Collective bargaining

According to Article 2 of the Collective Bargaining Convention, 1981 (No. 154) of the International
Labour Organisation, “collective bargaining extends 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
(c) regulating relations between employers or their organisations and workers or workers’
organisations”.
In the case of Ram Prasad Viswakarma v. Industrial Tribunal (1961), it was observed that before
collective bargaining was introduced, labourers found it very difficult to negotiate the terms and
conditions of their contracts. With the arrival of trade unions, collective bargaining became the
norm. It became more convenient as employers only had to negotiate with the representatives of the
labourers instead of engaging with every individual labourer.
In the case of Bharat Iron Works v. Bhagubhai Balubhai Patel (1976), it was observed that collective
bargaining is a part of the modern-day concept of the welfare State. It must be practised in a healthy
manner in which there is mutual cooperation between the employers and the employees.
Negotiation between the management and trade union helps in reaching a settlement regarding
various issues.

Aims of collective bargaining

The following are the aims and objectives of collective bargaining:
1. Upholding industrial democracy
2. Ensuring equality and justice for socially and economically backwards groups
3. Protecting the working class from exploitation
4. Meeting the legitimate expectations of labourers regarding the work they have undertaken

Condition precedent : merits and demerits

Condition precedent refers to a condition that must be met before a contract or agreement can be
considered legally binding. In the context of collective bargaining, condition precedent may refer to
certain requirements that must be met before negotiations can begin or before an agreement can be
reached.
Collective bargaining is a process through which employers and employees negotiate the terms and
conditions of employment, such as wages, benefits, and working conditions. The process usually
involves the formation of a union or employee association to represent the workers in negotiations
with the employer.
Merits of collective bargaining include:
1. Increased bargaining power: By joining together, employees have greater bargaining power than
they would have individually. This can lead to better pay and benefits, improved working conditions,
and more job security.
2. Improved communication: Collective bargaining provides a formal mechanism for employees to
communicate their concerns and needs to the employer. This can help to foster a more productive
and
collaborative working relationship.
3. Reduced conflict: Because the terms of employment are negotiated and agreed upon by both
parties, collective bargaining can help to reduce conflict in the workplace.
4. Fairness: Collective bargaining can help to ensure that employees are treated fairly and that their
rights are protected.
Demerits of collective bargaining include:
1. Cost: Negotiating and administering a collective bargaining agreement can be expensive for both
the employer and the employees.
2. Impacts on competitiveness: Collective bargaining can lead to higher labor costs, which can make
it
more difficult for employers to compete in the marketplace.
3. Limited flexibility: Collective bargaining agreements can be inflexible and may limit the ability of
employers to make changes to working conditions or pay.
4. Potential for conflict: Although collective bargaining can reduce conflict in the workplace, it can
also
lead to labor disputes if negotiations break down or if one party feels that they have been treated
unfairly.
Bargaining process: negotiation
collective bargaining is a process in which representatives of a group of workers, typically labor
unions,
negotiate with representatives of employers to reach agreements on various employment-related
matters. The negotiation stage is a crucial part of the collective bargaining process, where both sides
come together to discuss and find common ground on issues such as wages, working conditions,
benefits, and other terms of employment. Here's an overview of the negotiation process in collective
bargaining:
1. Preparation: Before negotiations begin, both labor and management sides engage in
thorough preparation. Union representatives gather information on the needs and desires of the
workers they represent, analyze industry trends, study the employer's financial situation, and review
existing collective bargaining agreements. Similarly, management representatives assess their
organization's financial capacity, goals, and priorities.
2. Opening statements: Negotiations typically start with opening statements from both
sides. These statements outline the general positions, goals, and key issues to be addressed during
the
negotiation process. Each party presents their initial proposals, which serve as a starting point for
further discussions.
3. Proposal and counterproposal: The negotiation process involves presenting proposals
and counterproposals from both sides. These proposals may include specific demands related to
wages, benefits, working hours, job security, and other terms and conditions of employment. Each
proposal is discussed, analyzed, and responded to by the opposing side, leading to a back-and-forth
exchange of offers and counteroffers.
4. Bargaining and compromise: Negotiators engage in bargaining, where they discuss
and negotiate the terms of the proposals. This involves presenting arguments, providing
justifications,
and considering various factors such as economic conditions, productivity, and the interests of both
parties. The goal is to find common ground and reach a mutually acceptable agreement.
Compromises
are often made on both sides to achieve a resolution.
5. Mediation or arbitration: In some cases, if negotiations reach an impasse or if both
parties are unable to reach an agreement, they may turn to mediation or arbitration. Mediation
involves the intervention of a neutral third party who assists the negotiators in finding a resolution.
Arbitration, on the other hand, entails submitting the unresolved issues to a neutral arbitrator or
panel,
whose decision is binding on both parties.
6. Ratification: Once an agreement is reached, it is typically subject to ratification by the
union members and the employer's management. The union members vote on whether to accept
the
proposed agreement, and if approved, the agreement becomes legally binding and enforceable.
It's important to note that the negotiation process may vary depending on the specific laws,
regulations, and practices in different countries, industries, and organizations. However, the general
principles of preparation, proposal, bargaining, and compromise remain integral to the collective
bargaining process.
Stages of collective bargaining
The following are the stages that the process of collective bargaining typically goes through:
1. Forming a union
As per Section 9A of the Trade Unions Act, 1926, the minimum number of employees to constitute a
trade union is seven. Though registration of a union is not compulsory, it definitely comes with its
advantages such as providing adequate representation for workers, using funds for specific purposes,
immunity from civil suits, etc.
Making a charter of demands
In this stage, either the union or the employer may initiate the proceedings of collective bargaining.
The trade union then drafts a charter of demands through several discussions conducted among all
of its members.
2. Negotiation
The negotiations begin with the submission of the charter of demands. Generally, it is the union that
formally presents proposals for changes in the existing labour agreements in the initial meeting.
Then, the management gets the opportunity to present counter-proposals. This keeps going on until
they can form an agreement. When it becomes impossible for them to reach an agreement, a third
party may be appointed as a mediator or an arbitrator.
3. Forming an agreement
Once a negotiation becomes successful, the management and the union form a written agreement.
This agreement is called a collective bargaining agreement.
4. Strikes
In case the negotiation process fails, the union may declare a strike. As per Section 22 of the
Industrial Disputes Act, public utility sector employees must provide six weeks’ notice of a strike, and
may strike fourteen days after providing such notice. Neither the management nor the union is
permitted to take any industrial action while the conciliation is pending, and not until seven days
after the conciliation proceedings conclude, or two months after the legal proceedings conclude.
5. Conciliation
The conciliation process begins when the conciliation officer receives a notice of strike. There are two
alternatives that can be taken in this step. As per Section 4 of the Act, during the cooling-off period,
the state government may appoint a conciliation officer for investigating, mediating and promoting
settlement. As per Section 5 of the Act, the second alternative is that the state government may
appoint a Board of Conciliation and it shall be composed of a chairman and either two or four
members. Strikes are not organised during the process of conciliation as per Sections 22 and 23 of
the Act. Section 20 of the Act provides that this step ends with a settlement or a reference to an
industrial tribunal or labour court, and sometimes no settlement is arrived at.

Place of collective bargaining in the era of globalization,

the place of collective bargaining has become both challenging and important. Collective bargaining
refers to the negotiation process between employers and employees, usually represented by labor
unions, to determine the terms and conditions of employment. It traditionally takes place at the
enterprise or industry level, but in the context of globalization, there are several key considerations
to
take into account:
1. Global supply chains: Many companies now operate globally, with complex supply
chains spanning multiple countries. This poses challenges for collective bargaining as it becomes
difficult to define the scope and jurisdiction of negotiations. Global supply chains often involve
subcontracting, outsourcing, and offshoring, making it harder for workers to identify the entities
responsible for their employment conditions.
2. Power imbalances: Globalization has led to an increased concentration of economic
power in the hands of multinational corporations. These corporations often have more resources and
bargaining power compared to individual unions or workers. Power imbalances can hinder the
effectiveness of collective bargaining, as weaker parties may struggle to negotiate favorable terms.
3. Regulatory variations: In a globalized world, labor regulations and employment laws
vary significantly across countries. These variations can affect the scope and effectiveness of
collective
bargaining. Unions may face different legal frameworks and constraints in different jurisdictions,
which
can impact their ability to negotiate collectively.
4. Transnational solidarity: Globalization has also facilitated increased connectivity and
communication among workers and unions worldwide. Unions can collaborate and exchange
information across borders, leading to transnational solidarity and collective action. This solidarity
can
enhance the effectiveness of collective bargaining by exerting pressure on multinational corporations
to uphold labor standards.
5. Multi-stakeholder initiatives: Given the global nature of many companies' operations,
there has been a rise in multi-stakeholder initiatives aimed at addressing labor rights and working
conditions. These initiatives involve collaboration between companies, unions, non-governmental
organizations, and other stakeholders. They provide platforms for dialogue and negotiation, which
can
complement traditional collective bargaining processes.
Overall, the place of collective bargaining in the era of globalization is characterized by both
challenges
and opportunities. While power imbalances and regulatory variations pose significant obstacles,
increased connectivity and transnational solidarity can help unions overcome these challenges. It is
crucial for unions and other stakeholders to adapt and find innovative ways to negotiate collectively
and protect workers' rights in the context of globalization.
Concept and definition of strikes and lockouts
A strike is defined under Section 2(q) of the Industrial Disputes Act, 1947 as the stoppage of work by
a body of persons employed in any industry acting as a combination, or a concerted denial, or a
denial under a common understanding, of any number of persons who are or have been so
employed to continue to work or to accept employment. Thus, in simple terms, a strike is the
walkout from work by a body of workmen employed in an industry acting in concert. The duration of
the strike is irrelevant. It is done with the objective of forcing an employee to meet their particular
demands. The employer has to give a notice as a reply to the strike within six weeks before the strike
ends, and the time mentioned in the notice expires. A duration of 7 days after the settlement of the
conciliation litigation. There are some requirements for the continuation of the strike :
1. There must be a stoppage of work.
 2. The strike must be fall under the definition of the industry as given in Section 2(j) of the
Industrial Disputes Act.
3. There must be a relationship between employee and employer between them.
4. The refusal of work must be accompanied by a concerted action for the fulfillment of the
industrial demand.
5. The strikers must have been acting in collaboration.
Case Laws:
Tisco Ltd. v. Workmen[3]
In this case, it was held that if the employer replaced the weekly rest day of Sunday by another day,
without giving notice of such change, then it is illegal. Since denying work in the course of execution
of an illegal change amounts to a lock-out, such a denial does not amount to a strike.

Lockout is the opposite of strike. Strike is a weapon of the labourers to force the management to
fulfill their demands. Whereas, a lockout is a weapon of the management to pressurize the labourers
to agree to their demands relating to the conditions of employment. Lockout is defined
under Section 2(1) which states that it is a short-term closing of a place of employment, or the
suspension of work, or denial by an employee to continue to employ some persons employed by
him. Lockout in layman’s language can be defined as a temporary shutdown till a settlement is
arrived between management and union. Lockout is a condition of work stoppage in which an
employer prevents & obstructs employees from working. It is a tactic used by employers to put
pressure on their workers to come about settlement of issued lead to lockout. This is different from a
strike, in which the opposite happens where employees refuse to work. Thus, a lockout can be
termed as employers’ weapon while a strike is declared on part of employees. According to 2(1) of
Industrial Disputes Act 1947,[4] lock-out means the temporary closing of a place of employment or
the suspension of work or the refusal by an employer to continue to employ any number of persons
employed by him. It causes losses to both the management and workers.

It is often seen that people generally interchangeably use lockout & closure. The two are two
different terms. The Indian judiciary has also deliberated in differentiating between closure and
lockout in the case of Managememt of Express Newspapers Ltd case[5] , Gajendragadkar J beautifully
explained that in case of a closure, the employer does not merely close down the place of business;
he closes the business itself. It is also mentioned that lockout is often used by the employer as a
weapon in his armoury to compel the employees to accept his proposals. Further Indian judiciary has
also deliberated on the difference between in Kairbetta Estate v Rajamanicham[6] The Supreme
Court stated that the employer can resort to lay off only in one of the cases mentioned in Section
2(k) of ID Act whereas there is no such requirement in case of a lockout. Also, in case of lay off the
employer may be liable to pay compensation whereas in case of lock out there is no such liability.
Case Laws
Shri Ramchandra Spinning Mills v. State of Madras[5]
In this case, it was held that if the employer shuts down his place of business as a means of
retaliation or as an instrument of constraint or as a mode of exerting pressure on employees or when
his act is what may be called an act of antagonism there will be a lock-out.

kinds of strikes
that workers can employ to achieve their objectives and draw attention to their grievances. Here are
some common types of strikes:
1. Traditional Strikes: These are the most common and well-known forms of strikes,
where workers cease work and refuse to perform their job duties until their demands are met.
Traditional strikes can be organized by labor unions and can involve workers from a specific industry,
company, or sector.
2. Sit-down Strikes: In a sit-down strike, employees occupy their workplace and refuse to
work, often by physically remaining on the premises. By occupying the workplace, workers create
disruption and prevent the employer from replacing them with other employees or continuing
operations. Sit-down strikes are aimed at putting pressure on employers and can be more
challenging
to address due to the physical presence of workers.
3. Slowdown Strikes: Also known as a work-to-rule strike, in this type of action, workers
deliberately slow down their work pace or strictly adhere to all rules, procedures, and safety
regulations. The goal is to reduce productivity and create bottlenecks in the workflow, demonstrating
the employees' value and impact on the organization's operations.
4. Wildcat Strikes: Wildcat strikes are unauthorized or unofficial strikes that occur
without the approval or direction of the union or labor organization. They are spontaneous actions
taken by workers to address immediate grievances or issues. Wildcat strikes can be challenging to
manage as they often bypass established processes for dispute resolution.
5. Sympathy Strikes: Sympathy strikes, also known as solidarity strikes, occur when
workers from one union or industry support and join the strike of workers from another union or
industry. The purpose is to show support and exert additional pressure on employers by extending
the
scope of the strike.
6. General Strikes: General strikes involve workers from different sectors or industries
across a region, city, or country. They are aimed at exerting widespread economic and social impact
by
bringing multiple sectors to a standstill. General strikes are typically organized by labor federations or
unions and are often used as a powerful tool to draw attention to broader social or economic issues.
It's worth noting that the legality and regulations surrounding these types of strikes vary by
jurisdiction. Laws governing strikes differ between countries, and there may be specific requirements
related to notice periods, mediation, or other procedures that need to be followed before initiating a
strike
The legality of strikes and lockouts in utility and non-utility services
will depend on the specific laws and regulations of the country or jurisdiction in question. However,
there are some general principles that may apply.
In many countries, including the United States, strikes and lockouts are generally legal as long as they
are conducted in accordance with specific legal procedures and requirements. For example, in the
United States, strikes by private sector employees are generally protected by the National Labor
Relations Act, which regulates the relationship between employers and employees in the private
sector.
However, there are some limitations on the right to strike in certain industries, such as those that
provide essential public services like electricity, water, and transportation. In these industries, the
government may impose restrictions on strikes and lockouts in order to ensure that essential services
continue to be provided to the public.
In some countries, such as Japan, strikes by public sector employees are generally prohibited or
heavily
restricted. In these cases, labor disputes are often resolved through other means, such as arbitration.
Overall, the legality of strikes and lockouts in utility and non-utility services will depend on the
specific
laws and regulations of the country or jurisdiction in question, as well as the particular industry and
circumstances involved.
A lockout in direct contravention of Sec 10(3) & Sec 10A (4A) [7]of ID Act i.e. declaration of lock-out
when an industrial dispute has been referred, is an illegal lockout. Also, a lockout in violation of Sec
22 & 23[8] i.e. issuing a notice before lockout is an illegal lockout Sec 24(1). However a lockout
declared against an illegal strike is legal Sec 24(3) [9]. A legal lockout can be used as a strong tool in the
hands of the employer in crucial situations against workers. Section 24 provides that a strike or
lockout in breach of Sections 22 and 23 is illegal. Under Section 23, an employee working in an
industry shall not strike, contradictory to the agreements made in the contracts. Further, no
employer of such an employee shall commence lockout. It is also illegal if a strike happens in public
utility service. Individuals who continue to run a strike or lockout opposed to the law may be subject
to punishments and penalties according to the Act. An employee who initiates strike may be
subjected to an imprisonment of one month or a fine of up to fifty rupees.
Layoff,retrenchment and closure
Layoff refers to the temporary or permanent termination of employment by the employer due to
reasons such as business downturns, financial constraints, organizational restructuring, or other
operational reasons. It typically involves the elimination of positions or reduction in workforce size.
During a layoff, employees are usually provided with a notice period, severance pay, and may be
eligible for certain benefits like unemployment insurance. The intention behind a layoff is not a
reflection of an individual employee's performance but rather a necessity arising from broader
business circumstances.
Retrenchment:
Retrenchment, also known as redundancy or downsizing, involves the permanent termination of
employees' employment due to a variety of reasons, including company restructuring, technological
advancements, financial difficulties, or changes in business strategies. Unlike a layoff, retrenchment is
focused on eliminating specific positions deemed no longer necessary or reducing the overall
workforce size in order to streamline operations or cut costs. Employers may provide employees with
a notice period, severance packages, and support in finding alternative employment.
Closure:
Closure refers to the permanent shutdown or cessation of operations of a business or establishment.
It occurs when a company decides to discontinue its operations entirely, often due to factors such as
financial insolvency, market conditions, lack of profitability, or other strategic considerations. A
closure
typically results in the permanent termination of employment for all employees associated with the
business. Employers may follow legal requirements related to providing notice periods, severance
pay,
or other support mechanisms as outlined by labor laws or employment contracts.
It's important to note that the specific regulations, legal requirements, and employee entitlements
related to layoffs, retrenchment, and closures can vary between jurisdictions. Labor laws and
employment contracts in each country may define the procedures, notice periods, and compensation
terms to be followed in such situations, aiming to protect the rights and interests of employees
affected by these actions
The conditions precedent to layoff, retrenchment, and closure compensation
can vary depending on the labor laws and regulations of each country. However, there are some
common factors that are often considered when determining compensation in these situations. Here
are some typical conditions that may need to be met:
1. Compliance with labor laws: Employers must comply with the applicable labor laws
and regulations of the jurisdiction in which the layoffs, retrenchments, or closures are taking place.
This includes adhering to legal requirements related to providing notice periods, consulting with
employee representatives or unions, and following any specific procedures outlined in the law.
2. Notification and consultation: Employers may be required to provide advance notice
to employees and their representatives, such as labor unions or works councils, before implementing
layoffs, retrenchments, or closures. This allows employees and their representatives an opportunity
to
discuss and negotiate alternatives, mitigate the impact, or explore potential solutions.
3. Severance pay: Severance pay is a form of compensation provided to employees who
are laid off, retrenched, or impacted by a closure. The amount of severance pay can be based on
factors
such as the length of service, salary level, or specific formulas outlined in labor laws, collective
bargaining agreements, or employment contracts.
4. Redeployment or retraining opportunities: In some cases, employers may be obligated
to provide redeployment or retraining opportunities to affected employees. This means offering
alternative employment within the company or assisting employees in acquiring new skills to
enhance
their employability elsewhere.
5. Redundancy criteria: Redundancy criteria refer to the factors considered when
selecting employees for layoffs or retrenchments. These criteria are often based on objective factors
such as seniority, job performance, or qualifications. It is essential for employers to demonstrate
fairness and non-discrimination in the selection process.
6. Compliance with negotiation or consultation requirements: If there are collective
bargaining agreements or consultation requirements with employee representatives, employers may
need to demonstrate that they have fulfilled their obligations to engage in meaningful negotiation or
consultation before implementing layoffs, retrenchments, or closures.
It's important to note that the specific conditions and requirements for compensation in cases of
layoffs, retrenchments, and closures can vary significantly between countries and even within
different
industries or sectors. It is advisable to consult the labor laws and regulations of the specific
jurisdiction
in question or seek legal advice to ensure compliance with the applicable requirements.
Special provisions relating to lay off , retrenchment, and closure
Special provisions relating to layoff, retrenchment, and closure can exist in labor laws or collective
bargaining agreements to provide additional protections and support for employees affected by
these
situations. While the specific provisions can vary across jurisdictions, here are some examples of
special provisions that may be in place:
0. Notice periods: Labor laws may require employers to provide a specific advance notice
period to employees before implementing layoffs, retrenchments, or closures. The notice period
allows employees to prepare for the upcoming job loss, seek alternative employment, or make
necessary arrangements.
0. Consultation requirements: In certain jurisdictions or under collective bargaining
agreements, employers may be obligated to engage in consultation with employee representatives
or
labor unions regarding proposed layoffs, retrenchments, or closures. The purpose of the consultation
is to discuss alternatives, mitigate the impact on employees, and explore potential solutions.
0. Redeployment or reassignment: Some laws or agreements may require employers to
make efforts to redeploy or reassign affected employees to other suitable positions within the
organization. This can include offering alternative employment or providing training and support for
employees to acquire new skills.
0. Severance pay and redundancy packages: In addition to standard severance pay, there
may be specific provisions for enhanced severance pay or redundancy packages based on factors
such
as length of service, age, or the number of employees affected. These provisions aim to provide
additional financial support to employees who lose their jobs due to layoffs, retrenchments, or
closures.
0. Job placement assistance: To support affected employees in finding new employment
opportunities, special provisions may require employers to offer job placement assistance services.
This can include providing career counseling, job search resources, or networking opportunities.
0. Retraining or reskilling programs: Some jurisdictions or agreements may establish
programs to facilitate the retraining or reskilling of affected employees, helping them acquire new
skills
or qualifications to improve their employability in the labor market.
It's important to note that the specific provisions and requirements can vary widely depending on
the
country, industry, and specific labor agreements in place. Employers and employees should refer to
the applicable labor laws, collective bargaining agreements, or consult with legal experts to
understand
the specific provisions that apply in their particular situation