Tamil Nadu National Law School Tiruchirappalli

(A State University Established By Act No.9 of 2012 )

Navalur Kuttapattu ,Srirangam (TK),Tiruchirappalli - 620 009 Tamil Nadu

Research Project on Labour Law I

(Industrial Relation)

''Bargaining Theory and The Trade Union''

By
Tamilarasan Varadarajan
BA.LLB(Hons), III Year
5th Semester
Section '' B'' - BA0130069

TABLE OF CONTENTS

An Project - '' Bargaining theory and Trade Union''

1. Introduction
2. Concept, Meaning and Definition of the collective bargaining.
Objectives of the collective bargaining
Subject-matter of collective bargaining
Parties to collective bargaining
Pre-requisites for collective bargaining
Advantages and Disadvantages of collective bargaining
3. International Labour Organisation's Convention on bargaining theory
ILO principles and convention
ILO Declaration in relation to collective bargaining
Supervisory mechanisms
India's stand on the ratification of conventions 87 And 98.
4. Indian Labour Laws and collective bargaining rights
The Constitution of India, 1950
Trade Union Act, 1926
Industrial Disputes Act , 1947
Collective bargaining rights
5. Recommdations and Suggestions
6. Conclusion
7. References and Bibliography

UNIT - I
INTRODUCTION
The Topic entitled to researcher have wide importance in the study of Industrial relations
between the labour and management .i.e. Collective Bargaining and Trade Union. Collective
bargaining is a method by which the industrial related problem like wages and conditions of

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employment are resolved amicably, peacefully and voluntarily between labour and
management without the intervention of state. It is recognised as a right of social importance
and having influence on India's five year plans. The Constitution of India ,1950 guarantees
the fundamental right to form association or union under the Article19(1)(c),but this
guarantee does not include recognition of trade union. This system of Collective bargaining
has been adopted from the industrially developed and advanced countries like United States
of America and United Kingdom. The Collective bargaining avoids the unnecessary litigation
and promoting the Industrial Harmony between the labour and management which is one of
important essential for the economic progress i.e. By ways of undertaking from both
employer and workmen, co-operation and sense of partnership. The Consumers who are the
victims of many of the collective bargaining agreements are kept out of the bargaining table.
Another drawback is that if collective bargaining fails, the strike or lockout will be the
immediate consequences. Without the recognized Trade Union, it is impossible to effect the
collective bargaining agreements. The recognition of the labour union is always in question
and Trade Union Act does not speak about the compulsory recognition of registered trade
Union. This Research works intends to explain the Collective bargaining principles in Indian
context and how does it differ from the version proposed by International Labour
Organisation (ILO). India who is the founding member of ILO, ratified the basic four core
conventions, left out the Convention No: 87and 98. The Convention No: 87 and 98 which
creates the mandate for the ratifying countries to implement the collective bargaining
principles and recognised the Trade Union. This Project mostly elucidate the bargaining
principles, state the reasons on which the collective bargaining opposed the intervention of
State in Industrial Disputes between the labour and Management. Further, the absence of any
statutory provisions at the central level for the recognition of representative trade union
affects the bargaining power of the Trade Union. Section 36 of Industrial Dispute Act, 1947
enables the worker to be represented by union but it does not enable a union to represent its
members. The first unit in my project speaks about the concept, meaning and definition of the
collective bargaining .The

Second unit focus about the role of

International Labour

Organisation' convention on bargaining theory .This was followed by Indian Labour Laws
and collective bargaining rights and ends with recommdations and suggestions.
RESEARCH OBJECTIVE
1. To know the applicability of bargaining principles in Indian Context.

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2. To critically examine the Pros and Cons of the Collective Bargaining Principles in
relation with Industrial Dispute act, 1947.
3. To understand the impact of bargaining principles proposed by ILO in Indian Trade
Unions.
RESERACH QUESTION
1. Whether Collective bargaining theory have full applicability in Indian Context?
2. Whether workers having constitutional right of enforcing the Principles of Collective
Bargaining under the Constitution of India, 1950?
3. How bargaining theory in India is differed from rest of the world.
RESEARCH METHODOLOGY
The Research Methodology adopted is purely doctrinal in nature with the aid of both primary
and secondary sources. The former includes Statutes, Regulations, Conventions and Orders
issued by the competent authorities from time to time while the latter includes books, journals
& periodicals, speeches, legal encyclopaedias and Reports & Article given by the various
Universities and Other Organisation etc.
LITERATURE REVIEW
The Researcher used the following books for reference in order to indentify the core issues
which revolving around the ''Bargaining theory and Trade union''.

This Researcher

analysed ''The National commission on Labour ,1968'' and the ''Reports of the International
Labour Office given by the ILO decent work team for South Africa''. Suresh C. Srivastava,
Industrial Relations and Labour Laws,(6thEd, First Print 2014),Vikas Publicising House Pvt.
Ltd ,Uttar Pradesh. India. - This book gave an detailed explanation about the concept of
collective bargaining , but it did not give that much information

about the collective

bargaining in the Indian context .This book is quite well to understand the inner lying
concepts and principles of the Collective bargaining . Prof. K.M. Pillai, Labour and Industrial
Laws , (15th Ed.2013), Allahabad Law Agency. India.- The Researcher gets detailed basic
information about the research from the above book stated and understand the context in
which the research projects revolves. The books which the researcher referred above did not
gave much detailed about the international bargaining standard of Labour. The Researcher
understood the position of Indian labour and their reforms & ratification methodology of the
Indian Legislation regarding the enforcement of collective bargaining principles in India
from the National Commission on Labour report, 1968, Reports of the International Labour
office (ILO).
UNIT -II
CONCEPT, MEANING AND DEFINITION OF THE COLLECTIVE BARGAINING

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What is meant by collective bargaining ?
The expression of Collective Bargaining'' was coined by Sydney and Beatrice. 1 This
was widely accepted in United States of America. The meaning of the expression '' Collective
bargaining '' has been the subject matter of controversy and it is defined in a variety of ways.
Harbison defines collective bargaining as "a process of accommodation between two
institutions which have both common and conflicting interests. 2. In 1960, in the manual
published by the '', International Labour Office'' Collective bargaining has been defined as "
'' negotiations about working condition 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 organisation on the other, with a view
to reaching agreement.'' 3
Golden treats collective bargaining

'' as a measure to distribute equitably the benefits

derived from the industry among all the participants including the employees, the union, the
management, the customers, the suppliers and the Public' 4'. There is no uniformity among the
authors regarding the meaning of Collective Bargaining.
According to Dale Yoder5 ''
Collective bargaining is the term used to describe a situation in which the essential
conditions of employment are determined by bargaining process undertaken by
representatives of group of workers on the one hand and of the one or more
employers on the other. ''
1 Sydney and Beatrice, Industrial Democracy, (1897,879-900,Vol 2), Universities of Connecticut
libraries London .
2 F.H Harbison, Goals and strategy in Collective Bargaining,(Harper and Bros,1951)University of
Illinois.
3 International Labour Office, Collective Bargaining (A Worker's Education Manual), Geneva.(1960),
(P.3) See also, S.C. Srivastava, Industrial relations and Labour Laws, 148,(16th Ed, first reprint
2014), Vikas publishing House Pvt .td, New Delhi.
4C.S Golden, causes of Industrial Peace under the collective bargaining, USA (1947), the National
Planning Association.
5 Smrithi Chand, Collective bargaining Meaning, objective and Importance,
http://www.yourarticlelibrary.com/hrm/collective-bargaining-meaning-objectives-and-importance/35472/ last
accessed on 01.10.2015 at 4. 55 pm (N.T.M).

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In the words Flippo6,
'' Collective bargaining is a process in which the representatives of a labour
organisation and the representatives of business organisation meet and attempt to
negotiate a contract or agreement, which specifies the nature of employee - employer
(union) relationship.''
Perlman aptly stated,7
"Collective bargaining is not just a means of raising wages and improving conditions
of employment. nor is it merely democratic government in industry. It is above all
technique, collective bargaining as a technique of the rise of a new class is quite
different ...... from the desire to displace or abolish" the "old ruling class"... ... to gain
equal rights as a class ... ... to acquire an excessive jurisdiction in that sphere where
the most immediate interests, both material and spiritual, are determined, and a
shared jurisdiction with the older class or classes in all other spheres.'
In toto,
'' Collective Bargaining is a process by which the terms of employment and the
conditions of service are determined by an agreement between management and the
union. In Effect to that, it is a business deal which determines the price of labour
services and the terms and the condition of labour's employment8.''
The Supreme court in Karnal Leather Karmachari Sangatham v. Liberty Footwear Co. 9
defines Bargaining theory as
'' A technique by which disputes as to Conditions of Employment are resolved
amicably, by agreement rather than coercion. The Dispute is settled peacefully and
voluntarily, although reluctantly, between the labour and management.''
It is the process of discussion and negotiation between an employer and a union culminating
in a written agreement or contract and the adjustment of problems arising under the
agreement and all the Industrial dispute Act and other labour legislations seeks to achieve
6Dr. Ravi Shekhar Vishal, Collective Bargaining,
https://docs.google.com/presentation/d/1qhr40Wzt8Oc_KLYF6oHCt1pdgL9RYJftfHWgjbzWkk/edit#slide=id.p
15 Last Accessed on 01.10.2015 at 4.59pm (N.T.M)

7 Arividam, Collective Bargaining, Concept & impact in India.

https://arividam.wordpress.com/2012/10/20/cb/ Last accessed on 01.10.2015.at 5.05 (N.T.C)

8 James J. Healy (Ed.), Creative Collective Bargaining, Prentice Hall, 1965,9.

9 1990 Lab IC 301 (SC)
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social justice10 on the basis of collective bargaining. In the present day context, the collective
bargaining, has become a great and inevitable feature of the industry. The trade union
movement in India has not been able to reach that standard which its counterpart, in all
developed countries could, yet it has done much. The object of labour movement at all the
times is to seek an ever rising standard of living, which is not more money but more leisure
and richer cultural life11. Collective bargaining is not only means of seeking a voice in
management12. The analysis of ''Collective bargaining'' requires the description of following
headings in order to understand the principles of collective bargaining in nexus with the
Trade Union.
OBJECTIVES OF THE COLLECTIVE BARGAINING :
The International Confederation of Free Trade Union called collective bargaining ''A worker's
Bill of Rights''. It is enumerated the following objects of the union in Collective Bargaining
1. To establish and build union recognition as an authority in the work place.
2. To raise workers standard of living and win a better share in the company's profit.
3. To express in a practical terms the worker's desire to be treated with due respect
and to achieve democratic participation in decisions affecting their working
conditions.
4. To establish orderly practices for sharing in these decisions and to settle dispute
which may arise in day to day life of the company.
5. To achieve board general objectives such as defending and promoting the workers
interest throughout the country.13
The following are also the other objectives of collective bargaining
Balances the legitimate expectations of labour and management i.e. The employer can
expect the most qualified labour at the permissible margin of investment. The labour
can expect the wages, allowances, and proper working conditions from the employer.
(''consensus ad idem'').The consensus is an important deciding factor.
Maintain equality between the individual worker and the Employer. The bargaining
power of an individual worker is weak because of factors like illiteracy, indebtedness
10 Titagarh Jute Co. Ltd. v.. Sriram Tiwari (1979) ILLJ 495 Cal.
11George Meany, what Americans Labour Wants,(July 1955) 12.
12 Id at 12.
13 Mary Sur, Collective Bargaining (1956),4..
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and socio-economic backwardness. It is accepted as a vehicle to take the voice of the
labour.
Industrial democracy which is ultimate aim of the Collective bargaining which can be
implemented in form of Trade Union . Collective bargaining can be a vehicle for the
peaceful co-existence between the employer and employee, democratization of
industrial life.
Collective agreements govern employment relationships in the bargaining unit and
thereby create generally applied standards.
SUBJECT-MATTER OF COLLECTIVE BARGAINING :
The International Labour Organisation has divided the subject matter of Collective bargaining
into two categories.
1. Those which set out standard of employment which are directly applicable to the
relations between the individual employer and worker.
2. Those which regulate the relations between the parties to the agreement themselves
and having no bearing on individual relations between the employers and workers.
first categories includes wages, working hours, holiday with pay and period of native of
termination of contract.
According to ILO, the second category includes eight items, i.e. the provision of enforcing
collective bargaining, methods of settling individual dispute, collective bargaining dispute
including grievance procedure and reference to conciliation and arbitration, recognition of
union as the bargaining agent of the workers, giving preference in recruitment to union
member seeking employment, duration of agreement, undertaking not to resort to strike or
lockout during the period and procedures for negotiation of new agreements14.
The other views about the subject of collective bargaining are as follows, the managing the
dispute of contract of employment relationship between employers and workers, and the
administration of the contract with the help of negotiation, agreements . It has been
recognised as a method of determining the wage rates and other terms and conditions of
employment and of regulating the relations between the management and organised
labour15.Collective bargaining includes provisions with respect to hiring, lay-offs,
promotions, transfers, work scheduling, work assignment, wages, welfare programmes,
retirement benefits, discipline, etc. The principle of hire and fire are implicitly present in the
collective bargaining agreements. This is an important method of regulating and balance the
14 Id at 46.
15Frankline, Features of the Collective Bargaining https://www.coursehero.com/file/p3hc4l/Features-ofCollective-Bargaining-The-features-of-collective-bargaining-are-as/ last accessed on 02.10.2015 at 7.06 am
(N.T.M)

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relations between the employers and employees with the help of instruments like negotiation,
administration and enforcement of the written contracts between the parties. It is process of
resolving between the parties within themselves without there is an intervention of state.
PARTIES TO COLLECTIVE BARGAINING:
Collective bargaining involves the two parties namely, management represented either alone
or through employers, association or federation of employers' on the one hand and workers
represented either through a union or workers federation on the another hand. These two
parties are directly involved in the process of Collective bargaining. In short terms,
2 parties
Management

either alone or
through employers association or
federation of employers

Workers
union or
workers federation bargaining agents
It has, however been debated time and again that a representation of the public should also be
included to represent the interest of public at the beginning table, but has not yet been used
much.16
PRE-REQUISITES FOR COLLECTIVE BARGAINING:
Freedom of association : In order to achieve collective bargaining, it is essential to
ensure that the denial of such freedom negates collective bargaining. In the respect, it
is significant to note that the International Labour Organisation adopted the
convention no: 87 concerning freedom of association and the protection of the right
to organise which seeks to provide for freedom of association. India which is not
ratifying this convention due to constitutional and administrative contingencies. In
constitution under the Art 19(c) guarantees the right to form association or unions.
however the Trade Unions Act, 1926 impliedly accepted the freedom of association
by conferring certain rights, duties and immunities upon members of registered trade
union.

16 Bartram F.Willcox, A Sketch of the Federal Law of Labour in the United states Aligarh Law
Journal (1965) 39.
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Strong stable trade union: There should be a strong, independent, democratic and well
organised trade union. Unorganised labour is the hurdle in its success. In India, the
union are generally weak because of diverse nature on the basis of caste, creed,
religion, and different political ideologies. The financial position of Trade Union is
weak and unable to maintain the proper office.
Recognition of trade union: recognition of trade union as the bargaining agents is the
backbone of collective bargaining.
Willingness to give and take : The mutual trust and appreciation of the view points of
the management and union is also essential. ILO states that '
'The fact of entering into negotiations implies that difference between the two
parties can be adjusted by compromise and concession in the expectation that
agreement can be reached. obliviously, if one or both sides merely make
demands when they meet, there can be no negotiations or agreement.17
Absence of unfair labour practices or victimizations: statutory provisions for unfair
labour practise or victimisation are another prerequisite of the collective Bargaining.
ADVANTAGES AND DISADVANTAGES OF COLLECTIVE BARGAINING
Collective bargaining has been preferred over compulsory adjudication system for several
reasons:
Advantages:
It is a system based on bi-partite agreement agreements.18
Quick and effective system of settlement disputes
Avoid unnecessary litigation
Democratic method of settlement of industrial dispute
No intervention of state
Disadvantages :
Situations in which a serious and prolonged strike simply cannot be tolerated19
Lack of represent from the public.
Public interest cannot be taken in an account.
When the prices are increased, only consumer must bear the burden.20

17 ILO Collective Bargaining , A worker's Education Manual , Geneva (1960) ,128.

18 Government of India, Report of the National Commission on Labour(1969), 325.
19 Bartam .F. Willcox : op.cit.
20 Id at 37.
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UNIT -III
INTERNATIONAL LABOUR ORGANISATION'S CONVENTION ON
BARGAINING THEORY
I.

ILO PRINCIPLES & CONVENTION :

The standards and principles emerging from the ILO'S conventions, recommdations and other
instruments on the right to Collective bargaining and the principles set forth by the
Committee and the freedom of association may be summarized as follows :
1. The right to collective bargaining is a fundamental right endorsed by the members
of the ILO in joining the Organisation, under which they have an obligations to
respect, promote and to realise ,in good faith (ILO Declaration on fundamental
principles and right at work and its follow up ) the right to collective bargaining.
2. Collective bargaining is the right of the employers and their organisations, on the
one hand and organisation of workers, on the other hand ( first level trade union ,
federations and confederation ) only in the absence of these latter organisation,
may representatives of the workers concerned conclude collective agreements.
3. The right to collective bargaining should be recognised throughout the private and
public sectors and it is only the armed forces , the police and the public servants
engaged in the administration of the state who may be excluded from the exercise
thereof. (Convention No.98.)21
The Convention no: 87- Freedom of association and protection of the right to organise
convention, 1948 clearly explains about the freedom of association including the right to
form and join unions for the protection of ones rights and interests has been recognized as
one of the fundamental human rights. It is derived from the inherent dignity of the human
person. The preamble to the constitution of the ILO indicates that recognition of the
principles of freedom of association is vital for the improvement of the conditions of labour
and the achievement of universal and lasting peace. The Declaration of Philadelphia that is
appended to the Constitution of the ILO reaffirms that freedom of association is essential to
sustained progress. The two main conventions of the ILO that protect the freedom of
association of workers are

21 S.C. Srivastava, Industrial relations and Labour Laws, 148,(16th Ed, first reprint 2014), Vikas
publishing House Pvt .td, New Delhi
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The Freedom of Association and Protection of the Right to Organize Convention,

1948 (Convention No. 87).

The Right to Organize and Collective Bargaining Convention, 1949. (Convention No.

98). 22
Freedom of Association and Protection of the Right to Organise Convention, 1948 (No.
87) - This is an one of the important fundamental Convention applies to all workers-with the
exception of the armed forces and the police and all employers and further explains about the
right of the workers and employers organizations shall have the right to establish and join
federations and confederations.
It can also gave right to affiliate with respective international organizations. The Convention
also guarantees to workers and employers organizations the right to draw up their
constitutions and rules, and elect their representatives in full freedom & to organize their
administration and activities and to formulate their programmes. This convention not
guarantees any right to strike. However, the right to strike is considered to be an intrinsic
corollary of the right to organize guaranteed. in the Articles 3, 8 and 10 of the convention and
also guarantee to trade unions the right to organize their administration and activities and to
formulate their programmes and further the interests of workers have been interpreted as
being inclusive of the right to strike. 150 member states of the ILO have ratified Convention
No. 8723.
Right to Organise and Collective Bargaining Convention, 1949 (No. 98) . It guarantees to
all workers adequate protection against acts of anti-union discrimination in respect of their
employment. and provides that such protection shall apply more particularly in respect of
acts calculated to:
make the employment of a worker subject to the condition that he shall not join a

union or shall relinquish trade union membership24 or

cause the dismissal of or otherwise prejudice a worker by reason of union
membership or because of participation in union activities outside working hours or
with the consent of the employer, within working hours. It also protects workers
organizations from acts of interference by employers or their organizations.

In

addition to this, it also requires member states to take appropriate measures to

22 International Labour Office, Challenges, Prospects and Opportunities of Ratifying ILO Conventions Nos. 87
and 98 in India, ILO Decent Work Team for South Asia ,5 (First Published 2011) New Delhi.

23 Id. at 5
24 Id at 6.
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encourage and promote collective bargaining between workers organizations and
employers or employers organizations and workers organizations and to regulate the
terms and conditions of employment by means of collective agreements. 160 member
states of the ILO have ratified Convention No. 98.
II.
ILO DECLARATION IN RELATION TO COLLECTIVE BARGAINING
ILO Declaration Of Fundamental Principles And Rights At Work And Its Follow-Up
These are some informal normative instruments as considered a informal labour standards.
The Declaration requires all member states to respect, promote and realize the principles
contained in the '' Eight fundamental conventions relating to the freedom of association and
the effective recognition of the right of collective bargaining''. It proclaims that all member
states have an obligation to do so, arising from the very fact of their membership of the
organization. The Member States which have not ratified the core conventions on freedom of
association and collective bargaining are required to submit annual reports 25 indicating the
status of law and practice regarding these principles in their countries, the measures taken to
realize the rights, the difficulties encountered in the realization of the rights and the kind of
technical assistance needed from the ILO to realize these rights. The International Labour
Office compiles information on the basis of the annual reports submitted by the concerned
member States and the observations made thereon by employers and workers organizations.
ILO Declaration On Social Justice For A Fair Globalization, 2006.
This declares that decent work should be placed at the centre of economic and social policies
of member states. It sets out the four objectives of the Decent Work Agenda26:

promoting employment by a creating a sustainable institutional and economic

environment;
developing and enhancing measures of social protection;
promoting social dialogue and tripartism as the most appropriate methods
respecting, promoting and realizing the fundamental principles and rights at work.

25International Labour Organisation ILO Declaration Of Fundamental Principles And Rights At Work And Its
Follow-Up http://www.ilo.org/declaration/lang--en/index.htm Last accessed on 02.10.2015 at 10.44 am
(N.T.M)

26 International Labour Organisation, About the ILO,http://www.ilo.org/global/about-the-ilo/decentwork-agenda/lang--en/index.html Last accessed on 02.10.2015 at 10.44 am (N.T.M)
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SUPERVISORY MECHANISMS: The two main supervisory mechanisms 27 of the

III.

ILO concerned with the freedom of association and collective bargaining rights of

workers are
The Committee of experts on the application of conventions and recommendations
The International Labour Conferences' Tripartite committee on the application of

convention and recommdations28

The Committee on freedom of association.

The Committee of experts on the application of conventions and recommendations (CEACR)

is a twenty member body consisting of eminent jurists drawn from member States who are
appointed by the governing body of the ILO. Article 22 of the ILO constitution requires each
member states are required to submit reports once every two years in respect of each of the
fundamental conventions they have ratified including convention Nos. 87 and 98 and the
priority conventions. The Conference committee on the application of standards is a tripartite
body appointed by the governing body of the ILO and consists of representatives of the
governments of member states, employers and workers. The Committee examines the annual
report of the CEACR that is submitted to the International Labour Conference (ILC) through
the governing body and chooses from it issues of concern for discussion. The Committee on
freedom of association (CFA) is a tripartite body consisting of nine members with three
members each drawn from representatives of governments, workers and employers in the
governing body. Thus, 'workers' organizations from ILO member States that have not ratified
either convention nos. 87 or 98 can also prefer complaints to the CFA. 68 29 complaints
concerning the freedom of association and collective bargaining rights of workers in India
have so far been examined by the CFA.
IV.

INDIA'S STAND ON THE RATIFICATION OF CONVENTIONS 87 AND 98. The

Ratification would ensure that that the national legislation relating to the freedom of
association and collective bargaining rights of workers is upgraded in conformity with the

27 International Labour Organisation, ILO Supervisory Mechanism,http://www.ilo.org/global/aboutthe-ilo/how-the-ilo-works/ilo-supervisory-system-mechanism/lang--en/index.htm Last accessed on

02.10.2015 at 11.00 am( N.T.M)
28 Supervision of ILO Convention http://www.ilo.org/wcmsp5/groups/public/---asia/--robangkok/documents/presentation/wcms_100412.pdf Last accessed on 30.09.2015 at 5.00 pm
(N.T.M)
29 Supra Note 22 at 10.
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principles contained in conventions Nos. 87 and 98. The ratification would also help
ensure that all categories of workers in India are entitled to these rights. In addition,
ratification would help ensure compliance with freedom of association and collective
bargaining principles in practice. The government of India has however over the last 60
years consistently been reluctant to ratify the conventions. The government of India has
indicated that it is not interested in formal ratification and that
'' it can ratify the conventions only when implementation of their provisions is fully
achieved in Indian law'30' and in practice.
The government can work towards bringing its national laws and practice in conformity
with the principles contained in the conventions. In the process, it could be guided by ILO
supervisory bodies, particularly, CEACR and the CFA. India is taking effects to
implement and enforce these mandatory rules which is present in the convention. It will
consume more time for India to implement all these measures because of its approach
towards the socialism which is deeply enriched in the
fundamental

& basic features which can be touched

Indian constitution as a
even by an constitutional

amendments.

30 The Government of India, The National Second Labour Law Commission report.,35.
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UNIT -IV
INDIAN LABOUR LAWS AND COLLECTIVE BARGAINING RIGHTS
This part of the project examines the extent to which workers having constitutional right of
enforcing the principles of Collective bargaining under the constitution of India, 1950? How
bargaining theory in India is differed from rest of the world? whether the central laws
concerning the freedom of association and collective bargaining rights of workers in India are
in conformity with the standards contained in conventions nos. 87 and 98.
1. THE CONSTITUTION OF INDIA, 1950.
The constitution of India in the chapters on fundamental rights justify the legality of
collective bargaining. In this context, Article 19(C) permits to form association and unions.,
but directives principles of the state policy also justifies the provisions for improving the
conditions of the labour in general and Article 43- A in particular provides that state shall
ensure the participation of workers in the management. The conflict lies between the DPSP
emphasised on the intervention of states in the labour policies and the fundamental right to
form trade unions and association. This was one of the debatable question and raised All
India bank employees association v. National industrial tribunal31, the apex court of India
considered the issue '' whether the right guaranteed by Article 19(1)(c) would be inclusive of
the right to collective bargaining and the right to strike''. The supreme court made to a
conclusion that collective bargaining is not elevated to be position of fundamental right
under Art 19(c), right to form an association or union under the constitution of India. In Re
Kerala education bill32 case, the supreme court observed that though the directives principles
cannot override the fundamental rights, nevertheless, in determining the scope and ambit of
fundamental rights the court may not entirely ignore the directive principles but should adopt
the principles of harmonious construction and should attempt to give effect to both as much
as possible In Kameshwar Prasad and others v. state of Bihar 33 and another, the SC held that
the right of workers to participate in peaceful and orderly demonstrations flows from Articles
31 AIR 1962 SC 171.
32 (1959) 1 SCR 995
33 AIR 1962 SC 1166.
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19(1)(a) and (b). In that case, the court ruled that rule 4-A of the Bihar government servants
conduct rules was in violation of Articles 19(1)(a) and (b) as it imposed a blanket ban on the
participation of government employees in demonstrations of all kinds including peaceful and
orderly demonstrations. The supreme court has held that the right of citizens to take out
public processions and hold public meetings flows from Article 19(1)(b) guaranteeing the
freedom of assembly read together with Article 19(1)(d). Therefore it is very crystal clear
from the above fact that collective bargaining is not the fundamental right under the
constitution of India.
2. TRADE UNION ACT, 1926.
The Trade Unions Act provides for the registration of trade union and determines the rights,
liabilities and immunities of the union. The object of this piece of legislation was to regulate
the relations between the employer and employee or among themselves and it is well
established that collective bargaining is one of the means of regulating such a relation. In the
case of D.N. Banerjee vs. P.R. Mukherjee, 34 the court recognises collective bargaining. and
observed that
having regard to the modern condition of society where capital and labour have
organised themselves into groups for the purpose of fighting their disputes and
settling them on the basis of the theory that union is strength, collective bargaining
has come to stay.
The amendments to the act effected in 2001 imposing a minimum membership requirement
on unions ( Section 4) for the purpose of registration and placing restrictions on outsiders
holding office in the union may be viewed as falling short of international labour standards.
Collective bargaining is the foundation of this movement, and it is in the interest of labour
that statutory recognition has been accorded to trade unions and their capacity to represent
workmen, who are members of such bodies. Section 22 of the Act places restrictions on
outsiders holding office in the trade union. In the case of Tamil Nadu electricity workers
Federation vs. Madras state electricity board 35, the madras high court observed that the whole
theory of organised labour and its statutory recognition in industrial legislation is based upon
the unequal bargaining power that prevails as between the capital employer and in individual
workman, or disunited workman.
3. INDUSTRIAL DISPUTES ACT , 1947

34 AIR 1953 SC 58.

35 AIR 1965 Mad.111
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The Industrial Dispute Act,1947 is enacted for providing solution , dispute settlement
system for the disputes arising in industries. According to Section 18 of the Act, A
settlement arrived at by agreement between the employer and workman otherwise than in the
course of conciliation proceeding shall be binding on the parties to the agreement . Thus,
settlement other than conciliation which may take place by a binding agreement between the
employer and the employee is nothing but an implication of the collective bargaining
agreement. The Industrial Disputes Act affords protection to office bearers and members of
trade unions from acts of anti-union discrimination, but it does not enable a union to represent
its members.
In Workmen of dimakuchi tea estate vs. The management of dimakuchi tea estate 36, the
examination of the salient provisions of the Act shows that the principal objects of the Act are
The promotion of measures for securing and preserving amity and good relations
between the employer and workmen
an investigation and settlement of industrial disputes, between employers and
employers, employers and workmen, or workmen and workmen, with a right of
representation by a registered trade union or federation of trade unions or association
of employers or a federation of associations of employers;.and
collective bargaining.
In the case of establishments where more than 100 workers are employed, the Act requires
the employer to obtain the permission of the government prior to effecting the lay off or
retrenchment of workers or closure of the concerned establishment.
In Karnal leather karamchari sanghatan (Regd.) vs. Liberty footwear company (Regd.) and
Ors37, Court laid down that Industrial Disputes Act, 1947 seeks to achieve social justice on
the basis of collective bargaining. The voluntary arbitration is a part of infrastructure of
dispensation of justice in the industrial adjudication.
In the case of Amalgamated coffee estates ltd. vs. Workmen38, the apex court held that the
process of negotiated settlements is at the heart of the solution of the collective disputes.
Unlike a settlement in the course of conciliation proceedings, a bipartite settlement with a
majority union is equally binding if it is held to be fair and reasonable.
COLLECTIVE BARGAINING RIGHTS
36 AIR 1958 SC 353 ) See also Supra Note 21 at 148..
37 1990 Lab IC 301 (SC)
38 (1995) IIILLJ 769 Kant
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The Industrial Disputes Act39 recognises the right of workers and their unions to collectively
bargain with employers and enter into collective agreements with them. The following statues
which recognized the collective bargaining Rights

S.2(p)
S.18., S.29.
S.19, S. 23 (c)
5th Schedule - unfair labour practices on the part of the employers and their

organisation.
Item 15 ( part I of 5th schedule ) - any refusal on the part of the employer to bargain

collectively in good faith with the recognised trade union is an unfair labour practice.
Item 3 ( part II 5th schedule)
These are provision which implicitly explain the bargaining principles in the

Industrial Dispute Act, 1947.

Legal vacuum in the Industrial Dispute Act, 1947 - Item 15 ( part I) and Item 3 (part II)
of the fifth schedule focusing the recognised unions "and in Item 4 (part II) mandates the
certification of a bargaining representative, the Act does not prescribe any procedure for the
recognition of trade unions or certification of a bargaining representative by the employer.

39 See, Industrial Dispute Act, 1947 , S.2(p),18,19,23,29.

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UNIT-V
RECOMMDATIONS AND SUGGESTIONS
Freedom of association and collective bargaining rights in practice - The Indian Labour
Laws did not effective in enacting and enforcing the freedom of association and collective
bargaining rights of workers. The Unionisation of unorganised sector of India is very low
and the changed economic context of India, since 1991 and the consequent change in
employment patterns in industrial establishments in the country has affected the unionization
of workers. Even permanent workers in industrial establishments are often unable to form and
join trade unions of their choice and exercise their collective rights on account of widespread
anti-union acts by employers. Employers often refuse to recognize representative unions.
India has so far not ratified conventions 87, 98, 138 and 182 which are the core ILO
conventions. The main reason for non-ratification of the above conventions create legally
binding obligations which are inconsistent with our Indian

laws and practices. The

ratification of these Conventions would lead to involve granting of certain rights that are
prohibited under the statutory rules for government employees namely, to strike work,
restrictions on maintaining any political funds, to openly criticize Government policies, to
freely accept financial contribution, to freely join foreign organizations etc. The smaller
union or organisations generally do not prefer the collective bargaining principles for
handling the dispute between the employer and workman. The reason

for the non

implantation are of given below

Due to the dominance of outsiders in trade unionism
There is multiplicity of unions which are weak and unstable, and do not represent

majority of the employees.

Inter-union rivalries, which further hinder the process of collective bargaining

between the labour and the management.

Trade Union are having political affiliations
The faith in the collective bargaining process is discouraged because parties to the
dispute may request the government to refer the matter to adjudication (very close
association between the trade unions and political parties).

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Trade union movement leads to political party propaganda rather than

giving

importance collective bargaining.

Collective bargaining provides a framework for deciding the terms and conditions of
employment without resorting to strikes and lockouts and without the intervention of
outsiders. In India, we have our own system of administration, allowing the disputed parties
to negotiate with the limited intervention of state. The management and the union can
develop a matured relationship. Instead of fighting amongst themselves, they should work
towards the betterment of the organisation. India following the socialist model of democracy
have to make laws for the welfare of the labour and union. The collective bargaining
principles are most relied upon the '' Laissez Faire'' which has deepen roots form capitalist
agendas. In Indian context, there should be an partial intervention of the state in order to
uplift the living stands of the workers. As far India is concerned, after the LPG, India shift
towards the socialist model to capitalist model of welfare state. This shift which ultimately
creates the balance between the bargaining principles and intervention of state in Industrial
Disputes.

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UNIT- VI
CONCLUSION
Collective Bargaining literally means the democratic way of an industrial life. For the
success of collective bargaining, the process must begin with proposals rather than demands
and the parties should be ready and willing to compromise otherwise the whole idea of
collective bargaining would be frustrated. In Indian context, the problem lies in the fact that
in the absence of any statutory provisions at central level, for the recognition of a
representative trade union by an employer affects the bargaining power of the trade union.
There is no representation from the unorganised Labour, and they are not represented by the
trade union, because of caste, creed, and religion is another characteristic of Indian trade
unions which come in the way of successful collective bargaining. Division of union on the
basis of political ideologies and weak financial are the prime most hurdles for recognition
of trade union. Therefore, India should provides for a recognition of the trade union at the
central level, so that peace and harmony will prevail with the management and workers,
which in turn can provide better service to the community and hence leads to the growth and
development of the economy. The progressive society will move from status to contract.
Collective bargaining as an effective tool for the settlement of industrial dispute, the
progressive society has to move otherwise i.e. from status to contract rather than from
contract to status and also vice versa.

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UNIT- VII
REFERENCES AND BIBLIOGRAPHY
Primary Sources
The Constitution of India, 1950
The Trade Unions Act, 1926.
The Industrial Disputes Act 1947
The Industrial Employment (Standing Orders) Act, 1948.
The International Labour Organisation Convention No: 87, 98
Secondary Sources
1. Suresh C. Srivastava, Industrial Relations and Labour Laws,(6 thEd, First Print
2014),Vikas Publicising House Pvt. Ltd ,Uttar Pradesh. India.
2. Prof. K.M. Pillai, Labour and Industrial Laws , (15 th Ed.2013), Allahabad Law
Agency. India.
3. H.K.Saharay, Textbook

on Labour and Industrial Law, 6th Ed, Universal Law

Publishing Co. New Delhi.

Reports:
1. International Labour Office, Collective Bargaining (A Worker's Education
Manual), Geneva.(1960
2. Government of India, Report of the National Commission on Labour(1969
3.

International Labour Office, Challenges, Prospects and Opportunities of

Ratifying ILO Conventions Nos. 87 and 98 in India, ILO Decent Work Team
for South Asia (First Published 2011) New Delhi.

Webliography
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3. http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/IndiaTrade-Unions-and-Collective-Bargaining.pdf, Last accessed on 05/09/2015 at 11.55
am.(N.T.M)
4. http://shodhganga.inflibnet.ac.in/bitstream/10603/8118/10/10_chapter%202.pdf
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5. http://shodhganga.inflibnet.ac.in/bitstream/10603/8118/13/13_chapter%205.pdf

accessed on 05/09/2015 at 12.05 am.(N.T.M).

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