According to the Encyclopaedia of Social Sciences, "collective bargaining is a process of discussion and negotiation between two parties, one or both of whom a group of persons is acting in consent." The resulting bargain is an understanding of the terms and conditions under which a continued service will be performed. Collective bargaining, in more concrete terms, is "a procedure by which employers and a group of employees agree on working conditions."

Collective bargaining is strictly a bipartite procedure, with only employers and employees involved. There is no third-party intervention. Those directly involved regulate employment conditions.

Collective bargaining is defined by the International Labour Organization (1980) as "an institutional procedure of joint determination of the rules to govern the terms and conditions of employment of the workers concerned and the labour management relations themselves."

Due to India's late industrialization, true collective bargaining gained traction after independence. Before independence, the first collective bargaining took place in an Ahmedabad textile mill when the workers realized that resolving industrial problems through the courts was a complete waste of time, energy, and money in British-occupied India.

Following independence, the first case of collective bargaining was between Dunlop Rubber Company in West Bengal, then the Indian Aluminium Company made its first five-year contract with its employees, and many companies followed suit.

In the case of Ram Prasad Viswakarma v. Industrial Tribunal (1961), it was said that prior to the introduction of collective bargaining, laborers found it extremely difficult to discuss the terms and circumstances of their contracts. Collective bargaining became the norm with the advent of trade unions. It became more convenient for companies because they simply had to negotiate with labour representatives rather than with each individual labourer.

Collective bargaining was recognized as a component of the modern welfare State in the decision of Bharat Iron Works v. Bhagubhai Balubhai Patel (1976). It must be carried out in a healthy manner, with cooperation between employers and employees.

AIMS & Objectives Of Collective Bargaining

Collective bargaining has the following goals and objectives:

• Maintaining industrial democracy
• Providing equity and justice to socially and economically disadvantaged groups
• Defending the working class against exploitation
• Meeting the fair expectations of workers for the work they have done

Historical Evolution Of Collective Bargaining

The historical evolution of collective bargaining is a complex and multifaceted journey that has been shaped by changing societal, economic, and political contexts. The concept of collective bargaining, where workers collectively negotiate with employers or management for better working conditions, wages, and benefits, has evolved over time. Here is an overview of its historical development:

1. Early Trade Guilds: The origins of collective bargaining can be traced back to the medieval craft guilds of Europe, where skilled workers banded together to set standards for their trade and to negotiate wages and working conditions with employers. These guilds laid the groundwork for the principles of collective action and solidarity among workers.
2. Industrial Revolution and Labor Unions: The Industrial Revolution in the late 18th and 19th centuries brought significant changes to the workplace. With the rise of factories and industrialization, workers faced harsh working conditions and long hours. In response, labour unions began to form in Europe and North America to advocate for workers' rights and collectively bargain for better terms of employment.
3. Early Labor Legislation: In the United Kingdom, the Combination Acts of 1799 and 1800 initially prohibited trade unions and collective bargaining. However, these acts were eventually repealed in the 1820s, signalling the government's recognition of the need for workers to organize and negotiate collectively.
4. Labor Movements and Legal Recognition: As industrialization spread, labour movements gained momentum. Key milestones included the establishment of the American Federation of Labor (AFL) in the United States in 1886 and the Trade Disputes Act of 1906 in the UK, which provided legal protection for trade unions. These developments marked a growing acceptance of collective bargaining as a legitimate means of resolving labour disputes.
5. International Labor Standards: The International Labour Organization (ILO) was founded in 1919, following World War I, and played a crucial role in setting international labour standards. These standards, such as those on collective bargaining, have influenced labour practices worldwide and furthered the global recognition of workers' rights.
6. Post-World War II Labor Relations: The aftermath of World War II saw a renewed focus on labour relations, with many countries adopting labour laws and regulations to protect workers' rights and support collective bargaining. The Treaty of Detroit in 1950, an agreement between the United Auto Workers (UAW) and General Motors, set a precedent for collective bargaining agreements that provided economic stability and benefits to workers.
7. Legal Frameworks and Evolving Practices: In the latter half of the 20th century and into the 21st century, collective bargaining has continued to evolve. Many countries have enacted comprehensive labour laws that regulate the collective bargaining process, and agreements between labour unions and employers have become increasingly sophisticated, addressing a wide range of issues beyond wages and working conditions.
8. Contemporary Challenges and Adaptations: Collective bargaining faces challenges in the modern era, including globalization, the gig economy, and technological advancements.
    

Indian Statutes & Case Laws Recognizing Collective Bargaining

• 1947 Industrial Disputes Act: This Act was designed to oversee the investigation and resolution of workplace disputes. Section 18 of the Act states that any settlement other than conciliation reached by an agreement between an employer and his employees is binding on them. Section 18 essentially recognizes industrial dispute resolution through collective bargaining.
  The Supreme Court ruled in Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company (Regd.) and Ors. (1990) that the Industrial Disputes Act, 1947 was established to ensure social justice through collective bargaining. The court went on to say that arbitration falls under the ambit of statutory tribunals.
   
• The Trade Union Act of 1926: This Act governs trade union registration, rights, liabilities, and immunities. A trade union's primary duty is to govern the interaction between a company or management and its employees.
  
  In the case of D.N. Banerjee v. P.R. Mukherjee (1952), Justice Chandra Shekhar Aiyer stated that because money and labour have become more important in the modern world, they have organized themselves into groups to settle disputes. This is founded on the premise that unity breeds strength, and collective bargaining is the result.
   
• The Industrial Employment (Standing Orders) Act, 1946: Section 2(g) of this Act defines "standing order" as "rules relating to matters such as classification of workers, attendance, conditions of granting leaves, manner of informing workers about work and wage-related details, and so on." According to Section 3 of the Act, the employer must first submit a draft of the standing order to the certifying officer and must also comply with the standing order model as closely as possible. Following that, the officer sends copies of the document to the trade union or the workers. If no trade union exists to seek objections, the officer must give both parties an opportunity to be heard before certifying the standing order with the required amendments and sending copies to both parties. The certifying officer clearly functions as the negotiator in this case, and the process of creating a standing order involves both the employer and the employees. This clause essentially applies the collective bargaining approach.
   
• The Constitution of India, 1950: Several clauses in the Indian Constitution, particularly the fundamental rights and state policy direction principles, support the concept of collective bargaining. To begin, Article 19 of the Indian Constitution grants every Indian citizen the freedom to organize an association, which includes the right to form a trade union. Article 43 A allows the state to enact legislation that encourage workers to participate in management.

 

Stages Of Collective Bargaining

1. Forming a union The minimum number of employees required to form a trade union is seven, according to Section 9A of the Trade Unions Act of 1926. Though unionization is not required, it does have advantages such as providing proper representation for workers, using funds for specific objectives, immunity from civil claims, and so on.
2. Forming a demand charter At this point, either the union or the company may commence collective bargaining proceedings. The labour union then writes a charter of demands through a series of meetings with all its members.
3. Negotiation The discussions begin with the filing of a demand charter. In most cases, the union is the one who formally proposes suggestions for revisions to current labour agreements during the first meeting. The management is then given the opportunity to propose counterproposals. This will continue until they reach an accord. When they are unable to reach an agreement, a third person may be appointed as a mediator or arbiter.
4. Forming an agreement After a successful negotiation, management and the union draft a written agreement. This is known as a collective bargaining agreement.
5. Strikes If the bargaining process fails, the union may declare a strike. According to Section 22 of the Industrial Disputes Act, employees in the public utility industry must give six weeks' notice of a strike and may strike fourteen days after giving such notice. Neither the management nor the union are entitled to take any industrial action while the conciliation is in progress, and not until seven days after the conciliation processes or two months after the judicial proceedings are completed.
6. Conciliation When the conciliation officer gets a strike notification, the conciliation process begins. This phase allows one to select between two options. Section 4 of the Act states that the state government may appoint a conciliation officer to investigate, mediate, and promote settlement during the cooling-off period. According to Section 5 of the Act, the state government may form a Board of Conciliation, which shall consist of a chairman and either two or four members.
7. Arbitration or adjudication by labour tribunals or courts If the conciliation procedure fails, the parties may choose either voluntary or compulsory arbitration, and the arbitrator's recommendations may be binding on the parties. Section 7A of the Act provides for such disputes to be resolved by a labour court or industrial tribunal within a state. Section 7B of the Act establishes national tribunals to handle disputes affecting matters of national interest. A signed agreement between the employer and the employees may send the dispute to a labour court, industrial tribunal, or national tribunal for adjudication or arbitration.

Collective Bargaining Agreements

1. Bipartite or voluntary agreement Bipartite agreements are agreements or settlements reached through voluntary negotiations within the collective bargaining process. Such agreements are binding on the parties involved, according to Section 18 of the Industrial Disputes Act.
2. Settlement A settlement is usually used to describe a tripartite agreement in which a third party is involved in the decision-making process. This is the agreement reached by the employer and the employees with the assistance of a conciliation officer. If the conciliation officer believes that a settlement is possible during the conciliation procedure, he withdraws it himself. Following that, the parties review the details of the agreement and report back to the officer within a certain time frame.
3. Consent Award When a disagreement is pending before a mandatory adjudicatory authority, the parties can still negotiate. The agreement reached because of such a negotiation is likewise incorporated into the authority's award and becomes legally binding.

Role Of Collective Bargaining In Labour Legislation

1. Influencing Labor Laws:
   • Wage Agreements: Collective bargaining often serves as the basis for determining fair wages and benefits. The negotiated agreements between labour unions and employers help set standards for compensation, influencing minimum wage legislation and fair wage practices.
   • Working Conditions: Labor unions negotiate for improved working conditions, safety regulations, and reasonable working hours. These negotiated terms often find their way into labour laws and occupational health and safety regulations.
   • Leave and Benefits: Agreements on paid leave, health benefits, retirement plans, and other employee benefits reached through collective bargaining can influence labour laws and regulations related to employee benefits.
2. Conflict Resolution:
   • Collective bargaining provides a mechanism for resolving disputes and conflicts between workers and employers. When disagreements arise, the negotiation process can help reach mutually acceptable solutions, preventing the need for costly and time-consuming legal actions.
   • The process of negotiation and dispute resolution within the framework of collective bargaining can help maintain industrial peace and reduce the incidence of strikes and lockouts.
3. Worker Empowerment:
   • Collective bargaining empowers workers by giving them a collective voice in the workplace. It allows employees to express their concerns and aspirations, influencing labor laws that protect their rights and interests.
   • The process of collective bargaining fosters a sense of ownership and solidarity among workers, leading to greater job satisfaction and an enhanced sense of workplace democracy.
4. Adaptation to Changing Workforce Needs:
   • As labour markets evolve, collective bargaining allows for the adaptation of labour laws to meet the changing needs of the workforce. Labor laws can be modified to address issues such as part-time work, remote work, and the gig economy, reflecting contemporary employment trends.
5. Government Involvement:
   • Governments often play a role in facilitating collective bargaining and ensuring its fair and equitable application. They may enact laws that promote collective bargaining and set regulatory frameworks for negotiations.
   • Governments can also step in to mediate or arbitrate when negotiations reach an impasse, ensuring the interests of both workers and employers are protected.
6. Globalization and International Standards:
   • In a globalized world, collective bargaining may influence labour laws through international agreements and standards. International bodies like the International Labour Organization (ILO) promote core labour standards, including the right to collective bargaining, influencing labour laws across nations.

Conclusion
Collective bargaining has played a pivotal role in shaping labour legislation in India, ensuring the rights and welfare of workers. While facing challenges, it remains an essential tool for promoting social justice and industrial harmony. To enhance its effectiveness, it is crucial to address issues related to unionization, enforcement, and worker empowerment, while promoting social dialogue in the ever-changing landscape of labour relations in India.

References:

• All about a Collective Bargaining Agreement in India available at https://blog.ipleaders.in/all-about-a-collective-bargaining-agreement-in-india/ (Last modified on April 5, 2022)
• Collective Bargaining and Labour Relations available at https://www.ilo.org/global/topics/collective-bargaining-labour-relations/lang--en/index.htm (Last modified on 19 October, 2023)
• Collective Bargaining available at https://www.legalserviceindia.com/legal/article-8300-collective-bargaining.html (Last modified on 19 October, 2023)
• Collective Bargaining available at https://www.mlsu.ac.in/econtents/1197_Collective Bargaining .pdf (Last modified on 19 October, 2023)
• https://indiankanoon.org/
• https://www.manupatrafast.com/