Collective Bargaining

In this post, we will learn about the Collective Bargaining.

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Collective Bargaining

Collective bargaining is the process of negotiation between an employer or group of employers, and a union or group of employees, to reach an agreement on the terms and conditions of employment. The goal of collective bargaining is to create a mutually beneficial agreement that satisfies the needs of both parties.

Collective bargaining typically involves negotiations over issues such as wages, benefits, working hours, job security, and working conditions. During the bargaining process, both the employer and the union will present their proposals and make counteroffers until an agreement is reached.

Collective bargaining is an important tool for employees to have a voice in their workplace, and for employers to ensure that they have a productive and motivated workforce. It is often used in industries such as manufacturing, transportation, and public services.

Collective Bargaining in India

In India, collective bargaining is a legal right guaranteed to workers under the Industrial Disputes Act, 1947. The Act recognizes the right of workers to form unions and engage in collective bargaining with employers.

Collective bargaining in India typically takes place between trade unions and employers, and it covers a range of employment-related issues, including wages, working hours, working conditions, health and safety, and other benefits.

The process of collective bargaining in India usually involves a series of negotiations between the trade union and the employer or their representatives. The aim is to reach an agreement that is satisfactory to both parties. If an agreement cannot be reached, the matter may be referred to a conciliation officer or a labor court for resolution.

Collective bargaining is an important tool for workers in India to ensure that their rights are protected and their needs are met. It helps to establish a fair and just workplace, and contributes to the overall development of the country’s economy.

Characteristics of Collective Bargaining

The characteristics of collective bargaining include:

  1. Two parties: Collective bargaining involves negotiations between two parties – the employer and the employees or their representatives.
  2. Common interest: The parties involved in collective bargaining have a common interest in the outcome of the negotiation. Both parties seek to reach an agreement that is beneficial to them.
  3. Voluntary: Collective bargaining is a voluntary process. Both parties are free to participate or not participate in the negotiation process.
  4. Equality: The parties involved in collective bargaining must have equal bargaining power. This means that neither party should be in a dominant position that would allow them to dictate the terms of the agreement.
  5. Transparency: Collective bargaining should be conducted in a transparent manner. Both parties should have access to all relevant information and be able to express their views and concerns openly.
  6. Continuous: Collective bargaining is a continuous process. The parties involved must be willing to negotiate and make compromises to reach an agreement that satisfies both parties.
  7. Legally binding: Once an agreement is reached, it is legally binding and enforceable by law. This means that both parties are obligated to abide by the terms of the agreement.

Types of Collective Bargaining

Bargaining is a process of negotiation between two or more parties, where each party tries to gain the most favorable outcome possible. There are different types of bargaining strategies that can be employed, depending on the goals and interests of the parties involved. Here are the five main types of bargaining:

  1. Distributive bargaining: This type of bargaining is also known as zero-sum bargaining, where the parties involved try to divide a fixed amount of resources or assets. In this type of bargaining, there is a limited amount of resources available, and each party tries to gain the maximum share for themselves. Distributive bargaining is often used in situations where there is a single issue or a few issues that need to be resolved.
  2. Cooperative bargaining: In cooperative bargaining, the parties involved work together to find a solution that benefits everyone. This type of bargaining involves brainstorming, sharing ideas and perspectives, and finding common ground. The goal of cooperative bargaining is to create a win-win situation for all parties involved, rather than trying to beat each other.
  3. Productive bargaining: Productive bargaining focuses on creating value for all parties involved in the negotiation. This type of bargaining involves looking for creative solutions that can increase the size of the “pie” so that all parties can benefit. Productive bargaining can be useful in situations where there are multiple issues to be resolved.
  4. Composite bargaining: Composite bargaining involves negotiating multiple issues at once. This type of bargaining is often used in labor negotiations, where several issues such as wages, benefits, working conditions, etc., need to be addressed. Composite bargaining can be challenging because it requires the parties involved to prioritize their issues and come up with a package deal that satisfies everyone.
  5. Concession bargaining: Concession bargaining involves giving up something in exchange for gaining something else. This type of bargaining involves making compromises and concessions to reach an agreement. Concession bargaining can be useful when there are significant differences between the parties involved, and neither party can get everything they want.

Industrial Conflicts and Disputes

Industrial conflicts and disputes are related concepts in industrial relations, but they have distinct meanings.

Industrial conflict refers to the disagreement or tension between management and workers over work-related issues such as wages, working conditions, job security, and other employment-related matters. This conflict can manifest itself in various forms, including strikes, lockouts, slowdowns, picketing, and other forms of collective action by workers.

On the other hand, industrial disputes are specific incidents or issues that give rise to industrial conflict. These disputes can be the result of differences in opinion, expectations, or interests between management and workers or between different groups of workers. Examples of industrial disputes include disputes over wage increases, overtime pay, job security, layoffs, and other issues related to employment.

In summary, industrial conflict is the broader concept that encompasses all forms of tension or disagreements between management and workers, while industrial disputes are specific incidents or issues that give rise to industrial conflict.

Manifestation of Conflicts

Workers resort to various methods like strikes, go-slow and work-torule as a manifestation of their discontentment and conflict with the employer, while lock-out is the weapon in the hands of the employer to manifest an industrial dispute. Let us elaborate on each of these weapons now.

Different Forms of Conflicts as per Industrial Dispute Act 1947:

  1. Strike: A strike refers to the collective refusal of workers to continue working for their employer. A strike is a temporary work stoppage by employees to put pressure on their employer to meet their demands related to wages, working conditions, and other benefits. According to the Industrial Disputes Act, 1947, a strike is a cessation of work by a group of workers in any industry.
  2. Go-slow: Go-slow is a form of protest in which employees work at a slower pace than usual, which can affect the productivity and profitability of the company. It is a form of industrial action that aims to put pressure on the employer by reducing output without completely stopping work. The Industrial Disputes Act, 1947, defines go-slow as a form of work slowdown by a group of workers.
  3. Work-to-rule: Work-to-rule is a form of industrial action in which employees strictly follow the rules and regulations of the company, which can lead to a slowdown in production. The aim is to demonstrate the negative impact of excessive regulations and procedures on productivity. The Industrial Disputes Act, 1947, defines work-to-rule as a method of slowing down work by strictly following the rules and regulations.
  4. Boycott: A boycott is a form of protest in which workers refuse to work with certain individuals or organizations, such as suppliers, customers, or other companies. The Industrial Disputes Act, 1947, defines boycott as a method of protest by workers in which they refuse to work with certain individuals or organizations.
  5. Blockade: A blockade is a form of protest in which workers prevent the movement of goods or people by creating physical barriers or obstacles. The Industrial Disputes Act, 1947, defines a blockade as a method of protest by workers in which they prevent the movement of goods or people by creating physical barriers or obstacles.
  6. Gherao: Gherao is a form of protest in which workers surround and confine their employer or managers within a workplace or other premises until their demands are met. The Industrial Disputes Act, 1947, defines gherao as a method of protest by workers in which they surround and confine their employer or managers within a workplace or other premises.
  7. Lock-out: A lock-out is a temporary closure of a workplace by the employer as a response to a strike or other form of industrial action by workers. The Industrial Disputes Act, 1947, defines a lock-out as the temporary closing of a place of employment or the suspension of work by an employer to enforce compliance with their demands or to resist demands made by workers.
  8. Picketing: Picketing is a form of protest where workers, typically union members, stand outside a workplace or other location and hold signs or banners to draw attention to their grievances. Picketing is often used during labor disputes as a way to put pressure on employers to negotiate with workers or to make a public statement about their concerns.
  9. Sympathetic Strike: A sympathetic strike is a work stoppage or strike action taken by workers in support of other workers who are involved in a labor dispute. For example, if workers at a factory go on strike, workers at other factories may go on strike in solidarity to show support for the striking workers.
  10. Bandh: Bandh is a form of protest commonly used in India and Nepal, where all shops, businesses, and public transportation are shut down as a form of protest. This is usually organized by political parties or unions to protest against government policies or to support a specific cause.
  11. Sick-in Strike: A sick-in strike is a form of protest where workers call in sick and do not report to work, often as a way to demonstrate their dissatisfaction with their working conditions. This type of strike can be difficult to organize and may face legal challenges, as it involves workers calling in sick when they are not actually ill.

Standing Labour Committee and its Functions

A Standing Labour Committee is a permanent committee established by an organization or government to deal with labour-related issues. Its main functions include:

  1. Policy Formulation: The Standing Labour Committee is responsible for developing and recommending policies on labour-related matters. This includes policies on employment, wages, benefits, workplace safety, and industrial relations.
  2. Advisory Role: The committee provides advice and recommendations to the organization or government on labour-related issues. It may be called upon to review proposals or make recommendations to management on collective bargaining agreements or labour laws.
  3. Dispute Resolution: The Standing Labour Committee may be involved in resolving disputes between employers and employees. This may include mediation, arbitration, or other forms of dispute resolution.
  4. Monitoring: The committee monitors compliance with labour laws and policies. It may also monitor working conditions, safety standards, and labour practices to ensure that they are in line with established policies and laws.
  5. Communication: The Standing Labour Committee serves as a communication channel between management and employees. It may facilitate communication between the two parties to ensure that issues are addressed and resolved in a timely and effective manner.

Labour & Five-Year Plans

First Five-Year Plan (1951-56)

  • Primary objective of the First Five Year Plan was to increase employment opportunities and to raise the standard of living of the masses.
  • Primary attention was given to the rural sector of the Indian economy on account of the magnitude and seriousness of the problem in the sector.
  • It emphasized the need for overall industrial peace in industry and the ultimate oneness of interest.
  • It propagated the virtue of harmonious relations between capital and labour.
  • The Plan encouraged mutual settlements, collective bargaining and voluntary arbitration.
  • The Plan concentrated on five aspects of labour policy – Industrial relations, wages, working conditions, employment & training and productivity.

Second Five-Year Plan (1956-61)

  • The underlying principle was the creation of industrial democracy and establishment of a socialist society.
  • Any agreement entered into by such associations would then be binding on all members as well as on non-members of the associations.
  • It emphasized the need for industrial discipline.
  • The necessity of a suitable framework for labour legislations and enforcement machinery was considered in the second five-year plan for ensuring industrial peace.
  • The Plan recommended appointment of a wage commission and an authority like a tripartite wage board, consisting of equal representatives of employers and workers, to be instituted for individual industries in different areas.
  • The main development programmes proposed under the plan were: Expansion of training of craftsmen and instructors, the employment service organization and the central labour Institute, financing of housing schemes and setting up of a Film Unit.

Third Five-Year Plan (1961–1966)

  • The development of Industrial relations in the Third Five Year Plan was contingent on the foundations created by the working of code of discipline.
  • It stressed on increasing the application of the principle of voluntary arbitration for resolving differences between workers and employers. It spelt out the need to strengthen workers’ participation in management through works committees and joint management councils.
  • Large scale expansion of the workers’ education Scheme was also visualized for the period of the third plan.
  • An urgent consideration was given to the conversion of the various Provident Fund Schemes into a statutory scheme for old age, invalidity and survivorship pension-cum-gratuity.
  • The Plan proposed to set up a standing advisory committee to promote measures for bringing down the incidence of accidents in factories and a National Mine safety council for safety education and propaganda in the mining industry.

Fourth Five-Year Plan (1969–1974)

  • The activities of the Employees’ State Insurance (ESI) Corporation were proposed to be expanded.
  • The Fourth Five Year Plan recommended that studies should be undertaken to get estimates on unemployment and information on different segments of the labour force.
  • It laid considerable emphasis on labor-intensive schemes such as roads, minor irrigation, soil conservation, rural electrification, village and small scale industries, housing and urban development.

Fifth Five-Year Plan (1974–1979)

  • This plan laid emphasis on generation of employment, labour welfare and greater mobility of labour especially from labour surplus to labour starved areas.
  • It stressed on strengthening industrial relation and conciliation machinery, better enforcement of labour legislations, research in labour and labour statistics, and undertaking studies in the field of wages and productivity.

Sixth Five Year Plan (1980–1985)

  • One of the principal objectives was the progressive reduction of unemployment in the country.
  • The estimates were obtained through surveys by the National Sample Survey Office (NSSO) on the basis of usual status participation rates. Special attention was paid to women and educated manpower both for the purpose of analysis of the existing employment market and for the formulation of suitable policies for these categories.

Seventh Five Year Plan (1985–1990)

  • emphasis of the Seventh Plan was on employment and manpower policy.
  • Technological upgradation, modernisation and scientific advances in production process in organised industry, agriculture and small industry were envisaged as the essence of growth of productivity.
  • The Plan also ensured suitable arrangements and adjustment policies in terms of education, training, retraining and re-orientation of workers to avoid dislocation effects and to ensure smoothening of the process of technology adoption.

Eighth Five Year Plan (1992–1997)

  • The Eighth Plan aimed mainly at reducing unemployment.
  • It also expressed concerns about rationalization of the regulatory framework with a view to provide reasonable flexibility for workforce adjustment for effecting upgradation of technology and improvement in efficiency.

Ninth Five Year Plan (1997–2002)

  • The Ninth Five Year Plan attempted to create conditions for improvement in labour productivity in general and for provision of social security.
  • It aimed at reducing the number of laws which determine the relations between workers and employers so that a much smaller number of laws can reach out to the entire workforce.
  • It has the provision of free or heavily subsidised basic needs like health, Spotlight Provision of gainful employment opportunities was a thrust area of the Tenth Plan. nutrition, housing and education. Efforts were made to extend the coverage of the National Social Assistance Programme to the casual and self-employed workers in the informal sector both in rural and urban areas with the objective to cover the economically active population outside the organised sector.
  • The Ninth Plan directed efforts to modify the existing National Child Labour Project (NCLP) by establishing special schools to provide non-formal education, vocational training, supplementary nutrition, stipend, healthcare, etc. to children withdrawn from employment.

Tenth Five Year Plan (2002–2007)

  • Unemployment was a major concern in the Tenth Plan;
  • The Tenth Plan envisaged reorganization and strengthening of the Labour Department. It also undertook affirmative measures to eradicate child labour by way of the Child Rehabilitation Scheme that included identifying child labour, providing vocational education to children and paying them stipend, and their placement in appropriate jobs or helping them in self-employment.

Eleventh Five Year Plan (2007–2012)

  • The employment strategy for the Eleventh Plan was to ensure rapid growth of employment while ensuring an improvement in the quality of employment, especially in the unorganised sector.
  • Employment of women was encouraged in this Plan period.
  • The Eleventh Plan highlighted the significance of programmes for skill development to aid the desired growth in employment. Services like Information Technology (IT) enabled services, telecom and tourism were identified to have prospects for high growth in output and for creation of new employment opportunities.

Twelfth Five Year Plan (2012–2017)

  • The focus of the Twelfth Five Year Plan is to improve the outreach of skill development, both quantitatively and qualitatively; to bridge the spatial, sectoral regional and gender divides; and to have an institutional mechanism focused solely on skill development.
  • As regards issues of employment, the Plan has suggested an outcome-based approach to ensure that employability created is manifested in immediate, measurable and tangible employment or self-employment of trainees.
  • The Twelfth Five Year Plan has recommended activating the State Skill Missions and making them nodal points for receiving most of the skill-related funding from Centre.

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FAQs on Collective Bargaining

What is collective bargaining?

Collective bargaining is a process in which representatives of a trade union negotiate with employers on behalf of their members to determine the terms and conditions of their employment. This negotiation process can cover a wide range of issues, such as wages, benefits, working hours, and working conditions. The aim of collective bargaining is to reach an agreement that benefits both the employees and the employer, and to establish a system of rules and procedures for resolving disputes in the workplace.

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