prpri Collective Bargaining : A Bonanza for Workmen Collective Bargaining : A Bonanza for Workmen

Introduction: The two wheels that are responsible for the working of industrial sector are – Labourers and Employers. To run the sector smoothly, both the parties are expected to work with co-operation and co-ordination. However, many a times, their interpersonal relations tend to stretch due to the typical industrial problems. Here, employer, being on a higher position gets a better stake in the matter as compared to an individual workman. The workman is compelled to accept all the terms offered by his employer, irrespective of what he expects, since he is the sole bread-winner of the family. His demands won’t hold much of a standing as he is the one in need of the job. However, this situation would surely change if instead of an individual workman putting forth his demands, the bargain is made by a body, an association or union of labourers COLLECTIVELY. Together they can settle and negotiate the terms in quite a better and peaceful way.

As per Ludwig Teller, “Collective Bargaining is an agreement between a single employer or an association of employers on one hand and a labour union on the other hand, which regulates the terms and conditions of employment.”

In the words of Sydney Webb, “Collective Bargaining is a method of fixing the terms of employment, by means of bargaining between the employees and the employers.”

Encyclopaedia Britannica defines Collective Bargaining as “A negotiation between an employer or a group of employers and a group of work people to reach an agreement on working conditions.”

Thus, Collective Bargaining is the process of arriving at an amicable solution between employers and employees collectively in order to settle various issues and disputes relating to terms and conditions of employment with the view of keeping the best interest of both the parties. Collective Bargaining is a fundamental right rooted in ILO (International Labour Organisation) Constitution.

Characteristic of collective Bargaining


‘To arrive at a mutually acceptable solution for the employers and the workmen by working out on their disputes together’ is a quintessential objective of Collective Bargaining. This process demands from the Trade Unions not to put any exaggerated claims upon management; and at the same time it is required from the industry that they would also consider and accommodate the reasonable claims of workmen. It is expected from both the parties to keep aside their respective prejudices and work in complete harmony. Both the organs must act in good faith by giving up unfair labour practices. Thus, Collective Bargaining is a process having the required fluidity which gives ample scope for compromise as well as a mutual give and take before the final agreement is reached. It not only provides an excellent opportunity for the representatives of the management and the workers for clear and face-to-face negotiations, but also furnishes a fantastic mechanism to establish and maintain stable relationship between them.

Following are a few noted objectives of Collective Bargaining:

> To protect the interest of an individual labour against capitalist employer.

> To provide for equal and fair bargaining power to both the parties.

> To secure better wages and better terms of employment for workmen.

> To minimise illegal strikes, lock-outs, go-slows, sit-ins etc. by settling the disputes amicably.

> To facilitate reaching a solution that is mutually acceptable to the involved parties.

> To harmonise and improve labour-employer relationship.

> To promote industrial peace and security..


In countries like United Kingdom, USA, Germany, Italy etc. the subject matter of collective bargaining is solely determined by the parties themselves. However, in some of the Latin American countries, the law of the respective country specifies certain subjects to be necessarily covered in collective bargaining agreements. Broadly, the terms of agreement can be classified into following two categories –

Standard of Employment


(1) Freedom of Association:

Collective Bargaining is simply not possible if the employees are not free to form their association as they please. The employers are assumed to give the required privacy to the employees and at the same time are expected not to interfere in the internal matters of the trade union. Additionally, the management shall not endeavour to divide the unity amongst the workmen by luring them with individual gains. Thus, the existence of organisation of employers and trade union is very essential as it ensures that either party is free to express their own case with their own issues and demands.

(2) Recognition of Trade Union:

Recognition and Registration are two different concepts. Recognition means approval by the respective management/organisation; whereas Registration fetches a legal status to a Trade Union. For the purpose of recognition, there should be absolute willingness by the management–

> To consider ‘Trade Union’ as an integral part of healthy industrial relations.

> To accept ‘Collective Bargaining’ as an institution.

Unless the trade union is recognised by the management, it will not have the required impact. Recognition of Trade Union is still considered to be a subject of debate in industrial relations. Although not mandatory, it is very much advisable to register the workers’ union under the Trade Unions Act, 1926 or under Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for the state of Maharashtra) since the legitimacy does carry some inherent benefits and immunity.

(3) Stability of Trade Union:

The Trade Unions must be strong, stable, democratic, capable of conducting collective agreements and completely free from any kind of undue influence. To achieve the same, there must be unity among its members first. Because if their internal differences are not resolved, their collective demand will not hold value and ultimately employers will be benefitted.

As rightly quoted by Thomas Paine, “Not in numbers, but in unity that the great strength lies!”

Thus, it is the duty of all the members of Trade Union to act together as a team in a framework, for their mutual interest and justice.

(4) Conducive Socio-Economic & Political Environment:

The government and its agencies play an important role in construction, passing and implementation of relevant industrial policies, laws and regulations concerning work schedules, income, safety, pensions, health care and social welfare of workers. It significantly shapes and regulates labour relations. Hence, existence of favourable political climate is a must for the full swing success of Collective Bargaining. Besides, Collective Bargaining is also heavily influenced by socio-economic factors such as wage-employment trade off, state of overall labour market, strike leverage, inflation ratio etc. So, an open line of communication and suitable environmental components becomes beneficial to create a win-win situation for both the involved parties.

(5) Willingness to Give & Take:

Flexibility is a basic requirement for any kind of bargaining. For a successful bargaining, both – the employers and the union leaders must negotiate in a spirit of compromise and reciprocity. If either of the party adapts an adamant attitude, then this process will be very strenuous and full of complications. If the employers are satisfied with the work done by employees, then they can in return keep the workers happy. Similarly, if the needs of employees are fairly taken care of, then they can surely earn some extra benefits for employers. It is like a vicious circle of satisfaction and progress. Thus, a perfect balance of give and take is sound recipe for long term healthy relationship.

(6) Problem Solving Attitude:

Parties must develop the thought that it is better to sort out the differences amicably by mutual understanding, rather than taking recourse to law. Because the legal process is not only formal, but also it is very costly and time consuming as well. So it would be the best if the internal disputes are resolved internally only. Thus for that, both the negotiating teams should have a problem solving and positive attitude rather than a fighting approach, or else, the end result would be just more and more confusion and arguments.


(7) Prohibition of Unfair Labour Practices:

Unfair Labour Practices include any kind of unjustified and unreasonable acts or omission done by the employers and/or workmen. One of the most common unfair labour practices in Collective Bargaining concerns about the allegation of absence of good faith while bargaining. ‘Bargaining in good faith’ includes fair and square right given to both the teams to put forth their respective demands, listening to the opposite side patiently, considering their proposals genuinely and making a sincere effort to reach to a common agreement amicably; keeping the ‘mutual interest’ as an utmost priority. However, that does not imply for one party to agree in everything that the other party suggests, just to avoid the said complaint. Basically it is just to prohibit any conscious effort conducted by either party with a deliberate intention to contradict the code. Still if any kind of unjust labour practices are observed, then that shall be an offence punishable with imprisonment up to 6 months or with fine up to Rs.1000/- or with both, as per S.25U of Industrial Disputes Act,1947.


(1) It provides financial, social as well as legal security to workmen since all the contracts reached at the end of the negotiation are legally binding agreements for the involved parties. Anything contradictory to the agreement shall amount to breach of contract and can be used as defence against the opposite party. Thus, the employees can be pacified about certain matters affecting their wages, work conditions, tenure, health insurance, pensions etc. and can continue to work without any kind of fear or pressure.

(2) It serves as a voice to employees. All the workmen, who are affected by the agreement, are allowed to have a say in the matter. Albeit, eventually the proposal might get accepted or rejected at the end but every member at least gets an opportunity of being heard regarding the issues faced. Every single opinion holds value at the time of creation of contract. Furthermore, it also ensures that the wants and needs of the majority are met satisfactorily. So, the collective demands of the workers can be well put through the medium of bargaining.

(3) It is cost effective and time saving. In collective Bargaining, as the parties try to resolve their disputes by themselves, through mutual dialogue and discussion, bitterness, delay and expenses are avoided in sharp contrast to adjudication. Besides, the time saved in lengthy litigation procedure can be utilized in other productive activities.

(4) It is more of a democratic process, because the issues are sorted by the involved parties mutually without any external legal help. This augments the interpersonal communication between representatives of management as well as union. As a result, their overall relationship is improved to a great extent. Also, the level of understanding about the problems faced by either side increases, encouraging them to work in harmony in the long run.

(5) It reduces bias and favouritism. Today, almost every industry is somehow stuck with the pressing issues such as inequality, gender bias, prejudice, discrimination, unfairness, racism etc. So, Collective Bargaining proves to be an excellent way to deal with the same effectively. The partiality being done on the part of employers can be eliminated; since collective bargaining process evens out the playing field for all the workmen. The egalitarianism granted to every employee through this process validates their equality in rights, thus, getting rid of any kind of preferential treatment.


(1) Employees are still considered at a weaker position compared to employers. Workmen cannot be presumed to have the required ability, intelligence, convincing power as well as the right skills to handle the issues tactfully due to their lack of knowledge and experience in managing such matters. They may not be able to act or represent the union diplomatically to their benefit. As a result, they might have to suffer or compromise to a large extent, in spite of collective bargaining efforts. At the same time, the unnecessary interference of union in every single matter may impede management’s freedom in implementing schemes designed for well-being of organisation causing further delay.

(2) It can widen the gap between the parties. There may be few instances when nothing at all is agreed upon from the on-going matter. It is absolutely possible that neither party concurs with any of the suggestions given by the opposite party. Here, the situation might aggravate instead of getting mitigated. Resultantly, a barrier is created forming a gaping hole in the healthy relationship between management and workmen. Besides, there is also a possibility of fabrication of internal differences between the union members themselves. Considering the group benefits as a whole, sometimes, decision taken or proposed by the union need not always fall in line with the individual wants. These suppressed demands can cause the feeling of rage and betrayal among them. Thus, Collective Bargaining is a responsible factor highlighting the divergence.

(3) It may at times observe unfair labour representation. Nowadays in many countries, unions are obligated to represent both – the unionized and non-union members equally. Consequently, even the non-union members tend to enjoy all the extra perks and fringe benefits without being active at all. This just might seem unjust to the members of union who is doing all the hard work, to fight for their rights and justice, by paying dues. Apart from that, equalized pay problems have also been spotted. By implementing the policy of equal pay and benefits to all, including the juniors and new-comers, is perceived as inequitable to the senior employees who have been working for years.

(4) It can adversely affect the final consumers. The whole purpose of collective bargaining is to help labourers increase their wages and assist them in gaining maximum add-on benefits. But the corollary effect of the same falls on the end consumers in the disguise of increased prices. Because if the employer is burdened with the extra cost of labourers, then he will get it reimbursed from his customers. Thus, even though the final users are not a direct party to the collective bargaining process, still they are in some way affected by the decisions taken by the management and union.


Technically, every organisational structure must be so efficient and co-operative that the need of methods such collective bargaining shall not arise only in the first place. However, this proposition is way too idealistic and impracticable. Obviously, there is going to be need for such mediation. So, the efforts must be taken by the management as well as the workmen to utilise such measures to the best extent possible. Constructive use of such initiatives can not only strengthen the interpersonal relations between the parties, but also be very useful in overall growth of the organisation leading to innovation and revolution.  Therefore, in a nutshell, in can be penned as –

Collective Bargaining practically enables the “Industrial Democracy” to be effective!

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  1. CHETAN PAREKH says:

    Once again very nice article, with simple words for better understanding. Style of writing is very nice for everyone to understand.
    In my opinion in India this “collective bargaining” practically doesn’t work. Here also corruption prevails. It can be either way i.e. sometimes the employer has upper hand whereas sometimes the employees but you rightly pointed that most of the times employers have an upper hand. Employees are mostly on weaker side.

    Keep it up. Keep on writing and share the knowledge.Good luck.

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August 2021