w | THE LEGAL FRAMEWORK OF ° | COLLECTIVE BARGAINING INTRODUCTION . Thi ized in the Trade Union Act, 1926, 947 and the ISGUSPAMEMployment (Standing Orders a > not ratified ILO Convention Nos. 87 and 98 due to ‘technical difficulties’ involving trade union rights for civil servants. This is not a valid reason for non-ratification, because a ratifying country can exempt certain services. The real intention could be, as Surendra Nath (1997), observes, ‘to restrict freedom of associa: tion to only manual workers (by defining them as workmen) and exclude supervisory and managerial workers’. The government also does not allow the right of collective bargaining even to industrial workers in government undertakings like the Railways, Posts, Telecommunications, and Central Public Works Depart- ment. Remuneration, etc. is decided by the government on the basis of Pay Commission recommendations, and not through collective bargaining. The labour laws at the national level do not mandate employers either to recognize unions or to engage in collective bargaining. However, some states (for instance, Andhra Pradesh, Bihar, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Oriss4 and West Bengal) have provisions concerning recognition of trade unions. Scanned with CamScanner1g Negotiated Change ILO CONVENTIONS From 1931 to date, the identification of a collective bargaining agent has remained a hotly debated issue. The Royal Commission on Labour (1931: 323) was not in favour of the idea that recognition should depend on the numerical strength of the union. If a union consisted of only a minority of employees jt was not adequate reason for withholding recognition. The 1947 amendment to the Trade Union Act, 1926, and the Trade Union Bill, 1950 provided for recognition of more than one union by an employer. However, neither came to be enforced. In 1956 the Second Five Year Plan stressed the importance of one union, one industry. In 1958, the Indian Labour Conference evolved a code of discipline in industry (Annexure I)—which did not and stili does not have statutory force—which contained criteria for recognition of unions. It was in favour of workers belonging to non-recognized unions to operate through the representative union of the industry or seek redressal of grievances directly. The First National Commission on Labour (1969) left the matter of union recognition to be decided on the basis of local circum- stances. The Second National Labour Commission on Labour (2002) has made specific recommendations on this issue. UNION RECOGNITION There is no law at the national level for recognition of trade unions. However, in some states—Maharashtra and Madhya Pradesh, for instance—there are legal provisions for i. ‘Thus, 4a India, there is considerable divergence in the methods for deter. mination of a representative union for the purposes of collective bargaining, These methods include: (a) code of discipline, which datory Foss most PSUs; (6) secret ballot, which is man- One bi three states, namely, Andhra Pradesh (since 1975), —— erin, and West Bengal Gince 1998); (0) check-off verification. In. 1995, the Sore hans and, (2) membership 2 government 95, the Supreme Court of India directed resolve the tregPoration, the Food Corporation of India, to * trade union recognition dispute through secret Scanned with CamScannerThe Legal Framework of Collective Bargaining 17 ballot. The judgement also mandated the procedure for the secret ballot. In 1982, the Bombay High Court struck down an order of the industrial court for a secret ballot in the case of Maharashtra General Kamgar Union v. Bayer India Ltd. The matter was taken to the division bench of the high court which upheld the order of the single judge. What was required to be proved by the Maharashtra General Kamgar Union was that the membership of the Mazdoor Congress had fallen to less than 30 per cent during the requisite six-month period. It was argued that hypothetically, if 25 of 100 workers in an establishment voted for a recognized union, it meant that the membership had fallen below the requisite percentage but, in the absence of the identity of the voters, it would not be possible to prove that the union members had voted against it. Under Section 2(p) of the Industrial Disputes Act, 1947, collective agreements to settle disputes can be reached with or without recourse to the conciliation machinery established by legislation. A settlement (written agreement between the em- ployer and the workers) arrived at in the course of conciliation proceedings is binding, under Section 18(3) of the Act, not only on the actual parties to the industrial dispute but also on the heirs, successors or assignees of the employer on the one hand and all the workers in the establishment—present or future—on the other. Conciliation officers are duty-bound to ensure that the parties reach a fair, amicable and lawful settlement of the dispute. A settlement/agreement with one trade union is not binding on members of another or other union(s) unless arrived at during conciliation proceedings; the other union(s)—including a minor- ity union—can, therefore, raise an industrial dispute. Under Section 36(1) of the Industrial Disputes Act, which deals with workers’ representation, a collective agreement is binding on the workers who have negotiated and individually signed the settle- ment. It is, however, not binding on workers who do not sign the settlement or authorize any other worker to sign on their behalf. A collective agreement presup, 7 pate consent of all the interested parties. When workers are m : ot it of different unions, every union, regardless of whether or BO™ ” represents a majority, is considered an interested party. y poses the participation and Scanned with CamScanner18 Negotiated Change in the case of workers who choose not to be members of any union, or one or more unions, for reasons of their own, are top interested in reaching a settlement, Sections 2(p) 4 and 18(3) of the Industrial Disputes Act, 1947 makes collective agreements binding on them, as the conciliation officer's presence is meant to ensure that the agreement is bonafide. UNORGANIZED SECTOR Collective bargaining is rare in the unorganized sector. There are several instances of bipartite collective agreements in the unorga- nized sector that have provided for wages lower than the appli cable minimum wages. Where such agreements are entered into through conciliation and/or registered with the appropriate gov. ernment, the labour commissioners concerned are expected to ensure that the wages, benefits and other terms and conditions are not less favourable than the applicable minimum wages and other standards laid down in labour laws. UNFAIR LABOUR PRACTICES The Industrial Disputes Act, 1947, does not contain any stipu- lation that only a recognized union can raice an industrial dispute, In this, the Code of Discipline, 1956, is at variance with the Tndustrial Disputes Act. In 1982, the Indestrial Disputes Act Zi amended to include the following as unfair labour practices: () refusal by the employer to bargain collectively in good faith with recognized trade unions; (b) refusal by a recognized union to bargain collectively in good faith with the employer; and () workers and trade unions of workmen indulging in coercive activities against certification of a bargaining representative. The collective bargaining rights of workers in the insurance the interests of policyholders, Now, : » insu: i consultations, but their ae ance workers engage in visions are notified unilaterally by Scanned with CamScannerThe Legal Framework of Collective Bargaining 19 the concerned government department. Of course, this curtail- ment does not apply to the private sector. Section 2(p) of the Industrial Disputes Act, 1947 defines ‘settlement’ and Section 29 makes the breach of any term of the settlement punishable with imprisonment for a term of sic months or with fine or both. Refusal to bargain collectively, in good faith, with recognized trade unions is an unfair labowe practice under Section 2(ra)/Schedule V of the Act and is punish. able under Section 25(u) with imprisonment for a term which may extend to six months or with fine which may extend to Re 1,000 or with both. Several practices that qualify to be called unfair labour practices go unquestioned or unprosecuted. For instance, in one of the units of a multi-unit engineering company in north India, the manage- ment unilaterally declared a wage revision package after negotia- tions with the trade union broke down. The workers were ‘happy’ with the management's gesture; in fact, they left the next revision to the management's discretion as well. In another case, a multinational corporation near Delhi lured its workers with higher wages in return for not joining the trade union. Even in the public sector there have been occasions when supervisors have got benefits like interim relief pending wage revision only when they have given in writing that they will not join the union, To the extent managements are willing to pay a price to keep unions out, workers in India, would themselves contribute to making trade unions redundant in collective bargaining, Further, private sector companies, particularly pharmaceutical ones, have often designated sales representatives as officers and offered them additional benefits. Since this curtails job security, when sales representatives have protested and moved the court, the latter has held that 2 mere change in designation does not take away their right to unionize or disentitle them to job security. LEVELS OF BARGAINING NATIONAL-LEVEL AGREEMENTS Prior to the 1970s, wage boards appointed by the, goverment were given awards on wages and working conditions. Scanned with CamScanneree. 20 Negotiated Change i ineteen in the late 1969, f wage boards declined from ninete ae or journalists) in the late 1990s. Since the early 1979, sectoral bargaining at the national level is prevalent mainly in industries in which the government is the dominant player, for insta 1 (approximately 700,000 workers instance, banking and coal ‘ ioe yy steel and ports, and docks (approximately 200,000 work sae ch). About 60 private, public and multinational banks are currently members of the Indian Banks’ eee They negotiate long-term settlements with the all-India federations of bank employees. In the coal sector, over 200 coking and non. coking mines across the country were nationalized in the early 1970s. However, since then to date there has been only one national agreement for the entire coal industry. In steel, there is a permanent bipartite committee for integrated steel mills in the public and private sectors. Since 1969, this committee, the National Joint Consultative Committee for Steel Industry (NJCS), has signed six long-term settlements. In the port sector, 13 major ports have formed the Indian Ports’ Association. It holds nego- tiations with the industrial federations of the major national trade union centres in the country. A peculiar feature of national-level sectoral bargaining is the presence of a single employer body and the involvement of the concerned administrative ministry from the employers’ side. In many sectors, negotiations are conducted by two to five major national trade union centres with a significant presence through their respective industry federations of workers’ organizations. In banks, coal and ports and docks, all agreements have invariably been preceded by strikes or strike threats, It is only in the steel jndusiry that this has not happened during the past three decades. ite nationalization in the late 1970s, there is no industry-wide pareuining in the oil sector. The Oil Coordination Committee ieatodl in ply in ae a appreciable level of standard: bargaining takes pl conditions, even though collective 2 6 takes place at the firm and/or plant level (for instance Hindustan Petroleum Corporation Limited). scan hn devaie Pay provides the base-mark for the publi the best bargain, invoking Acccys ive arBsining bases itself 08 has in certain case been inten egey Of the Constitution which een interpreted by the Supreme Court ‘° Scanned with CamScannerThe Le I Framework of Collective Barg: ing 21 1 that the public sector represents the State and hence cannot minate among its employees, Public sector pay in turn provides the base-mark for unionized workers in the private sector, where the collective bargaining has tended to become coercive, with employers often making the best of the current economic condition. ‘The distinguishing features of collective bargaining in the public sector are discussed in Chapter 6. Industry-cum-region-wide Agreements ‘These are common across the private sector-dominated cotton and jute es, engineering and tea industries. But such agreements are not binding on enterprise managements in the particular industry or region unless the managements authorize the respec- tive worker organizations in writing to bargain on their behalf. Decentralized Firm/Plant-level Agreements While employers generally prefer decentralized bargaining at the plant level, unions insist on bargaining at higher levels. They feel that plant-level bargaining reduces their bargaining power, par- ticularly during periods of crisis. For instance, till 1990, in Escorts Limited, a private sector conglomerate with over 14 factories and 35,000 workers, collective bargaining used to take place for the entire company. Post-liberalization, when the management wanted to decentralize bargaining to the plant level, the union resisted and held a strike for 39 days. This, however, did not deter the management from going ahead with decentralized bargaining on the basis of capacity to pay. DURATION OF AGREEMENTS Till the 1970s, the duration of collective agreements was of two to three years. During the 1970s and 1980s, the duration increased to three to four years. In the 1990s, over four-fifths of central public sector agreements were signed for five years each. Beginning from the sixth round of wage negotiations (1997 to date), duration of wage agreements in the public sector has been raised from ae to 10 years, The validity of most of collective agreements in the continues to be three or, in rare cases, exclusively with one aspect dof six years. private sector, however, four years. Some agreements, dealin; f such’ as incentives), have been for a perio Scanned with CamScanner22. Negotiated Change SUBSTANCE OF AGREEMENTS About 2 per cent of the total workforce, or over 30 per cent of the workers in the organized sector Participate in collectiy, bargaining. The legal framework encourages adjudication, wig the government as the big brother. Most unions being highly politicized and the government wielding enormous discretionary power, without the commensurate responsibility, legal adminis, tration becomes delinquent. Not infrequently, trade unions co opted in the collective bargaining process by either the government or the management. This leads to a crisis of con. fidence, particularly when unions find the going tough and an unable to meet the expectations of their members. As a result, workers’ commitment to any solidarity-based ideology dimin. ishes and they become increasingly instrumental in their orien tation. They will not hesitate to shift their allegiance to another leader or union who or which promises more in less time, particularly, now that private sector managements want workers to do more for less. Labour is able to have its way in the produc and labour market when conditions are not critical, but when they are, there are trade-offs: jobs with wages; relay layoffs; take money and leave (control over) jobs. If trade unions are still able to wield some influence, more so in the public sector, it is largely because coalition governments have been struggling for their own survival. Scanned with CamScannerThe Legal Framework of Collective Bargaining 23 Annexure I Code of Discipline in Industry (India, 1958)! I. To Maintain Discipline in Industry (oth in public and private sectors) There has to be (j) a just recognition by employers and workers of the rights and responsibilities of either party, as defined by the laws and agreements (including bipartite and tripartite agreements arrived atall levels from time to time) and (ii) a proper and willing discharge by either party of its obligations consequent on such recognition. The central and state governments, on their part, will arrange to examine and set right any shortcomings in the machinery they consti- tute for the administration of labour laws. To ensure better discipline in industry. II. Management and Union(s) Agree + that no unilateral action should be taken in connection with any industrial matter and that disputes should be settled at appropri- ate level; that the existing machinery for settlement of disputes should be utilized with the utmost expedition; that there should be no strike or lockout without notice; thataffirming their faith in democratic principles, they bind them- selves to settle all future differences, disputes and grievances by mutual negociation, conciliation and voluntary arbitration; that neither party will have recourse to (2) coercion, () intimi- dation, (¢) victimization, or (d) go-slow; ; that they will avoid (4) litigation, ()) sit-down and stay-in strikes, and (0) lockouts; : that they will promote constructive cooperation between their representatives at all levels and as between workers themselves and abide by the spirit of agreements mutually entered into; Scanned with CamScanner24 Negotiated Change + that they will establish, upon a mutually agreed basis, 3 Briey, ance procedure which will ensure a speedy and full inves tion leading to settlement; _ . ; «+ that they will abide by various stages in the grievance prog, dure and take no arbitrary action which would bypass qh, procedure; and + that they will educate the management personnel and worker, regarding their obligations to each other. III. Management Agrees + not to increase workloads unless agreed upon or settled otherwise; + not to support or encourage any unfair labour practice such a (@ interference with the right of employees to enroll or continue as union members, (2) discrimination, restraint or coercion against any employee because of recognized activity of trade unions, and (@) victimization of any employee and abuse of authority in any form; + to take prompt action for (a) settlement of grievances, and (0) implementation of settlements, awards, decisions and orders, * to display in conspicuous places in the undertaking the provi- sions of this Code in the local language(s); + to distinguish between actions justifying immediate discharge and those where discharge must be preceded by a warning reprimand, suspension or some other form of disciplinary a¢ tion and to arrange that all such disciplinary action should be subject to an appeal through normal grievance procedure; to take appropriate disciplinary action against its officers and members in cases where inquiries reveal that they were respot™ ipitate action by workers leading to indiscipline: to recognize the union in accordance wi ure I) evolved at the 16th Session of the ence held in May 1958, th the criteria (Annex Indian Labour Confer IV. Union(s) Agree or to engage in any form of physical duress per arinit demonstrations which are not peaceful and not © Permit rowdyism in demonstration; Scanned with CamScannerThe Legal Framework of Collective Bargaining 25 that their members will not engage or cause other employ to engage in any union activity during working hours, unless as provided for by law, agreement or practic to discourage unfair labour practices such as (a) negli- gence of duty, (#) careless operation, (@) damage to property, () interference with or disturbance to normal work, and (© insubordins to take prompt action to implement aw. ments and decision; to display in conspicuous places in the union offices the provi- sions of this Code in the local language(s); and to express disapproval and to take appropriate action against office-bearers and members for indulging in action against the spirit of this Gode. ion; ds, agreements, settle- Scanned with CamScanner26 Negotiated Change Annexure II Criteria for Recognition of Unions Where there is more than one union, a union claiming recognition should have been functioning for at least one year after registration Where there is only one union, this condition would not apply. The membership of the union should cover at least 15 per cent of the workers in the establishment concerned, Membership would be counted only of those who had paid their subscriptions for at leas three months during the period of six months immediately preceding the reckoning, A union may claim to be recognized as a representative union for an industry in a local area if it has a membership of at least 25 per cent of the workers of that industry in that area, When a union has been recognized, there should be no change in its position fora period of two years. Where there are several unions in an industry or establishment, the one with the largest membership should be recognized. A representative union for an industry in an area should have the right to represent the workers in all the establishments in the industry, but ifa union of workers in a particular establishment has seraber ship of 50 Per cent or more of the workers of that establishment it should have the right to deal with matters of purely local interest such the question of 0 be dealt with separately. observed the Code of Di: recognition would have t Only unions which entitled to recognition, scipline would be Scanned with CamScannerThe Legal Framework of Collective Bargaining 27 Box 2.1: ILO CONVENTIONS —— eee Freedom of Association and Protection of the R ight to Organize Convention, 1948 (No. 87) Convention no. 87 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 on the international level, ‘These organiza. tions or federations may not be liable to arbitrary dissolution or suspension by an administrative authority. Workers’ and employers’ organizations have the right to draw up their own constitutions and rules, elect their representatives and organize their activities, without any interference which would restrict this right or prevent its lawful exercise. Rules for the acquisition of legal personality of workers’ and em- ployers’ organizations may not be of such a character ; ’s to restrict the application of the right to organize. In exercising the rights provided by the Convention, workers and employers and their organizations must respect the laws of the land applicable to all persons and organizations. However, these laws must not be such as to impair the guarantees provided for in the conventions, nor may they be applied in such a way. The only exception to the cardinal principle of the right to organize ‘without distinction whatsoever’ is the armed forces and the police, to whom special rules and regulations may apply. The Right to Organize and Collective Bargaining Convention, 1949 (No. 98) This Convention aims to protect the exercise of the right to organize and to promote voluntary collective bargaining. Scanned with CamScanner28 Negotiated Change + Workers must be adequately Protected agains, acts of anti-union discrimination, in Particular acts calculated to : > make the employment of a worker subject to conditions that he or she does not join a union, or gives up trade union membership; > cause the dismissal or otherwise prejudice a worker because of trade union membership or participation in trade union activities, + Both workers’ and employers’ organizations shall enjoy adequate protection against acts of inter- ference by each other or each other’s agents or members, including in particular > acts designed to promote the establishment of workers’ organizations under the domination of employers’ organizations; the provision of financial or of workers’ organizations for placing them under the contr or employers’ Organizations, > ther support to the purpose of ‘ol of employers Scanned with CamScanner