about getting their needs and wants met will it have a happy conclusion.
We cannot expect collective bargaining to be successful if any of the parties use unfair or unhealthy tactics, such as delaying the submission of work or the employer victimising trade union leaders. Furthermore, the idea of collective bargaining suffers if the employer uses a lockout or the employees declare a strike in response to a breach of an earlier agreement reached by the parties.
The ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (“the ILO MNE Declaration”) provides companies with a very useful framework for development of a mature system of industrial relations. Convention No. 98 (in Articles 4-6) establishes the relationship between collective bargaining and the conclusion of collective agreements for the regulation of terms and conditions of employment.
PRINCIPLES GOVERNING
- Free and voluntary negotiation
Article 4 of Convention No. 98′ expressly states that collective bargaining is voluntary. Despite the fact that many national laws require the parties to follow set procedures outlining every step of the negotiation process and that involve frequent, mandatory interventions by the administrative authorities within set time limits, the supervisory bodies’ principles emphasise that the mechanisms supporting bargaining—such as the provision of information, consultation, mediation, and arbitration—should be of a voluntary nature.
- Free choice of bargaining level
When conflicts are categorised based on levels, it is easier for all parties to identify the resolution and the industry’s behaviour, facilitating a speedy settlement between the parties. Management and the national-level union typically engages in national-level negotiations. The benefit of this kind of bargaining is that, when the negotiating process starts, all industries identify the problems and take into account all industrial employees.
Trade unions are arranged as industry federations for the purpose of bargaining at the industry level. An industry-wide bargaining process guarantees uniform labour costs and working conditions. But as we can see, every organisation or business has varying degrees of productivity, technology usage and access, performance, etc., which has made industry-level bargaining less effective.
Corporate-level bargaining is the process by which the management of a multi-plant corporation negotiates and discusses a single agreement with various unions representing different factories within the same organisation. Corporate management routinely engages in these kinds of talks.
Most private sector companies in India participate in collective bargaining at the plant level. The management of a particular factory or industrial site engages in this kind of bargaining. The complaints and problems are highly specific to a certain business or institution. These kinds of agreements are based on issues that include talks about productivity, related to remuneration or performance.
- The principle of good faith
Convention No. 154, recognizes that collective bargaining could only function effectively if it was conducted in good faith by both parties; but as good faith cannot be imposed by law, it “could only be achieved as a result of the voluntary and persistent efforts of both parties” (ILO, 1981, p. 22/11)
INDUSTRIAL DISPUTES ACT, 1947
In the IDA 1947, the s. 2A defines ‘industrial disputes’ as a dispute between an employer and an employee, notwithstanding the other parties being the workmen’s union or any other workman, connected with or arising out of discharge, dismissal, retrenchment or termination of an individual workman.
S.33 provides for protection of workmen during the pendency of proceedings before the conciliation officer or a Board or an arbitrator or a labour court or tribunal or National tribunal. The conditions of labour shall not be altered during the pendency of proceedings. Where any contravention of provisions is made, an employee aggrieved may u/s. 33A make a complaint in writing to the respective officer, which shall be taken into account trying a mediation on the dispute else the complaint shall be adjudicated as if it were a part of original dispute.
The Fifth Schedule gives a comprehension to the s.2(RA), about the Unfair Trade Practices. The schedule is a protection and recognition of the Rights of collective bargaining or other mutual aid. The schedule provides the workmen right to organise, join, or assist a trade union.
OTHER LABOUR LAWS
- Industrial Employment (Standing Orders) Act 1946
- Labour Laws and Constitution of India
- Collective Bargaining
- Maternity Benefits Act 1961
- Labour Law Compliance Rules
- MRTU and PULP Act, 1971
- Indian Industrial Disputes Act, 1947
- The Payments of Gratuity Act, 1972
- Worker’s Compensation Act 1923
- The Payments of Gratuity Act, 1972
STEPS IN COLLECTIVE BARGAINING
Collective bargaining can be an intense process that can be stressful and difficult for all parties involved. It often involves a lot of back-and-forth, with offers and counteroffers. But the end goal is to reach an agreement. The process goes through a number of stages. These steps can be summed up as follows:
- Identifying the issues and preparing the demands:This may include a list of grievances, such as abusive management practices or low salaries.
- Negotiating: The union will hire a team of professional negotiators to reach an agreement with the employer. The employer will also hire negotiators, and the two teams will continue to meet until they find a satisfactory agreement.
- Tentative agreement: Upon reaching a consensus, the negotiation teams will present the agreement to their respective constituencies. Any last-minute concerns will now be brought up while the specifics are worked out.
- Endorsing and approving the contract: Union members will be given the chance to vote for or against the new contract after it is presented to them.
- Putting the agreement into practice: Workers and shop stewards will keep an eye on the corporation to make sure it is adhering to its duties after an agreement is finalised.
However, there are situations in which the parties are unable to reach a consensus. In the event that negotiations conclude without a collective bargaining agreement in place, union representatives could advise employees to go on strike in order to get their demands fulfilled.
CONCLUSION
The processes for resolving industrial disputes that have been established have developed over time as a result of rulings from the highest court. However, rather than serving to fulfil the original intent of the legislation, they have created confusion and sparked numerous legal disputes. A single judge of the Karnataka High Court has made a notable argument that Section 10 should be appropriately amended to allow a worker to directly approach an adjudicatory body regarding an industrial dispute that falls under the purview of Section 2A of the Industrial Disputes Act, rather than going through the laborious and pointless reference procedure outlined in Section 10.
It should also be eliminated that such conflicts must be referred to the relevant government for resolution. The adjudicatory organisations ought to have the original authority to decide on these disputes by conducting a thorough investigation into the particulars of each case. The application of the aforementioned recommendations w ill aid in creating a suitable setting for resolving labour disputes, preventing needless, costly, and time-consuming legal action.
[1] https://www.ilo.org/global/about-the-ilo/lang–en/index.htm
[2] https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312299
