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  • The following article includes the introduction to the concept of Collective Bargaining in India and,
  • The basic procedure to initiate collective bargaining in India.
  • There are three types of Collective Bargaining methods in India as mentioned in this article.

1. What is Collective Bargaining?

Collective bargaining is a mechanism of discourse and negotiation between an employer and a collective union that culminates in a negotiated agreement and an alteration of the issues occurring under the agreement. The Indian Supreme Court has described the collective bargaining process as a mechanism by which, by consensus rather than force, conflict about conditions of employment is resolved amicably.Staffs, which are usually served by a labour union, use this medium to express their anger about different issues such as wages and working conditions.

2. What is the procedure to initiate Collective Bargaining in India?

Etymologically stating, a major part of Collective Bargaining procedures can be said to have evolved after the Independence of India. There was a tremendous increase in the issues covered under the Labour and Industrial laws during the post-independence period. A report was published in this regard by the National Commission of Labour. The report on collective bargaining published by the commissionduring the late sixties revealed that the determination of wages and conditions of employment through collective agreements has spread to most of the major segments of the economy. In this connection the commission (NCL) observed: "Most of the collective agreements have been at the plant level, though in important textile centres, like Bombay and Ahmedabad, industry level agreements have been common —- such agreements are also to be found in the plantation industry in the south and in Assam, and in the coal industry. Apart from these, in new industries, like chemicals, petroleum, oil refining and distribution, aluminium, manufacture of electrical equipment and automobile repairing, arrangements for settlement of disputes through voluntary agreements have become common in recent years.”

Coming to the present scenario, collective bargaining takes place not only at the level of plants and firms, but also at the Industry level, where the parties are united at regional or national level, as in the case of cotton, silk, jute, plantation and coal mines. A major landmark event that affected labour policies in the post-Independence period was the Labour Investigation Committee report, 1946. In 1946, the national government drew up a four-year step plan to:

a) Amend existing labour laws to suit the evolving needs of the time,

b) Fully abolish and/or regulate contract labour,

c) Expand job opportunities to include all classes of employees,

d) Establish equal terms of service and trade for employees.

The procedure of Collective Bargaining in India includes:

a. A charter of demands

The trade union will notify the employer for commencing collective bargaining negotiations. The representatives of the trade union will then draft a charter of demands which will contain issues related to terms of employment and the working conditions namely wages and allowances, bonuses, working hours, benefits, holidays etc. In some cases, an employer can also notify the trade union and initiate collective bargaining negotiations.

b. Negotiations

Negotiation is the subsequent step after the compliance of the charter of demands by the trade union. Both the employer and the employee shall seek opportunities to suggest compromise solutions in their favour thereby trying to find a middle ground until an agreement is reached. If it impossible to reach out to an agreement, a third party such as a mediator or an arbitrator may be brought in from outside. If, even with the assistance of the third party, no viable solution can be found to resolve the parties’ differences, the trade union may decide to engage in strikes.

c. Collective Bargaining Agreement

Pursuant to the discussions between the parties, a collective bargaining agreement will be executed between the employer and employees represented by trade union(s), setting out the terms of employment and the working conditions and environment of labours in the industry.

d. Strikes

If both parties are unsuccessful in reaching an agreement because of mutual unanimity, the union has an option to go on a strike, which shall be in accordance with the provisions of the Industrial Disputes Act 1947.

e. Conciliation

Once the conciliation officer receives a notification of strike or lockout, the conciliation proceedings will begin. The appropriate Government may appoint a conciliation officer or a Board of Conciliation to investigate disputes, mediate and then promote a settlement. Workers are prohibited from going on strike during the pendency of such conciliation proceedings

f. Compulsory Arbitration and adjudication

When conciliation and mediation fails, parties may either resort to compulsory or voluntary arbitration. Arbitration and the commendations of the arbitrator may be obligatory to the parties. Section 7A of the ID Act provides for a labour court or industrial tribunal in a state to adjudge lingering industrial disputes such as strikes and lockouts. Section 7B of the ID Act provides for composition of national tribunals to resolve disputes and clashes concerning questions of national interest or issues regarding more than two states. In the event, a labour dispute is not resolved by conciliation and mediation, the employer, and the workers may refer the case by a written agreement to a labour court, industrial tribunal or national tribunal for adjudication or compulsory arbitration.

3. What types of collective Bargaining are prevalent in India?

  • Bipartite agreements -These agreements are the result of joint negotiations between employer and trade union, and are binding in compliance with ID Act provisions.
  • Settlements- By essence it is tripartite because it includes the employer, the trade union and the conciliation official. Settlements emerge from particular conflicts which a mediation officer addresses. Unless the conciliation officer suspects at any point in time that there is a likelihood of reaching a settlement during the conciliation process, then the officer can withdraw from the negotiations. The parties are free to finalize the terms of the agreement and, if such an agreement is reached after its termination, they will contact the conciliation officer within a prescribed time frame.
  • Consent awards- These are settlements which have been concluded when a dispute is pending before an adjudicator. Such agreement is incorporated into the award of the authority, and while it is jointly agreed between the parties, it is binding under the award passed by the authority.


Refusal of collective bargaining in good faith by the employer is an unfair labour practice as provided for in the ID Act. Under Section 18 of the ID Act, collective bargaining arrangements between the trade-union and employers are enforceable. For an effective collective bargaining process, it needs to start with ideas rather than demands and the parties should be able to discuss and compromise. The collective bargaining process allows for constructive negotiations between employers and employees and promotes the development of labour relations.

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