SRI VENKATESWARA

COLLEGE OF COMPUTER APPLICATIONS AND MANAGEMENT

Approved by AICTE, New Delhi and Affiliated to AUT, Coimbatore

COLLECTIVE BARGAINING SWARNAM S

SVCCAM, Coimbatore

Introduction
Before Industrial Revolution, employer enjoyed powers on matters relating to wages, working conditions Workers become restless Government intervention was of little help Workers realised the importance of fighting jointly This collective fighting spirit is back of the collective bargaining

DEFINITION

According to International Labour Organization, collective bargaining is negotiations about the working conditions and terms of employment between an employer and a group of employees or one or more employees organisation with a view of reaching an agreement

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Meaning
It is the technique that has been adopted by unions and management to reconcile their conflicting interest It is called as collective bargaining because the employees, as a group, select representatives to meet and discuss differences with the employer. Collective bargaining is opposite of individual bargaining Collective bargaining plays a significant role in improving labor management relations and in ensuring industrial harmony This helps in better understanding between them and through discussions each party learns about the other and misunderstanding are often removed.

SVCCAM, Coimbatore

Contd..
All major differences cannot be always sorted out. Helps in resolving out many minor differences without work stoppage or outside intervention Collective, which implies group action through its representatives Bargaining suggests negotiating Thus, a contract between the managements representatives on one side and workers on the other.

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Concept
It is carried out on a collective (group of people) The main actors are employees, employers and associations Their object is rule-making Both the employer and employee may begin the process with divergent views but ultimately try to reach compromise Arriving an agreement, for the object is not warfare but compromise It is a device used to safeguard their interests It is an institution or instrument for discussion and negotiations between two parties

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Objectives
To settle disputes relating to wages and working conditions Protect the interest of workers through collective action Resolve differences To avoid third party intervention

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Features of Collective Bargaining

It is a group or collective action It is flexible and two way process. It is a mutual give-and-take rather than just take-it method arriving solution to a dispute It is a continuous process It ensures democracy at workplace Representation It is not a competitive process but rather a complementary process (each person needs something where other party has)

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Advantages of Collective Bargaining

It avoids unnecessary legal proceedings and the issue is sorted out of the Court. It promotes workers democracy and workers participation in management. It helps in establishing harmonious relationship between employee and the employer. It emphasizes on the interests and benefits of both parties. It eliminates unnecessary expenditure and avoids bitterness among involved parties. It is quick and efficient method of settlement of industrial disputes.

SVCCAM, Coimbatore

Contd.,
It develops a sense of self-responsibility and self-respect among the employees concerned and thus significantly paves the way for improved employee morale and productivity. Can lead to high-performance workplace where labor and management jointly engage in problem solving, addressing issues on an equal standing. Redresses the imbalance of power Employers and employees rights protected by binding collective bargaining agreement. Promotes fairness and consistency in employment policies and personnel decisions within and across institutions

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Disadvantages of Collective Bargaining

Increased wages and improved facilities for workers will indirectly result in high prices for goods and services. Consumers are affected badly due to price rise The collective bargaining process may not be fair at all times; the decision is often influenced by power and politics. In case of failure of the collective bargaining agreement, the immediate consequence is strike or lock-out More difficult for employees at smaller campuses to have their voices heard. Requires longer time needed for decision making.

Restricts managements ability to deal directly with individual employees.

SVCCAM, Coimbatore

Contd.,
Managements authority and freedom are much more restricted by negotiated rules. Eliminates ability of management to make unilateral changes in wages, hours, and other terms and conditions of employment. Restricts managements ability to deal directly with individual employees

SVCCAM, Coimbatore

Collective bargaining in India

In early part of the 18th century when trade union came into existence, the idea of collective bargaining gained strength The idea spread to France, Germany and USA Initially negotiation were carried out at a plant level By early 1900, industry and national level were quite common In India, collective bargaining developed from 1940s but some evidence of joint negotiations and agreements were found earlier. In 1918, the parties to a wage dispute were persuaded to settle disputes through negotiation and mutual discussion, failing which, the matter resolved through conciliation, and in the event of failure, resolved through arbitration

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Contd.
In 1920, a permanent arbitration board was established After this, the disputes will be settled through discussion. If no settlement could be arrived settled through bipartite permanent arbitration board In 1929, The Trade Disputes Act was passed The Act empowered to appoint Boards of Conciliation for settling trade disputes The Bombay Trade Disputes Conciliation Act was passed in 1934 The Act of 1934 was replaced by Bombay Industrial Disputes Act, 1938 The Act of 1938 was replaced by Bombay Industrial Relations Act, 1946 The central Trade Disputes Act, 1929 was amended in 1938

 In 1942, the Rule 81 (A) of the Defence of India Rules inhibiting the growth of Collective bargaining Another reason for development of Collective Bargaining is Industrial Employment (standing orders) Act in 1946 In 1946, Bombay Industrial Act which provides constitution of Joint Committees, Conciliators, Labour Court and Industrial Court In 1947, Industrial Disputes Act Came into existence

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 After Independence there was considerable growth in collective bargaining Trade Unions gained importance after Independence The CB become popular because of Formation of Workers and Employers Organisations, Formation of Industrial Committees, Policy Statement, Code of Discipline, Central Wage Boards It was also found personnel factors accounted for maximum agreements, followed by monetary issues and health welfare are given due importance The reason for limited success of collective bargaining are -- Problems with unions, Inadequate Unionisation -- Problems with the government, Restriction on Strikes -- Management Attitude, Poverty of Workers, Inadequate capacity of Employers to pay.
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Workers Participation in Management

The word participation means sharing the decision making power with lower ranks of the organisation When workers involved in decision making: -- It promotes harmony and peace between management and workers -- Able to see big picture clearly -- Provide feedback -- Makes them more responsible -- The feeling of treated as equals -- View organisation and job as their own and committed themselves

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Implications of WPM by ILO:

Workers have ideas which can be useful Upward communication facilitates sound decision making Workers work more intelligently if they are informed Workers work harder It may foster a cooperative attitude amongst workers and management Thus raising efficiency by team spirit and reduce loss of efficiency by conflict

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 Definition WPM has been defined as the participation resulting from practices which increases the scope for employees share of influence in decision making at different tiers of organisational hierarchy with concomitant assumption of responsibility. Meaning: Workers participation as a system of communication and consultation, either formal or informal, by which employees of an organisation kept informed about the affairs of the undertaking and through which they express their opinion and contribute to management decisions.

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Objectives of WPM
An instrument in increasing the efficiency of enterprises by harmonious relations Increasing productivity, which in turn benefits employers, employee and community Elevating the status of workers in the society Satisfying the workers urge self expression, thus leading to industrial peace, co-operation and better relations. Improve the quality of working life

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FORMS OF PARTICIPATION
INFORMATION SHARING -- Under this type, the employer agrees to keep the employees informed about the business conditions and general prospects -- Here the worker does not have right to scrutinise the information PROBLEM SOLVING -- An employer faced with some problem may consult with the workers and their union in solving them

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Contd..
JOINT CONSULTATION -- Whereas the first two co-operation may be of temporary nature designed to get out of difficulties -- In this process of consultation where union and their workers acquire definite status -- It means consultation with the workers by the management before any decisions are made. -- They may offer suggestion and give their own view points but cannot insist it should be accepted

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Contd..
WORKERS PARTICIPATION IN MANAGEMENT -- Under this form, the process of decision making becomes joint -- It involves representatives of workers and management who jointly involved in decision making

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Five Levels of Participation by Mhetras

Information Participation Consultative Participation Associative Participation Administrative Participation Decisive Participation (economic status) (sharing of workers views) (give suggestions, may or may not accept) (giving authority in management function) (joint decision)

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Evolution of WPM
From the very beginning social thinkers were concerned with the problems of the workers and the status of workers They wanted them to protect against capitalist and managerial exploitation They pleaded that workers should have the power as the managers Thinkers like Comte and Owen advocated workers participation in management is needed for achieving social justice The radicals opposed to private ownership The labour was regarded as commodity of commerce Elton Mayo underscored the importance of human factor in organization

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Contd
Various researches conducted at the Tavistock Institute, London, revealed that autonomous and cohesive work groups committed to be more efficient than the work group without cohesiveness and responsibility Thus, the scheme of workers participation came into existence Which in turn brought new set of values, both for workers and employers Powers has been replaced by persuasion, authoritarianism by democracy and compulsion by co-operation The researches by Kurt Lewin have shown that democratically managed groups which get an opportunity to participate in decision making are more efficient than authoritarian way.

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Worker Participation Management In India

The participation of workers in management is not an novel idea, imported from outside Mahatma Gandhi Advocated employees must regard as trustees. He insisted that capital and labour should supplement and help each other; they should be a great family, living in unity and harmony Since Independence various schemes were offered by Government to promote WPM

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Contd
Main Schemes of workmen participation in management experimented in the country have been: -- Mill Committees -- Royal Commission on Labour and Workers Participation in Management (1920) -- Works Committee (1947) -- Joint Management Council (1958) -- Board-Level Participation (1970) -- Shop Council and Joint Council (1975) -- Participation of Workers in Management Bill (1990)
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Contd..
Mill Committees -- Informal Joint consultation -- The employers in textile industry started joint consultation with the workers by establishing Mill Committees -- The main function is to ascertain and represent the grievances of workers -- But the management do not accept the committees as spokesman -- Though such consultation considered of a basic type, it was significant as it was first of its kind in the country

SVCCAM, Coimbatore

Contd..
Royal Commission on Labour and WPM (1920) -- The Government of India, in 1920 constituted joint committees in Printing Presses and Railways. -- At the request of Mahatma Gandhi, the workers and employers of the textile mills agreed for mutual discussions and consultation of issues failing which they were to be resolved by arbitration. -- From 1922 onwards joint committees of workers and management were formed in Bengal, Madras and other states -- Assessing the performance of such committees, observed that some had been successful and few had been disappointing -- Main Reason: Lack of Clarity with management and trade unions and the illiteracy of the Indian workers
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Developments during 1940s

With all these set backs, joint consultation did not entirely die out After independence, India attempted to introduce WPM One of the earliest attempts to promote this was the enactment of Industrial Disputes Act, 1947 and the Factories Act, 1948

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Works Committees (1947)

The Industrial Disputes Act, 1947 provides for the setting up of bipartite works committees It consists of representatives of employers and employees The number of workers representatives is not less than the number of employers representatives The duty of the works committee to promote good relations between employers and employee and to reconcile any material difference of opinion The works committees have office bearers, president, vice president, secretary and joint secretary Tenure of these bodies is 2 years
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Contd..
Functions: -- The works committees will deal with (i) conditions of work such as ventilation, temperature, lighting etc.. (ii) amenities such as drinking, water, canteens, crches, medical and health services (iii) safety provisions (iv) educational activities (v) promotion of thrift and savings (vi) Implementation of new decision arrived at meetings -- The works committees do not deal with wages, allowances, bonus, profit sharing, provident fund, retrenchment, lay-off, gratuity, quantum of leave, incentive schemes and bonus schemes

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Reason for failure of work committees

Minor function Exclusion of wages, allowances, bonus etc.. Lack of competence shown by the workers representatives Employers consider it as dignity issue to sit with the employees Inter-union rivalry

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JMC (1958)
Second experiment in workers participation began in 1958 with the establishment of JMCs Representatives consist of an equal number of employer and employee not exceeding 12 The employees representative are nominated by trade unions The Government of India deputed a study group to study the schemes of workers participation in countries like UK, France, Belgium, Sweden The committee recommended WPM schemes should be set on a voluntary basis

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Objectives of JMCs
To promote cordial relations between employer and employee To improve the efficiency of the workers To provide welfare facilities to them To educate them so that they are well prepared to participate in schemes To satisfy the psychological needs Criteria for Selection of enterprises where JMCs can be introduced: The unit must have 500 or more employees It should have a fair record of industrial relations It should have well organised trade union The management and workers should agree to establish JMCs Trade unions should be affiliated to one of the central federations.
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Functions
It involved in introduction of new methods of production Closure, reduction or cessation of operations Has right to receive, discuss and give suggestions regarding organisation and general running of the undertaking, the annual report, profit and loss account, concerned documents, plans for expansion Has responsibility in administration function, safety measures, vocational training, preparation of working hours and breaks and of holidays, payment of rewards

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Reason for failure

No enthusiastic shown in development Employers having an effective system of consultation, found JMCs as Superfluous. Many employers and unions do not want to have multiplicity of bodies Many unions thought that the JMCs divert the attention of important issues like wages, bonus, allowances.

SVCCAM, Coimbatore

Board-level Participation (1970)

Another experiment of workers participation is appointment of workers representatives on the board of directors in selected PSUs and Nationalised Banks He have to be appointed by the central government out of a panel of 3 employees The qualification laid down for the workers director were that should have been in continuous service for a period of 5 years

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Reasons for failure

In most cases workers directors were ill-equipped to understand and deal in the conflict with the chairman Management never share their secret with the workers The unions many cases were opposed to these directors they feel that their powers were reduced The workers directors were unable to play double role

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Shop and Joint Council (1975 and 1977)

The fourth experiment in workers participation began on October 30, 1975 It was voluntary as like 1958 scheme The scheme covered all manufacturing and mining industries employing 500 or more workers whether public, private or cooperative sector The Chairman of the council would be elected by management The Vice-Chairman by the workers representatives The council function for 2 years

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Shop Council
Whether a joint management council exist or not there shall be shop council for each department or shop Each council consist of an equal number of employer and employee The employer representative shall be nominated by management The employee representatives shall be from the workers actually engaged in the department or shop concerned The number of representatives determined by the employer in consultation with union but not exceeding 12 All decision taken by consensus and not by voting The council meet atleast once in a month
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Functions
Involved in assistance of monthly/ yearly production targets Improvement of production and efficiency and reduce of wastages Identification of low productivity areas and taking necessary correcting steps Study on absenteeism in departments and taking steps to reduce it Assistance of general discipline in departments Welfare and Health measures Physical conditions of working Ensure two-way communication

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Joint Council
Every Industrial unit employing 500 or more workers, there was to be a joint council The council function for a period of two years The person who engaged in such industry can become members of the joint council The joint council shall appoint Chairman, Vice-Chairman and a Secretary The term of council shall be for a period of two years The council shall meet at least once in a quarter Every decision of the shall be on the basis on consensus and not by voting

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Functions of Joint Council

Fixation of production norms Matters which remains unresolved in ship council Preparation of schedule for working hours and holidays Development of skill of workmen and adequate facilities for training Optimum use of raw materials and quality of finished goods General health, safety and welfare measures.

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Reasons for failure

The function of joint committees and work committees was overlapping It was not clear which two bodies involved in decision making

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The Participation of Workers in Management Bill, 1990

In this bill the term worker has been defined to include all types of employees managerial and non-managerial Workers doing managerial jobs are termed as other workers Those who doing non-managerial jobs and getting wages less than Rs.1600 are termed as workmen The bill provides setting up of shop floor level and establishment council Both council should consist of equal number of workmen and employer (not other workers) The person to represent employer is nominated by the employer The person to represent workmen is represented by the employee
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Contd
The chair person shall be chosen by the members amongst it The term of office of each council shall be three years The councils shall meet as and when necessary but not less than 4 meetings in every year The persons representing workmen shall be 13% and the persons representing workers shall be 12% of the total strength of the Board The bill provides punishment to the extent of imprisonment of 2 years and fine up to Rs.25,000 for any person who contravenes any provisions of the Act Appropriate Government can appoint monitoring committee
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Criticism of the Bill

All efforts failed because of attitudinal change, multiplicity of unions and absence of single strong union The bill workers of an enterprise into workmen and other workers on the basis of the nature of jobs which is incorrect It is agreed that all vital information cannot be shared with the workers It is pointed out that the penalties under the bill are rather harsh and lead to harassment

SVCCAM, Coimbatore