Workers, represented by their trade unions, negotiate terms and conditions of employment with employers in a process known as collective bargaining. In labor relations, it is an essential tool that fosters equity, justice, and collaboration between employees and management. Collective bargaining typically results in a collective agreement that establishes the parameters for pay, benefits, working conditions, and other employment-related matters.

Establishing and regulating the terms of employment via formal negotiation between employers and employees—typically represented by a trade union—is known as collective bargaining. This procedure gives workers the ability to bargain as a group rather than as individuals and gives them a say in how they are treated at work.

OBJECTIVES OF COLLECTIVE BARGAINING

Ensuring the protection of workers’ rights and representation of their interests in talks with employers is the main goal of collective bargaining. In particular, collective bargaining aims to:

• Improve wages and working conditions: Ensuring fair compensation and improving working environments.
• Promote equality: Protecting workers from discrimination and unfair practices.
• Resolve disputes: Addressing grievances and preventing industrial disputes by providing a structured process for negotiations.
• Enhance communication: Fostering open dialogue between management and workers to prevent misunderstandings and promote cooperation.

IS IT A RIGHT?

The concept of collective bargaining is a right in itself, which can be regarded as the basic rights of the workers which is governed and subtly talked about in the Industrial Disputes Act, 1947. The very process of collective bargaining is usually initiated by the trade unions that represent the workers, the employers as well as the representatives.

RECOGNITION OF COLLECTIVE BARGAINING

In India, there is no statute as such that defines or describes the very term, however, the Indian Judiciary has taken note of that and has laid down the same in the case of Karnal Leather Karmchari Sanghatan v. Liberty Footwear Company (Regd.), 1990¹ , the Hon’ble Court laid down that industrial dispute act, 1947 was laid down solely for the purpose of securing social justice by means of collective bargaining.

Moreover, it was further recognized under ILO Convention 154² that, “All negotiations that take place between an employer, a group of employers or one or more employers’ organizations, on the other hand, one or more worker’s organizations, on the other, for: determining working conditions and terms of employment; regulating relations between employers and workers; regulating relations between employers or their organizations and a workers’ organizations.”

The notion of Collective Bargaining in India is backed by several statutes that falls into the ambit of labour law, which protects the rights of the employees/ workers of an organization and duly act as a skeleton of guidelines for employers.

• The Trade Unions Act, 1926: Although “collective bargaining” is not specifically mentioned in the Act, it is intended to allow legitimate labor organizations to support collective bargaining through trade union registration.
• The Industrial Employment (Standing Orders) Act, 1946: The very term “standing orders” has been stated u/s 2(g) of the Act and is further defined as rules relating to matter set out in the schedule. Such a “matter” includes classification of workmen; attendance, working conditions and the process the workers are related about work and wage-related details.
• The Industrial Disputes Act, 1947: In a nutshell, the entire legislation/ statute speaks about the ways and process to resolve industrial disputes so arising between the employers and the employees and certainly, collective bargaining is explicitly a part of the dispute resolution mechanism, even if it is not mentioned as such in any provisions. The Act has also set up rules for formation of committees such as Board of Conciliation, Conciliation officer and many more in order to resolve industrial disputes.

¹ https://indiankanoon.org/doc/1465475/

²https://normlex.ilo.org/dyn/nrmlx_en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_I

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• The Constitution of India: Being considered as the mother law of the country, there are various provisions enshrined under the COI with special reference to Part III I.e., Fundamental Rights and DPSPs that subtly specifies the notion of Collective Bargaining. The Right to Freedom under Article 19 permits every Indian Citizen to form an association under Article 19(1)(c).

TYPES OF COLLECTIVE BARGAINING

• Distributive Bargaining: Includes discussing resource allocation, including pay raises. One party’s benefit is the other party’s loss in this win-lose situation.
• Integrative Bargaining: Looks for ideas that will benefit both sides, including better working conditions without significantly raising employer expenses, in order to achieve a win-win situation.
• Concessionary Bargaining: This happens when a union consents to accept reductions or return certain perks in return for maintaining jobs or keeping the business viable during lean economic times.
• Productivity Bargaining: A form of bargaining where the employer agrees to increase pay or benefits in exchange for improvements in productivity by the employees.

PHASES OF COLLECTIVE BARGAINING

In order to guarantee a methodical and successful negotiating process between employers and employees, the stages of collective bargaining are essential. To establish a mutually beneficial agreement, each step is crucial.

1. Preparation and Planning: One of the most crucial stages of collective bargaining is preparation. Before engaging in discussions, the union and the employer must collect pertinent data, establish goals, and create plans of action. Data on pay, benefits, working conditions, labor regulations, and industry standards are gathered by both sides. Unions concentrate on workers’ demands, problems, and grievances, whereas employers may examine their financial health, productivity statistics, and market circumstances. The main points of negotiation are determined by both parties. Wage increases, health benefits, working hours, job security, safety regulations, and other employment circumstances are frequently among these concerns.
2. Negotiation: Representatives from both parties gather to start talks at this phase, which officially starts the collective bargaining process. It establishes the tone for the remaining discussions. Both sides make their first suggestions. The business may make counteroffers based on operational needs, productivity, and budgetary limits, while the union will usually seek salary hikes, improved working conditions, benefits, and other enhancements. The parties may decide on basic principles governing the procedure before delving into in-depth negotiations. Timelines, the number of meetings, appropriate communication channels, and the secrecy of conversations are a few examples of these guidelines.
3. Negotiation Phase: The actual bargaining takes place at the negotiation stage. Both sides engage in in-depth conversations, exchanges, and concessions. Each side makes reasons and defends its stance throughout the course of several sessions of negotiations. Both sides will converse back and forth, offering alternatives or concessions to achieve their goals. Both sides may compromise during the negotiation in order to find common ground. For instance, the union may reach a settlement on other matters, like as working hours or overtime regulations, while the company may consent to pay increases.
4. Agreement or Settlement: Formalizing the agreement is the next step once the parties agree on the problems. In this stage, the outcomes of the negotiation are codified into a legal document. A comprehensive collective bargaining agreement³ (CBA) documents the parameters that were agreed upon during discussions. The terms and conditions of employment, such as pay, benefits, working hours, grievance processes, and conflict resolution systems, are described in this legal document. The agreement is legally binding once it is signed by both parties and approved by the employer and employees. The terms and circumstances of work are now governed by the agreement for the time period that is mentioned in the contract, which is usually one to three years.
5. Implementation and Administration of the Agreement: The implementation phase starts as soon as the agreement is signed. Both parties must enforce and abide by the agreements that were agreed upon during this phase. Both the employer and the union keep an eye on how the agreement is being implemented. While unions make sure that workers are treated properly and that the agreement

³ https://www.shrm.org/in/topics-tools/tools/hr-answers/collective-bargaining-agreement

is upheld, employers must make sure that pay, benefits, and working conditions are in line with the CBA. Procedures for settling disagreements or complaints that come up throughout the agreement’s duration are often included in the CBA. A grievance may be filed by an employee or the union if they feel that the employer is not upholding the contract. Depending on the terms of the contract, dispute resolution may entail arbitration, mediation, or negotiation.

ADVANTAGES OF COLLECTIVE BARGAINING

Employer-employee relations can be managed through collective bargaining, which has benefits and drawbacks. Although it has influenced labor laws and working conditions in a variety of sectors, its efficacy varies depending on the situation and application. The benefits and drawbacks of collective bargaining are thoroughly examined here.

• Improved Working Conditions: The potential of collective bargaining to enhance workers’ working conditions is one of its main benefits. It gives employees a forum to collectively bargain with employers for improved pay, benefits like health insurance and retirement plans, and working conditions and safety.
• Fair Wages and Benefits: Fair remuneration for workers is guaranteed by collective bargaining. Compared to individual discussions, employees sometimes have more negotiating power when they bargain collectively to get greater pay, bonuses, or other advantages. This helps to lessen salary differences among employees.

For instance, because of the power of collective bargaining, unionized workers in industries like manufacturing, education, and construction frequently make more money than their non-unionized counterparts.

• Workplace Democracy and Voice of the Employee: By granting workers a say in significant choices that impact their day-to-day job and long-term career aspirations, collective bargaining promotes a feeling of democracy in the workplace. Allowing employees to take part in decision-making procedures and contribute to the creation of policies empowers them.
• Conflict Resolution: Grievance processes, which offer organized and amicable means of resolving disputes between staff and management, are frequently a part

of collective bargaining. This lessens the possibility of lockouts, strikes, and other disruptive events that can hurt the company.

• Reduction of Inequality: In general, collective bargaining tends to lessen pay disparity. Fair pay and benefits for all workers are promoted by unions, which can help level the playing field, especially for lower-paid workers, women, and minorities.
• Increased Job Security: Due to the precise provisions outlined in collective bargaining agreements regulating layoffs, promotions, and termination procedures, unionized workers frequently enjoy higher job security. Because employers are prohibited from firing employees without cause, workers are protected from losing their jobs suddenly.

DISADVANTAGES OF COLLECTIVE BARGAINING

• Chances for Strikes and Stoppage of Work: The possibility that unions would turn to strikes in the event that talks break down is one of the major dangers associated with collective bargaining, which might cause interruptions to corporate operations. Strikes have the ability to sour relations between employers and employees by costing the former money and the latter their income.
• Costs to Employees: Employers may incur increased expenses as a result of collective bargaining, particularly if unions are successful in securing better pay, benefits, and working conditions. The employer’s budget may be strained by these expenses, especially in sectors with narrow profit margins or during recessions.
• Inefficiency and Rigidity: The flexibility of the employer may be restricted by the specific requirements that collective bargaining agreements frequently contain, which outline precise working conditions. Restrictions on hiring, promotions, or shifts, for instance, may make it difficult for businesses to react swiftly to changes in the market or make necessary operational modifications.
• Declining Competitiveness: Collective bargaining may raise labor expenses in fiercely competitive industries to the point that enterprises find it difficult to compete with foreign or non-unionized companies that can operate with less regulation and cheaper salaries. In the long term, this may lead to decreased profitability and possible job losses.