INTERNATIONAL LABOUR LAW PROJECT

FILE

ILO CONVENTION
98 :rights to organise
AND COLLECTIVE
BARGAINING
CONVENTION 1949

SUBMITTED TO: SUBMITTED BY:

DR. VARINDER NEGI ANMOL GUPTA
208/13
B.COM,LLB(H)
SECTION D

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 ACKNOWLEDGEMENT

The following project is an outcome of my sole efforts and I would like to

present my gratitude to Dr. VARINDER NEGI for giving me the present topic
and an opportunity to enhance my knowledge on the same.

I further would like to thank my friends and family who have been enough
supportive towards me and aided in their full capacity to complete the project
well in time.

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 INDEX

TOPIC PAGE NO.

1. Introduction to the convention 4

2. Meaning of collective bargaining 5
3. Provisions of convention 6
4. Process of collective bargaining 8
5. Types of collective bargaining 10
6. Functions of collective bargaining 11
7. Conclusion 14
8. Bibliography 15

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 INTRODUCTION

The Right to Organise and Collective Bargaining Convention (1949) No 98 is

an International Labour Organization Convention. It is one of eight ILO fundamental
conventions .

Convention concerning the Application of the Principles of the Right to Organise and to
Bargain Collectively

Signed July 1, 1949

Location Geneva

Effective July 19, 1951

Condition 2 ratifications

Parties 165[1][2]

Depositary Director-General of the International Labour Office

Languages French and English

The Preamble of Convention 98 notes its adoption on July 1, 1949. After this the Convention
covers, first, the rights of union members to organise independently, without interference by
employers in article 1 to 3. Second, articles 4 to 6 require the positive creation of rights
to collective bargaining, and that each member state's law promotes it.

MEANING OF COLLECTIVE BARGAINING

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Collective bargaining is a fundamental right. It is rooted in the ILO Constitution  and
reaffirmed as such in the 1998 ILO Declaration on Fundamental Principles and Rights at
Work . Collective bargaining is a key means through which employers and their
organizations and trade unions can establish fair wages and working conditions. It also
provides the basis for sound labour relations. Typical issues on the bargaining agenda include
wages, working time, training, occupational health and safety and equal treatment. The
objective of these negotiations is to arrive at a collective agreement that regulates terms and
conditions of employment. Collective agreements may also address the rights and
responsibilities of the parties thus ensuring harmonious and productive industries and
workplaces. Enhancing the inclusiveness of collective bargaining and collective agreements
is a key means for reducing inequality and extending labour protection..

The collective bargaining in India remained limited in its scope and restricted in its coverage
by a well defined legal structure. In reality, the labour laws systematically promoted and keep
in existence a duality of labour-formal sector workers enjoying better space for collective
bargaining and informal ones with no scope for collective bargaining.

Legal Boundaries for Collective Bargaining:

 No ratification of ILO Convention –C-87 and C-98.

 Limited scope and coverage of collective bargaining within legal boundaries of
Trade Union Act and Industrial Dispute Act.
 Trade Union Act and Industrial Dispute Act are silent on recognition of trade
unions.
 Right to strike is not a fundamental right but a legal right governed by Industrial
Dispute Act, 1947.
 Section 10K: can be imposed to prohibit strikes or lock outs.
 Section 22: In public utility services there must be a notice atleast 6 weeks before
strike.
  Section 23: Prohibition of strikes during the pendency of conciliation, arbitration
and court proceedings.
 Trade Union activities are granted immunity from the applicability of CRPC but
nor in case of illegal strikes.

LEGAL PROVISIONS OF THE CONVENTION

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Article 1
1. Workers shall enjoy adequate protection against acts of anti-union discrimination in
respect of their employment.
2. Such protection shall apply more particularly in respect of acts calculated to--

(a) make the employment of a worker subject to the condition that he shall not join a union or
shall relinquish trade union membership;
(b) cause the dismissal of or otherwise prejudice a worker by reason of union membership or
because of participation in union activities outside working hours or, with the consent of the
employer, within working hours.

Rights to organise

Article 1 states that workers must be protected against discrimination for joining a union,

particularly conditions of employers to not join a union, dismissal or any other prejudice for
having union membership or engaging in union activities. Article 2 requires that both workers
and employers' organisations (i.e. trade unions and business confederations) should not be
interfered in their own establishment, functioning or administration. Article 2(2) prohibits, in
particular, unions being dominated by employers through "financial or other means" (such as
a union being given funding by an employer, or the employer influencing who the officials
are). Article 3 requires each ILO member give effect to articles 1 and 2 through appropriate
machinery, such as a government watchdog.

Article 2
1. Workers' and employers' organisations shall enjoy adequate protection against any acts of
interference by each other or each other's agents or members in their establishment,
functioning or administration.
2. In particular, acts which are designed to promote the establishment of workers'
organisations under the domination of employers or employers' organisations, or to support
workers' organisations by financial or other means, with the object of placing such
organisations under the control of employers or employers' organisations, shall be deemed to
constitute acts of interference within the meaning of this Article.
Article 3

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Machinery appropriate to national conditions shall be established, where necessary, for the
purpose of ensuring respect for the right to organise as defined in the preceding Articles.
Article 4
Measures appropriate to national conditions shall be taken, where necessary, to encourage
and promote the full development and utilisation of machinery for voluntary negotiation
between employers or employers' organisations and workers' organisations, with a view to the
regulation of terms and conditions of employment by means of collective agreements.

Rights to collective bargaining

Article 4 goes on to collective bargaining. It requires that the law promotes "the full
development and utilisation of machinery for voluntary negotiation" between worker
organisations and employer groups to regulation employment "by means of collective
agreements." Article 5 states that national law can provide different laws for the police and
armed forces, and the Convention does not affect laws that existed when an ILO member
ratifies the Convention. Article 6 further gives an exemption for "the position of public
servants engaged in the administration of the State".

Article 5
1. The extent to which the guarantees provided for in this Convention shall apply to the
armed forces and the police shall be determined by national laws or regulations.
2. In accordance with the principle set forth in paragraph 8 of Article 19 of the Constitution
of the International Labour Organisation the ratification of this Convention by any Member
shall not be deemed to affect any existing law, award, custom or agreement in virtue of which
members of the armed forces or the police enjoy any right guaranteed by this Convention.
Article 6
This Convention does not deal with the position of public servants engaged in the
administration of the State, nor shall it be construed as prejudicing their rights or status in any
way .

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 PROCESS OF COLLECTIVE BARGAINING
Collective Bargaining is the process of negotiating wages and other conditions of
employment by an organization of employee.
Collective bargaining consists of negotiations between an employer and a group of
employees that determine the conditions of employment. Often employees are represented in
the bargaining by a union or other labor organization. The result of collective bargaining
procedure is called the collective bargaining agreement (CBA). Collective agreements may
be in the form of procedural agreements or substantive agreements. Procedural agreements
deal with the relationship between workers and management and the procedures to be
adopted for resolving individual or group disputes.
This will normally include procedures in respect of individual grievances, disputes and
discipline. Frequently, procedural agreements are put into the company rule book which
provides information on the overall terms and conditions of employment and codes of
behavior. A substantive agreement deals with specific issues, such as basic pay, overtime
premiums, bonus arrangements, holiday entitlements, hours of work, etc. In many companies,
agreements have a fixed time scale and a collective bargaining process will review the
procedural agreement when negotiations take place on pay and conditions of employment.
The collective bargaining process comprises of five core steps:

 Prepare: This phase involves composition of a negotiation team. The negotiation

team should consist of representatives of both the parties with adequate knowledge and skills
for negotiation. In this phase both the employer’s representatives and the union examine their
own situation in order to develop the issues that they believe will be most important. The first
thing to be done is to determine whether there is actually any reason to negotiate at all. A
correct understanding of the main issues to be covered and intimate knowledge of operations,
working conditions, production norms and other relevant conditions is required.

 Discuss: Here, the parties decide the ground rules that will guide the negotiations. A
process well begun is half done and this is no less true in case of collective bargaining. An
environment of mutual trust and understanding is also created so that the collective
bargaining agreement would be reached.

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 Propose: This phase involves the initial opening statements and the possible options
that exist to resolve them. In a word, this phase could be described as ‘brainstorming’. The
exchange of messages takes place and opinion of both the parties is sought.

 Bargain: negotiations are easy if a problem solving attitude is adopted. This stage
comprises the time when ‘what ifs’ and ‘supposes’ are set forth and the drafting of
agreements take place

 Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision regarding the
problem or the issue. This stage is described as consisting of effective joint implementation
of the agreement through shared visions, strategic planning and negotiated change.

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 TYPES OF COLLECTIVE BARGAINING
There are four types of Collective Bargaining classified on the basis of their nature and the
objectives, and can be practiced depending on the different situation requirements.

1. Conjunctive or Distributive Bargaining: In this form of collective bargaining, both

the parties viz. The employee and the employer try to maximize their respective gains. It is
based on the principle, “my gain is your loss, and your gain is my loss” i.e. one party wins
over the other.The economic issues such as wages, bonus, other benefits are discussed, where
the employee wishes to have an increased wage or bonus for his work done, whereas the
employer wishes to increase the workload and reduce the wages.
2. Co-operative or Integrative Bargaining: Both the employee and the employer sit
together and try to resolve the problems of their common interest and reach to an amicable
solution. In the case of economic crisis, such as recession, which is beyond the control of
either party, may enter into a mutual agreement with respect to the working terms.For
example, the workers may agree for the low wages or the management may agree to adopt
the modernized methods, so as to have an increased production.
3. Productivity Bargaining: This type of bargaining is done by the management, where
the workers are given the incentives or the bonus for the increased productivity. The workers
get encouraged and work very hard to reach beyond the standard level of productivity to gain
the additional benefits.Through this form of collective bargaining, both the employer and the
employee enjoy the benefits in the form of increased production and the increased pay
respectively.
4. Composite Bargaining: In this type of collective bargaining, along with the demand
for increased wages the workers also express their concern over the working conditions,
recruitment and training policies, environmental issues, mergers and amalgamations with
other firms, pricing policies, etc. with the intention to safeguard their interest and protect the
dilution of their powers.Thus, the purpose of the Collective Bargaining is to reach a mutual
agreement between the employee and the employer with respect to the employment terms and
enjoy a long term relationship with each other.

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 FUNCTIONS OF COLLECTIVE BARGAINING

1. Long Term Social Change 

Collective bargaining, in its broader aspects, is not confined solely to economic relations
between employers and employees. Selig Perlman has defined it as a “technique whereby an
inferior social class or group carries on a never slacking pressure for a bigger share in social
sovereignty as well as for more welfare, security, and liberty for its individual member.
Collective bargaining manifests itself equally in politics, legislation, court litigation,
government administration, religion education and propaganda. When viewed as a process of
social change, collective bargaining encompasses more than the direct clash between
employers and trade unions. It refers to the rise in political and social power achieved by
workers and their organization.

Thus collective bargaining is not an abstract class struggle in a Marxian sense, but it is rather
pragmatic and concrete. The inferior class does not attempt to abolish the old ruling class, but
merely to become equal with it. It aims to acquire a large measure of economic and political
control over crucial decisions in the area of its most immediate interest and to be recognized
in other areas of decision making.

Collective bargaining has no final form. It adapt- itself to the changing social, legal and
economic environment. It has varied considerably from plant to plant and industry to
industry, and also between and within unions. For example, a number of industrial unions
have successfully bargained for higher bonus and Provident Fund benefit, why many unions
in the construction industry have ignored these goals. Bargaining in some plants is
characterized by comparatively frequent strikes, whereas in other plants there are long
records of uninterrupted industrial peace.

Wage corners have enhanced their social and economic position in absolute terms and in
relation to other groups and at same time, management has retained a large measure of power
and dignity. These gains were not registered in one great revolutionary change, but rather step
by step, with each clash between the apposing parties settled with a new compromise
somewhat different from the previous settlement. In short, collective bargaining accomplishes

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long-run stability on the basis of day-to-day adjustments in relation between labor and
management.

2. Temporary Truce 

Collective bargaining may be viewed as a struggle between two opposing forces with the
outcome depending on their relative strength. The inherent strength of each side is its ability
to withstand a strike. This is partly an economic matter: To what extent can the union provide
financial aid to the strikers? Can the workers find temporary jobs? How much will the
employers sales be reduced? Will his position in the product market be permanently
impaired? These are the economic factors on which the ability to withstand a strike depends.
The ability to withstand a strike also depends on such non-economic factors as the loyalty of
the workers to the union, their willingness to make personnel sacrifice to support its goals.
The degree of loyalty, of course, is affected by the presence of factionalism within the union.
For either the employer or the union, a belief that some basic principle is at stake, e.g.
management right or union security, stiffens the will power of the antagonists. The
compromise, then, is a temporary truce with neither side being completely satisfied with the
results. Each would like to modify it at the earliest opportunity. Since the contract is always
of limited duration, each begins immediately to prepare a new list of demands, including
previously unsatisfied demands, and to build up its bargaining strength in anticipation of the
next power skirmish.

3. Industrial Jurisprudence 

Collective bargaining creates a system of industrial jurisprudence. It is a method of

introducing civil rights into industry, that is of requiring that management be conducted by
rule rather than by arbitrary decisions. It establishes rules which define and restrict the
traditional authority exercised by employers over their employees, placing part of the
authority under joint control by union and management. Finally collective bargaining must
never stagnate if it is to serve its role of adapting labor and management institutions, and their
relative power positions, to the changing socioeconomic environment.

(a) It is rule making or legislative process, in the sense that it formulates the terms and
conditions under which labour and management will cooperate and work together over a
certain stated period.

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(b) It is an executive process, for both management and trade union officials share the
responsibility of enforcing the rules.

(c) It is a judicial process for in every collective agreement there is a clause/provision

regarding the interpretation of the agreement.

4. Peace Treaty:
Collective bargaining is a sort of peace treaty between two parties in continual conflict. This
conflict is smoothened by the compromises. Compromise represents a state to which each
side is prepared to descend from the original stand (with neither party fully satisfied). This
receding from original position may come about in two major ways.

(a) Compromise with Combative Aspects:

When combative aspects of parties are in operation the outcome of struggle depends on the
parties relative strength. The extent to which each side is willing to accept less than its
original bargaining demand depends, in part, on how strong it feels relative to its opponent.

The compromise then is a temporary truce with neither side being completely satisfied with
the results. Since the contract is always of limited duration each begins immediately to
prepare a new list of demands, including previously unsatisfied demands and to build up its
bargaining strength in anticipation of next power skirmish.

(b) Compromise without Combative Aspects:

The compromise reached between the two parties is not always the culmination of continuous
struggle and antagonistic attitudes. A tranquil stability is achieved in the process of
controlling economic changes. The union starts first of all to make changes and
improvements in its relations with the employers.

Once a truce has been signed the union stabilizes working conditions by presenting the status
defined in the contract. It generally adheres to this contract and might bring sanction against
any attempt to abrogate the contract.

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 CONCLUSION

India has so far not ratified Conventions 87, 98, 138 and 182 which are the Core ILO
Conventions.

.(1) Convention No.87: Convention No.87 concerning Freedom of Association and

Protection of the Right to Organize provides for the right of workers and employers, without
any distinction, to establish and join organizations of their own choosing without previous
authorization. Their organizations have the right to form or join federations and
confederations, including those at the international level.

.(2) Convention No.98: Convention No.98 concerning Right to Organize and Collective
Bargaining aims to protect the right to organize and to promote voluntary collective
bargaining. . The guarantees provided for under these two Conventions are by and large
available to workers in India by means of constitutional provisions, laws and regulations and
practices.

Reasons for non-ratification of the conventions: The main reason for non-ratification of
the above two Conventions is due to reservations expressed by DoPT because :

Ratification would create legally binding obligations which are inconsistent with our laws
and practices.

DoPT’s view is that ratification of these Conventions would involve granting of certain rights
that are prohibited under the statutory rules for Government employees, namely, to strike
work, restrictions on maintaining any political funds, to openly criticize Government policies,
to freely accept financial contribution, to freely join foreign organizations etc. 1

1
https://labour.gov.in/sites/default/files/gyanesh.pdf

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 BIBLIOGRAPHY

 www.google.com
 www.wikipedia.com
 http://www.yourarticlelibrary.com
 businessjargons.com

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