What is Collective Bargaining? Discuss its advantages and disadvantages.

Question: What is Collective Bargaining? Discuss its advantages and disadvantages.

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Answer

Collective bargaining refers to the process of negotiation between an employer or a group of employers and a group of employees, usually represented by a trade union, with the aim of reaching an agreement on terms and conditions of employment, such as wages, working hours, and other benefits. Collective bargaining is an essential part of industrial relations, and it is an important mechanism for resolving disputes between employers and employees. In India, the legal provisions related to collective bargaining are contained in the Industrial Disputes Act, 1947.

It is a bipartite process in which only the employee and the employer are the parties. Only these two parties have the power to involve in the bargaining process. There is no intervention from the third party and the discussion is carried out collectively.

In P. Virudhachalam & Others. v. The Management of Lotus Mills, (1998) 1 SCC 650, the Hon’ble Supreme Court stated that it is important to remember that the Act is built on the notion of collective bargaining for the purpose of settling industrial disputes and sustaining industrial peace. Individual workers must inevitably fade into the background in all collective bargaining negotiations. The union that represents such workers takes up the reins of negotiating on his behalf. On behalf of its members, unions advocate for a shared cause.

As a result, any agreement they reach with management will bind at least their members, and if it is reached through conciliation processes, it will bind even non-members. As a result, settlements are the Act's live wires for guaranteeing industrial peace and prosperity.

Advantages of Collective Bargaining in India:

Strengthening of Trade Unions: Collective bargaining is the most important tool for strengthening trade unions in India. Unions are able to represent the interests of their members better by negotiating with employers on issues that are important to them.

Improved Working Conditions: Collective bargaining can help improve the working conditions of employees by negotiating better wages, benefits, and other working conditions. This can also help to increase employee satisfaction and motivation.

Reduced Conflicts: Collective bargaining can help to reduce conflicts between employers and employees. By providing a forum for negotiation, collective bargaining can help to resolve disputes in a peaceful and constructive manner.

Increased Productivity: Collective bargaining can lead to increased productivity by ensuring that employees are satisfied with their working conditions, which can help to reduce absenteeism and turnover.

Disadvantages of Collective Bargaining in India:

Strife between Unions: Collective bargaining can lead to strife between different trade unions, especially when multiple unions are representing the same group of employees. This can create confusion and lead to conflicts.

Adverse Effects on Smaller Businesses: Collective bargaining can adversely affect smaller businesses that may not have the resources to negotiate with trade unions effectively. This can lead to higher labour costs and reduced competitiveness.

Reduced Flexibility: Collective bargaining can reduce employers' flexibility to adjust to changes in market conditions. This can be a significant disadvantage in industries that are highly competitive and subject to rapid change.

Disruptive Strikes: In some cases, collective bargaining can lead to disruptive strikes, which can have a significant impact on the economy and the general public. Strikes can cause significant losses to employers and can also disrupt public services.

Overall, collective bargaining has both advantages and disadvantages in India. While it can help to improve working conditions and resolve disputes, it can also lead to conflicts, reduced flexibility, and disruptive strikes. It is essential that the legal framework and the collective bargaining process in India are designed in a way that balances the interests of employers, employees, and the general public.

In the case of Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company (Regd.) and Ors., (1990) AIR 247, the Supreme Court laid down that the Industrial Disputes Act, 1947 was enacted for the purpose of securing social justice by means of collective bargaining. The court further stated that arbitration comes within the purview of statutory tribunals. The workers involved must be aware of what is presented before the arbitrator and must be able to share their arguments and claims before him. Even though it is the labour union that helps to resolve the disputes, the labourers must be involved in the process and suggest remedies.

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