Collective bargaining is a process of negotiation between employers and employees or their representatives to determine fair terms of employment in terms of wages, hours, benefits and other work.
It pertains to the following:
a) determining working conditions and terms of employment; and/or
b) regulating relations between employers and workers; and/or
c) regulating relations between employers or their organisations and workers or workers’ organisations”.
During collective bargaining, both the employer and the union present their proposals and negotiate until they reach a compromise. If an agreement is reached, it is typically put into writing and signed by both parties. If an agreement cannot be reached, the parties may enter mediation or arbitration to resolve the dispute.
Indian statutes and case laws recognizing collective bargaining in India:
Industrial Disputes Act, 1947: to governing the investigation and settlement of industrial disputes.
Trade Union Act, 1926: act deals with the registration, rights, liabilities and immunities of a trade union.
The Industrial Employment (Standing Orders) Act, 1946: act deals with the matters such as the classification of workmen, attendance, conditions of granting leaves, manner of intimation to workers about work and wage-related details, etc.
The Constitution of India, 1950: Article 19 of the Indian Constitution allows every Indian citizen to form an association, including the the right to form a trade union. In Article 43 A, the state is permitted to make laws that encourage workers to participate in management.
Advantages of Collective Bargaining
- Collective bargaining is an important tool for employees to advocate for their rights and to improve their working conditions. It provides a way for employees to negotiate as a group, which gives them more bargaining power than they would have as individuals.
- Collective bargaining is also important for employers, as it allows them to negotiate with a single entity representing all employees, rather than negotiating with each employee individually
- Improved working conditions: Collective bargaining can lead to better working conditions for employees, such as improved safety measures, increased training opportunities, and better job security.
- Fair treatment: Collective bargaining can help ensure that employees are treated fairly and that they are not subject to discrimination or unfair labor practices.
- Reduced turnover: When employees are satisfied with their working conditions, they are less likely to leave their jobs, which reduces turnover and saves employers the costs associated with recruiting and training new employees.
Disadvantages of Collective Bargaining
- Disruption to operations: Strikes or other forms of work stoppage can disrupt operations and lead to lost productivity and revenue for employers.
- Exclusion of non-union workers: Collective bargaining typically only applies to workers who are members of the union, which can exclude non-union workers from receiving the benefits negotiated in the agreement.
- Unionisation: In some cases, unions may have too much power, which can lead to abuse and an imbalance of power between employers and employees.
- Impacts on competitiveness: Collective bargaining can increase labor costs for employers, which can make them less competitive in the marketplace. This can result in job losses or outsourcing of work to other countries with lower labor costs.
- Adversarial relationships: Collective bargaining can create an adversarial relationship between employers and employees, which can lead to a lack of trust and cooperation in the workplace.
