INDUSTRIAL AND LABOUR LAWS

BRIEF DISCUSSION
1. DEFINE COLLECTIVE BARGAINING BRIEFLY. PROVIDE THE
OBJECTIVES OF COLLECTIVE BARGAINING.

Collective Bargaining refers to the discussion and negotiation between the employer and the
employees on the terms of employment, including the working environment, conditions of
employment, shift length, work holidays, vacation time, sick leave, and health care benefits,
as well as compensation-based items like basic pay, overtime pay and retirement benefits.

Collective bargaining is a process of negotiating between management and workers

represented by their representatives for determining mutually agreed terms and conditions of
work which protect the interest of both workers and the management. According to Dale
Yoder’, “Collective bargaining is essentially a process in which employees act as a group in
seeking to shape conditions and relationships in their employment”.

Michael J. Jucious has defined collective bargaining as “a process by which employers, on

the one hand, and representatives of employees, on the other, attempt to arrive at agreements
covering the conditions under which employees will contribute and be compensated for their
services”.

Edwin B. Flippo – “Collective bargaining is a process in which the representatives of labour

organization and the representatives of business organization meet and attempt to negotiate a
contract or agreement which specifies the nature of the employer – employee union
relationship.”

Dale Yoder – “Collective bargaining is the term used to describe a situation in which the
essential conditions of employment are determined by a bargaining process undertaken by
representative of a group of workers on the one hand and one or more employers on the
other.”

J.H. Richardson – “Collective bargaining takes place when a number of work people enter
into a negotiation as a bargaining unit with an employer or group of employers with the
object of reaching an agreement on working conditions of the employees.”

Thus, collective bargaining can simplify be defined as an agreement collectively arrived at by

the representatives of the employees and the employers. By collective bargaining we mean

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the ‘good faith bargaining’. It means that proposals are matched with counter proposals and
that both parties make every reasonable effort to arrive at an agreement’ It does not mean
either party is compelled to agree to a proposal. Nor does it require that either party make any
specific concessions.

Why is it called collective bargaining?

It is called “collective” because both the employer and the employee act collectively and not
individually in arriving at an agreement. It is known as ‘bargaining’ because the process of
reaching an agreement involves proposals and counter proposals, offers and counter offers.

What is the Collective Bargaining Agreement?

Collective Bargaining may lead to the Collective Bargaining Agreement (CBA), which
contains the policies acceptable to both i.e. the company’s management and workers. It states
the terms and conditions of employment and relation amidst the two parties. Further, CBA is
legally binding in nature.

Why is collective bargaining important?

Collective bargaining is important because it allows unionized employees to advocate for

their needs and define the terms of their employment. Through this process and a resulting
collective agreement, employees may gain access to various benefits that allow them to foster
more professional satisfaction and focus on producing high-quality work in the long term.
Here are a few of those benefits explained to help you understand the value of collective
bargaining:

 Standardized process for negotiation: Collective bargaining allows employees to

access a regulated process for negotiation through which they can effectively address
workplace challenges and introduce solutions that benefit an organization's
workforce.

 **Resulting contractual agreement:** As stated above, collective bargaining

usually results in a contract called a collective agreement that defines the terms and
conditions of employment for stakeholders. This agreement is typically binding, and
therefore, all parties involved must adhere to its terms until renegotiation occurs.

 ****Higher rates of pay:**** Collective bargaining allows unionized employees to

advocate for higher rates of compensation overall. According to a 2019 report from
the U.S. Bureau of Labor Statistics (BLS), union employees earn approximately 19%

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 more in weekly pay than their nonunion counterparts, which is likely a result of
collective bargaining.

 ****Workplace protections:**** Through collective bargaining, employees can

negotiate their workplace conditions and achieve protections regarding the number of
hours they can work on a daily, weekly or monthly basis, safety regulations and the
type of work they can perform. This can help employees establish a more secure work
environment.

 ****Comprehensive benefits packages: **** Collective bargaining and their resulting

agreements often provide employees with more comprehensive benefits packages.
These packages typically include provisions for benefits like employer-sponsored
health care, dental insurance, life insurance, paid time off (PTO), sick leave and
family leave.

 Arbitration provisions: Through collective bargaining, employees and employers

can come to an agreement about arbitration, an internal dispute-resolution method that
serves as an alternative to standard litigation processes. Arbitration allows for both
employees and employers to access a streamlined process for addressing employment
issues.

TYPES OF COLLECTIVE BARGAINING

It can be classified into five major types –

1. Distributive Bargaining: In this type of negotiation process, one party benefits at the
expense of others. It discusses redistribution of profit sharing to increase wages,
bonuses, or financial benefits.

2. Integrative Bargaining: In this type of bargaining, the agreement is reached so that

both the participating sides tend to benefit – a win-win situation. In other words, both
parties consider each other’s needs and concerns.

3. Productivity Bargaining: In this type of bargaining, the negotiations revolve around

productivity and pay. The two parties agree to certain changes that promise to boost
productivity in exchange for higher wages.

4. Composite Bargaining: This type of negotiation emphasizes various factors not

directly related to pay but rather focused on employee welfare and job security. It
ensures the long-term relationship between employer and employee that is mutually

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 beneficial.

5. Concessionary Bargaining: In this type of bargaining, the union sacrifices some

benefits to bail out the employer during the stressed economic situation, which
benefits the employees in the long run.

OBJECTIVES OF COLLECTIVE BARGAINING

Collective Bargaining is an effective way through which the employer and the trade union
can set fair wages and working conditions. It helps in improving the quality of labour
relations. The basic objective of collective bargaining is to arrive at an agreement between
the management and the employees determining mutually beneficial terms and conditions of
employment. The objectives of collective bargaining are:

1. Improve wages and benefits - The primary objective of unions in collective

bargaining is to negotiate higher wages and more comprehensive benefits for their
members. This helps improve members' standard of living and economic security.

2. Establish fair work rules and policies - Unions aim to bargain for policies and rules
that protect members' rights, ensure due process and promote fairness and justice in
the workplace. This includes grievance procedures, discipline policies, health and
safety standards, etc.

3. Secure job protections - Unions negotiate for contract provisions that protect
members' jobs like just cause for dismissal, seniority rights, layoff procedures, recall
rights and severance pay. This gives members stability and security.

4. Gain union rights and resources - Unions seek contract language that provides them
with the rights and access needed to effectively represent members. This includes
rights like dues deduction, access to members at work and relevant employer
information.

5. Foster due process and fairness - Unions aim to develop grievance and dispute
resolution processes that ensure an impartial procedure and fair outcomes for
members. This protects against arbitrary management decisions.

6. Promote worker voice and input - Unions seek to establish formal channels for
workers to provide feedback and input into workplace decisions that impact them.
This empowerment benefits both workers and employers.

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 7. Advance social justice goals - Unions aim to negotiate for policies, practices and
benefits that promote equity, diversity and fair treatment of all workers. This supports
unions' broader mission of advancing social and economic justice.

Furthermore, the major objective of collective bargaining can be divided into the following
sub-objectives:

 To foster a pleasant and cordial relationship between employer and employees.

 To equally safeguard the interests of both employer and employees.

 To ensure that the government intervention is maintained at a minimum level.

 To encourage the maintenance of a democratic environment at the workplace.

 To arrive at a decision or settlement which is mutually beneficial.

IMPORTANCE OF COLLECTIVE BARGAINING

The need for and importance of collective bargaining is felt due to the advantages it offers to
an organisation.

The chief ones are as follows:

1. Collective bargaining develops better understanding between the employer and the
employees:

It provides a platform to the management and the employees to be at par on negotiation table.
As such, while the management gains a better and deep insight into the problems and the
aspirations of die employees, on the one hand, die employees do also become better informed
about the organisational problems and limitations, on the other. This, in turn, develops better
understanding between the two parties.

2. It promotes industrial democracy:

Both the employer and the employees who best know their problems, participate in the
negotiation process. Such participation breeds the democratic process in the organisation.

3. It benefits the both-employer and employees:

The negotiation arrived at is acceptable to both parties—the employer and the employees.

ADVERTISEMENTS:

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4. It is adjustable to the changing conditions:

A dynamic environment leads to changes in employment conditions. This requires changes in

organisational processes to match with the changed conditions. Among other alternatives
available, collective bargaining is found as a better approach to bring changes more amicably.

5. It facilitates the speedy implementation of decisions arrived at collective negotiation:

The direct participation of both parties—the employer and the employees—in collective
decision making process provides an in-built mechanism for speedy implementation of
decisions arrived at collective bargaining.

The importance of collective bargaining is given as under:

 It improves wages and working conditions, as well as it promotes equality.

 It provides a stage to both the parties, i.e. management and workers to stand on the
same level at the negotiation table.

 It is influential in ensuring the adaptability of the companies and economies during

the economic crisis.

 It helps in developing trust and mutual respect between employers, workers and their
organizations.

 It increases stability and productivity in labour relations.

 It benefits both the parties, as the workers get fair remuneration for the work
performed, without impairing the capacity of the employers to work profitably.

 It facilitates the adaptability of the enterprise to a short term rise or falls in demand.

 It facilitates instant implementation of the decisions, made during the bargaining

process.

 It results in an increased worker’s commitment and enables information sharing.

 It also eliminates income inequality.

 It demonstrates the relative strength of the opposing parties.

Collective Bargaining takes place between employer and workers, to negotiate the new
contracts, as well as to renegotiate the existing ones.

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2. EXPLAIN THE PRE-REQUISITES OF SUCCESSFUL COLLECTIVE
BARGAINING PROCESS.
Existence of a strong representative trade union in the industry that believes in constitutional
means for settling the disputes.
 Existence of a strong and enlightened management which may integrate the different
parties, i.e., employees, owners, consumers and society or Government.
 Agreement on basic objectives of the organisation between the employer and the
employees and on mutual rights and liabilities.
 Existence of a fact-finding approach and willingness to use new methods and roles for the
solution of industrial problems. The negotiation should be based on facts and figures and
both the parties should adopt constructive approach.
 Proper records for the problem should be maintained.
 Collective bargaining should be best at plant level. If there are more than one plant of the
firm, the local management should be delegated proper authority to negotiate with the
local trade union.
 In order that collective bargaining functions properly, unfair labour practices must be
avoided by both the parties.
 The contract must include arbitration clause in case there is a dispute. The institution of
collective bargaining represents a fair and democratic attempt at resolving mutual
disputes. Wherever it becomes the normal mode of settling outstanding issues, industrial
unrest with all its unpleasant consequences is minimised.

CONDITIONS ESSENTIAL FOR SUCCESSFUL COLLECTIVE BARGAINING:

In order to make collective bargaining effective the following conditions must be satisfied:
A Favourable Political Climate: The Government and the public opinion must he
convinced that collective bargaining is the best method of regulating employment conditions.
The Government should remove all legislative restrictions which hamper collective
bargaining. It can also confer a right to bargain collectively, lay down the form and content of
collective agreement, register these agreements and assist in their enforcement.
Freedom of Association: Collective bargaining is not possible if employees are not free to

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form trade unions, as they please. A strong and representative trade union is required to
bargain with the employer on equal basis. In some countries, governments have made illegal
any attempt by employers to interfere with the right of workers, to form their unions. Trade
unions must be stable and strong enough to honour the collective bargaining agreement. The
union should have enough members to justify entering into collective bargaining. Inter-union
rivalry often creates instability in unions.
Recognition of Unions: Employers should be required by law to give recognition to
representative trade unions. It is in the interest of an employer to recognize a strong union to
avoid strikes and to safeguard against under-cutting labour standards.
Willingness to give and take: Both employers and union leaders should bargain in a spirit of
compromise and reciprocity. If the either party adopts a adamant attitude, bargaining will not
be possible. Willingness to give and take does not mean that concessions made by one side
must be marked by equal concessions by the other side. One party may win concessions for
the other depending upon their relative strength. But exaggerated demands must be toned
down to reach an agreement.

Everything you need to know about the pre-requisites for effective collective bargaining.
Collective bargaining is an important method of regulating relations between employers and
employees.
Collective bargaining involves negotiation, administration and enforcement of the written
contracts between the employees and the employers.
Collective bargaining also includes the process of resolving labour-management
conflicts. Collective bargaining is a joint decision-making process by employers and
employees.
Therefore, its effectiveness depends on their attitudes and the relevant environment in which
collective bargaining takes place. If these factors are conducive, collecting bargaining may
be a good mechanism for preventing the emergence of industrial disputes.
The pre-requisites for effective collective bargaining are:-
1. Favourable Political and Social Climate
2. Stability of Trade Unions
3. Approach of Management and Unions
4. Recognition of the Bargaining Agent

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5. Deciding the Level of Bargaining
6. Determining the Scope and Coverage of Bargaining
7. Fair Labour Practices
8. Freedom of Association
9. Continuous Dialogue
10. Problem-Solving Attitude
11. Availability of Data
12. Recognition of Union and Willingness to Give and Take.

3. Prerequisites of Collective Bargaining

Prerequisites for Collective Bargaining – 3 Conditions: Favourable Political & Social
Climate, Stability of Trade Unions & Approach of Management & Unions
Collective bargaining is a joint decision-making process by employers and employees.
Therefore, its effectiveness depends on their attitudes and the relevant environment in which
collective bargaining takes place. If these factors are conducive, collecting bargaining may be
a good mechanism for preventing the emergence of industrial disputes.
From this point of view, the following conditions are essential for effective collective
bargaining:
Condition # 1. Favourable Political and Social Climate:
Favourable political and social climate is a necessary condition for effective collective
bargaining. The history of the development of collective bargaining throughout the world
indicates that it has emerged and progressed in those countries where it has been supported
by the government and the public opinion has been favourable for the bargaining as a means
for settling terms and conditions of employment.
In fact, many countries have encouraged collective bargaining as a means for settling
differences between employers and employees. These countries have the system of
adjudication and arbitration but put in operation only when voluntary bargaining fails. As
against these countries, some countries influenced by socialistic moves have almost abolished
the very basic concept of collective bargaining.
In India, collective bargaining has not been effective because of the adverse political and
legal system though our traditional socio-cultural features which encourage trust, mutuality,
tolerance, and participation are more conducive.
Each major political party has sponsored a central trade union and these parties take the
favour of employees not based on the merit of the issues of the collective bargaining but
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based on their political considerations. Similarly, the existence of plethora of legal laws also
creates unfavourable climate for bargaining.
Condition # 2. Stability of Trade Unions:
In any democratic country, employees have fundamental rights to organize trade unions or
other associations for protecting their interest. The right to organize is a positive feature for
collective bargaining as employees may negotiate with management on equal footing.
However, mere right to organize does not ensure stability of employees’ associations in the
form of trade unions.
The indiscriminate use of the right for organizing leads to multiplicity of trade unions with
conflicting approaches, and sometimes even objectives, making the total industrial relations
system including collective bargaining unworkable. In India, multiplicity of unions and inter-
union rivalry have wrecked the system of collective bargaining. Where it has succeeded, it is
due to single union which has been recognized by the management.
Condition # 3. Approach of Management and Unions:
Collective bargaining is an institutional system of defining and achieving mutuality between
employers and employees.
It functions well when:
(a) Management fully accepts it as a mechanism for overcoming differences with employees
and union is accepted as an institution to participate in the process on the basis of equality.
(b) The union fully accepts the rights of management to manage and operate the organization
and recognizes that the welfare of the employees is linked to the successful operation of the
organization.
(c) The union and management mutually trust each other and have no major ideological
differences.
(d) Both the parties adopt flexible approach characterized by ‘give and take’ and the
bargaining outcomes as ‘win-win’ phenomenon.
(e) Neither party adopts unfair practices before negotiation, during negotiation, and after
negotiation.
To the extent such approaches are adopted by both management and union, the collective
bargaining will be effective. If the approach is to defeat the opposite party in negotiation
room (the place of battle through the words and approach), neither the meaningful
negotiations will be held nor there will be positive outcomes.
Collective bargaining is not merely a mechanism of outwitting another party with the use of
debating skill; it is a spirit of mutuality of interests which must prevail over words.
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Prerequisites for Collective Bargaining – Pre-Requisites for Successful Collective
Bargaining Process
A successful collective bargaining process must have the following prerequisites:
i. Careful thought and selection of the negotiating team is imperative. The team should have a
fixed composition, including production, finance and IR experts. It should be headed by a
person, preferably a personnel and industrial relations specialist of sufficient seniority who
has an adequate brief to commit the enterprise and take decisions without frequent referrals to
top management.
ii. It is necessary for the management to recognize the union and to bargain in more good
faith, in unionized situation. Unions as representatives of the workers’ interest are a growing
phenomenon. This also puts pressure on the union to formulate plans and demands in a
systematic manner. Strong unions and progressive managements can help create an
atmosphere of mutual confidence.
iii. The members of the bargaining teams must have open minds, to listen and appreciate the
other’s concern and point of view and to have some flexibility in making adjustments to the
demands made.
iv. It is necessary to study adequately or do ‘homework’ on the demands presented by
gathering data on wages and welfare benefits in similar industries in the geographical area.
v. Both the management and the union should be able to identify grievances, safety and
hygiene problems on a routine basis and take appropriate remedial steps.
vi. Trade unions must encourage internal union democracy and have period consultations
with the rank-and-file members.
vii. Trade unions should equally be concerned with both quantity of work output as agreed
upon and quality of work, both leading up to a consistent concern for the viability of the firm
and its products/services.
viii. Strikes/lockouts should be resorted to, in the ultimate analysis. Periodic discussions may
be necessary between the management and the unions to interpret the provisions of the
contract and clarify doubts.

Prerequisites for Collective Bargaining – Recommended by National Commission of

Labour
According to A. Flanders, there are certain conditions which must be satisfied before
collective bargaining can survive as a viable process. These are- The parties must attain a
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sufficient degree of organization; Mutual recognition – the parties must be ready to enter into
agreements with each other; The agreements must generally be observed and implemented by
those to whom they apply.
The collective bargaining relation is between the organized bodies as distinct from the
contract of employment reached between workers and employers in the 19th century. The
organizations of workers or trade unions are formed to protect and promote the interests of
workers through collective bargaining.
So long as trade unions remain organizationally and financially weak, their ability to bargain
with employers is weakened and impaired. Workers’ effectiveness in bargaining is dependent
on their organizational strength.
The employers, workers and their trade unions must realize that for a successful collective
bargaining relationship they must develop a considerable degree of consensus, support and
co-operation. They must recognize each other and also recognize that accommodation and
adjustment between them are necessary for the achievement of their goals.
The next condition relates to the sanctions behind the agreement and also the sanctions
required ensure the observance of rules regarding the employment relationship incorporated
in the agreement. The main issue in this regard is whether the parties themselves conform to
the rules or whether they will seek the help of a third party – the government.
In terms of these pre-requisites, collective bargaining is practiced in different countries at
different stages of the organizational growth of the parties involved, the nature and extent of
mutual recognition and the sanctions required to ensure the observance of the agreements.
Recommendations of the National Commission of Labour for Successful Functioning of
Collective Bargaining:
National Commission of Labour in 1969, made the following recommendations after
considering the problem.
(a) Government intervention in Industrial relations particularly in the settlement of industrial
disputes should be reduced gradually to the minimum possible extent. Compulsory
adjudication of disputes should be used only as a last resort.
(b) Trade unions should be strengthened both organisationally and financially by amending
the Trade Union Act of 1926 to make registration of unions compulsory, enhance the union
membership fee, and reduce the presence of outsiders in the union executive and among the
office-bearers and increase the minimum number of members in respect of union applying for
registration.
(c) Legal provision may be made either by a separate legislation or by amending an existing
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enactment for-
(1) Compulsory recognition of trade unions and certification of unions as bargaining agents.
(2) Prohibition and penalisation of unfair labour practices.
(3) Bargaining in good faith by both employers and unions.
(4) Conferring legal validity and legitimacy on collective agreements.
Recommendations of NCL, 1969:
The National Commission on Labour offered the following recommendations:
1. Good Faith:
In the absence of arrangements for statutory recognition of unions except in some States and
provisions which require employers and workers to bargain in ‘good faith’, it is no surprise
that reaching of collective agreements has not made much headway in our country.
Nonetheless, the record of collective agreements has not been as unsatisfactory as it is
popularly believed. Its extension to a wider area is certainly desirable.
2. Adjudication:
There is a case for shift in emphasis and increasingly greater scope for and reliance on
collective bargaining. Any sudden change replacing adjudication by a system of collective
bargaining is neither called for nor is practicable. The process has to be gradual. A beginning
has to be made in the move towards collective bargaining by declaring that it will acquire
primacy in the procedure of settling industrial disputes.
3. Congenial Condition:
Conditions have to be created to promote collective bargaining. The most important among
them is statutory recognition of a representative union as the sole bargaining agent. The place
strikes/lock-out should have in the overall scheme of industrial relations needs to be defined;
collective bargaining cannot exist without the right to strike/lock-out.

Prerequisites for Collective Bargaining – Equal Bargaining Power, Free Consultation,

Representative Union, Mutual Confidence, Proactive Approach and a Few Others
(i) Equal bargaining power – Constructive consultation between trade union and management
is possible only when the bargaining power of two parties is relatively equal and is exercised
with responsibility and discrimination.
(ii) Free consultation – Two parties of collective bargaining accept the principle of ‘free
consultation’ and ‘free enterprise’ consistent with the advancement of public interest.
(iii) Representative union – The willing acceptance by management to recognise
representative union for this purpose.
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(iv) Mutual confidence – Both the parties must have mutual confidence, good faith and a
desire to make collective bargaining machinery a success.
(v) Proactive approach – Management should not await the union to raise problems but
should make every reasonable effort to prevent them from arising and to remove them
promptly when they arise. Thus, management should have proactive approach.
(vi) Problem solving, not legalism – An emphasis upon a problem solving approach with de-
emphasis upon excessive legalism.
(vii) Quick disposal – Dispose of the issues in the same meeting and minimise of the pending
of items.
(viii) Desire to settle – Desire of the management to settle the issues to the satisfaction of
employees. This does not mean that management must relinquish its right to direct the
company or that it must accede to all union demands.
(ix) Union cooperation – Unions must understand the economic implications of collective
bargaining and realise that union demands must be met from the income and resources of the
organisation.
(x) Mutual respect – Both the parties should respect the rights and responsibilities of each
other.
(xi) No unfair practices – The process of bargaining should be free from unfair practices.
(xii) Unanimity among workers – Before entering into negotiations, there must be unanimity
among workers. At least the representatives of workers should be able to represent the
opinion or demands of majority of workers.
(xiii) Positive attitudes – The attitudes of the parties (involved) should be positive. Both the
parties should reach the negotiating table with an intention to find better solutions.
(xiv) Give and gain – The parties involved in collective bargaining should be prepared to give
away something in order to gain something.
(xv) Respect previous agreements – Both the parties to collective bargaining should observe
and follow the terms and conditions of previous agreements that are reached. Collective
Bargaining, being a continuous process, can be effective only with the successful
implementation of previous agreements. Any lapse on the part of any party concerned shows
its effect on present process.
(xvi) Clarity of implications – The representatives of both the parties should fully understand
and be clear about the problems and their implications.
(xvii) Beyond salaries – The workers can make effective use of collective bargaining process
to achieve participative management and good working conditions. They should not confine
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collective bargaining for mere monetary benefits.

Prerequisites for Collective Bargaining – Recognition of the Bargaining Agent, Deciding

the Level of Bargaining & Determining the Scope and Coverage of 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.
The important pre-requisites for effective collective bargaining are:
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. Please note that all the three points are
needed for applying collective bargaining effectively.

Prerequisites for Collective Bargaining – 8 Important Pre-Requisites: Favourable

Political Climate, Fair Labour Practices, Freedom of Association and a Few Others
Collective bargaining is the process where terms and conditions of employment are
determined by mutual agreement between the management and the workers. According to
Jucissous, “Collective Bargaining refers to a process by which employers on the one hand
and representative of employees on the other, attempt to arrive at agreement covering the
conditions under which employees will contribute and be compensated for their services”.
It is a process in which the representatives of the employer and of the employees meet and
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attempt to negotiate a contract governing the employer-employee union relationship.
In order to make collective bargaining effective the following pre-requisites must be
satisfied:
Pre-Requisite # 1. A Favourable Political Climate:
Collective bargaining is the best method of regulating employment condition. Therefore,
government remove all legislative restriction which hamper collective bargaining. It can also
confer a right to bargain collectively lay down the form and content of collective agreement
register. These agreements assist in their enforcement.
Pre-Requisite # 2. Fair Labour Practices:
Both the employer and the trade union should avoid unfair labour practices. Collective
bargaining is possible only in an atmosphere of mutual recognition and respect. Management
must recognize and accept the worker’s right to organise and fight for justice. Similarly
worker and their union must recognise and accept the employer’s right to manage. In the
absence of such recognition, collective bargaining is a mere trial of strength.
Pre-Requisite # 3. Freedom of Association:
Collective bargaining is not possible if employees are not free to form trade union as they
please. A strong trade union, is required to bargain with the employer for their own interest,
an equal basis. Trade union must be stable and strong enough to honour the collective
bargaining agreement. In some of the countries government opposed, the action taken by
employers against the right of workers to form their union.
Pre-Requisite # 4. Continuous Dialogue:
For successful collective bargaining, continuous dialogue between the employer and
employee is necessary. As highly controversial issues are easily solved through continuous
dialogue.
Pre-Requisite # 5. Problem-Solving Attitude:
For successful collective bargaining, both employer and employee must adopt a problem-
solving approach rather than fighting approach. The teams should consist of persons with an
analytical mind, objective outlook and cool temper. And they have an intimate knowledge of
operation, working condition and other relevant factors. They must have full authority to
speak and take decision on behalf of their sides.
Pre-Requisite # 6. Availability of Data:
The employer must ensure that all the required records are readily available. Facts and figures
concerning rates of pay, fringe benefits, manpower forecast, technological changes etc.
provide a rational basis for negotiations. But unless the trade union believes in the data and
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accepts the same, collective bargaining process may be hampered.
Pre-Requisite # 7. Recognition of Union:
Employers should be required by law to give recognition to representative trade union. It is in
the interest of an employer to recognise a strong union, to avoid strikes and to safeguard
against undercutting labour standards.
Pre-Requisite # 8. Willingness to Give and Take:
Both employers and union leaders should bargain in a spirit of compromise and reciprocity. If
either party adopts an adamant attitude, bargaining will not be possible. Willingness to give
and take does not mean that concession made by one side must be marked by equal
concession by the other side. One party may win concessions over the other depending upon
their relative strength. But exaggerated demands must be toned down to reach an agreement.

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3. LIST OUT THE VARIOUS ACTS INCLUDED IN THE OCCUPATIONAL
SAFETY, HEALTH & WORKING CONDITIONS CODE, 2020.
The Code comprises amalgamates, subsumes, and simplifies the below-mentioned laws under
its 14 Chapters 143 Sections 3 Schedules.
The following 13 Central Acts will be repealed by this Code:
1. Factories Act, 1948;
2. Mines Act, 1952;
3. Dock Workers (Safety, Health and Welfare) Act, 1986;
4. Building and Other Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996;
5. Plantations Labour Act, 1951;
6. Contract Labour (Regulation and Abolition) Act, 1970;
7. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979;
8. Working Journalist and other Newspaper Employees (Conditions of Service and
Miscellaneous Provision) Act, 1955;
9. Working Journalist (Fixation of Rates of Wages) Act, 1958;
10. Motor Transport Workers Act, 1961;
11. Sales Promotion Employees (Condition of Service) Act, 1976;
12. Beedi and Cigar Workers (Conditions of Employment) Act, 1966; and
13. Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

 The Code simplifies the registration process prescribing that the establishment having
ten or more employees are required to be registered with the registering officer
appointed by the appropriate Government thereby minimizing the statutory
compliances.

 Defines factory with increase in the threshold on number of workers from ten and

18
 twenty workers to twenty and forty workers respectively and fixed the maximum limit
of daily working hours for the factory workers as eight hours per day.

 Mandates issuance of appointment letters to the employees and workers.

 Defines core activity of establishment as any activity which is the purpose of

constituting an establishment and activities that are incidentally essential and thereby
prohibits employment of contract labour in such core activities, however, exempts a
few situations such as, (i) the normal functioning of the establishment is such that the
activity is ordinarily done through contractor, (ii) the activities are such that they do
not require full time workers for the major portion of the day, or (iii) there is a sudden
increase in the volume work in the core activity which needs to be completed in a
specified time.

 Expands the list of benefits to the inter-state migrant workman such as the benefits of
the insurance and provident fund benefits either in the native state or the state of
employment, portability of benefits of the inter-state migrant worker working for
building or other construction work out of the building and other construction cess
fund in the destination State where such inter-state migrant worker is employed.

 Mandates free health check-ups for who attained the age of forty five years for
prescribed industries such as factories, mines, plantations, workers employed in
hazardous process.

 Introduces the concept of limiting the carryover of annual leaves (paid leaves) to a
maximum of 30 days but provision made for encashment of leave in excess of 30
days. Therefore, the concept of leave lapse will cease to exist by virtue of
encashment.

 Introduced the penalty provisions more strictly such as contravention of any provision
of the Code shall attract a fine up to Rs. 2 Lakhs to 3 Lakhs.

Applicability

The Central Government will notify in the Official Gazette the date on which the Code will
become effective and operational. It may be a single date appointed to bring the entire Code
operational, or there may be different dates appointed for different provisions to come into
force.

The Code is not applicable to the offices of the Central Government, offices of the State

19
Government and any ship of war of any nationality, provided that the Code shall apply in
case of contract labour employed through contractor in the offices of the Central Government
or in the offices of the State Government, where the Central Government or, as the case may
be, the State Government is the principal employer.

Registration of Establishment

Every employer of any establishment, that comes into existence after the commencement of
this Code, and to which this Code is applicable, should, within sixty days from the date of
such applicability of this Code, make an application electronically to the registering officer
appointed by the appropriate Government for the registration of such establishment.

Any change in the ownership or management or in any that occurs after the registration of an
establishment under this Code, should be intimated by the employer electronically to the
registering officer within thirty days of such change in such form as may be prescribed and
such amendment will be carried out in the certificate of registration electronically.

The employer of an establishment should, within thirty days of the closing of the
establishment inform the closing of such establishment and certify payment of all dues to the
workers employed in such establishment, to the registering officer and the registration will be
cancelled in 60 days.

The employer of an establishment who has not registered the establishment as prescribed in
this Code; or has not preferred appeal against the cancellation or revocation of the registration
certificate of the establishment or the appeal so preferred has been dismissed, should not
employ any employee in such establishment.

The establishment to which this Code applies, that has been already registered under any
Central labour law, or any other law that may be notified by the Central Government and that
applies to such establishment which is in existence at the time of the commencement of this
Code, shall be deemed to have been registered under the provisions of this Code, subject to
the condition that the registration holder provides the details of registration to the concerned
registering officer within such time and in such form as may be prescribed.

Duties of Employer & Employees

Employers

20
Every employer should:

 ensure that workplace is free from hazards which cause or are likely to cause injury or
occupational disease to the employees;

 comply with the occupational safety and health standards declared under the rules,
regulations, bye-laws, or orders made under this Code;

 provide such annual health examination or test free of costs to such employees of such
age or such class of employees of establishments or such class of establishments, as
may be prescribed by the appropriate Government;

 provide and maintain, as far as is reasonably practicable, a working environment that

is safe and without risk to the health of the employees;

 ensure the disposal of hazardous and toxic waste including disposal of e-waste;

 issue a letter of appointment to every employee on his/her appointment in the

establishment, with such information and in such form as may be prescribed by the
appropriate Government and where an employee has not been issued such
appointment letter on or before the commencement of this Code, he/she shall, within
three months of such commencement, be issued such appointment letter;

 ensure that no charge is levied on any employee, in respect of anything done or

provided for maintenance of safety and health at workplace including conduct of
medical examination and investigation for the purpose of detecting occupational
diseases;

 relating to factory, mine, dock work, building or other construction work or

plantation, ensure and be responsible for the safety and health of employees, workers
and other persons who are on the work premises of the employer, with or without his
knowledge, as the case may be.

Without affecting the above-mentioned, the duties of an employer shall particularly in respect
of factory, mines, dock, building or other construction work or plantation include:

 the provision and maintenance of plant and systems of work in the workplace that are
safe and without risk to health;

 the arrangements in the workplace for ensuring safety and absence of risk to health in
connection with the use, handling, storage and transport of articles and substances;

21
  the provision of such information, instruction, training, and supervision as are
necessary to ensure the health and safety of all employees at work;

 the maintenance of all places of work in the workplace in a condition that is safe and
without risk to health and the provision and maintenance of such means of access to,
and egress from, such places as are safe and without such risk;

 the provision, maintenance or monitoring of such working environment in the

workplace for the employees that is safe, without risk to health as regards facilities
and arrangements for their welfare at work.

National & State Occupational Safety and Health Advisory Board

The Central Government will constitute the National Occupational Safety and Health
Advisory Board to discharge the functions conferred on it by or under this Code and to advise
the Central Government on the matters relating to:

 standards, rules, and regulations to be declared or framed under this Code;

 implementation of the provisions of this Code and the standards, rules and regulations
relating thereto;

 the issues of policy and programme relating to occupational safety and health referred
to it, from time to time, by the Central Government; and

 any other matter in respect of this Code referred to it, from time to time, by the
Central Government.

The State Government shall constitute a Board to be called the State Occupational Safety and
Health Advisory Board to advise the State Government on such matters arising out of the
administration of this Code as may be referred to it by the State Government.

Occupational safety and health standards

The Central Government shall declare, by notification, standards on occupational safety and
health for workplaces relating to factory, mine, dock work, beedi and cigar, building and
other construction work and other establishments.

Such standards shall relate to:

22
  physical, chemical, biological and any other hazards to be dealt with for the working
life of employee to ensure to the extent feasible on the basis of the best available
evidence or functional capacity, that no employee will suffer material impairment of
health or functional capacity even if such employee has regular exposure

 to such hazards;

 the norms, appraising the hazards to employees and users to whom such hazards are
exposed; relating to relevant symptoms and appropriate energy treatment and proper
conditions and precautions of safe use or exposure; for monitoring and measuring
exposure of employees to hazards; for medical examination and other tests which
shall be made available, by the employer or at his cost, to the employees exposed to
hazards; and

 for hazard evaluation procedures like safety audit, hazard and operability study, fault
free analysis, event free analysis and such other requirements;

 medical examination including criteria for detection and reporting of occupational

diseases to be extended to the employees even after he ceases to be in employment, if
he is suffering from an occupational disease which arises out of or in the course of
employment;

 such aspects of occupational safety and health relating to workplaces which the
Central Government considers necessary on the report of the authority designated by
such Government for such purpose;

 such safety and health measures as may be required having regard to the specific
conditions prevailing at the workplaces relating to mine, factory, building and other
construction work, beedi and cigar, dock work or any other establishments notified;
and

 matters specified in the Second Schedule to this Code.

Safety Committee and Safety Officers

The appropriate Government may, require any establishment or class of establishments to

constitute a Safety Committee consisting of representatives of employers and workers
engaged in such establishment in prescribed manner.

23
In every establishment which is a:

 factory wherein five hundred workers or more; or

 factory carrying on hazardous process wherein two hundred fifty workers or more; or

 building or other construction work wherein two hundred fifty workers or more; or

 mine wherein one hundred workers or more, are ordinarily employed.

The employer shall also appoint such number of safety officers, who shall possess such
qualifications and perform such duties, as may be prescribed by appropriate Government.

Responsibility of employer for maintaining health, safety and working conditions

The employer is responsible to maintain in the establishment such health, safety and working
conditions for the employees as may be prescribed by the Central Government. The Central
Government may prescribe for providing all or any of the following matters in the
establishment or class of establishments, namely:

 cleanliness and hygiene;

 ventilation, temperature, and humidity;

 environment free from dust, noxious gas, fumes, and other impurities;

 adequate standard of humidification, artificially increasing the humidity of the air,

ventilation, and cooling of the air in work rooms;

 potable drinking water;

 adequate standards to prevent overcrowding and to provide sufficient space to

employees or other persons, as the case may be, employed therein;

 adequate lighting;

 sufficient arrangement for latrine and urinal accommodation to male, female, and
transgender employee separately and maintaining hygiene therein;

 effective arrangements for treatment of wastes and effluents; and

 any other arrangement which the Central Government considers appropriate.

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4. LIST THE ADVANTAGES OF COLLECTIVE BARGAINING.
The advantages of collective bargaining have been stated below.
1. Higher wages and better help for union members. Unions can negotiate collectively for
gains unique workers could not reach alone. For example, unionized workers typically
earn 10-30% higher wages than their non-union peers.
2. Fairer work rules and policies. Collective deals help establish workplace order, justice,
and due process. Clear grudge policies and discipline policies benefit both workers and
regime.
3. Improved job joy, productivity, and loyalty. Union fellows report higher job joy due to
better pay, benefits, and protections. This leads to lower turnover, less truancy, and higher
productivity.
4. More social justice through the fairer distribution of economic gains. Collective
bargaining helps narrow wage gaps between executives and non-executive workers. For
example, CEO-to-median worker pay ratios are typically lower at unionized firms.
5. Safer working needs. Union contracts often include extensive health and safety conditions
that enhance workplace safety. Union workers have lower occupational injury and fatality
rates.
6. Greater worker voice and input. Unions provide an organized channel for workers to
provide input on workplace issues that affect them. This charge enhances decision-
making and creation.
7. More stable job and income. Collective bargaining typically includes conditions like
seniority rights, just cause, and severance, feeding job security for union fellows during
financial downturns.
8. Spillover benefits for non-union workers. Union contracts set standards that non-union
employers must match to remain competitive. This "union premium" spills to non-union
workers through higher pay and better benefits.
9. Higher labor force participation. Research shows collective bargaining rights increase
women's and older workers' labor force participation by feeding benefits like paid leave,

25
 flex time, and retiree healthcare.
10. More economic equality. Collective bargaining helps redistribute income from capital to
labor, easing economic inequality. Countries with stronger union rights tend to have less
income disparity.
11. Early resolution of disputes. Grudge courses in union contracts provide an set process for
fixing conflicts early to avoid costly arbitration or litigation.
12. Greater adaptability and creation. When joint, unions can work with management to
identify gain options that benefit both workers and the firm.
13. Higher bars for non-union firms. Union contracts set wages, benefits, and working needs
that non-union firms match to attract talented workers and remain competitive. This raises
bars for all.
14. System of checks and balances. Collective bargaining serves as a balance to corporate
power, securing workers have a voice in decisions that impact them and holding direction
liable. This enables a fairer economy.
15. Democratic participation in the workplace. Through unions, workers gain a joint voice
and participation in results that affect their jobs and livelihoods. This fosters democracy
and worker license.
In summary, while higher wages and benefits remain the most visible benefits, collective
bargaining - when effective - can also promote broader financial and social uses like greater
equality, productivity, innovation, participation, and democracy in the workplace. However,
disadvantages also exist and must be weighed.

Here are some merits which would be helpful for both the parties.
 Awareness: The underlying advantage of collective bargaining is that both parties get
to know what they are expecting from each other and are also aware of the rights. It is
helpful to decline the number of conflicts that may happen later and also make all the
business operations more efficient.
 Protection: After going through the process of collective bargaining, the workers
know that they have some sort of protection from the employer’s exploitation.
 No deaf ears: When the employer is dealing with workers, then they have to listen to
the queries of the employees and fulfill them as it is possible.
 Fight for rights: The employees can fight back for their rights and collective
bargaining allows them to stand for their betterment.
26
  No strikes: It reduces the strikes as if the employees are not happy with the decisions
of their management, and then they have the option of go on strike. Further, this will
hinder the business operations and the business suffers a loss. Thus, collective
bargaining helps businesses to arrive at a mutual understanding of their labor.
 Security and stability: The employees do not have any fear of losing the job or get
terminated but if they will be, then they have a labor union who can support them
through collective bargaining.

Some of the advantages of collective bargaining are as follows: –

1. Enhance worker’s quality of life: It helps workers in improving their quality life of
life. The main focus is on improving safety and working conditions of employees.
Collective bargaining leads to increase in pay level of workers and other types of
benefits. Hence the workers enjoy higher quality of life. The collective bargaining
agreement will lead the workers to enjoy a higher overall quality of life.
2. Offer security and stability: It provides employees security of work tenure and they
need not worry about their wrongful termination. They have a team of representatives
and strong support system who represent them and fight for the rights of employees.
3. Creates a binding result: Due to the collective bargaining agreement both the parties
are bound together to follow the rules. It provides for extra security for employers and
employees for defending their positions. Both the parties need to follow the contract
and if either of them don’t follow then may be held liable by the injured party.
4. Give workers a larger voice: In case of an individual worker, he is unable to
negotiate with the employer and fulfil his demands regarding work conditions.
Whereas, collective bargaining provides strength to workers by binding them together
into a large group. They are able to create a big impact and leads to mutually
beneficial outcome. The recognised trade unions are able to create a louder voice. The
workers who do not have their unions are faced with lot of problems.
5. Prevent employees strike: Another advantage of Collective bargaining is it helps to
resolve the dispute between employer and employees. It avoids the disputes between
the employer and employees which often leads to strike. The representatives of the
workers help them in solving their problems and work for their benefit and indulge in
mutual settlement during disputes.
6. It is a transparent process: All the discussions are kept in written form and are open

27
 to all for reference. Whatever is decided between the parties can be easily known.
Such type of flexibility may not be available at other workplaces.
7. Collective bargaining also promotes welfare of workers. It is a flexible and quick and
efficient process. Speedy decisions are taken by both the parties.

5. LIST THE DISADVANTAGES OF COLLECTIVE BARGAINING.

The drawbacks of collective bargaining have been stated below.
1. Higher labor costs for employers. Wages and benefits negotiated by unions can
increase firm costs and reduce profitability. This can affect prices for buyers and
competitive positioning.
2. Loss of management flexibility. Collective deals with clear work rules and job
protections can reduce employers' flexibility to adjust forces in reply to varying
market conditions.
3. Conflict and disruptions. Grudges, arbitration hearings, and strikes triggered by union
contracts can create upsets, uncertainty, and costly firm delays.
4. An overly adversarial relationship. Collective bargaining can foster an adversarial "us
vs. them" dynamic between unions and control, stressing positions over interests and
compromise.
5. Reduction in individual incentives and incentive. Union work rules and seniority
systems can reduce unique stimuli for high performance and creation. However,
unions say they boost morale and motivation through higher pay and job security.
6. Lower productivity growth. Some research points unionization is associated with
slower productivity growth over time due to work rule rigidities and high costs passed
on to clients. However, this is debated.
7. Reduction in firm startup and growth. Enhanced job protections from union contracts
can crush entrepreneurship and risk-taking. Economies with weaker union rights tend
to have higher firm startup and growth rates.
8. Lower global competitiveness. Strict union work rules and high labor costs can put
companies at a disadvantage vs. non-union competitors, especially in global markets.
9. Higher consumer prices. Higher labor costs negotiated by unions tend to get passed on
to clients through higher prices for goods and services. This disproportionately

28
 impacts lower-income clients.
10. Misallocation of labor and talent. Seniority systems and strict job classifications in
union work rules can lead to the less optimal matching of workers to jobs and
underutilization of talent.
11. Reduced creation and asset. High union costs can reduce firms' incentives and
abilities to innovate and make productivity-enhancing assets. However, unions argue
they promote creation through worker input.
12. Widening geographic inequalities. Areas with high unionization, like Rust Belt cities
in the U.S., have struggled economically, while right-to-work states with weaker
unions have grown faster. This widens regional economic disparities.
13. Inflexible wage scales. Union pay scales based on seniority rather than merit can fail
to nicely reward top entertainers and high-demand skills. But unions argue this
promotes greater pay equity.
14. Bureaucratic grudge systems. Complex union grievance procedures designed to
protect fellows can create needless bureaucracy, delays, and costs for firms. Yet,
unions see them as ensuring due process.
In summary, while collective bargaining benefits union members through higher pay and job
protections, it also poses faults for firms through higher costs, rigidity, and conflict.
Economically, collective bargaining entails trade-offs between equity and efficiency that
different stakeholders experience differently. Both perspectives have merit and must be
weighed.

Collective bargaining creates many problems.. Other disadvantages of collective bargaining

are-
1. No representation of consumers: There is no representation of consumers in the
process of collective bargaining.
2. Prone to inequality: Collective bargaining may lead to inequality among the parties
and either of them may suffer and get less of what they deserve. There is no fair
representation in collective bargaining process. Both parties suffer. The workers may
not get enough employment benefits which they deserve if their representation is
weak. On the other hand, if the representation of employers is weak, then business
may get into loss due to over-compensation and excessive benefit.
3. Can be a financial burden: The persons who become the member of the union, are
required to pay various dues. So, the paying members have to pay for those dues.
29
 Hence, in this process there is lot of financial burden to member as well as union.
There is the cost of lost productivity as both parties sit and discuss out a deal. Many
collective bargaining agreements are lengthy and require time to read, which further
reduces worker availability. All this involves lot of cost. Employer representatives
become less productive and they are part of this process.
4. Influence relationship between members: Collective bargaining may not always
result in grouping of workers. There may be conflict among workers due to
disagreement of some issue. The divisions and differences may surface among
workers due to grouping or because of union which were not present before making
an agreement. It can be biased to employers.
5. Consumer gets affected by this process– Consumer has to bear the burden of
settlement, as when wages of workers are raised by employers, they raise the price of
goods which affects the consumer.
6. It creates tension in workplace– The union workers complain often that their
managers act as boss instead of partner. The representation of unions results in
reducing openness and trust found in a workplace.
7. If the transaction of collective bargaining fails, strikes and lockouts may take place.

30
6. EXPLAIN THE REASONS FOR FAILURE OF COLLECTIVE BARGAINING IN
INDIA.

Though it is argued that collective bargaining has grown in India due to the statutory
provisions and voluntary measures, its success is limited. Collective bargaining has not made
much headway in India when compared to other industrial nations. Collective bargaining
machinery essentially is a reflection of a particular social and political climate. The Indian
trade unions are weak in collective bargaining. This is because of various political,
economical and social factors prevailing in India.The reasons are:

i. Weak unions

Collective bargaining process mainly depends on the strength of unions. Indian unions are
marked with multiplicity, inter and intra-union rivalry, weak financial

position and non-recognition. Weak trade unions cannot initiate strong arguments during
negotiations. All in all, the lack of unified and strong trade union movement represents a
missing link in the existing industrial relations framework.

ii. Problems from Government

The Government has not been making any strong efforts for the development of collective
bargaining. The regulatory framework covering the industrial relations

scene is quite tight, leaving very little room for bargaining to flourish on a voluntary basis.

iii. Legal problems

Now adjudication is easily accessible. No attempt has been made by the Government to
rationalise or simplify the multifarious laws covering labour management relations.

iv. Attitude of Management

Employers have failed to read the writing on the wall, they do not appreciate the fact that

31
unions have come to stay with almost equal bargaining strength. Such negative

attitudes have come in the way of negotiating with unions voluntarily.

v. Employers‟ uncertainty about who is the recognised bargaining agent

Employers quite often are not very sure who the recognised bargaining agent is. When there
are multiple unions, bargaining with one union may prove to be a tough battle.

vi. Statutory fixation of conditions of work

Areas of collective bargaining have not grown in view of the encouragement given to wage
boards, pay commissions, statutory fixation of other conditions of work and social security
measures.

vii. Political interference

Almost all unions are associated with some political party or the other. The political parties
interfere in the smooth functioning of the union. Some of the politically affiliated Central
trade unions in India are:

(a) BMS- Bharatiya Mazdoor Sangh (linked with far right political party BJP)- members: 6
million

(b) INTUC- Indian National Trade Union Congress (linked with centrist Congress party)-
members: 3.8 million

(c) AITUC- All India Trade Union Congress (linked with Communist party of India)-
members: 3.3 million

(d) CITU- Centre of Indian Trade Unions [linked with the Communist Party of India
(Marxist)]- members: 2.6 million

(e) UTUC(LS)- United Trade Union Congress (Lenin Sarani) (linked with the party named
Socialist Unity Center of India)

(f) UTUC United Trade Union Congress (linked with political party- Revolutionary Socialist
Party)

(g) TUCC- Trade Union Co-ordination Centre (linked with political party- All India Forward
Bloc)

(h) LPF- Labour Progressive Front (linked with political party- Dravida Munnetra
Kazhagam)

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(i) ICCTU- All India Central Council of Trade Unions (linked with Communist Party of India
(MarxistLeninist)- Liberation group)

(j) INTTUC- Indian National Trinamool Trade Union Congress (linked to the political party-
All India Trinamool Congress)

Justice Gupta in his “Our Industrial Jurisprudence” made the observation: “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 the last ten years reveals that there was no industrial
dispute regarding wage structure or bonus in any industry of some significance.”

viii. Outsiders in the process of collective bargaining

The 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. 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.
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 the 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 funds 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 crating conditions for building up the internal
leadership would develop through their education and training. Accordingly the Commission

33
suggests proportion of the outsiders and the workers in a union

executive. On realising the problems of outsiders in the Union, the Industrial Relations Bill,
1988 proposes to reduce the number of outsiders to two only.29 Critic says that the presence
of outsiders is one of the important reasons for the failure of collective bargaining in India.

ix. Industrial relations framework

Collective bargaining is a voluntary process. It presupposes an appropriate industrial relations

framework which provides scope for effective interaction of the

parties within the parameters set by the requirement of peaceful existence of civilisation. It
has been opined that in India, the conditions necessary for such interaction are either non-
existent or not feasible thus making the industrial relations framework less hospitable for the
development of a collective bargaining relationship in machinery.

x. Other factors

The unorganised trade unions in India are also the root cause of inefficient collective
bargaining of trade unions. In India the Government policies are not conducive to the trade
unions. This leads to in weakness on part of trade unions to negotiate effectively with
management. There is no apex body of trade unions in India. This further lowers the chances
of proper collective bargaining.

Unfortunately in India, due to certain factors such as interunion and intra-union rivalry,
multiplicity of trade unions, self-seeking politicians dabbling in trade unions, encouragement
to the workers for indulging in coercion measures, intimidation, violence, etc. collective
bargaining has mainly been distributive bargaining. However, instances of two-way traffic
are available. There have been agreements when there is noticeable shift towards integrative
bargaining. Shri M.K. Verma32 has emphasized that the Management’s charter of demands is
not a matter of confronting the union with the counter-irritant; nor is it merely a matter of
making a cheap attempt at counterbalancing the impact of union’s demands. It goes much
deeper than that. It springs from the fact that in any industrial or commercial undertaking,
growing competition and even increasing costs have no alternative for the

organisation but to internally generate sufficient efficiencies and cost reductions so as to

enable it to retain its business position while meeting numerous demands, including those of
the union.

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STEPS TO BE TAKEN TO MAKE COLLECTIVE BARGAINING EFFECTIVE IN
INDIA: The following steps may be taken to make collective bargaining in India more
effective:
1. Trade unions should be made more strong and responsible, so that they are able to honour
the collective agreements. For this purpose it is essential to build internal leadership and
to free unions from political control. Minority unions should be excluded from the right to
bargain, and right to concilliation. Majority union should be determined by secret ballet
rather than check off system, the idea of one union for plant/industry should be
popularised.
2. Each party should develop the skill to understand the viewpoint of the other. Positive
attitudes should he accepted by both employer and employees towards each other.
3. Collective bargaining should be restricted to matters concerning interests. Disputes
concerning rights should be better settled through grievance machinery.
4. When negotiations fail, both the parties should have equal right and freedom to strike
work or to declare a lockout.
5. Statutory provisions should be created to make the agreement binding on all the workers.
Under Sec. 18(1) of the Industrial Disputes Act, a collective agreement is binding only on
workers who were not a party to it. It does not automatically extend to workers who were
not party to it even though they might have obtained certain benefits under the agreement.
6. A collective bargaining authority may be created. Its functions may include advising the
parties on various aspects of collective bargaining, helping them in resolving
jurisdictional disputes and register in the agreement made by the parties.
7. Legal provision should be made for (a) compulsory registration of trade unions and their
certification as bargaining agents. (b) prohibition and penalisation of unfair labour
practices (c) legal recognition of collective agreements.
8. Compulsory adjudication of disputes should be used only as a matter of last resort.
9. Workers education should be intensified to build up internal union leadership and to
improve knowledge of workers.
10. The Governments should declare its policy of encouraging the parties to settle their
disputes through bipartite consultation and negotiation consistent with public safety and
social interest.

35
7. LIST OUT THE DIFFERENT ACTS INCLUDED IN THE CODE ON SOCIAL
SECURITY, 2020.
The Code on Social Security, 2020 is a code to amend and consolidate the laws relating
to social security with the goal to extend social security to all employees and workers either
in the organised or unorganised or any other sectors.
 Social security refers to protection measures provided to workers to ensure
healthcare and income security in case of certain contingencies such as old age,
maternity, or accidents.
The act amalgamates nine central labour enactments relating to social security.
1. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
2. Employees’ State Insurance Act, 1948;
3. Employees’ Compensation Act, 1923;
4. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
5. Maternity Benefit Act, 1961;
6. Payment of Gratuity Act, 1972;
7. Cine-workers Welfare Fund Act, 1981;
8. Building and Other Construction Worker’s Welfare Cess Act, 1996; and
9. Unorganised Workers Social Security Act, 2008

Key Provisions of the Social Security Code, 2020

The definition of employees has been widened to include inter-state migrant workers,
construction workers, film industry workers and platform workers. It has provisions for the

36
registration of all three categories of workers – unorganised workers, gig workers and
platform workers.
 Gig workers refer to workers outside the “traditional employer-employee
relationship”.
 Platform workers are those who are outside the “traditional employer-
employee relationship” and access organisations or individuals through an
online platform and provide services for payment. Read more on gig and
platform workers.
 An unorganised worker is defined as one who works in the unorganised sector,
and includes workers not covered by the Industrial Disputes Act, 1947, or
other provisions of the Bill (such as provident fund or gratuity). It also
includes self-employed workers.
 A social security fund will be created for paying these benefits to workers and
it will be funded by central and state governments and also through CSR
funding. Aggregators who are digital intermediaries employing gig workers
will have to set aside at least around 1-2 per cent of their annual turnover
(amount not exceeding 5 per cent of the amount payable to the workers) for
the purpose of this social security fund.
 The government could notify schemes for unorganised sector workers (such as home-
based and self-employed workers), gig workers, and platform workers.
 The Code also provides for the setting up of a ‘National Social Security Board’. The
functions of the Board include recommending schemes to the central government and
also monitoring the schemes for the different types of workers, advising the
Government on matters relating to the administration of the Code amongst others.
Social Security Code Significance
This Code is far from being a mere consolidation of previous legislations. It has enhanced the
coverage, extended the benefit to all workers in the organised/unorganised sectors, introduced
concepts of providing maximum benefits under minimum governance and reflects uniformity
in approach across the four labour codes.
Enhanced coverage:
 New-age businesses that thrive on e-commerce have created new types of jobs. Some
of the workers in these new businesses were not covered under any of the existing
laws. The new Social Security Code expands the scope of social security by providing
for the registration of all types of workers including gig workers and platform
37
 workers. Its recognition of non-conventional forms of work outside the scope of the
traditional employer-employee arrangement is encouraging as there is a global shift
towards self-employment, gig, and platform work.
 Gig workers will now become eligible for life and disability coverage,
maternity benefits, pension, etc.
 The Code has widened coverage by including the unorganised sector, fixed-term
employees, inter-state migrant workers, etc., in addition to contract employees.
 Therefore, in terms of coverage, the scope has been expanded.
 The Social Security Code, 2020 brings these workers under the ambit of social
security schemes, including life insurance and disability insurance, health and
maternity benefits, provident fund and skill up-gradation, etc.
Taking care of the fixed-term employees:
 The code expands the scope to cover fixed-term contract workers who will now be
eligible for gratuity; whereas earlier only employees that were permanent were
covered.
 The events giving rise to gratuity are superannuation, retirement, resignation, death or
disablement due to accident or disease or termination of a contract under fixed-term
employment or on the happening of any event notified by the central government.
 With the inclusion of ‘expiration of fixed-term employment’, fixed-term contract
workers will become eligible for gratuity and this is a welcome move.
Penal provisions:
 The strength of implementing a legislation lies in the ease of compliances as well as
in the penalties that deter non-compliance. The Code captures it all.
 The Code contains penal provisions in the case of failure to pay gratuity to employees
or a failure to pay the contributions.
Digitisation:
 As per the Act, all records and returns have to be maintained electronically.
Digitisation of data will help in the exchange of information among various
stakeholders/funds set up by the Government, will ensure compliance and also
facilitate governance.
Uniform definitions:
 Uniformity in determining wages for the purpose of social security benefits is another
highlight of the code given the ambiguity in the current regulations.
 This has provided a wide definition for wage. Specific exclusions with ceilings have
38
 been provided for discouraging inappropriate structuring of salaries to minimise social
security benefits.
Consultative approach:
 The Code has brought in a facilitating approach by the authorities. Unlike the existing
role of inspectors, the Code provides for an enhanced role of inspector-cum-facilitator
whereby employers can look for support and advice to enhance compliances.
Important recommendations of the NCL neglected:
National Commission on Labour recommendations
 The National Commission on Labour (2002) (NCL) had emphasised the need for
universal and comprehensive social security coverage to avoid deprivation of basic
needs of workers, and recommended the simplification and consolidation of existing
laws towards this end.
 The NCL recommended that: (i) the social security system should apply to all
establishments, (ii) the existing wage ceilings for coverage should be removed, and
(iii) there should be a functional integration of the administration of existing schemes.
Further, every employer and employee may make a single contribution for the
provision of all the benefits, with a ceiling prescribed for such contributions.

The code largely retains the existing setup and does not fully implement the NCL
recommendations.
 The code continues to retain thresholds based on the size of the establishment for
making certain benefits mandatory. Benefits, such as pension and medical insurance,
continue to be mandatory only for establishments with a minimum number of
employees (such as 10 or 20 employees). All other categories of workers (i.e.,
unorganised workers), such as those working in establishments with less than 10
employees and self-employed workers may be covered by discretionary schemes
notified by the government. Thus, a large number of workers may continue to be
excluded.
 The code continues to treat employees within the same establishment differently
based on the amount of wages earned. For instance, provident fund, pension and
medical insurance benefits are only mandatory to employees earning above a certain
threshold (as may be notified by the government) in eligible establishments.
 The code continues to retain the existing fragmented set up for the delivery of social
security benefits. These include: (i) a Central Board of Trustees to administer the
39
 EPF, EPS and EDLI Schemes, (ii) an Employees State Insurance Corporation to
administer the ESI Scheme, (iii) national and state-level Social Security Boards to
administer schemes for unorganised workers, and (iv) cess-based labour welfare
boards for construction workers.
Know more about the Labour Sector in India at the inked article and also know the
classification of the labour force in the country.
Provisions on gig workers and platform workers are unclear:
 The code introduces definitions for gig worker, platform worker and mandates
different schemes for all these categories of workers. However, there may be some
overlap between their definitions. With such overlap across definitions, it is unclear
how schemes specific to these categories of workers will apply.
Provisions on gratuity for fixed-term workers unclear:
 The code on social security and the Industrial Relations code, 2020 have different
provisions on gratuity for fixed-term workers and it is not clear whether a fixed-term
employee with a contract of lesser than one year will be entitled to gratuity under the
Code on Social Security, 2020.
Mandatory linking with Aadhaar may violate Supreme Court judgement:
 The code mandates an employee or a worker (including an unorganised worker) to
provide his Aadhaar number to receive social security benefits. This may violate the
Supreme Court’s judgement in the Puttaswamy case.
 In its judgement, the Court had ruled that the Aadhaar card/number may only be made
mandatory for expenditure on a subsidy, benefit or service incurred from the
Consolidated Fund of India. Since certain entitlements such as gratuity and provident
fund (PF) are funded by employers and employees and not by the Consolidated Fund
of India, making Aadhaar mandatory for availing such entitlements may violate the
judgement.
Conclusion
The Code on Social Security, 2020 is clearly a step in the right direction from an ease of
compliance and universality perspective as it covers a large portion of our working
population. A regulatory authority to separately administer the code would be beneficial to
monitor the welfare of workers and it can better track the efficacy of schemes.

40
8. POINT OUT THE DIFFERENCES BETWEEN COLLECTIVE BARGAINING
AND COMPULSORY ADJUDICATION SYSTEM.
Collective Bargaining
1. 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
2. Carried out voluntarily, freely, and in good faith
3. Settles issues through dialogue and consensus rather than through conflict and
confrontation
4. Improves the labor relations climate by providing an institutionalized and agreed way of
managing conflict.
5. Gives legitimacy to the rules regulating labor relations.
6. Allows the parties to tailor a collective agreement governing the employment relationship
to their particular industry or enterprise.
7. Allows parties to solve problems that may be specific to their industry or workplace.
8. Parties are free to engage in bargaining, and there should be no interference from the
authorities in their decisions to do so.

41
9. Collective bargaining should be carried out voluntarily, freely, and in good faith.
10. Collective bargaining has the advantage that it settles issues through dialogue and
consensus rather than through conflict and confrontation.
Compulsory Adjudication
1. System where labor disputes are resolved through the intervention of a third party, such
as a government-appointed arbitrator or a court.
2. Not voluntary, and the parties involved have no choice but to accept the decision of the
third party
3. Can lead to the juridification of industrial relations, where labor disputes are treated as
legal issues rather than workplace issues
4. Can be seen as a last resort when collective bargaining fails to resolve a dispute
5. Parties involved have no control over the outcome of the dispute
6. The third party may not have the same level of knowledge or understanding of the
industry or workplace as the parties involved
7. Can be a lengthy and costly process
8. The third party may not be able to take into account the specific needs and circumstances
of the parties involved
9. The third party may not be able to provide a solution that is acceptable to both parties
10. The third party's decision may not be binding, and the parties may still need to negotiate a
settlement
In summary, collective bargaining is a voluntary process that allows the parties involved to
negotiate and reach a mutually agreed-upon solution, while compulsory adjudication is a
system where a third party intervenes to resolve a dispute when the parties involved cannot
reach an agreement.

The Supreme Court has held that though social and economic justice is the ultimate ideal of
industrial dispute settlement, the immediate objective is to settle the dispute by constituting a
wage structure which would be acceptable to both labour and capital and lead to genuine
cooperation in the task of production. Therefore, to achieve this objective, industrial
adjudication takes into account several principles such as, the principle of comparable wages,
productivity in the trade or industry, the cost of living and the ability of the industry to pay.
There is however one principle, also laid down by the Courts for which there is no exception.
No industry has the right to exist if it is unable to pay the workmen at least the bare minimum
wages. On the other hand through the system of collective bargaining the workmen are able
42
to voice their demands regarding wages, hours of working and other conditions of
employment. For the success of collective bargaining, the process should begin with
proposals rather than demands and the parties should be willing to go with some
compromises otherwise the whole process will be a failure.
According to the Supreme Court, the Industrial Disputes Act, 1947 seeks to achieve social
justice on the basis of collective bargaining. In an earlier judgment in Titagarh Jute Co. Ltd.
v. Sriram Tiwari(1982), the Calcutta High Court clarified that this policy of the legislature is
also implicit in the definition of ‘industrial dispute’,
“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 of other
disputes.”
Supporters of adjudication contend that, though the process is coercive in nature, is superior
to the collective bargaining. A dispute on principal of trial by combat can be settled by
collective bargaining. Any strong union in the industry may take a weak case and can still
win the case & vice versa. On the other hand, adjudication, though imperfect, introduces an
element of law and justice in the procedure of industrial relations. The judicial standards
available to the judges in the process of adjudication in the area of industrial disputes may be
imperfect. But they are still better than the “might is right” principle which underlies
collective bargaining. As theinstitution of adjudication grows, so will the industrial
jurisprudence. So, we can say that the adjudication is based upon the coercive power of the
state, but the institution of collective bargaining is fully on the coercive power of the parties
themselves. The authority of the state should be used to prevent any strong group of
employers or workers from any ransom activities in the organization. The adoption of
collective bargaining as one of the main instrument in the economic growth demands that in
order to maintain the achieving targets on economic development, industrial peace should be
maintained. So, adjudication should be adopted for the purpose of resolving industrial
disputes. In India, adjudication does not suppress the collective bargaining. Adjudications
acts as a supplement for the collective bargaining process. In spite of arguments of heavy
expenses & delays are concerned, the adjudication mechanism can be improved and
improving gradually.
One of the strong arguments against the adjudication procedure is that it leads to an
authorization imposition of different terms and conditions of employment and suppresses the
43
possibilities of self-governance in the organization/industries based on the democratic
freedom of people to solve their problems through collective bargaining. It should be noted
that people should have their own democratic right in the industry to settle their disputes by
themselves without any intervention of third party. Another argument against adjudication
relates to the absence of any absolute standards to resolve divergence interests and to judge
the fairness which can results a healthy work environment. While a Civil Judge can locate the
facts and apply them on the known land of law, the adjudicator of an industrial dispute does
not have such laws or clear guidelines which can guide him in resolving differences of
opinion relating to economic interests.An adjudicator is just a law-giver whereas the civil
judge is an interpreter of law.Finally, adjudications can sometimes lead to vitiate industrial
relations by creating a controversial atmosphere. Under this method, the labour unions can
demand anything which is unreasonable in nature. Because they know, this demand will not
require to be backed by any industrial or organizational strength to make it logically
approved. If the demands are not fulfilled, they can be easily shifted to the courts of
adjudication. So, the adjudication can create any artificial atmosphere because in both end the
parties are trying to evade the real issues as long as possible. This can create a huge stress on
the legalism which may satisfy the legal parameters but may not solve the actual problem.

9. EXPLAIN THE PROCESS OF COLLECTIVE BARGAINING. WHAT ARE THE

LIMITATIONS OF COLLECTIVE BARGAINING?

Collective bargaining is a two-edged sword; what is won may also be lost. Today’s collective
bargaining process is based upon statutory law. What makes collective bargaining possible in
this context is that both labour and management have an ultimate harmony of interest; that is,
the desire to assure that the firm for which they work – and from which they are both paid –
will remain in business. In order to stay in business, it must be competitive with other firms.

The bargaining process includes preparation of initial demands, negotiations, and settlement.
Adequate preparation for bargaining is often the key to success – preparation for negotiations
is a comprehensive on-going job for both the management and the union.

Preparation allows each bargaining team to determine their bargaining objectives; a

negotiating team to defend its proposals; and to anticipate the opponent’s demands. Among
the more important steps to pre-negotiation preparations are the following:

1) Coordinating preparations among persons responsible for gathering and analysing

44
information relevant to the bargaining process.

2) Selection of a chief negotiator and bargaining team members.

3) Reviewing previous negotiations because it provides insights into the opponent’s

bargaining tactics and probable demands.

4) Gathering data on internal operations and policies of comparable firms through wage and
salary surveys.

5) Formulate proposals and priorities.

6) Select a suitable site for negotiations.

7) Organise the relevant information in a bargaining book for easy access at the bargaining
table.

8) Notify the opponent the intent to bargain by serving required notice.

One of the most difficult aspects of the collective bargaining process is to determine
appropriate bargaining units. The principle to be followed is that there should exist a
community of interest among the employees to be represented. Otherwise, a single bargaining
agent would find it impossible to represent all of their interests equally well.

The first step in the collective bargaining process is establishing a relationship for ongoing
negotiations and the formulation of agreements covering conditions in the workplace. It is
obvious that a great deal of effort can go into the process of establishing a collective
bargaining relationship. It is an anxiety producing process and that each step may involve
bitter conflict between the parties. Sometimes, this conflict escalates to litigation; and
sometimes it even spills over to violence. Hence, one of its objectives should be promotion of
rational and harmonious relations between employers and unions.

The second step in the bargaining process relates to the scope of bargaining, i.e., the matters
on which to bargain. It consists of three broad categories of items – subjects over which
bargaining is mandatory, subjects considered illegal or prohibited, and subjects on which
bargaining is permitted but not required. In case of subjects, which are mandatory, the
relevant statute or common law makes it unfair labour practice or breach of good faith to
refuse to bargain over them. The second category of items in the scope of bargaining is
practices considered illegal or prohibited. These are the matters that cannot be bargained

45
under law. Falling between these two categories are items upon which bargaining is
permitted, but not required. Either side may refuse to discuss such a matter. To do so is not
considered a breach of fair labour practice or good faith.

The third step in the bargaining process is careful structuring. Many observers agree that
some structural aspects are crucial in facilitating the ability to reach agreements. The
personnel department should take the initiative of forming a negotiating team consisting of
two or three members, besides the industrial relations expert. The management team should
include representatives of the departments, a personnel specialist, and some one competent to
assess the various proposals and counter proposals. The bargaining teams should also be
balanced in terms of number of individuals present. Both the sides should agree in advance
on the timing, location, and length of bargaining sessions. An agenda should be prepared
indicating which items are to be taken up first – economic or non-economic. A decision must
be made as to whether to treat each item separately, or to seek to bargain an entire package at
once. The task of management team should range from formulation of management’s charter
of demands to the full participation in the actual bargaining sessions; and above all, the
preparation of the draft of the settlement and, then, the readiness to negotiate.

An absence of good faith bargaining has been found to include:

1) An unwillingness to make counter proposals.

2) Constantly changing positions in bargaining.

3) The use of delaying tactics.

4) Withdrawal of concessions after they have been made.

5) Unilateral actions over topics of bargaining.

6) Refusal to furnish necessary data for negotiations.

Steps to improve the process of collective bargaining are:

 Begin the process of negotiations with proposals, not demands.

 Avoid taking public positions for or against certain proposals in advance of negotiations.

 Avoid taking strike votes before the process of negotiation begins.

 Give negotiators proper authority to bargain.

 Avoid unnecessary delays in beginning negotiations and in conducting them.

46
 Insist on offering facts and arguments.

 Make plenty of proposals to enhance the opportunities to find compromises.

 Be prepared to compromise.

 Be prepared to get results gradually.

 Preserve good manners and keep discussion focused on relevant issues.

 Be prepared to stand for a long and hard strike or lockout (as the case may be) in

 order to force a settlement justified by facts and arguments.

PROCEDURE FOR COLLECTIVE BARGAINING

a) A charter of demands

The trade union will notify the employer for initiating collective bargaining negotiations. The
representatives of the trade union draft a charter of demands which contains issues related to
terms of employment and the working conditions namely wages and allowances, bonuses,

working hours, benefits, holidays. In some cases, an employer may also notify the trade union
and initiate collective bargaining negotiations.

a) Negotiations

Negotiation is the next step after the submission of the charter of demands by the trade union.
Both the employer

and the employee seek opportunities to suggest compromise solutions I their favour until an
agreement is reached. If it possible to reach out to an agreement, a third party (mediator /
arbitrator) may be brought in from outside. If, even with the assistance of the third party, no
viable solution can be found to resolve the parties‟ differences, the trade union may decide to
engage in strikes.

b) Collective bargaining agreement

Pursuant to the negotiations between the parties, a collective bargaining agreement will be
executed between the employer and workmen represented by trade unions, setting out the
terms of employment and working conditions of labour. Section 18(1) of the Industrial
Disputes Act, 1947 impliedly speaks about collective bargaining agreement: “13[Settlement
arrived at otherwise than in the course of conciliation proceedings i.e., without aid of

47
statutory agency.”

Ludwig Teller defines collective bargaining agreement as: “An agreement between a single
employer or an association of employers on the one hand and a labour union upon the other,
which regulates terms and conditions of employment.”

Types of collective bargaining agreements:

i. Procedure agreements

Procedure agreements spell out the steps by which the industrial relations process are carried
out. Procedure agreements are collective agreements which relate to:

 Machinery for consultation, negotiation or arbitration on terms and conditions of

employment or for any other matters which arise between trade unions and employers;

 Negotiating rights;

 Facilities for trade union officials; and

 Disciplinary matters and individual workers‟ grievances.

ii. Substantive agreements

These contain the „substance‟ of any agreement on terms and conditions of employment.
They cover payments of all kinds, i.e. wage rates, shift allowances, incentive payments, also
holidays and fringe benefits such as pensions and sick pay and various other allowances.

c) Strikes

If both parties fail to reach an agreement because of mutual consensus, the union may go on a
strike, which shall be in accordance with the provisions of the Industrial Disputes Act, 1947.

d) Conciliation

Once the conciliation officer receives a notice of strike or lockout, the conciliation
proceedings shall commence. The State Government may appoint a conciliation officer or a
Board of Conciliation to investigate disputes, mediate and promote a settlement. Workers are
prohibited from goingon strike during the pendency of such conciliation proceedings.
Conciliation proceeding may have one of the three outcomes, namely:

(i) A settlement; or

(ii) No settlement; or

48
(iii) Reference being made to the appropriate labour court or any other industrial tribunal.

ROYAL CALCUTTA GOLF CLUB MAZDDO UNION v. STATE OF WEST

BENGAL

The main task of the Conciliation Officer is to go from one camp to the other and find out the
greatest measure of agreement…to investigate the dispute and do all such things as he thinks
fit to arrive at a fair and amicable settlement of the dispute.

e) Compulsory arbitration or adjudication

When conciliation and mediation fail, parties may either resort to compulsory or voluntary
arbitration. Arbitration and the recommendations of the arbitrator may be binding to the
parties. Section 7A of the Industrial Disputes Act, 1947 provides for a labour court or
industrial tribunal within a state to adjudicate protracted industrial disputes such as strikes
and lockouts. Section 7B of the Industrial Disputes Act, 1947 provides for constitution of
national tribunals involving questions of national interest or issues concerning more than two
states. In the event, a labour dispute is not resolved by conciliation and mediation, the
employer, and the workers may refer the case by a written agreement to a labour court,
industrial tribunal or national tribunal for adjudication or compulsory arbitration.

LEGAL BOUNDARIES FOR COLLECTIVE BARGAINING

i. India has not ratified convention- 87 (convention on Freedom of Association and Protection
of the Right to Organize, 1948) and convention- 98 (Right to Organize and Collective
Bargaining Convention, 1949) of International Labour Organisation.

ii. There is only a limited scope and coverage of collective bargaining within legal boundaries
of Trade Union Act, 1926 and Industrial Disputes Act, 1947 . The Trade Union Act, 1926
was amended in 2001 and after the amendment it became more difficult to form trade unions.
In the Act of 1926, only seven members were required to register a trade union, but after
amendment at least 10% or 100, whichever is less, subject to a minimum of seven workmen
engaged or employed in the establishment are required to be the members of the union before
its registration. The amendment also introduces a limitation on the number of outsiders
among the office bearers.

iii. Trade Union Act, 1926 and Industrial Disputes Act, 1947 remains silent regarding the
recognition of trade unions. Only when the unions are recognised by the management then
only they have the fullfledged right as bargaining agent on behalf of workers. But there is no
legal obligation on employers to recognise a union or engage in collective bargaining. The
49
statutes of only few states of India like Maharashtra, Gujarat, Madhya Pradesh and Rajasthan
have made some provisions for recognition of unions with a specific percentage of the
workforce. iv. In India, right to protest is a fundamental right under Article 19 of the
Constitution; but right to strike is not a fundamental right under Part III of the Constitution
but a legal right governed by Industrial Disputes Act, 1947.

 Section 22 (1) : No person employed in a public utility service, shall go on strike in breach
of contract-

(a) Without giving to the employer notice of strike, as hereinafter provided, within six weeks
before striking; or

(b) Within fourteen days of giving such notice; or

(c) Before the expiry of the date of strike specified in any such notice as aforesaid; or

(d) During the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings

 Section 23 : No workman who is employed in any industrial establishment shall go on

strike in breach of contract and no employer of any such workman shall declare a lock-out-

(a) During the pendency of conciliation proceedings before a Board and seven days after the
conclusion of such proceedings;

(b) During the pendency of proceedings before [a Labour Court, Tribunal or National
Tribunal] and two months after the conclusion of such proceedings; [(bb) during the
pendency of arbitration proceedings before an arbitrator and two months after the conclusion
of such proceedings, where a notification has been issued under sub-section (3A) of section
10A; or] (c) During any period in which a settlement or award is in operation, in respect of
any of the matters covered by the settlement or award.

TAMIL NADU ELECTRICITY WORKERS FEDERATION v. MADRAS STATE

ELECTRICITY BOARD

Collective bargaining is the foundation of the movement and it is in the interest of the labour
that statutory recognition has been accorded to Trade Union and their capacity to represent
workmen, who are members of such bodies. But, of course there are limits to this doctrine,
for otherwise, it may become a tyranny stifling the freedom of an individual worker.

v. Trade Union activities are granted immunity from the applicability of CRPC under section

50
18 of Trade Unions Act, 1926 and immunity from civil suit in certain cases under section 18
of Trade Unions Act, 1926.

vi. Moreover, in recent decades, a number of judgments came from the Supreme Court
setting precedents against the right to strike. There are two reasons to believe that labour
standards may finally be able to claim a place on the public agenda. The first is that positive
evidence is accumulating that attention to decent labour standards may help to improve
economic performance; the second is that discontent with falling and occasionally exploitive
standards may be emerging as a concern for a broad spectrum of workers and voters. The
right of a Trade Union to speak legitimately on behalf of their members is recognised in
Indian Law but it does not in any way derogate an individual from his right to judge for
himself, independently of any Trade Union, as to offer advantageous to him, concerning his
employment.

Main Hindrances for Collective Bargaining:

The main objective of developing collective bargaining technique is to improve the workers-
management relations and thus maintain peace in industries. The technique has developed in
India only after India got independence and got momentum since then.
The success of collective bargaining lies in the attitude of both management and workers
which is actually not consistent with the spirit of collective bargaining in India. There are
certain problems which hinder the growth of collective bargaining in India.
The following factors or activities act as hindrances to effective collective bargaining:
(1) Competitive Process:
Collective bargaining is generally becoming a competitive process, i.e., labour and
management compete each other at negotiation table. A situation arises where the attainment
of one party’s goal appears to be in conflict with the basic objectives of the other party.
(2) Not Well-Equipped:
Both the parties—management and workers—come to the negotiation table without doing
their homework. Both the parties start negotiations without being fully equipped with the
information, which can easily be collected from company’s records. To start with, there is
often a kind of ritual, that of charges and counter charges, generally initiated by the trade
union representatives. In the absence of requisite information, nothing concrete is achieved.
(3) Time to Protest:
The immediate objective of the workers’ representatives is always some kind of monetary or

51
other gains, accrue when the economy is buoyant and the employer has capacity to pay. But
in a period of recession, when demand of the product and the profits are falling, it is very
difficult for the employer to meet the demands of the workers, he might even resort to
retrenchment or even closure collective bargaining is no answer to such a situation.
(4) Where Prices are Fixed by the Government:
In industries, where the prices of products are fixed by the Government, it becomes very
difficult for the employer to meet the demands of workers which would inevitably lead to a
rise in cost of the products produced. Whereas the supply price to the consumers cannot be
increased. It will either reduce the profits of the firm or increase the loss. In other words, it
will lead to closure of the works, which again is not in the interest of the workers.
(5) Outside Leadership:
Most of the Indian trade unions are led by outsiders who are not the employees of the
concerned organisations. Leader’s interests are not necessarily to be identical with that of the
workers. Even when his bonafides are beyond doubt, between him and the workers he leads,
there cannot be the degree of understanding and communication as would enable him to
speak on behalf of the workers with full confidence. Briefly, in the present situation, without
strong political backing, a workers’ organisation cannot often bargain successfully with a
strong employer.
(6) Multiplicity of Trade Unions:
One great weakness of collective bargaining is the multiplicity of trade unions. In a multiple
trade union situation, even a well recognised, union with long standing, stable and generally
positive relationship with the management, adopts a militant attitude as its deliberate strategy.
In Indian situation, inter-union rivalries are also present. Even if the unions combine, as at
times they do for the purpose of bargaining with the employer they make conflicting
demands, which actually confuse employer and the employees.
(7) Appointment of Low-Status Executive:
One of the weaknesses of collective bargaining in India is that the management deputes a
low-status executive for bargaining with the employees. Such executive has no authority to
commit anything on behalf of the management. It clearly indicates that the management is
not at all serious and the union leaders adopt other ways of settling disputes.
(8) Statutory Provisions:
The constraints are also imposed by the regulatory and participative provisions as contained
in the Payment of Wages Act, the Minimum Wages Act, and Payment of Bonus Act etc. Such
provisions are statutory and are not negotiable.
52
(9) Fresh Demands at the Time of Fresh Agreement:
At the time when the old agreement is near expiry or well before that, workers representatives
come up with fresh demands. Such demands are pressed even when the industry is running
into loss or even during the period of depression. If management accepts the demand of
higher wages and other benefits, it would prefer to close down the works.
(10) Agreements in Other Industrial Units:
A prosperous industrial unit in the same region may agree with the trade unions to a
substantial increase in wages and other benefits whereas a losing industry cannot do that.
There is always pressure on the losing industries to grant wages and benefits similar to those
granted in other (relatively prosperous) units in the same region.
Scope of Collective Bargaining:
Collective bargaining broadly covers subjects and issues entering into the conditions and
terms of employment. It is also concerned with the development of procedures for settlement
of disputes arising between the workers and management.

DETAILED DISCUSSION
10. GIVE OUT THE DETAILED LIST OF THE VARIOUS ACTS WHICH ARE
INCLUDED IN THE FOUR LABOUR CODES IN INDIA.

Labour Code Acts subsumed

 Payment of Wages Act, 1936;

 Minimum Wages Act, 1948;
Code on Wages, 2019
 Payment of Bonus Act, 1965; and
 Equal Remuneration Act, 1976

53
 14. Factories Act, 1948;
15. Mines Act, 1952;
16. Dock Workers (Safety, Health and Welfare) Act, 1986;
17. Building and Other Construction Workers (Regulation
of Employment and Conditions of Service) Act, 1996;
18. Plantations Labour Act, 1951;
19. Contract Labour (Regulation and Abolition) Act, 1970;
20. Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979;
21. Working Journalist and other Newspaper Employees
Occupational Safety, Health and
(Conditions of Service and Miscellaneous Provision)
Working Conditions Code, 2020
Act, 1955;
22. Working Journalist (Fixation of Rates of Wages) Act,
1958;
23. Motor Transport Workers Act, 1961;
24. Sales Promotion Employees (Condition of Service) Act,
1976;
25. Beedi and Cigar Workers (Conditions of Employment)
Act, 1966; and
26. Cine-Workers and Cinema Theatre Workers
(Regulation of Employment) Act, 1981

 Trade Unions Act, 1926;

 Industrial Employment (Standing Orders) Act, 1946,
Industrial Relations Code, 2020
and
 Industrial Disputes Act, 1947

Code on Social Security, 2020  Employees’ Provident Funds and Miscellaneous

Provisions Act, 1952;
 Employees’ State Insurance Act, 1948;
 Employees’ Compensation Act, 1923;
 Employment Exchanges (Compulsory Notification of
Vacancies) Act, 1959;
 Maternity Benefit Act, 1961;

54
  Payment of Gratuity Act, 1972;
 Cine-workers Welfare Fund Act, 1981;
 Building and Other Construction Worker’s Welfare
Cess Act, 1996; and
 Unorganised Workers Social Security Act, 2008

The Parliament authorised 4 labour codes in 2020 to replace 29 sets of employment

regulations and incorporate these many statutes. All four labour laws have previously
received the President’s blessing and approval from the Parliament.

1. Code on Wages, 2019:

 The Code on Wages applies to all establishments and to all employees in both
organised and unorganised sectors.

 This labour code envisages uniform applicability of the provisions of timely payment
of wages and minimum wages to all employees and bonus payments in all

55
 employments where any industry, business, trade or manufacture is carried out.

 It introduces the concept of a floor wage, which is to be determined by the Centre

after taking into account the minimum living standards of workers which may be
different for different geographical areas.

 The state government can, under no circumstance, fix a minimum wage rate lower
than the floor rate determined by the Centre.

 The minimum wages decided by the central or state governments should be above the
floor wages. In case the existing minimum wages are higher than the floor wages, the
central or state governments cannot reduce the minimum wages.

 While fixing the minimum wages, the government should take into account the
difficulty level of the work, and the workers’ skill levels also.

 The Code prohibits gender discrimination in wages and recruitment of people for the
same work or work of similar nature. Work of a similar nature is defined as work for
which the skill, effort, experience, and responsibility required are the same.

 Wages include salary, allowance or any other monetary component. It does not
include bonuses and travelling allowances.

 The number of working hours will be fixed by the central or state governments. In the
case of overtime work, the worker is entitled to overtime compensation which should
be at least twice the standard wages.

 The employer can fix the wage period as either daily, weekly, fortnightly, or monthly.

 Advisory boards will be constituted which will advise the governments on minimum
wage fixing and increasing the employment opportunities for women.

 The Code specifies penalties for offences committed by an employer for

Contravention of any provision of the Code, Paying less than the minimum wage and
the maximum punishment is three-month imprisonment along with a fine of Rs. 1
lakh.

2. Code on Industrial Relations, 2020:

 This labour code amalgamates three existing laws and expands the definition of
worker to include persons employed in a skilled or unskilled, manual, technical,
operational and clerical capacity.

56
  Besides, persons employed in a supervisory capacity and earning less than Rs. 18,000
per month have been brought under the definition.

 The code introduces a new provision for fixed-term employment, giving employers
the flexibility to engage a worker on the basis of a written contract. Fixed-term
employees will get the same benefits as permanent employees.

 The minimum number of workers employed for an establishment to have standing

orders has been raised to 300. With the increased threshold, it becomes more flexible
and easier to hire and fire thus leading to increased employment according to the
government.

 The new industrial relation code would also improve the ease of doing business by
allowing firms with up to 300 workers to go ahead with lay-offs, retrenchment and
closure without government permission.

 The new Code also proposes the setting up of a re-skilling fund for training retrenched
workers with a contribution from the employer, of an amount equal to 15 days last
drawn by the worker.

 Efforts made by the Government to quickly resolve disputes of the workers include a
Compulsory facility for the Helpline for the redressal of problems of migrant workers.
Making a national database of migrant workers. Provision for the accumulation of one
day of leave for every 20 days worked when work has been done for 180 days instead
of 240 days.

 Equality for women in every sphere: Women have to be permitted to work in every
sector at night, but it has to be ensured that provision for their security is made by the
employer and consent of women is taken before they work at night.

 In the event of the death of a worker or injury to a worker due to an accident at his
workplace, at least 50 % share of the penalty would be given. This amount would be
in addition to the Employee’s Compensation.

 The provision of a “Social Security Fund” for 40 Crore unorganized workers along
with GIG and platform workers will help Universal Social Security coverage.

3. Code on Social Security, 2020:

57
  The definition of employees has been widened to include inter-state migrant workers,
construction workers, film industry workers and platform workers/ gig workers.

 It subsumes nine laws and empowers the Centre to notify various social security
schemes like the EPF, EPS and ESI for the benefit of workers in all sectors.

 The facility of ESIC would now be provided in all 740 districts. At present, this
facility is being given in 566 districts only.

 It also empowers the Centre to frame any other schemes for the self-employed,
unorganised workers, gig workers and platform workers and the members of their
families.

 EPFO’s coverage would be applicable to all establishments having 20 workers. At

present, it was applicable only to establishments included in the Schedule.

 Firms employing more than 20 workers have to mandatorily report vacancies online
under this code.

 The Code has a provision for the creation of a social security fund for workers in the
unorganized sector.

 The Code proposes the establishment of a National Social Security Board for
recommending to the central government the formulation of schemes for the various
sections of unorganised, gig and platform workers.

 Provision for Gratuity has been made for Fixed Term employees and there would not
be any condition for a minimum service period for this.

 The gratuity period for working journalists has been reduced from 5 years to 3 years.

 With the aim of making a national database for unorganised sector workers,
registration of all these workers would be done on an online portal and this
registration would be done on the basis of Self Certification through a simple
procedure.

4. Code on Occupational Safety, Health and Working Conditions, 2020:

 It amalgamates 13 existing labour laws into the labour code and applies to factories
(as the code expands the definition) having at least 20 workers if the manufacturing
process is being carried on with the aid of power and 40 if the manufacturing process
is being done without power.

58
  Under this code, employers are required to ensure that the workplace is free from
hazards which cause injury or occupational disease to the employees and provide free
annual health examinations or tests, free of cost to certain classes of employees.

 The Code defines an inter-state migrant worker as someone who has come on his/her
own from one state and received employment in another state and earns up to
Rs.18000 per month.

 Portability benefits for inter-state migrant workers: They can avail of benefits in the
destination state as regards ration and benefits of building and other construction
worker cess.

 The Code also proposes a Journey Allowance – this is a lump sum fare amount to be
paid by the employer for the journey of the worker from his/her native state to the
place of employment.

 To encourage formalisation in employment, A legal right for getting an Appointment

Letter given to workers for the first time is covered.

 Cine Workers have been designated as Audio Visual workers so that more and more
workers get covered under the OSH code. Earlier, this security was being given to
artists working in films only.

 The Code removes the manpower limit on hazardous working conditions and makes
the application of the Code obligatory for contractors recruiting 50 or more workers
(earlier it was 20).

 The Code fixes the daily work hour limit to a maximum of eight hours.

 The Code empowers women to be employed in all kinds of establishments and at

night (between 7 PM and 6 AM) subject to their consent and safety.

Conclusion:

 While industries are entitled to make a reasonable profit on investment, workers are
equally entitled to reasonable wages and good and safe working conditions.

 It is an uphill task to enact and codify rules that satisfy both parties and the mid path,
taking care of the interest of both should be the goal of any labour legislation. To that
end, the four labour codes have been rightly grouped together.

 While the labour codes could be called “historic” because they come after nearly a

59
 century, the exuberance of the Union govt terming them as “landmark” and “game-
changer” is an exaggeration.

 The laws have adapted to the prevailing industrial and economic activity, but there is
a long way to go to achieve a fine balance in the interest of workers and the industry.

 The government needs to work more to recognise that focusing on economic growth
without redistribution of wealth leads to jobless growth and socially unaccountable
prosperity.

 Every law has to aim to maintain the best possible balance between competing
interests and should try to give as much comfort to the weaker of the two sides, as
much possible in the larger interest of our nation.

 Ultimately these laws will be as good as their implementation, mere letters of law
have no meaning.

 The government has to ensure that they are implemented with honesty and integrity,
then only the country will be able to achieve the desired goal of speeding up
economic growth and unleashing the untapped potential of thousands and thousands
of our industries, businesses and entrepreneurs to take the nation to new heights

60
61
BENEFITS OF LABOUR CODES

The benefits of the four-labour code have been given below:

1. It is anticipated that litigation will decline as a result of the 2019 Code of Wage Act,
which simplifies the idea of pay. This will ensure that every worker receives a minimum
salary and improve their purchasing power, both of which will spur economic growth.

2. The three Codes (IR, SS, and OSHW) streamline the labour laws by consolidating 25
central labour legislation that have been on the books for at least 17 years.

3. Despite a reduction in the number of definitions and authorities that apply to businesses,
it will result in a considerable rise in employment and industry.

4. The codes specify only one licencing process.

5. The guidelines also streamline out-of-date laws governing workplace disputes and
modernise the adjudication process, promoting early conflict resolution.

6. Industry insiders and some economists anticipate that this legislation will boost
investment and streamline business dealings. It greatly reduces internal complexity and
inconsistencies, increases adaptability, and modernises rules.

7. In any industry, women must be permitted to work at night, but only if the employer has
taken steps to assure their protection and only after receiving their consent.

8. Maternity leave now lasts for 26 weeks instead of the previous 12 weeks. Women are
now able to work in mines because to the Pradhan Mantri Rojgar Protsahan Yojana
(PMRPY).

62
11. IN DETAIL, DISCUSS THE HISTORICAL BACKGROUND OF LABOUR LAWS
IN INDIA.

Discussion of Indian labour law and

industrial relations is often divided
into discrete time
periods, reflecting important stages
in the evolution of the Indian state as
well as stages of
economic development and policy.
8
Writing in 1955, Ornati suggested
three key periods in
Discussion of Indian labour law and
industrial relations is often divided
into discrete time
periods, reflecting important stages
in the evolution of the Indian state as
well as stages of
economic development and policy.
8

63
Writing in 1955, Ornati suggested
three key periods in
Discussion of Indian labour law and
industrial relations is often divided
into discrete time
periods, reflecting important stages
in the evolution of the Indian state as
well as stages of
economic development and policy.
8
Writing in 1955, Ornati suggested
three key periods in
Discussion of Indian labour law and industrial relations is often divided into discrete time
periods, reflecting important stages in the evolution of the Indian state as well as stages of
economic development and policy. Writing in 1955, Ornati suggested three key periods in the
evolution of Indian labour law to that point of time. The earliest regulation was largely aimed
towards securing labour supply and control, including Indian versions of the Masters and
Servants provisions of English law, but these were eventually added to by a sequence of
factory-type regulations, providing for some basic levels of protection, between the 1880s
and the 1930s. This legislation essentially reflected an accommodation of sorts between the
interests of British industry, seeking protection for its domestic enterprises against cheap
foreign labour, and Indian social reformers intent on improving what were regarded as
subhuman working conditions in Indian factories. In the view of some commentators, this
early period of labour law reform was largely “formal or unimportant,” constituting only a
“minimum of interference with the working conditions of labour and the relationship between
the employer and the worker.” A second period (1937–47), Ornati suggests, was more

64
creative, and began with the emergence of “Provincial Autonomy” in the second half of the
1930s, the focus of the Indian Congress Party on workers’ rights (including such matters as
standards of living, trade union rights, the right to strike, and so on), and the introduction of
greater uniformity through the extension of workplace regulation. The third period in Ornati’s
analysis begins with the critical post-Independence legislation of the late 1940s and early
1950s. Ornati’s analysis would suggest that there was nothing very eventful about early
Indian labour law, but others have argued that there was important progress made in labour
legislation in the immediate post-World War I period, pointing specifically to the influence of
several International Labour Organisation (ILO) conventions and the Royal Commission on
Labour in the 1920s as major advances. For the purposes of present discussion we propose to
examine the evolution of labour law in India, and the regulatory policy associated with it,
across six main periods.

2.1 Pre-1920s

As we have already noted, in the early period of industrialization and the gradual shift of
labour from rural areas to cities, there was little attention paid to the organization of work by
the colonial authorities beyond various penal provisions aimed at securing labour supply and
discipline for emerging industries. Much of the early British regulation related to workers in
the government service, including the military, and “forced labour” for the performance of
public works. In this early legislation, the Workmen’s Breach of Contract Act 1859 was of
pronounced importance, imposing not merely fines for breaches of employment contracts, but
also allowing for orders of specific performance of the service contract. These provisions
were long-standing and extensively used in labour discipline. It is important to note further
that at the same time labour organization was also substantially a matter of family, land, and
cultural regulation, and the relationship of the Masters and Servants laws and other penal
provisions, and the idea of the “contract” of employment, with the traditional patterns of
regulation grounded in these earlier customs and forms, were complex to say the least.
However, from the 1880s onwards there was a succession of legislative interventions by the
colonial government, mainly in relation to the employment of women and children, and
concerning hours of work, in factories and mines. Much of this legislation was the result of
various government-initiated enquiries. However, the legislation made only very slight
inroads into working practices in these industries, and was of limited impact insofar as it
applied only selectively. Regulation in the plantation sector was focused principally upon
matters relating to labour supply and the problems of the indentured labour system.

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2.2 Post-World War I and the 1920s

As we noted, there is some disagreement about the importance of this period. Several factors
had combined to alter the industrial and political landscape, including the emergence of a
strong nationalist movement, the rapid development of trade unions (most importantly the
formation of the All India Trade Union Congress in 1920), and the emergence of Communist
influence in the labour movement following the successful Bolshevik revolution in Russia in
1917. At the same time, the newly created International Labour Organization began to have
an influence on labour policy in India. Much of the legislation of this period was a
continuation of the “factory”-style regulation of the pre-war period, dealing with hours of
work, rest periods, female and child protections, health and safety, and so on. Typical
protective legislation of the period includes the Factories Act 1922, the Mines Act 1922, and
the Workmen’s Compensation Act 1923, much of it responding to the ratification of various
relevant International Labour Organization conventions by the colonial Indian government.

However, even if this body of legislation is correctly characterized as “unimportant,” two

further enactments in this period point to what has been described as the emergence of a more
modern approach to the regulation of industrial relations: the Trade Unions Act 1926 and the
Trade Disputes Act 1929. The regulatory framework set down in these two provisions
continues formally to underpin the collective labour law system of presentday India. The
Trade Unions Act 1926 provided for the registration of trade unions (though registration was
not made compulsory), gave unions a legal status, and extended some protections against
civil and criminal liability in the course of industrial disputes. The Act was limited in certain
respects (for example unregistered unions were excluded from the Act’s protections), and the
legislation provided no support for a collective bargaining system as such, insofar as there
was no obligation upon employers to bargain with unions (even registered unions) in the
course of an industrial dispute, nor, in the case of such bargaining, was there any legal
obligation to bargain in good faith. The Trade Disputes Act 1929 placed severe limitations
upon the right to strike, and provided for the compulsory reference of industrial disputes to a
conciliation board or a court of enquiry. The outcomes of the reference, however, were not
binding upon the parties. Both pieces of legislation were strongly criticized by sections of the
trade union movement, including the All India Trade Union Congress.

2.3 The 1930s

In the context of world economic depression and the associated rise in unemployment, there

66
was also in this period continued agitation for Indian independence in which the All India
Trade Union Congress was playing a major role. Mass dismissals were accompanied by a
renewed wave of strikes, especially as the economic depression took hold through 1928 and
1929. Against this background, the British government established the Royal Commission on
Labour in India on 4 July 1929. The Commission was effectively boycotted by the Indian
labour movement, the All India Trade Union Congress pointing to the British Imperialist
government’s “open and brutal attack upon the trade union movement by means of repressive
legislation” and its lack of “bona fides” in establishing the Commission. The Commission
handed down its Report34 in 1931, still a period of continued job cuts, wage reductions, and
ongoing industrial unrest and strike action. But during the 1930s, two major factors began to
put some further shape on Indian labour law. First, many of the outcomes of the Report of the
Royal Commission made their way into a string of new labour legislation between 1933 and
1939. Menon estimates that of 24 pieces of labour legislation introduced by central and
provincial governments between 1932 and 1937, 19 arose from the Royal Commission’s
recommendations. Virtually all of this new law was in the nature of protective factory and
mines regulation to do with wages, hours of work, and compensation of one sort or another,
similar to earlier periods. One exception was the Payment of Wages Act 1936, which
empowered the employer to deduct wages of employees absent from work in concert, and
without reasonable cause. A further example was the Trade Disputes (Amendment) Act 1938,
which authorized provincial governments to appoint conciliation officers to assist in the
settlement of disputes. Second, and potentially more important, were the developments which
followed from the Government of India Act 1935. The heightened profile given to provincial
autonomy made possible under these new constitutional arrangements gave rise to popular
expectation that more “labour”- or “union”-friendly policies would emerge at the provincial
government level, and this in turn gave rise to further concentrated periods of extensive strike
action. Even prior to the 1935 Act, several provincial governments had begun to experiment
with labour law, much of it an important contribution to the development of better working
conditions in workplaces. Not all of this, however, was particularly directed to creating a
more favourable environment for combined labour activity. One important instance was the
introduction of the Trade Disputes (Conciliation) Act 1934 by the provincial government of
Bombay. Whilst novel insofar as it was designed to effect changes to collective labour
relations (by providing for the appointment of a Labour Officer to represent the interests and
grievances of workers in the cotton mills), the 1934 Act seems to have been aimed mainly at
heading off communist influence among the labour movement following many years of
67
decline in the Bombay-based textile industries and a major strike earlier in that year.
However, more adventurous legislation followed after the election of more popular provincial
governments in the wake of the Government of India Act 1935. The introduction of the
Industrial Disputes Act 1938 by the Bombay provincial government, for example, among
other things made some move towards the imposition of a legal obligation on the part of
employers to recognize trade unions. Again, it is necessary to note, however, that these were
largely limited measures which were not greeted with general approval by the Indian trade
union movement. The All India Trade Union Congress described the 1938 Bombay Bill as
“uncalled for, reactionary, prejudicial and harmful to the interest of the workers [and]
‘calculated to create slave unions’.” In general it appears that the expectations created in the
popular election of provincial governments remained largely unfulfilled.

2.4 World War II and the Pre-Independence Period

Regulation in the World War II period appears against the background of considerable
industrial unrest and strike action against the conditions and effects of the war itself. These
circumstances brought into being several pieces of legislation (at central and state level)
designed to secure labour co-operation in support of the war effort. This legislation included
passage in 1941 of s. 49A of the Bombay Industrial Disputes Act, granting power to the
Bombay government to refer industrial disputes to compulsory arbitration by an Industrial
Court, and banning all strikes and lockouts prior to arbitration. Much of this restrictive
legislation in the Bombay province was continued after the war ended in the form of the
Bombay Industrial Relations Act 1946. Other relevant legislation included the central
government’s Essential Services Act 1941, and the Defence of India Rules (Rule 81-A,
introduced in 1942, and Rule 56-A, introduced in 1943). Each of these sets of provisions laid
down severe restrictions against strikes, and other forms of industrial action, in the course of
industrial disputes, including industrial action on the part of employers in some cases.
General and political strikes were also targeted. The provisions of Rule 81-A in particular
were continued after the war as part of the Industrial Disputes Act 1947, and, as is noted in
subsequent sections of this paper, have remained a core part of the legislation governing
industrial disputes and bargaining since that time. To greater or lesser extent, the Trade
Disputes Act 1929, its successor the Trade Disputes Act 1947, and earlier provisions such as
the Bombay Act of 1934, were essentially designed to enable government agencies to
investigate industrial disputes over relevant terms and conditions of employment, and to
settle them in appropriate cases. But generally the terms of this legislation were historically

68
directed more towards the control of labour than towards the settlement issue. Certainly there
was little or nothing in these various provisions which facilitated the development of
collective bargaining in a British- or American-style model. While strikes and lockouts were
strictly controlled, Indian governments, at both central and state levels, exercised strong
controls over the circumstances in which disputes might be referred to adjudication, the
industries to which the legislation applied, and which unions might be permitted to notify
such disputes.The overall impact of this was, then, one of limitation and exclusion. The
Industrial Disputes Act 1947, for example, applied (and applies) generally to “workmen” in
“industries.”

“Workmen” excluded various categories of workers engaged in particular occupations, or in

managerial and administrative capacities, and so on. Whereas the term “industry” has now
been interpreted quite broadly, many types of employment, including workers in government
departments and services, and domestic and agricultural workers, are still excluded. Similarly
the Trade Unions Act 1926 also contained important limitations on its coverage. It has been
said of the system set up under the Industrial Disputes Act 1947 that “the freedom of
industrial action on the part of workers [is] more illusory than real” and that the “provisions
of the law [operate] to restrict the options available to the side represented by the workers.”
What collective bargaining there was, developed without state support and, not surprisingly,
evolved almost entirely in the formal (or organized) sectors of the economy. These are
largely confined to the public and large corporate sectors and constitute about 3% or less of
the workforce in each case. Most scholars have noted that the path taken in the evolution of
labour law in India in the post-1945 period basically followed the pattern established earlier
in the restrictive policies of the colonial government and in particular the legislation of the
war years. Only in a few states were there exceptions made to the overall discretionary power
of government to refer or not to refer disputes for adjudication, and in only a few states did
laws emerge which created some sort of obligation upon employers to recognize trade unions.
One such provision was the Bombay Industrial Relations Act 1946 which, building upon the
earlier (and much criticized) attempts in the Bombay Industrial Disputes Act 1938,
distinguished several types of union, and extended to some of those unions the right to
represent workers in particular industries and areas. At the same time, however, there was a
continued strengthening of the protective regulation applying to an individual worker’s rights
during this period. One example is the Industrial Employment (Standing Orders) Act 1946,
which required employers to provide their employees with clear terms and conditions of

69
employment according to the items set down in a Schedule to the Act and certified by the
relevant authority. Other major statutes of this period included the Factories Act 1948 and the
Minimum Wage Act 1948. Much of this body of regulation, as we have noted also in the case
of the Industrial Disputes Act 1947, was (and remains) limited in its application because it
was applied only selectively to certain kinds of business establishment, and, in respect of
some provisions, only to businesses of a certain size as determined by the number of
employees. This is a common theme in Indian labour law, with obvious implications for the
legitimacy of the labour law system as a whole.

2.5 Post-Independence, 1948 Onwards

In the immediate post-war period it was agreed that the Indian central government would be
primarily responsible for labour legislation, and the promotion of labour’s interests, reflecting
a five-year plan of development “dealing with all phases of the worker’s life, of housing,
welfare, work, better working conditions, and fair wages.” Many of these social values were
articulated in the Constitution of India 1950, particularly its commitment to economic,
political, and social justice in the Preamble, and its general egalitarian conception of national
development. Consistent with this socio/political outlook, we have noted the introduction of a
raft of protective legislation in the form of the Factories Act 1948, and the Minimum Wages
Act 1948. Important also to note are the Dock Workers (Regulation of Employment) Act
1948, which among other things sought to “decasualize” dock labour, the Employees’ State
Insurance Act 1948, providing for an insurance system for employees in cases of sickness,
maternity, injury, and death, the Plantations Labour Act 1951, which sought to regulate
conditions of work and provide welfare measures for India’s high-employment industries in
tea and rubber plantations, and the Employees’ Provident Fund and Miscellaneous Provisions
Act 1952, one of the most important pieces of legislation in India’s social security system. It
follows from what we have said earlier, however, that this period did not mark out a
completely new approach to the issue of labour regulation in India. When it came to the
regulation of collective labour relations in particular, the restrictive policies of government
control which had characterized the colonial and immediate post-war period continued to
hold sway. As various authorities have noted, the major influence on the formation of post-
independence labour and economic policy was the priority given to government-directed
“nation-building”—in which the need for trade union co-operation in securing industrial
peace and labour support for industrialization and economic development (economic
nationalism) was paramount. Consequently, the development of labour law in India continued

70
to follow the dual pattern already identified. In support of the state planned and organized
economy, the Indian government continued its strong interventionist role in industrial
relations. The laws regulating trade unions and industrial disputes remained largely fixed on
the model set by the legislation introduced over the period from 1926 to 1947, and this in turn
had certain implications for the Indian industrial relations system. While trade union
organization was legally sanctioned, collective bargaining (at least nominally) “recognized,”
and strikes and lockouts to a degree legalized and regulated, the level of state intervention in
the actual industrial relations process, and the emphasis given to the maintenance of
“industrial peace” effectively circumscribed the possibility that collective bargaining might
develop as the primary form of industrial relations in India: in effect “[c]ollective bargaining
was held to be incompatible with economic planning.” Overall, the law on bargaining has
changed little since these formative days, although in an important amendment to the Trade
Union Act in 2001 it was provided that trade unions were required to have at least 100
members or to represent at least 10% of the workforce in order to secure registration under
the Act, thereby making the formation and legalization of unions far more onerous than had
previously been the case. As noted earlier, some states did move to provide unions with a
right to recognition, and some subsequent legislation made the refusal to bargain on the part
of an employer an “unfair labour practice,” more or less making the duty to bargain legally
obligatory. Probably the best example of this legislation is the Maharashtra Recognition of
Unions and Prevention of Unfair Labour Practices Act 1971, which supplemented the
Industrial Relations Act 1946 of Bombay, although that legislation was limited in its
application to nine industries only. In 1982, the Indian central government amended the
Industrial Disputes Act of 1947, introducing the concept of “unfair labour practice” into
national labour law. This legislation outlawed various practices by employers, unions, and
workers designed to disrupt the legitimate processes of dispute settlement under the Act. The
refusal by an employer to bargain collectively in good faith with the recognized trade union
was listed as an unfair practice. Whilst on the face of it this provision might seem to have
amounted to a major breakthrough in collective bargaining law in India, it does not appear to
be regarded as particularly important by Indian labour law scholars, perhaps principally
because it has had little impact in practice. What collective bargaining there is in India, and it
does exist at all levels and across many industries, has evolved in a de facto sense, and, as
noted earlier, has been largely limited to the public, and corporate, sectors of the economy. In
the mid-1990s, the proportion of Indian workers covered by collective bargaining agreements
was estimated to be lower than 5%. On the other hand, Indian labour law continued to
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develop in a second dimension; that is, in respect of the relations between the employer and
the individual worker. Here we can identify two main categories of intervention. The first
concerns the continued regulation for protective labour standards which took place at both
central and state levels. We have already noted the continuation of this pattern in the post-
World War II period, and, as Sundar has pointed out, the ongoing regulation for minimum
wages, equal pay, social security and insurance, maternity benefits, health and safety, leave
and holidays, housing, and so on, occupied much of the regulatory space which was taken up
in the contents of collective agreements in industrialized Western countries. The second area
of development concerns employment security. Originally the termination of, or dismissal
from, employment was not an appropriate subject of an individual “industrial dispute”
pursuant to the Industrial Disputes Act 1947, and there was thus little limitation on the
employer’s right to fire an employee as it saw fit, other than a requirement that appropriate
notice be given. Nor did the legislation place limitations upon the power of the employer to
retrench or lay off redundant workers. However, pursuant to amendments to the Industrial
Disputes Act in 1953, 1976, and 1982, the central government began gradually to introduce
important new regulations pertaining to retrenchments, lay-offs, and plant and industry
closures. These regulations, including the all important Chapters VA and VB of the Act
required, inter alia, permission by the appropriate authorities for mass redundancies and firm
closures, minimum notice periods, and further relief in the form of compensation.

As far as individual dismissals are concerned, a 1965 amendment to the Industrial Disputes
Act created a right in an individual employee to notify an “industrial dispute” over his or her
discharge, dismissal, retrenchment, or other form of termination, whether or not that person
was represented by a trade union. A subsequent amendment, in 1971, empowered the
Industrial Tribunals and the Labour Court to investigate the dismissal of employees, and
make appropriate orders, including reinstatement and compensation, where the dismissal was
found to be unfair. As a consequence of these legal changes, the Labour Court and other
tribunals developed a general broad discretion to review the dismissal of workers and to
award relief according to notions of substantive and procedural justice. In 1976, amendments
to the Act substantially increased (from one month to three months) the amount of notice
required to be given to certain categories of employee who had been in continuous service for
at least one year, and prohibited the dismissal of workers by way of retrenchment, lay-off, or
industry closure in factories, mines, and plantations employing 300 or more persons (later
reduced to 100 or more in 1982) without permission of the appropriate government. Other

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legislation introduced in the 1970s and into the 1980s consolidated this evolving protective
framework of laws for employees engaged in the regulated (formal) sectors of the economy.
Aside from further strengthening the law on dismissal, major legislation was introduced by
the central government in 1970 which strictly limited and regulated the use of contract and
agency labour. Further, the Industrial Disputes (Amendment) Act of 1982, in addition to
declaring certain collective behaviours by both employers and unions to be “unfair labour
practices,” declared certain hiring practices, such as the continuing employment of workers
on casual or temporary contracts with “the object of depriving them of the status and
privileges of permanent workmen,” also to be unfair. Overall, then, the post-Independence
period was, at least at the level of the individual worker in the regulated sector, clearly a
period of important consolidation in employment protection. Not only the central
government, but also several of the state governments, played an important role in this
development. In his study of the impact of Indian labour regulation on unemployment, Sarkar
notes that in the period from 1970 to 2006 there were changes in only nine of 40 variables
used in one quantitative study of Indian labour law. Of those nine changed variables, eight
were numerically assessed to have been of advantage to labour and thus of disadvantage to
management. Of those eight, seven pertained to the individual employment rights
(employment status and security) of workers. What this says about the overall protective
strength of Indian labour law is problematic, and we address this issue in Section 2.6 of this
paper. But what it does confirm is that in the long sweep of post-war evolution in Indian
labour law, Indian governments were concerned principally with the construction and
maintenance of a “floor of rights” for certain classes of labour, and at the same time
restricting the industrial, if not the political, development of collective labour influence.

2.6 The Struggle for Liberalization: Post-1990

Whatever might be said with accuracy about the protective qualities of the Indian labour law
system, it is certainly the case that there is a widespread perception that both the extent and
content of regulation in the Indian labour market has placed severe restrictions on the
capacity of the Indian economy to develop, particularly in the context of economic
globalization. References are constantly made to the volume and severity of the regulatory
framework and the arcane nature of the rules and institutions constituting Indian labour law.
As noted earlier, India has well in excess of 150 separate laws governing the labour market
and the workforce, many of which overlap, deviate from central principles, or are perceived

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to be simply out of date. This perception of “overregulation” has given rise to agitation from
many sources for the various Indian governments to roll back their regulation of labour and
workplaces, particularly those laws which impact upon the capacity of enterprises to hire and
fire more easily, and to engage labour on more flexible arrangements, and those requiring the
payment of minimum wages. At the same time, this pressure for reform has been strongly
resisted by the labour movement generally. In part this comes down to disagreement over
evidence, and in part over ideology. Certainly there are legitimate doubts raised in the
literature on the accuracy of the supposed connection between Indian labour law and the
perceived “inflexibility” of the Indian labour market: at the very least the evidence is
considered slight, ambiguous, or both. However, this question is not a core concern for us
here, although we do return to the issue in the Section 3 of this paper. Rather, we are
interested in whether, and if so to what extent, labour law in India has undergone a period of
modification in response to liberalization, and what form that change might have taken. The
immediate catalyst for action in labour market reform in India is grounded in the state of
economic crisis which confronted the country in the late 1980s. It is not necessary for us to
detail these problems here, but it is important to note that the government was obliged to
accept a readjustment package proposed by the World Bank and the International Monetary
Fund which required certain steps to be taken to liberalize the economy. As part of this “New
Industrial Policy,” the Indian government was committed to reducing the number of industry
sectors under the monopoly or control of the state, abolishing the need for government
approval for new investment in specific sectors of the economy, and generally winding back
the public sector. Unprofitable state industries were to be wound back or closed down, and a
more flexible system for the licensing of new businesses introduced. A shift to a less
regulated labour market, particularly in relation to the tight controls exercised (at least in the
organized sector) over dismissals and redundancies and the use of contract labour, was
inevitably part of this policy. Workers were to be disciplined by the market rather than by
state control. Generally, successive governments, through various policy pronouncements,
have continued to espouse support for these policies, including those designed to effect
adjustment in the labour market and employment relations. But the degree to which these
policies have achieved real outcomes, and the manner of their doing so, have remained
unclear and contentious. Consequent neoliberal reform measures, according to one account,
have included policies to “weaken union power, outlaw strikes, individualize labour relations,
privatize public enterprises, dilute labour laws, freedom to hire and fire and close
undertakings [sic], removal of prohibition of contract labour [sic], freedom to introduce
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technical changes [sic], repeal of legal provisions relating to bonus [sic] and so on.” But
nevertheless, there is considerable caution, if not to say scepticism, over how much progress
has been made in following these policies through. The main reason for caution seems to be
linked with both the political and legal strategies being adopted in the slow liberalization
process. By and large the labour reform policies have been pursued not through major
legislative change, but through a “less direct” and more piecemeal approach. One critical
explanation for this lies in the fact that various political and labour alliances across different
political parties are usually sufficient to block major labour law reform. Put another way:
“Labour law reforms have traditionally worked in India when approved through the tripartite
route.” Traditionally the Indian union movement was very powerful in political terms by
virtue of its incorporation into the party political process, and although this power had
reached its high point by about the mid-1970s, and membership decline has since impacted
upon its capacity to resist change, overall most authorities still rank the political influence of
the union movement as critical. This has led, then, to what has been described as a gradual
approach to liberalization. Although there have been some labour policy initiatives at the
central government level, including, for example, various proposals and Bills for the
protection of workers in the unorganized sector, the most important and ongoing movements
towards liberalization in labour law have taken place at the state government level. Jenkins
has pointed out that India’s federal political structure has lent itself to a more gradual reform
agenda in three specific ways. First, competition between the various states for investment
has led to legal change on a state by state basis, hence avoiding the need for an all-embracing
national reform of labour law. In order to attract investment, often state governments provide
assurances to investors that certain inconvenient labour standards will not be enforced.
Second, dealing with the issues on a state by state basis also waters down the degree of
political resistance from unions and other opposition forces. Third, state reforms may act as
models for changes in other states, or even to provide some leadership for reform at the
central government level. It is important, therefore, in understanding whatever limited
progress has been achieved in the liberalization of Indian labour law and regulation, to look
closely at the developments in several of the important states. It is first necessary to note that
even here many of the bolder proposals for reform have failed to pass into law. The State of
Maharashtra is a good case in point, with major reform proposals being presented by the
Director of Industries in 2000, and through an Industrial Policy Statement in 2001. Among
these proposals were changes to minimum wage laws, retrenchment laws, laws relating to the
inspection of work premises, and laws pertaining to the size of plants excluded from
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regulation. None of these changes were implemented due to opposition from trade union and
political interests. Similarly, attempts by the Maharashtra state government (and other states)
to introduce more flexible “hire and fire” laws into the businesses situated in the state’s
Special Economic Zones has generally been met with a negative response from the central
authorities (although it is necessary to note that in practice labour laws are rarely enforced in
these zones, and thus rarely, if ever, restrict market operations, despite the limitations
inherent in the formal law). On the other hand, there are also examples of successful
modifications being made to central labour laws by some provincial governments, the State
of Andhra Pradesh being a case in point. In general terms, the liberalization process in the
labour laws of the Indian states has included the relaxation of laws against the employment of
women at night, greater ease in shift working, and greater freedom for the use of contract
labour. According to one source, the use of contract labour, and the subcontracting of non-
core activities to other firms, increased substantially during the 1990s, though this increase
was more pronounced in some states than others. On the other hand, despite the general laxity
of enforcement in labour law, the laws on retrenchment continue to be comparatively strictly
implemented. Other minor changes include matters such as the minimization of workplace
inspections and technical changes to the administration of workplaces and keeping of records
required under various pieces of factory legislation and so on. Much of this change has been
facilitated through administrative procedure rather than formal legal repeal and enactment.
According to one recent study, while India’s job security laws have remained fairly stable for
regular contracts (i.e. ongoing contracts in the organized or formal sector), the system is now
more flexible in relation to temporary and fixed-term contracts. This reflects the fact that “the
main area of labour law reform that has come about in recent years, allowing employees to
work on temporary work agency contracts to carry out a range of ‘non-core’ activities, a
concept that is defined in various ways across states … Standard fixed-term contracts are
allowed for white-collar workers as well as, in principle, for regular workers.” However,
despite these shifts in labour law at the state level, it remains the case that the liberalization
process has produced modest outcomes at best. An Organization for Economic Cooperation
and Development (OECD) study reported by Dougherty examined eight sets of regulatory
variables (totaling 50 separate subject areas) for potential reform lightening the regulatory
burden upon businesses across 21 Indian states. In keeping with our earlier observations, the
largest number of reforms related to contract labour, but even so, there had only been reform
in about half of the subject areas pertaining to this form of employment. No state had a score
of much more than 50% in terms of change in possible reform areas, and in seven of the 50
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subject areas no more than two states had made any reforms at all. Areas of regulation
showing little change across the 21 states included collective lay-offs, the regulation of
working hours, union recognition, and reductions in the numbers of inspections.

QUALITY, PURPOSE, AND IMPACT IN INDIAN LABOUR LAW

There are always difficulties, we suggest, in interpreting the purpose and role of labour law
systems in any given society. Labour law, more than many other areas of regulatory policy,
may have more immediate and fundamental implications for social and economic stability
and progress, and legal formality may not always fully express or capture the kinds of
compromise which inevitably exist in relations between capital and labour, and in the
regulation of labour markets. In our necessarily brief overview of the evolution of labour law
in India, we have pointed to various anomalies and problems which require further
elaboration and discussion. First, though, it is necessary for us to clarify one or two matters
going to the legal foundations of the Indian labour law system. As we have noted, there is a
continued relevance of some nonlegal, sociocultural relations in the organization and
practices of Indian labour markets to the present day.124 However, formal labour law in
India is firmly based on Western values and concepts, much of it derived from International
Labour Organization standards. It has evolved from early penal provisions on labour, through
to the extension of protective labour conditions of work, and the rights of labour to security in
a broader social sense. Moreover, Indian labour law has recognized and legitimated trade
unions and their activities and established procedures for the settlement of industrial disputes.
While there may be problems in accurately categorizing India according to the indicators
used in the “legal origins” labour law discourse, Indian labour law is Western in conception
and (at least nominal) operation.125 This suggests, then, that we are able to evaluate the role
and impact of Indian labour law accordingly. It is necessary, of course, to recognize that
social, economic, political, and cultural contexts will inevitably have a heavy bearing upon
how labour laws are received, adapted, and given effect in particular socioeconomic
contexts,126 but it is also important to recognize that such laws are introduced usually not to
replicate or reproduce existing social and economic relations, but at least in part to replace or
alter them. In the Indian case we must suppose that its labour law values, as articulated in its
Constitution and its originating economic policies in the post-independence period, were
constructed and evolved in the supposition that the country’s socioeconomic path would
follow a similar trajectory to the process of industrialization, urbanization, and formalization

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that occurred in the developed economies of Western countries.

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