All About Collective Bargaining in India
🏛️ Collective Bargaining in India: An Overview
Collective Bargaining refers to the process of negotiation between employers and a group of employees (usually represented by trade unions) aimed at reaching agreements that regulate working conditions. It covers wages, working hours, benefits, workplace safety, and other employment terms.
📚 Definition
According to the International Labour Organization (ILO):
“Collective bargaining is a voluntary negotiation between employers or employers' organizations and workers’ organizations with a view to the regulation of terms and conditions of employment by collective agreements.”
⚖️ Legal Framework in India
While India does not have a specific law titled "Collective Bargaining Act", it is recognized and supported under various labor laws:
1. Industrial Disputes Act, 1947
Recognizes trade unions and provides a mechanism for dispute resolution.
Promotes conciliation, arbitration, and adjudication if collective bargaining fails.
2. Trade Unions Act, 1926
Provides legal status to trade unions.
Encourages workers to unionize for collective bargaining purposes.
3. Code on Industrial Relations, 2020
Part of the new labor codes.
Consolidates provisions of the Industrial Disputes Act, 1947; Trade Unions Act, 1926; and Industrial Employment (Standing Orders) Act, 1946.
Recognizes Negotiating Unions or Negotiating Councils in industrial establishments.
⚙️ Process of Collective Bargaining
The process typically involves these stages:
Preparation:
Both parties (employer and employees/trade union) gather relevant data and define objectives.
Demand and Proposal:
The union submits a charter of demands.
Negotiation:
Meetings are held; both parties attempt to reach a compromise.
Agreement or Breakdown:
May result in a collective agreement, or lead to industrial action if talks fail (strikes, lockouts, etc.)
Implementation:
Terms agreed upon are implemented and monitored.
📄 Types of Collective Bargaining Agreements
Bipartite Agreements: Between employer and trade union without government intervention.
Tripartite Agreements: Involving government representatives as mediators or conciliators.
Settlement under the ID Act:
Section 18(1): Bipartite settlement binding only on signatories.
Section 18(3): Settlements reached in conciliation proceedings are binding on all parties in the establishment.
🇮🇳 Challenges to Collective Bargaining in India
Multiplicity of Trade Unions: Different unions within the same industry or company may have conflicting demands.
Political Interference: Many trade unions are affiliated with political parties, which often disrupts objective bargaining.
Low Union Penetration in Private Sector: Especially in IT, service sectors, and gig economy.
Employer Resistance: Employers may discourage union formation or bypass unions in negotiation.
Fragmented Labour Market: Presence of contractual and informal workers often outside the bargaining framework.
✅ Advantages of Collective Bargaining
Promotes industrial peace and harmony.
Balances power between employer and employee.
Results in mutually agreed employment terms.
Provides a platform for dialogue and grievance redressal.
📌 Landmark Case Laws in India
Bangalore Water Supply vs. A. Rajappa (1978)
Defined the term "industry" broadly, bringing more organizations under collective bargaining coverage.
Tata Iron & Steel Co. vs. Workmen (1972)
Reiterated that settlements through collective bargaining are binding on all employees.
🌐 Collective Bargaining and Global Standards
India is a signatory to ILO Conventions:
Convention No. 87 – Freedom of Association
Convention No. 98 – Right to Organize and Collective Bargaining
However, India has not ratified both, citing concerns about granting rights to government servants.
💬 Conclusion
Collective bargaining in India plays a crucial role in maintaining industrial relations and protecting worker rights. While legal backing exists, there is a need to strengthen institutional mechanisms, promote union recognition, and modernize practices to align with changing labor dynamics, especially in the gig and informal economy. Do write to us if you need any further assistance.
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