Interface of Collective Bargaining Across Statues: Different Laws, Same Premise

“Explore the intersection of collective bargaining in labor law with competition law, contract law, human rights regulations, and sustainable development goals. Analyze the compliance and challenges in different legal realms.”

1. Introduction

Labour law focuses on the legal relationship between employers and employees. It covers agendas such as employment contracts, working conditions, salaries, benefits, employee rights, labour unions etc. In order to promote fair treatment and prevent exploitation, labour laws are created to safeguard the rights and interests of employees and to govern the employment relationship.

An essential component of labour law is collective bargaining, which involves the negotiations that take place between employers and labour unions on behalf of employees. It enables workers to bargain for better working conditions, pay, and other employment terms collectively.[1]

Since collective bargaining involves the formation of an agreement involving the rights and obligations of employers and employees who work in an establishment that constitute to be a part of a market system of manufacturing/production, the ancillary provisions of law also being attracted are Competition Law, Contract Law, Human Rights law and Environment Law (with respect to Sustainable development goals for labour standards). As a result, the authors in the following sections will assess whether the concept of collective bargaining, which is gaining momentum in labour-oriented legislations, are also as accepted and celebrated across other laws or not.

2. The compliance of Collective bargaining with Competition Law.

Competition law focuses on regulating competition between businesses with the goal of promoting fair competition, preventing monopolies, and ensuring that enterprises operate on an equitable playing field in the market. Agreements between rivals that aim to limit competition or have that effect are typically seen as anti-competitive and may be illegal under competition law.[2] On the other hand, Labour laws may provide employees with the right to engage in collective bargaining and form labour unions to negotiate with employers for better wages, working conditions, and other employment terms.

 Nevertheless, collective bargaining may result in agreements that restrict competition, then the same may raise antitrust concerns under competition law.[3] For instance, it may be against the law if a collective bargaining agreement between labour unions or workers contains anti-competitive agreements, such as stipulations on costs, output, customer allocation, or market allocation as they may adversely affect consumers or other firms by limiting competition. Secondly, collective bargaining agreements may generate competition law issues if labour unions or workers engage in coordinated actions that are intended to or really do limit competition.

Furthermore, a labour union or collective representative may abuse its market power during collective bargaining to engage in anti-competitive conduct, such as placing unfair demands on employers or restricting competition in a way that hurts other market participants.[4] However, it’s crucial to keep in mind that not all collective bargaining agreements do so by default. For instance, Collective bargaining agreements that focus on improving wages, working conditions, and other terms of employment for employees and do not involve agreements on prices, output, customer allocation, or market allocation, and are limited to the terms and conditions of employment of the employees, are unlikely to violate antitrust laws.

Moreover, Collective bargaining that addresses labour market practices, such as recruitment, hiring, and employee mobility, is typically considered to be a legitimate exercise of labour rights and unlikely to raise antitrust concerns, as long as it is not restricting competition among employers. Lastly, Collective bargaining conducted by labour unions or representatives that do not have market power or do not abuse their market power is unlikely to raise antitrust concerns. Thus, determining how collective bargaining and competition law interact may depend on a number of variables, including its effects, the applicable jurisdiction, and the general level of competition in the market.

3. The compliance of Collective Bargaining with Contract Laws:

There is ongoing debate around whether collective bargaining is violative of the principle of freedom of contract, which is a fundamental principle of contract law. The principle of freedom of contract holds that parties to a contract should be free to negotiate the terms of their agreement, and that the law should not interfere with their ability to do so.[5]

Critics of collective bargaining argue that it violates this principle because it allows employees to negotiate as a group, rather than as individuals. This, they argue, gives unions an unfair advantage in negotiations and can lead to employers being forced to agree to terms that they would not otherwise agree to if negotiating with individual employees.[6]

One argument against collective bargaining is that it restricts the freedom of employers to contract with employees on an individual basis. Critics argue that the process of collective bargaining essentially forces employers to negotiate with a group of employees as a unit, rather than with each employee as an individual. This, they argue, is a violation of the principle of freedom of contract because it removes the freedom of the employer to negotiate individual terms with each employee.

Another argument against collective bargaining is that it can lead to an imbalance of power between employers and employees. Critics argue that collective bargaining gives unions an unfair advantage in negotiations because they are able to leverage the collective power of all employees, rather than negotiating on an individual basis. This can lead to employers being forced to agree to terms that they would not otherwise agree to if negotiating with individual employees.

However, supporters of collective bargaining argue that it is not a violation of the principle of freedom of contract, but rather an extension of it. They argue that by allowing employees to negotiate collectively, they can more effectively negotiate for fair terms and conditions of employment, and that this is in line with the fundamental principle of freedom of contract.

Proponents of collective bargaining argue that it is a necessary mechanism for ensuring that employees can negotiate for fair wages, benefits, and working conditions. They argue that without the collective bargaining process, employers would have greater power to dictate the terms of employment, and that this would lead to an imbalance of power between employers and employees.

Additionally, supporters of collective bargaining argue that the process of collective bargaining does not restrict the freedom of contract, but rather expands it. They argue that by allowing employees to negotiate collectively, they can negotiate for terms and conditions that they would not be able to negotiate for individually. This, they argue, actually enhances the freedom of contract by allowing employees to negotiate for more favorable terms than they would be able to negotiate for individually.

Ultimately, the question of whether collective bargaining is violative of the principle of freedom of contract is a complex one, and there is no easy answer. Different countries and jurisdictions have different laws and regulations governing collective bargaining, and the debate around this issue is ongoing. While some argue that collective bargaining is a violation of the principle of freedom of contract, others argue that it is an extension of this principle and a necessary mechanism for protecting the rights of employees.

4. The compliance of Collective Bargaining with Human Right Regulations:

When employers fail to comply with collective bargaining agreements, the rights of workers may be violated, and this can be seen as a violation of human rights regulations. Non-compliance with collective bargaining agreements can take many forms. For example, an employer may refuse to negotiate with workers’ representatives, or may fail to implement the terms of an agreed-upon contract. In some cases, employers may engage in anti-union practices, such as intimidating or retaliating against workers who attempt to organize or engage in collective bargaining.[7]

The failure to comply with collective bargaining agreements can have serious consequences for workers. For example, if an employer fails to implement the terms of an agreed-upon contract, workers may not receive the wages, benefits, or working conditions that they were promised. This can lead to economic hardship and can make it difficult for workers to support themselves and their families. Additionally, the failure to comply with collective bargaining agreements can undermine workers’ ability to organize and negotiate with employers in the future, which can further erode their rights.

Non-compliance with collective bargaining agreements can also be seen as a violation of international human rights law. The International Labour Organization (ILO), which is a specialized agency of the United Nations, has recognized the right to collective bargaining as a fundamental right of workers.[8] The Universal Declaration of Human Rights, which is also a United Nations document, recognizes the right to form and join trade unions, as well as the right to collective bargaining.

In addition to international human rights law, many countries have laws and regulations that protect the right to collective bargaining. These laws typically require employers to engage in good faith negotiations with workers’ representatives, and may provide remedies if employers fail to comply with the terms of collective bargaining agreements.

When employers fail to comply with collective bargaining agreements, workers and their representatives may take legal action to enforce their rights. This may involve filing a complaint with a government agency, such as a labour board or a court, or it may involve engaging in collective action, such as a strike or a boycott.

Thus, non-compliance with collective bargaining agreements can be seen as a violation of human rights regulations. The right to collective bargaining is a fundamental right recognized by international human rights law, as well as by many national legal systems. When employers fail to comply with collective bargaining agreements, the rights of workers may be violated, and this can have serious consequences for workers and their families. Thus, it is important for employers to respect the right to collective bargaining and to comply with the terms of collective bargaining agreements.

5. The compliance of Collective Bargaining with Sustainable Development Goals

Sustainable development refers to the economic, social, and environmental development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

In the context of sustainable development, collective bargaining can play a significant role in promoting sustainable economic growth and social development. Collective bargaining can ensure that workers receive fair wages and benefits, which can contribute to reducing poverty and inequality. However, non-compliance with collective bargaining can be violative of sustainable development goals. One of the key principles of sustainable development is social justice, which includes the protection of workers’ rights.[9] Non-compliance with collective bargaining can lead to violations of workers’ rights, including their right to fair wages, safe working conditions, and freedom of association.

Moreover, there can even be negative economic impacts, such as low wages resulting in reduced consumer purchasing power, which can lead to reduced demand for goods and services. This can lead to a decline in economic growth and can have adverse impacts on the environment.

Furthermore, non-compliance with collective bargaining can also have adverse environmental impacts. Poor working conditions can result in environmental degradation, such as pollution and deforestation, as workers may resort to unsustainable practices to make ends meet. Thus, non-compliance of collective bargaining can lead to negative impacts on ecosystems, biodiversity, and climate change, eventually undermining sustainable development.

6. Conclusion

After engaging in the comparative and interdisciplinary study about the practical application of Collective bargaining and its interface with other legislations such as Competition Law, Contract Law, Human Rights Law and Environment Law, it is safe to say that the legal literature is divided in two schools of thoughts. As far as Human Rights and Sustainable Development goals are concerned, the right to engage in collective bargaining is an inherent right which every employee or worker shall possess. Consequently, a non-compliance of this right will be said to infringe the basic human right of forming trade associations. However, on the other hand, as far as the interface with competition law and contract law is concerned, the viability of collective bargaining shall differ from case-to-case basis as there is no straitjacket formula which will categorically adjudicate whether collective bargaining is violative of other laws or not. As a result, the effect of each collective bargaining agreement has to be taken into consideration and only then shall the Adjudicating authority hold the same to be violative of the allied laws. Nevertheless, the authors can conclusively conclude that the analysis of collective bargaining as under labour law is in compliance with the varied regulations and in no statute is the concept a per say violation. Consecutively, the premise of protecting a worker’s right remains the same throughout all laws and the Courts shall adopt an effect-based approach while analysing the validity of the claims.

7. Bibliography

1. Prasad, V. Vijay Durga, “Collective Bargaining — Its Relationship to Stakeholders.” Indian Journal of Industrial Relations, vol. 45, no. 2, 2009, pp. 195–202. JSTOR, http://www.jstor.org/stable/20788259. Accessed 28 Mar. 2023.

2. Chigudu, D. (2015), Collective bargaining: An analysis of hurdles and applicability in the public sector, Journal of Governance and Regulation, 4(1-2),168-174. https://doi.org/10.22495/jgr_v4_i1_c2_p1.

3. Wellington, H.H, (1964) “Freedom of Contract And the Collective Bargaining Agreement,” University of Pennsylvania Law Review, 112(4), pp. 467–498.

4. R.S. Khemani, A Framework for the Design and Implementation of Competition Law and Policy, World Bank Publications, 1999.

5. Bernard Grenigon, Alberto Odero, Horacio Guido, COLLECTIVE BARGAINING: ILO Standards And The Principles Of The Supervisory Bodies, , ISBN 92-2-11188

6. In Competition Commission of India v. Steel Authority of India Limited (2010) 10 SCC 744.

7. Excel Crop Care Limited v Competition Commission of India, 8 SCC 47 (2017).

8. National Labor Relations Bd. v. Montgomery Ward & Co., 157 F.2d 486 (8th Cir. 1946).

9. Majure v. Nat’l Labor Relations Bd., 198 F.2d 735 (5th Cir. 1952).

Notes:-

[1]Prasad, V. Vijay Durga. “Collective Bargaining — Its Relationship to Stakeholders.” Indian Journal of Industrial Relations, vol. 45, no. 2, 2009, pp. 195–202. JSTOR, http://www.jstor.org/stable/20788259. Accessed 28 Mar. 2023.

[2] Competition Commission of India v. Steel Authority of India Limited (2010) 10 SCC 744.

[3] R.S. Khemani, A Framework for the Design and Implementation of Competition Law and Policy, World Bank Publications, 1999.

[4] Chigudu, D. (2015), Collective bargaining: An analysis of hurdles and applicability in the public sector, Journal of Governance and Regulation, 4(1-2), 168-174. https://doi.org/10.22495/jgr_v4_i1_c2_p1.

[5] Wellington, H.H. (1964) “FREEDOM OF CONTRACT AND THE COLLECTIVE BARGAINING AGREEMENT,” University of Pennsylvania Law Review, 112(4), pp. 467–498.

[6] Chigudu, D. (2015). Collective bargaining: An analysis of hurdles and applicability in the public sector, Journal of Governance and Regulation, 4(1-2), 168-174. https://doi.org/10.22495/jgr_v4_i1_c2_p1.

[7] National Labour Relations Bd. v. Montgomery Ward & Co., 157 F.2d 486 (8th Cir. 1946).

[8] Bernard Grenigon, Alberto Odero, Horacio Guido, COLLECTIVE BARGAINING: ILO Standards And The Principles Of The Supervisory Bodies, ISBN 92-2-11188.

[9] Majure v. Nat’l Labor Relations Bd., 198 F.2d 735 (5th Cir. 1952).