12/14/22, 11:05 AM Collective Bargaining: Definition, Need, Objectives, Features, Prerequisites

Meaning of Collective Bargaining

By Hemant More < https://thefactfactor.com/author/hemantraje/>

February 25, 2019 <

https://thefactfactor.com/facts/law/civil_law/labour_laws/collective_ba
rgaining/collective-bargaining-01/255/>

Indian Legal System > Civil Laws <

https://thefactfactor.com/civil-laws/> > Labour Laws >
Collective Bargaining < https://thefactfactor.com/collective-
bargaining/> > Meaning of Collective Bargaining
Collective bargaining is a process of negotiating between management and workers
represented by their representatives for determining mutually agreed terms and
conditions of work which protect the interest of both workers and the management.
Collective bargaining has been defined by the Supreme Court as “the technique by
which dispute as to conditions of employment is resolved amicably by agreement
rather than coercion”.

Definition by Different Authors:

Michael J. Jucius defines collective bargaining as a process by which employers on the

one hand and representatives of the employees on the other, attempt to arrive at

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12/14/22, 11:05 AM Collective Bargaining: Definition, Need, Objectives, Features, Prerequisites

agreements covering the conditions under which employees will contribute and be
compensated for their services.

Dale Yoder defines collective bargaining as a situation in which the essential

conditions of employment are determined by a bargaining process undertaken by
representatives of a group of workers on the one hand and one or more employers on
the other.

Edwin B. Flippo defines collective bargaining as a process in which the representatives

of labour organization (Trade Union) and the representatives of business organization
(Management) meet and attempt to negotiate a contract or agreement which specifies
the nature of the employer-employee union relationship.”

Encyclopaedia of Social Services defines collective bargaining as a process of

discussion and negotiation between two parties one or both of whom is a group of
persons acting in concert. The resulting bargain is an understanding as to terms and
conditions under which a continuing service is to be performed.

J.H. Richardson defines collective bargaining takes place when a number of work
people enter into a negotiation as a bargaining unit with an employer or group of
employers with the object of reaching an agreement on the conditions of the
employment of the work people.

S.H. Slitcher defines collective bargaining as the beginning of industrial jurisprudence.

It is a method of enforcing citizenship right in industry i.e. management should abide
by certain ruler rather than taking an arbitrary decision.

Archibald Cox defines collective bargaining as the resolution of industrial problems

between the representatives of employers and the freely designated representatives of
employees acting collectively with a minimum of government direction.

ILO Convention No. 154 defines collective bargaining as referring to: “all negotiations
which take place between an employer, a group of employers or one or more
employers’ organisations, on the one hand, and one or more workers’ organisations,
on the other, for:

(a) determining working conditions and terms of employment; and/or

(b) regulating relations between employers and workers; and/or

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12/14/22, 11:05 AM Collective Bargaining: Definition, Need, Objectives, Features, Prerequisites

(c) regulating relations between employers or their organisations and a workers’

organisation or workers’ organisations.” (Article 2)

In Ram Prasad Viswakarma v. Industrial Tribunal, (1961) I LLJ 504 case, the
Court observed that “It is well known how before the days of ‘collective bargaining,
labour was at a great disadvantage in obtaining reasonable terms for contracts of
service from its employer. As trade unions developed in the country and Collective
bargaining became the rule, the employers found it necessary and convenient to deal
with the representatives of workmen, instead of individual workmen, not only for the
making or modification of contracts but in the matter of taking disciplinary action
against one or more workmen and as regards of other disputes.”

In Karnal Leather Karamchari Sanghatan (Regd.) v. Liberty Footwear

Company (Regd.) and Ors, AIR 1990 SC 247 case, the Court laid down that the
Industrial Disputes Act, 1947 seeks to achieve social justice on the basis of collective
bargaining. The voluntary arbitration is a part of the infrastructure of the dispensation
of justice in the industrial adjudication. The arbitrator thus falls within the rainbow of
statutory tribunals. When a dispute is referred to arbitration, it is, therefore, necessary
that the workers must be made aware of the dispute as well as the arbitrator whose
award ultimately would bind them. They must know what is referred to arbitration,
who is their arbitrator and what is in store for them. They must have an opportunity
to share their views with each other and if necessary to place the same before the
arbitrator. This is the need for collective bargaining and there cannot be collective
bargaining without involving the workers. The Union only helps the workers in
resolving their disputes with management but ultimately it would be for the workers to
take a decision and suggest remedies. It seems to us, therefore, that the arbitration
agreement must be published before the arbitrator considers the merits of the dispute.
Non-compliance of this requirement would be fatal to the arbitral award.

In Bharat Iron Works v. Bhagubhai Balubhai Patel, (1976) Lab 1 C: 4[SC] case,
the Court observed that “Collective bargaining, being the order of the day in the
democratic, social welfare State, legitimate trade union activities, which must shun all
kinds of physical threats, coercion or violence, must march with a spirit of tolerance,
understanding and grace in dealings on the part of the employer. Such activities can
flow in the healthy channel only on mutual cooperation between the employer and the
employees and cannot be considered as irksome by the management in the best
interests of its business. Dialogue with representatives of a union helps striking a
delicate balance in adjustments and settlement of various contentious claims and
issues.”

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12/14/22, 11:05 AM Collective Bargaining: Definition, Need, Objectives, Features, Prerequisites

In Amalgamated Coffee Estates Ltd. v. Workmen, 1965 II LLJ 110 SC case, the
Supreme Court held that the process of negotiated settlements is at the heart of the
solution of the collective disputes. Unlike a settlement in the course of conciliation
proceedings, a bipartite settlement with a majority union is equally binding if it is held
to be fair and reasonable.

What does Collective Bargain Involve?

It is a process of discussion and negotiation between employer and workers regarding

terms of employment and working conditions. Workers are generally represented by
trade unions with respect to expressing their grievance concerning service conditions
and wages before the employer and the management. It is perceived as a process both
by employers and employees and important machinery to settle differences on the
work-related issues. The need for collective bargaining in India arose, particularly after
World War II.

Modernization, the need for quality, and increased productivity are important for
competing in the international market. Modernization may cause the introduction of
modern automatic machinery and may require high skilled labours. Thus
modernization results in the displacement, laying off, and retrenchment of workers.
Such condition results in hostility between the workers and the management.  In such
a case, management and workers must come together and use the concept of
collective bargaining. Collective agreements provide the climate for the smooth
working of the business.

Need for Collective Bargaining:

An individual worker under financial constraint cannot bargain with the cash-rich
employer. In such a situation, the individual may be tempted to accept undesirable
conditions including low remuneration. Here there is a fear of loss of a job in the
minds of the worker. This fear may be due to the ignorance, illiteracy and industry-
specific skill factors. Sometimes employers are in a position to control the bulk
demands for the labours, and they may through combined action, force the workers to
accept low wages. Collective bargaining allows workers to band together into larger
groups like trade unions, create a louder voice that can help provide the benefits for
the workers and employers.

Determination of wages can be settled by the demand and supply in the market but
issues like the length of working day, health and safety of workers, speed operations,

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12/14/22, 11:05 AM Collective Bargaining: Definition, Need, Objectives, Features, Prerequisites

the security of job can only be settled by negotiation. The problem of good human
and industrial relations can be tackled successfully by the collective bargaining process.

Objectives of Collective Bargaining:

To foster and maintain cordial relations between the employer/management and

employees.
To protect the interests of the workers and employer through collective action and
by preventing unilateral actions from being taken by either party.
To keep outside the government interventions
To promote industrial democracy.

Characteristics of Collective Bargaining:

It is a group or collective action as opposed to individual action. It is initiated

through the representatives of the employees (trade union members).
It is two way give and take process because its outcome is mutually beneficial. The
negotiation arrived at is acceptable to both parties: the employer and the
employees. Hence it creates a stable relationship.
It is a voluntary bipartite and continuous process without any third-party
intervention.
It is a flexible and dynamic process wherein no party adopts a rigid attitude. It
changes as per the conditions prevailing at the time of negotiations.
It ensures industrial democracy in the workplace. Both the employer and the
employees who best know their problems, participate in the negotiation process.
It is a practical way of solving issues between the employer and the employee.
It involves balancing of strength and power.
The decision taken by collective bargaining can be implemented speedily.

Subject Matter of Collective Bargaining:

Rights and responsibilities of the management and of the trade union.

Wages, bonus and other allowances including profit sharing.
Hours of work, rest intervals.
Production norms
Leave and other facilities

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12/14/22, 11:05 AM Collective Bargaining: Definition, Need, Objectives, Features, Prerequisites

terms and conditions of service.

retirement benefits
Grievance redressal system.
The procedure of joint consultation
The procedure of settling disputes.
Purpose, scope and duration of the agreement
Differences in interpretation of the agreement
the definition of important terms.
Annual holidays and pays
Termination, discharge, suspension and dismissal clauses.
Prohibition of strikes and lockouts in the period of the agreement.

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