13. Collective Bargaining and Grievance Procedure – Industrial Relations, Trade Unions, and Labour Legislation, 2nd Edition

Chapter 13

Collective Bargaining and Grievance Procedure

Chapter Objectives

This chapter will enable students to:

  1. Explain the main features of collective bargaining and its importance
  2. Describe the levels of collective bargaining and explain the factors influencing them
  3. Explain the theories of collective bargaining
  4. Present a brief description of the growth and development of collective bargaining in India and explain the hurdles in its way
  5. Understand the characteristics of productivity bargaining and its advantages
  6. Explain the meaning of ‘grievance’ and describe its various types and causes
  7. Explain the concept and advantages of grievance procedures and the desirable features of a successful grievance procedure
  8. Describe the main features of model grievance procedure adopted by the Indian Labour Conference

Emergence of Collective Bargaining

The doctrine of individualism that profoundly influenced the economic and political theories during most part of the nineteenth century laid emphasis on the assumption that the individual seller of labour service—the worker and the buyer of such service—the employer had the freedom to bargain individually on the price of such service. The individual seller of labour service was aware that he had to compete with other sellers for jobs and that the openings for alternative jobs were restricted. He was often forced to sell his service at a very low price. In most cases, he accepted what the buyer offered. The bargain was not between equals. The contract was forced by circumstances which seemed always to weigh upon the employee to the advantage of the employer.

Sooner or later, the workers came to realize that concerted and common action could prevent competition among themselves, and collectively they could insist that if the employer wanted to hire any of their number, he must offer at least the minimum wage for all his workers. The employer could dispense with the services of an individual worker, but he could not afford to part with the services of all his workers and fill the vacant jobs by replacements. Gradually, as concerted and collective action on the part of workers became stronger, their bargaining power in relation to that of the employer was strengthened. The trade unions took advantage of the indispensability of workers for the employer and forced him to bargain on terms and conditions of employment on the basis of equality. Initially, confined to the question of wages alone and the individual employer in a local area, the subject matter of bargaining and its levels continued to expand during the course of time.

Many pertinent aspects of collective bargaining such as its nature, the processes involved, bargaining units and bargaining agents, its subject matters, collective bargaining as a trade union method and as a method of settling industrial disputes, compulsory collective bargaining, legal provisions and nature of collective bargaining in India have already been dealt with at appropriate places in the book. The purpose of this chapter is to present, briefly, a consolidated picture of the scattered discussions, more in-depth analysis and certain new aspects of collective bargaining.

MEANING OF COLLECTIVE BARGAINING

Ever since the advent of modern trade unions, the workers have been pressurizing their employers in a concerted manner for improving the terms and conditions of employment, but the term ‘collective bargaining’ was seldom used for this concerted action. Sidney and Beatrice Webb were the first to use the term ‘collective bargaining’ in 1891.1 Subsequently, Samuel Gompers, the President of the American Federation of Labour considered ‘collective bargaining’ as the most important for determining the terms and conditions of employment. Gradually, the term came to be extensively used not only by the trade unionists and employers, but also by the governmental agencies, academicians and others. It has become a very important institution in the realm of industrial relations, and volumes of literature on the subject have come up all over the world.

A plethora of definitions of ‘collective bargaining’ has emerged during the course of time. Some of the oft-quoted definitions of the term are reproduced below.

According to the Encyclopaedia of Social Sciences, ‘Collective bargaining is 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 the terms and conditions under which a continuing service is to be performed.… More specifically, collective bargaining is a procedure by which employers and a group of employees agree upon the conditions of the work’.2 The ILO considers collective bargaining as ‘Negotiations about working conditions and terms of employment between an employer and a group of employees or one or more employees’ organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment relations with one another; fix a large number of detailed conditions of employment; and, during its validity, none of the matters it deals with can in normal circumstances be given as a ground for a dispute concerning an individual worker’.3 Robert F. Hoxie holds, ‘Collective bargaining is a mode of fixing the terms of employment by means of bargaining between an organized body of employees and an employer or an association of employers usually acting through organized agents. The essence of collective bargaining is a bargain between interested parties and not a decree from outside parties’.4 Similarly, J. H . Richardson says, ‘Collective bargaining takes place when a number of work-people enter into a negotiation as bargaining unit with an employer or group of employers with the object of reaching an agreement on the conditions of employment of the work-people’.5 A number of other scholars notably Neil W. Chamberlain,6 John T. Dunlop7 and H. W. Davey8 have explained in detail various aspects of, and issues involved in, collective bargaining.

The essential features of collective bargaining as evident from the above and other available definitions may be summarized as follows:

  1. Collective bargaining is a process in which the terms and conditions of employment are determined jointly by the employer and workers. Like bargaining in the commodity market where the sellers try to sell commodities at higher possible prices, and the buyers want to purchase them at lower possible prices, in collective bargaining the sellers of labour services, that is, workers, bargain for obtaining better and improved terms and conditions of employment, and the buyers of these services try to purchase them at as low price as possible. In this process of give-and-take, the final terms are determined on an agreed basis.
  2. The term ‘collective’ in collective bargaining generally represents the workers’ side, who bargain either in combination or through their trade unions. There may be only one employer or a group or organization of employers on the other side. Bargaining between individual workman and the employer is individual bargaining and not collective bargaining. In practice, it is the representatives of workers and the employer or his agents who actually participate in the bargaining.
  3. Collective bargaining emanates from employment relationship. The employer–employee relationship is a precondition for collective bargaining. Where there is no such relationship as in the case of self-employed persons or members confined to a trade union or an employers’ organization, the question of collective bargaining does not arise.
  4. The main object of collective bargaining is the determination of terms and conditions of employment through negotiations and process of give-and-take. If negotiations succeed, the parties arrive at an agreement, which is called ‘collective agreement’. In the event of the failure of negotiations, the parties generally take recourse to coercive measures, for instance strike by workers and lock-out by the employer.
  5. The agreement arrived at during the course of bargaining may relate to a number of subjects of the terms of employment and working conditions or to only a single issue. As the terms of employment and working conditions have widened during the course of time, so also has the subject matter of collective bargaining.
  6. Collective bargaining is confined not only to employers and workers, but the state has also come to play a notable role in regulating various aspects of collective bargaining. Some of these aspects are—selection of bargaining agent, determining the enforceability of collective agreements, obligating the employer and trade unions to bargain collectively, and imposing restrictions on industrial actions in the event of failure of negotiations and so on.
  7. The nature of collective bargaining is changeable and dynamic. With the changes taking place in technology, economic order, political environment, structure of trade union organizations, ownership of industrial enterprises, role of the government and so forth, the various ingredients of collective bargaining also change. The pattern of collective bargaining in different countries is not the same, nor is collective bargaining at the same stage of development everywhere.
  8. The main steps usually involved in collective bargaining include: (i) presentation in a collective manner to the employer their demands by the employees, (ii) discussions and negotiations on the basis of mutual give-and-take for fulfilling the demands, (iii) signing of a formal agreement or arriving at an informal understanding, when negotiations result in mutual satisfaction and (iv) in the event of the failure of negotiations, a likely resort to strike or lock-out to force the opposite party to come to terms.

Bargaining Agent

The trade union or association of workers representative of the group of workers in collective bargaining recognized by governmental agencies or by the management.

IMPORTANCE OF COLLECTIVE BARGAINING

Collective bargaining has come to occupy a significant place in modern industrial societies for various reasons. The benefits it has conferred upon workers have been overwhelming. The institution has also benefited the employers and managements in numerous ways. It has also wider implications for the economy and society as a whole. Some of the notable areas in which the influence of collective bargaining can be easily discerned are explained below.

Improvement in the Conditions of Workers

Collective bargaining has considerably helped in securing a wide variety of economic benefits for the workers in the form of higher wages, liberal allowances, fringe benefits, economic security, shorter hours of work, better terms and conditions of employment, and physical working conditions. Experiences of many industrially advanced countries of the world like the United States, Great Britain, France and other European countries show that through collective bargaining, the workers have been able to get such economic benefits which could not have been possible through legislation, adjudication or other measures. In many countries, collective bargaining has helped workers in getting economic benefits and facilities, over and above the standards set by labour laws or industrial awards. The success of one bargaining leads to the success of another and the process just continues.

Check on Autocracy in Industry

During early years of industrialization, the employers unilaterally determined the terms and conditions of employment of their workers. ‘Hiring and firing’ of workmen was considered their prerogative. Even in more recent times, the employers have been freely determining the terms and conditions of employment in many unorganized sectors of the economy, without any hindrance from trade unions and government; the only influencing factor being the market forces. Collective bargaining has put an effective check on employers’ autocracy in regard to the laying down of terms and conditions of employment. Initially, the employers’ freedom of action was curtailed only in a few areas such as wages, hours of work and working conditions, but during the course of time, a number of subjects came under the purview of collective bargaining and these subject matters are expanding day-by-day. Collective bargaining has usurped a vast area of prerogatives traditionally enjoyed by the employers. Thus, collective bargaining has led to the promotion of industrial democracy.

Promotion of Lasting Industrial Peace

The contribution of collective bargaining as a method of settling industrial disputes has been discussed in detail in Chapter 12. It has been seen that a lasting solution to the problems in an industry can be possible only when the parties have a say in reaching decisions. Collective bargaining provides this opportunity. The employers and workers are in a better position to understand and appreciate the problems and difficulties of each other. Collective bargaining enables the parties to settle their differences or disputes based on facts and realities of the situation. A solution imposed from outside cannot provide a lasting solution to the problems. Collective agreements contain a set of rules for compliance by both the parties. So long as collective agreements remain in operation, the veil of uncertainty about rights does not exist. Although threat of strike or lock-out in the event of failure of negotiations continues and the parties may occasionally take recourse to these industrial actions, such a situation is not of much significance in comparison to the existence of industrial harmony established on the basis of collective bargaining. Many collective agreements also provide for grievance procedure for redressing the grievances resulting from non-compliance of the clauses of the agreement. This also contributes towards establishment of industrial peace. A study of industrial disputes in a few countries shows, that in countries where collective bargaining is firmly established, man days lost due to strikes are not overwhelming in comparison to figures of those countries where it is not extensively used (see Chapter 11, Table 11.5).

Conducive to Managerial Efficiency

Collective bargaining has also contributed towards improving managerial efficiency and solution of specific problems facing the management. There are difficult situations when the management has to face a hostile trade union, opposed to managerial measures. Under such situations, collective bargaining provides an opportunity to the management to take the trade union in confidence, and seek its cooperation in tackling the problem. There have been instances where the management and trade unions have jointly solved specific problems facing an industrial undertaking or company. Collective bargaining taking place in a free and frank atmosphere also leads to revelations of deficiencies in managerial policies and practices. This helps the management modify and improve its working. Moreover, in order to counteract the union pressures, management may try to sharpen its tools and discover more effective ways to deal with the union and employees. In collective bargaining, it is not always the trade union which is the winner; in many cases, the outcome of bargaining may be favourable to the management. Further, operation of a collective agreement for a stipulated period and the provision of grievance procedure or other measures to solve the problem of interpretation of agreements, provide an opportunity to the management, to devote more time and attention to the other issues. All these result in improvement of managerial efficiency and effectiveness.

Development of Industrial Rules

Successful conclusion of collective bargaining and incorporation of the terms in collective agreements lead to the establishment of rules or standards to be observed by both the parties. Where collective agreements are legally enforceable documents, as in the United States, the importance of these rules becomes more obvious. These rules may relate to numerous subjects concerning terms and conditions of employment such as wages, allowances, personnel matters, working conditions, economic security and welfare amenities, and others. Most of these issues are such for which no guidelines are available from other sources—legislation, decision by law courts or adjudication awards. Collective bargaining itself becomes the rule-maker. Confusion relating to interpretation and application of rules is generally sought to be solved by grievance procedure and, in its absence, by other devices. Contents of a collective agreement in one organization may provide a guideline for others and, thus, the rules go on spreading with elements of uniformity. There are also instances where norms and standards laid down in collective agreements concluded at higher levels have been adopted by government and embodied in labour laws. It was in this context that Dunlop has considered collective bargaining, also, as a system which establishes, revises and administers many of the rules which govern the workers’ place of work.9

Significant for Society and Economy

With a small and moderate beginning, collective bargaining has increasingly become a pervading phenomenon impinging upon many facets of social and economic life. In countries where collective bargaining is in a developed stage, it has been exercising a potent influence on the governmental policies and programmes, social institutions, standards of living, distribution of national income and economic and social development. Collective bargaining has manifestations in ‘politics, legislation, court litigation, government administration, religion, education and propaganda’.10 Arthur D. Buttler has viewed collective bargaining also as ‘a process of social change’.11 There have been collective agreements on broader economic and social issues such as productivity, provision of social security, reservation in jobs, problems of particular industries, technological change, workers’ education, maintenance of industrial peace and improvement in environment.

THEORIES OF COLLECTIVE BARGAINING

In the context of the importance of collective bargaining and its functions, it is relevant to refer to Chamberlain who has made a mention of three theories of collective bargaining, that is, marketing theory, governmental theory and managerial theory.

The Marketing Theory

The marketing theory views collective bargaining as a means of contracting the sale of labour. The collective agreement arrived at during the process contains a statement of the terms on which employees collectively are willing to work. According to this approach, ‘Collective Bargaining… may be viewed as the process which determines under what terms labour will continue to be supplied to a company by its existing employees, and by those newly hired as well’.12 Collective bargaining constitutes a process through which demand for and supply of labour are equated in the labour market. The view is strengthened by the fact that money exchange is basically involved in the contract resulting from collective bargaining. When there is no agreement on the price of labour, no sale can be expected. Employees continue to sell their labour only on terms determined collectively. Apart from wages, many other terms of employment also have monetary value. The price for labour also covers these items.

The marketing of labour may take into account the differences in quality of labour to be sold and the extent of demand for particular types of labour services. As in commodity markets, so also in labour market, labour services of good quality fetch higher prices than those of inferior quality. Besides, the buyers may also offer higher prices for scarce labour services. Piece-rates of wages provide an example of graded prices for different categories of labour.

Prior to the advent of trade unions, the workers, no doubt, bargained individually with the employer, but in general, they competed with other individual workers and in most cases accepted what the employer offered. The bargain was thus not in between equals. They sooner or later came to realize that common and concerted action could prevent their mutual competition. Collectively, the employees could insist that if the employer were to hire any of their number, he must offer at least a standard minimum price. The employer could dispense with the services of an individual employee, but he could not afford to dispense with the services of all his employees. The initial success of this approach resulted in strengthening of the bargaining power of the organized workers. Thus, collective bargaining led to the establishment of equality. On account of the inability of the employer to replace all his employees by new hands, collective bargaining increasingly became necessary for the employer. In actual situations, the strategic position and the bargaining power of the buyers and sellers of labour services—the employers and workers vary.

The Governmental Theory

The governmental theory of collective bargaining considers collective agreement as a constitution, on the basis of which, a sort of industrial government is established in an enterprise, company or industry. The industrial constitution is established by joint conferences of the union and management representatives. The result of these conferences is contracting of an agreement, whether written or oral understanding. The principal function of the constitution is to establish organs of the government, specify them and provide agencies for making, executing, and interpreting rules and the manner of their enforcement. ‘In common with other governments, the industrial polity has its legislature, its executive branch and its judiciary’.13

The basic laws are contained in collective agreements, and these are supplemented by joint committees such as local shop and grievance committees which deal with day-to-day and new problems. However, the legislative functions of these committees must be commensurate with the basic law established by the agreement. The executive authority is generally vested in the management. It is the management which is expected to execute the contents of the agreement. The role of the management is, however, circumscribed by the basic rules established by the collective agreement and the supplementary rules of the local committees. The management may discharge an employee for disciplinary reasons, but only after meeting jointly determined norms.

There may, however, be problems relating to ambiguity of certain clauses and conflict between the actions of the local committees and contents of the basic agreement. A judicial machinery is needed to deal with such issues. This judicial machinery is generally the grievance procedure culminating in arbitration. Chamberlain says, ‘To establish and maintain such an industrial government, with its three branches, continuity of the founding organizations must be assured. The government rests upon the management and the union jointly, and the passing of either carries away with it the government’.14

The Managerial Theory

The managerial theory of collective bargaining views collective bargaining as a method of management. In every institution or organization some form of management is necessary. In industrial organizations, in regard to both the method of management and procedures for making decisions, collective bargaining establishes joint or group management. Collective bargaining by its very nature involves the unions’ representatives in the managerial role. They may not look upon themselves as managers, but the effect of their actions drive them to such a role. The managerial theory does not assert that collective bargaining usurps managerial function from the management. It simply asserts that it has become one method of management in which the area of application extends to only those matters in which the unions have secured a voice. ‘It holds that just as decisions of hiring, discharge, layoff and recall, discipline and wages, hours, scheduling, promotion, methods of production, subcontracting, rates of operation, and so on were matters of management prior to the advent of union, they remain decisions involving the managerial function after the union has gained some part in their making’.15

 

Directive Management

The apex person or body in management hierarchy in which final authority is vested such as the owner in small businesses and board of directors in corporations.

The managerial theory of collective bargaining poses a sharing of directive management. In collective bargaining, union representatives meet the representatives of the owners to reach joint decisions ‘which are incorporated in a written agreement and which cannot be overruled or rescinded for the period of the agreement except by another joint conference possessing similar authority’.16 Neither the union representatives nor the representatives of the owners have the power to modify its terms. These can be changed or modified only by mutual agreement of the two groups of representatives.

In the administrative management also, the unions at times participate by way of contracting supplementary agreements or union officials may be associated with making decisions. Where there is no mention of a matter in the basic agreement, there may be a joint decision at the local level. Collective agreements may also provide for the establishment of joint committees such as production committee, safety committee, grievance committee, welfare committee in which the representatives of the union perform some managerial functions jointly with the representatives of the management. As the area of joint concern expands, so too does the participation of the union in the management of the enterprise.

These three approaches to collective bargaining cannot be sharply distinguished from each other. Many elements of one approach are related to the others. The approaches generally reflect the stages of development of bargaining process and differences in the conceptions about it. However, these approaches are of substantial importance in providing guidelines to the study of industrial relations and serving as tools of analysis of problems involved in collective bargaining.

UNITS AND LEVELS OF COLLECTIVE BARGAINING

Collective bargaining may take place at various levels, for instance, plant, locality, employer, area or region, company, industry and the nation. Even at a particular level, a number of situations may be envisaged. For example, at the plant or establishment level, collective bargaining may take place between the employer, on the one side, and one or more industrial unions, or one or more craft unions, and one or more general unions separately or in combination, on the other. Similarly, at the industry level, there may be various units of bargaining, for example, one or more employers of a company/corporation or one or more employers’ associations on the one side, and one or more trade unions established at the industry, region, plant or national level, on the other. A complex of similar situations may be conveniently cited. The term bargaining unit refers to the parties, that is, employers and workers/trade unions represented in negotiations, and to whom the resulting collective agreement applies. The ‘level of bargaining’ is a broad term denoting the nature of ownership of undertakings, the geographical area, the industry, the jurisdictions of employers and trade unions, or the layer where collective bargaining takes place.

 

Bargaining Unit

(i) A group of workers who are accepted by an employer, a group of employers or by the government as representing the views and interests of majority of the workers concerned in an establishment or industry, and is able to enter into collective bargaining proceedings with the employer or group of employers; or (ii) A group of employers accepted by the organized workers or by the government as an appropriate agency for collective bargaining with workers in particular establishment, industry or area.

Some of the possible situations considered from the point of view of the levels and units of collective bargaining are cited below.

Plant or Establishment Level

Bargaining between one employer/company on the one side, and one or more unions established at the plant, locality, region, industry, nation level, or a group of workers, on the other.

Local Level

Bargaining between one employer or a group of employers, or one or more employers’ associations on the one side, and one or more unions established at the plant, locality, region, industry, nation level, or a group of workers, on the other.

Region/Area Level

Bargaining between one or more employers/companies or one or more employers’ associations at the region, industry or nation-level on the one side, and one or more unions established at the plant, region/area, industry or nation level, on the other.

Industry Level

Bargaining between one or more employers/companies/corporations or one or more employers’ associations on the one side, and one or more unions established at the industry, nation, region/area or plant level, on the other.

National Level

Bargaining between one or more employers/companies/corporations or one or more employers’ associations on one side, and one or more unions established at the national, industry, region/area or plant level, on the other.

The above illustrations serve only as examples. There may be numerous variations in each category depending upon a host of factors; the more notable among them are explained in the following section.

FACTORS INFLUENCING BARGAINING UNITS AND LEVELS

Some of the pertinent factors that influence or determine the bargaining unit and level are listed here.

Structure of Trade Union Organization

One of the notable factors influencing the unit and level of collective bargaining has been the structure of trade union organization. Where industrial unions at the plant level are predominant, a single union may bargain for all the workers in the plant. In such cases, the level of bargaining is plant and the unit is confined to the representatives of the employer and workers in the plant. When such unions are formed at the industry level, industry level bargaining may become more frequent and the unit of bargaining becomes wider. On the other hand, where there is plurality of craft unions at the plant or industry level, the number of bargaining units either at the plant or industry level is likely to be more. In many cases, collective agreements contracted at the industry level are supplemented by agreements at the plant level. In such cases, both the levels and units of bargaining become diversified. Some trade unions are also formed at the regional level. Here, the level of bargaining is region and the unit will consist of the representaives of the parties. In many countries, parallel etrialedns of workers operate at the plant, industry or regional level, as in the case in India. In such situations, a large number of bargaining units may be formed for the purpose of collective bargaining. Similarly, the structure of employers’ organizations also influence both the levels and units of bargaining. In some countries, apart from the industrial federations of trade unions or industry-level unions, national federations of trade unions such as BMS, INTUC and AITUC in India, TUC in Great Britain, and AFL-CIO in the United States, have also been established. Many of such national unions also bargain with national level employers’ organizations, leading to the enlargement of the level as well as unit of bargaining.

Nature of Ownership of Industrial Enterprises

The unit and level of bargaining are also related to the nature of ownership of industrial and business enterprises and the structure of employers’ organizations. Where the ownership of industrial enterprises is confined to an employer or company at the local level and there is preponderance of plant-level industrial unions, the level of bargaining will be low and units simple. When a single employer owns a large number of establishments spread in different areas, bargaining may take place at each of the establishments separately or a single agreement applicable to all the plants may be contracted. Along with the formation of trade unions at higher levels, the employers have also formed their organizations at industry, national and regional levels. These developments combined with the advent of large corporations have tended to widen both the level and unit of bargaining.

In some countries, as in India, a large number of big-sized industrial undertakings have been established in the public sector. This has necessitated the establishment of forums to ensure a broad uniformity in regard to the terms and conditions of employment, and avoidance of wide dispartities. To achieve it, forums such as Bureau of Public Enterprises have come into existence. The national unions on their part have been led to combine together to counteract any move detrimental to the interests of workers, and bargain at the national level.

Nature of Industrial Relations Laws and Governmental Policy

Both the levels and units of collective bargaining are profoundly influenced by the contents of industrial relations laws and governmental policies. In many countries, these laws regulate the selection of bargaining agent, recognition of representative unions, disposal of representation cases, determination of bargaining units, registration of collective agreements, unfair labour practices and other procedural aspects of collective bargaining. Thus, in the United States, the Labour Management Relations Act, 1947 (Taft-Hartley Act) which has established compulsory collective bargaining has vested wide powers in the National Labour Relations Board (NLRB) in regard to the determination of the bargaining unit, certification of bargaining agent and disposal of representation cases. In the United Kingdom, the Trade Union and Labour Relations (Consolidation) Act, 1992, and Employment Relations Acts extensively regulate procedural aspects of collective bargaining (see Chapter 3).

In India, the Industrial Disputes Act, 1947, provides for the appointment of conciliation officers and adjudication authorities—labour courts and tribunals by both central and state governments, and national tribunals by the central government—for settlement of industrial disputes (see Chapter 21). An amendment of the Act in 1982 makes it an unfair labour practice for an employer to refuse to bargain collectively with recognized unions and for a recognized union to refuse to bargain collectively with employer. However, there is no legal compulsion for the employer to recognize unions, which is still voluntary under the system of industrial relations in the country. As the conciliation and adjudication authorities are dispersed in different areas, both the levels and units of bargaining become dispersed and diversified having a larger concentration at the plant level.

The Code of Discipline adopted by the Indian Labour Conference in 1958 has laid down criteria for the recognition of unions for the purpose of collective bargaining (see Chapter 12). The code which is observed by the employers and trade unions on a voluntary basis also encouraged collective agreements at the plant and region-cum-industry basis. However, in absence of legislation making recognition of unions compulsory, the code has not proved effective in this area.

Other Factors

Some other factors influencing the pattern of bargaining units and levels are patterns set by reputed employers, extent of trade union rivalry, nature of trade union leadership, proximity influence, nature and extent of benefits available under labour laws and industrial awards, and the type of industry or business.

SUBJECT MATTERS OF COLLECTIVE BARGAINING

During initial periods, the subject matters of collective bargaining were confined mainly to wages and other pecuniary gains. Subsequently, hours of work and certain aspects of physical working conditions also became subjects of joint negotiations. As trade unions grew in strength, more and more subjects came under the purview of collective bargaining. Many terms and conditions of employment, which the employers had been deciding unilaterally, became subjects of collective bargaining. The practices in different countries show that wide varieties of subjects have been covered by collective bargaining. These include wages, allowances, hours of work, physical working conditions, fringe benefits, incentive payments, welfare amenities, economic security, job security, promotion, retiral benefits, discipline, training, leave and holidays, discharge and dismissal, lay-off and retrenchment, overtime work and payment, vacations, leave travel, technology and technological changes, production and productivity, environment and so forth. Collective bargaining may cover even details of the subjects noted above and many other subjects.

Collective bargaining also takes place on the procedural matters relating to bargaining. To cite a few examples—bargaining unit, selection of bargaining agents, recognition of representative union, grievance procedure, unfair labour practices, union-security clauses, industrial actions including strikes and lock-outs, and establishment of joint bodies.

In many countries, the parties in collective bargaining enjoy freedom to decide the subject matters of negotiations. In many others, they are free also to bargain for improved standards over and above the minimum standards prescribed under protective, social security and welfare legislation, and industrial awards. In some countries, the parties are under the obligation to include certain subjects in collective agreements. In a few countries, the parties are prohibited from discussing certain matters for considerations of public interest for instance, ‘closed shop’ in the United States and the United Kingdom.

PRODUCTIVITY BARGAINING

Productivity bargaining is an aspect of collective bargaining which aims at improving inefficient working methods by specifying changes in working practices. It is the process of making negotiations between the two parties with the object of improving productive efficiency and the rewards for increased productivity. The enforcement of productivity agreements is considered as joint responsibility of the management and trade union. It is often considered integrative bargaining because the parties appear to be more concerned with increasing the total sum available for distribution. Productivity bargaining is more specific with respect to the nature of achievement and reward and the time period involved.

Characteristics of Productivity Bargaining

The more notable characteristics of productivity bargaining are as follows:

  1. It is concerned with overall cost performance of the enterprise. It involves wage-work bargaining covering performance-related issues.
  2. It is management-initiated bargaining. The management is potently concerned with improving productivity. The union becomes interested only when there is satisfactory arrangement for sharing the fruits of increased productivity.
  3. It has an element of input–output relationship and a two-way process. It also presents a win–win situation.
  4. It is based on the principle of mutuality. The parties participate in generating gains and sharing the fruits on a mutually agreed basis. It ensures high rewards for workers’ efforts and leads to the reduction of labour costs.
  5. It involves arriving at decisions on the basis of discussions and cooperation in raising efficiency.
  6. It is a continuing process. The approach is comprehensive, integrated and planned.
  7. It leads to the establishment of a positive motivational policy and programme.

The Process in Productivity Bargaining

Generally, the process in productivity bargaining is initiated by the conduct of a feasibility study. This study may be made by an outside consultant or a group of functional personnel of the company. The study involves an examination of the total work-situation and an analysis of the nature of the problems. The main areas of study are production, economy and earnings.

The feasibility study is followed by the development of a wage-system which involves reckoning of agreed wage-differentials at various levels. It also provides a performance-based variable element under which there is a provision of increase in remuneration with the enhancement of individual capacity and contribution. An important element in the process is the sharing of the prosperity of the enterprise based on the index of productivity. The final stage in the process involves devising, negotiation and implementation of the productivity agreement.

 

Feasibility Study

A study made to ascertain whether a particular plan or scheme is possible and likely to be achieved.

Benefits of Productivity Bargaining

Productivity bargaining benefits both the management and the union in various ways. Its main benefits are as follows:

  1. It provides an opportunity to the restructuring of collective relations by changing the emphasis from confrontation and conflict to constructive involvement of the parties and cooperation on a continuing basis.
  2. It offers opportunity to the management to structure industrial relations on the basis of objective information and data and removes or reduces irritating features in work-environment.
  3. It helps in securing more effective utilization of resources by plugging cost-leakages.
  4. It enables the development of employee participation and a problem-solving approach to areas of conflict.
  5. It leads to a positive motivational work-organization.
  6. It provides continuing education, status and authority for employee–representatives in the joint regulation of the employment situation.
  7. It leads to the development of internal leadership in the trade union ranks and promotes union growth.
  8. It ensures enhanced earnings, fringe benefits and improved working conditions for the workers.

Limitations of Productivity Bargaining

Some of the more obvious limitations of productivity bargaining are as follows:

  1. Difficulties are often encountered in implementing and monitoring efficiency schemes.
  2. Certain unforeseen external factors such as technological changes, market fluctuations and unavailability of materials impede effective implementation of the schemes.
  3. Requisite managerial skills in the development of the programmes may not be available.
  4. A number of workers are reluctant to accept the changes in operations and methods.
  5. Where compensating the workers for their increased efficiency involves time and uncertainty, there is the difficulty in satisfying the workers who expect immediate gains.
  6. The process is time-consuming and the management may not have sufficient resource to frame and implement the schemes.

Productivity Bargaining in India

Although the need for augmenting productivity in Indian industries has been emphasized ever since the dawn of Independence, productivity bargaining in the country is a scarce phenomenon. A few collective agreements contracted in the country have covered productivity, but generally in broader perspectives. The question of productivity has, however, been emphasized in most of the schemes of workers’ participation in management experimented within the country at the behest of the government (see Chapter 14). Some of the measures adopted at the initiative of the government such as Industrial Force Resolution, 1947, which recommended the establishment of Production Committees at the central, regional and unit levels, establishment of Productivity Centre at Mumbai and National Productivity Council were expected to promote joint deliberations and negotiations in matters of productivity. However, these could not contribute much to the development of productivity bargaining in the country. However a few, industrial organizations have contracted some form of productivity agreements with the unions, but mainly covering broader aspects of productivity. The main features of productivity agreements in TISCO and Tata Motors Ltd., Jamshedpur, which may provide guidelines to other industrial organizations, are described below.

Productivity Agreements in TISCO

The historic agreement between the Tisco and the Tata Workers’ Union, 1956, contains important clauses relating to productivity. The agreement provides that the union, its officers and representatives agree to give their full support and cooperation in the matter of securing improvement in labour productivity. It further states that the parties agree on the need to establish a standard force in each of the existing departments and declares that such standard force will be fixed by the company for securing improvement in labour productivity after consultation with the union. The company assures the union that: ‘(i) there will be no retrenchment of existing employees; (ii) those employees required for jobs other than those in which they are at present employed will, wherever necessary, be trained for other jobs; (iii) the present average earnings of employees transferred or under training will be guaranteed to them’.17 The agreement also provided the details regarding the adjustment of workforce in the event of redundancy in particular departments or sections.

The agreement of 1956 was modified by the memorandum of settlement between the company and the union in 1989. The settlement contains enlarged and detailed provisions relating to productivity, technological improvement and modernization. The relevant clauses of the settlement are reproduced below.

‘The Company and the Union recognizes the importance and need of providing for technological development, modern facilities, better utilization of labour force, good working conditions and cordial management–employee relations for growth and efficient operation of the company’s business and for the effective and timely implementation of schemes of modernisation, rehabilitation and expansion which may be undertaken by the company at heavy capital expenditure. To this end, the parties commit themselves to continue to work together in attaining higher levels of production and productivity and profitability. Joint efforts would be made continuously in the following areas:

  1. Efficient handling of raw materials and reducing wastes
  2. Improvement in yields and reducing operational costs
  3. Reducing energy consumption
  4. Improving quality in all operations
  5. Improvement in house-keeping
  6. Necessary improvement in working conditions, health and safety of workers
  7. Continuously adopt better working practices
  8. Reducing unauthorized absenteeism
  9. Improve effective utilization of all resources including human resources.

The union recognizes the right of the company

  1. To fix the number of men required for the normal operation of a section or department, provided that in the case of existing sections and departments, the union is consulted before the company takes a decision.
  2. To eliminate, change or consolidate jobs, sections, departments or divisions; provided that when the employees’ interests are likely to be adversely affected, the union is consulted before the company takes a decision.

The company assures the union whom they have recognized as the sole bargaining agent since 1956 and continue to do so, that:

  1. There will be no retrenchment of existing employees.
  2. The employees required for jobs other than those in which they are at present employed, will, wherever necessary, be trained for other jobs.
  3. When they are transferred to other jobs or when they are under training, their existing rates and grades will be guaranteed to them and they will also be entitled to an average of proceeding twelve months’ incentive bonus earnings, if any’.18

The provisions of these two agreements were reiterated and retained in subsequent agreements between the company and the union, and have continued to provide the base for productivity measures in the company even till today.

Productivity Agreements in Telco/Tata Motors Ltd.

The Telco was established in 1960 and on ceasing the production of locomotives in 2003, its name was changed to the Tata Motors Ltd. The earliest name of the company was Tata Locomotives (Estd., 1945). Many provisions of collective agreements contracted between the Telco and the only recognized union the Telco Workers’ Union continued to operate even after the change of the name of the company, which also entered into new agreements with the union subsequently.

The memorandum of settlement between the Telco and Telco workers’ union (1 April 1989 to 31 March1992) contained important clauses relating to productivity. The contents of the settlement are reproduced below.

  1. The Union and the management agree that TELCO can remain viable only through improved standards of productivity throughout the Jamshedpur Works and by optimizing utilization of plant, equipment and human resources. Both parties recognize that it will be essential to utilize state of art or the latest technology available in manufacturing methods in order to remain competitive and both will work jointly to ensure that the company remains modern, current and maintains the highest standards of productivity.
  2. The Union recognizes that adherence to production quotas or any restrictive practices which inhibits production and productivity should be removed in the interest of the company and its employees.
  3. The Union recognizes that the productivity principle is based on the concept of ‘returnability’ with respect to input and agrees to work jointly with the Management to ensure that an improvement in productivity at the rate of 10% in terms of output per man per year is achieved in order to achieve the productivity level, the Union will work with the management to remove all restrictive practices which come in the way of increasing productivity of plant and equipment.
  4. All technical, clerical and other indirect employees working in areas like maintenance, inspection, shop cleaning, sanitation and hospitals, will also achieve the targeted levels of productivity in their respective areas. They will also make commensurate efforts to help the direct men enhance productivity.
  5. The union accepts that an individual’s unwillingness or inability to attain targeted performance levels retards the improvement in overall performance. The Union, therefore, agrees to cooperate with the management in counselling and training such individuals whereby they can achieve targeted performance levels.
  6. The Union appreciates the fact that with change in market conditions as also changes in methods of production, retraining and deployment of workers is essential. The Union agrees to cooperate, with the management in such deployment plans so as to ensure optimum utilization of human resources in the Jamshedpur Works and flexibility in production to meet changing market conditions. The Union, however, reserves the right to represent to the management if there be anything which adversely affects the interests of the employees.
  7. The Union also agrees to support the management in its efforts to identify and eliminate wasteful practices and to improve quality through replacement of out-dated methods, equipment, tooling and systems with more effective and efficient alternatives.
  8. The Union and the management recognize that participation of employees in ‘small group activity’ will go a long way in promoting goals of productivity, quality of product and quality of work-life. The parties, therefore, agree to encourage employees in their role in achieving their goals through participation in small group activities.
  9. The management and the Union believe that quality is produced and not inspected. Hence, joint efforts will be made for self-certification of products by concerned employees, backed by an effective feed-back system so as to ensure products and services of the highest quality.
  10. The Union and the management agree that special attention needs to be paid and results achieved in the following areas through joint efforts of both parties:
    1. Full capacity utilization of each plant/equipment/facility
    2. Improved/effective utilization of resources, including human resources
    3. Optimizing energy consumption
    4. Improving quality in all operations and of products
    5. Efficient handling of raw materials and reduction of wastages
    6. Improvement in yields and reduction in operation costs
    7. Improvement in house-keeping
    8. Improvement in environment
    9. Continuous adaptation of better working practices
    10. Reducing unauthorized absenteeism
    11. Improving customers’ services and delivery.

The Union and management agree to discuss each of these issues in detail department-wise/division-wise and arrive at specific targets and to jointly implement plans to achieve the same. For attaining productivity targets… the management will identify non-performing workmen and will mutually negotiate with the Union to plan corrective actions’.19

The memorandum of settlement between Tata Motors and the Telco Workers’ Union (1 April 2004 to 31 March 2007) contains the following provisions regarding productivity, quality of products and work-services.

‘To attain the objectives of growth and excellence, we need to further improve our standards of productivity of all resources and maximize customer satisfaction through manufacture of cost effective and quality products. The Union agrees to work jointly with the company for improvement in productivity targeted by the company and achieve production level as per the established standards or as per the standards developed through various improvement initiatives like Kaizen.

For improving the standards of quality, the agreement laid emphasis on zero defects, ‘first shot O.K.’, implementation of quality improvement plans, enhancement of levels of skill and customers’ satisfaction.

In order to ensure continuous improvement in overall efficiency of plants and equipments, the settlement provides that all workmen shall be committed whole-heartedly in: (i) implementation of 5-S and its maintenance at desired level, which involves cleaning up, organizing, cleaning, standardizing and self-discipline; (ii) Kaizen initiative for continuous improvement in performance through elimination of wastage of time and resources.21

 

Kaizen

Japanese word for ‘improvement’ refers to the philosophy or policies that focus upon continuous improvements in manufacturing, engineering or management.

Value Stream Mapping (VSM)

A concept originated in Toyota, a Japanese auto manufacturer, is a lean manufacturing technique used to analyse the flow of materials and information currently required to bring a product or service to a consumer. The focus being to meet the customer requirement on time’.20

The settlement also laid emphasis on dedication and commitment to ‘total productive maintenance’, ‘zero breakdowns’, ‘zero defects’ and ‘zero accidents’.

 

5-S

5-S is the name of workplace organization or method of shop floor house-keeping improvement that uses a list of five Japanese words—SEIRI, SEITON, SEISO, SEIKETSO and SHITSUKE. The five words describe how items are stored, arranged, maintained, standardized and ownership of the processes among its employees.

The settlement of 2007 which remained in operation till 31 March 2010 retained all the provisions of the 2004 settlement in regard to productivity, quality and work-practices.

The agreements in both Tisco and Telco show a wide and detailed coverage in regard to productivity. The unions agreed with the managements to associate themselves and extend cooperation at various levels and different forms. However, the major responsibility for formulating and implementing specific programmes rest with the management which is required to obtain the consent of the unions at every step. Both the agreements apprehend the possibility of the problem of redundancy, which is sought to be solved by not resorting to retrenchment, but through planned measures of training and transfers. Although the agreements provide for enhancing the compensation to workers for increased productivity in the form of incentive earnings, there is absence of laid-down manner in which fruits of increased productivity would be shared by the workers promptly and within a short period. However, these agreements are expected to provide sufficient guidelines for contracting productivity agreements in other industrial undertakings where these are non-existent or inadequate.

GROWTH OF COLLECTIVE BARGAINING IN INDIA

In India, collective bargaining in one form or the other, developed on a more or less regular basis from the 1940s but some evidences of joint negotiations and agreements are found even earlier. In Ahmedabad, as a result of the efforts of Anasuyaben Sarabhai, Shankar Lal Banker and Mahatma Gandhi, quite a few disputes in the textile mills came to be resolved through joint negotiations. In 1918, the parties to a wage dispute were pursuaded to settle it through negotiation and mutual discussion, failing which, the matter would have been resolved through conciliation, and in the event of its failure, through a decision by an agreed arbitrator or Board of Arbitration, whose decision would be binding. The dispute was ultimately resolved by a Board of Arbitration consisting of representatives of employers and workers. With the establishment of Textile Labour Association in 1920, the process of settling disputes by joint negotiations got a further impetus. In 1920, a permanent arbitration board consisting of representatives of workers and employers was also established. Mahatma Gandhi represented the workers on the Board and Seth Mangaldas, President of the Ahmedabad Mill Owners’ Association, the employers for quite sometime. The TLA and the Ahmedabad Mill Owners’ Association agreed that all grievances and disputes should, in the first instance, be discussed between the workers and the management of the mills concerned. If no settlement could be arrived at, the matter would be reported by the TLA to the Mill Owners’ Association. The two organizations would discuss the matter for amicable settlement. In case no agreement could be reached, the matter was to be finally referred to the bipartite permanent arbitration board. Since then, a number of disputes in the textile industry in Ahmedabad have been resolved either by mutual negotiations or by the awards of bipartite arbitration board, and sometimes by an impartial umpire. The two organizations have contracted collective agreements both comprehensively and on particular issues. While appreciating the Ahmedabad experiment, the Royal Commission on Labour commented that in Ahmedabad there was greater understanding, if not sympathy, between the employers and the employed than was usual elsewhere.

In 1920, a central federation of trade unions, AITUC came into existence. In 1925, on the initiative of the trade union, check-off system was introduced in TISCO and since then, informal and formal discussions between the management and trade union has taken place on a number of occasions. There were also scattered examples of joint negotiations in cotton textile mills in Madras and Bombay.

Developments Prior to Independence

The Trade Unions Act, 1926, which provided for the registration of trade unions and criminal and civil immunities to registered unions, gave a fillip to the formation and strengtheming of trade unions. In 1929, the Trade Disputes Act was passed. The Act empowered the central and provincial governments to appoint boards of conciliation for settling trade disputes and rendered lightning strikes in public utility services, a punishable offence. A demand for introduction of compulsory method for settling trade disputes was made before the Royal Commission on Labour, but the commission disagreed and observed, ‘We believe that the effect on industry would be disastrous if there was a general tendency to look to some external authority to preserve industrial peace and to discourage settlement by industry itself’.22 The commission regretted that conciliation, which could be the most useful form of state assistance, was scarcely employed in India.

The Bombay Trade Disputes Conciliation Act, enacted in 1934, provided for the appointment of labour officers, special conciliators and empowered the government to appoint commissioner of labour as the chief conciliator. The Act of 1934 was repealed and replaced by the Bombay Industrial Disputes Act, 1938. The Act of 1938 provided for an elaborate machinery for promotion of peaceful and amicable settlement of industrial disputes. The Act of 1938 was replaced by the Bombay Industrial Relations Act, 1946. The central Trade Disputes Act, 1929, was also amended in 1938. The amendment authorized the central and provincial governments to appoint conciliation officers for mediating in and promoting the settlement of trade disputes. With the enactment of these laws quite a number of disputes came to be settled by agreement between the parties, with the assistance of the conciliation officers.

In January 1942, the central government added Rule 81(A) to the Defence of India Rules, which empowered the government to refer any dispute to conciliation or adjudication and to order prohibition of strikes and lock-outs resorted to without notice. The rule also required the employers to observe specified terms and conditions of employment and provided for enforcement of the decisions of the adjudicators. These provisions proved deleterious for the growth of collective bargaining and resolution of issues by joint negotiations. Many of the provisions of the rule were incorporated in the Industrial Disputes Act enacted in 1947.

However, along with the deleterious clauses of Rule 81(A) of the Defence of India Rules inhibiting the growth of free collective bargaining, an encouraging development took place in 1942 itself with the establishment of tripartite Indian Labour Conference and Standing Labour Committee. The objectives behind the establishment of these national forums inter alia included ‘discussing all matters of national importance as between employers and employees’ and ‘laying down of procedure for the settlement of industrial disputes’.23 In practice, these forums provided a platform for the repesentatives of national level organizations of employers and workers to deliberate over vital issues concerning labour and industrial relations and to arrive at unanimity along with government representatives. The unanimous resolutions adopted at these forums have profoundly influenced government’s labour policy and pattern of industrial relations including collective bargaining and joint negotiations in the country.

Another notable development having a bearing on collective bargaining in the country was the enactment of the Industrial Employment (Standing Orders) Act in 1946. The Act provides for the framing of draft standing orders by the employers of industrial undertakings, employing 100 or more workmen, on specified matters relating to terms and conditions of employment, for example, recruitment, discharge, disciplinary action, holidays, leave and redressal of grievances, and so on (see Chapter 22) and get these certified by certifying officer appointed by the government. The certifying officer is required to forward a copy of the draft to the trade union or the workmen concerned for raising objections, if any, and to give to the parties an opportunity of being heard. In the light of such objections or representations, the certifying officer may modify the draft and certify it taking into consideration the viewpoints of the parties. In practice, many employers frame the standing orders in consultation with the trade unions, so that there may not be difficulties and delay in their certification and implementation. Many employers and trade unions have also agreed to cover such other matters relating to terms and conditions of employment which are not specified in the schedule of the Act. Here, it is pertinent to note that many matters on which standing orders have been made in India form subject matters of a large number of collective agreements in the United States, Great Britain and many other countries.

As mentioned earlier in the chapter, in 1946 the Bombay Industrial Relations Act was also passed. This Act, which is also in force today inter alia, provides for the constitution of joint committees, conciliators, labour courts, wage boards and industrial court. The employers of industrial establishments are required to constitute joint committees, to serve as a direct and continuous link between employers and employees. Conciliators are required to make endeavour for speedy and expeditious settlement of industrial disputes. Labour courts, wage boards and industrial court are adjudication authorities. The Act also classifies trade unions as ‘representative unions’, ‘qualified unions’, ‘primary unions’ and ‘approved unions’. A ‘representative union’ is the sole bargaining agency in all proceedings in which it is entitled to appear. An agreement reached with such a union is effective and is, ordinarily, to be made binding by an award in terms of an agreement.

The Industrial Disputes Act, 1947, was enacted in March 1947 and it came into force from April 1947. The Act with subsequent amendments is still in force in the country. The Act provides for the constitution of works committees in industrial undertakings and appointment of conciliation authorities in the form of conciliation officers and board of conciliation and adjudication authorities in the form of labour court, tribunal and national tribunal. The Act also contains provisions relating to prohibition of strikes and lock-outs. A detailed list of unfair labour practices on the part of employers and recognized trade unions was also inserted in the Act by an amendment introduced in 1982 (see Chapter 22). This amendment makes refusal by an employer to bargain collectively with the recognized union, and by a recognized union to bargain collectively with the employer, an unfair labour practice and punishable offence.

Prior to Independence, apart from collective agreements reached between the Ahmedabad Mill Owners’ Association and the TLA at intervals, there has been a strong tradition of contracting comprehensive collective agreements between the Tisco and the union. Beginning from 1920, a number of such agreements were reached between the management and the union on the direct initiative of the union’s presidents who included S. N. Haldar, C. F. Andrews, Subhas Chandra Bose, and Prof. Abdul Bari and involvement other eminent personalities of the country including Byomkesh Chakravarthy, Mahatma Gandhi, Lala Rajpat Rai, Jawaharlal Nehru and Dr. Rajendra Prasad. These agreements covered a wide range of subjects such as wage increases, provident fund, gratuity, leave, check-off system, bonus, grievance procedure, welfare amenities, safety and dearness allowance.24 There have also been scattered examples of collective agreements in Maharashtra and Tamil Nadu. In 1943, the employers’ association and the Travancore Coir Factory Workers’ Union had constituted the Industrial Relations Committee for resolving all future differences by mutual negotiations. The formation of the INTUC in May 1947, gave a boost to the contracting of such agreements in a number of industrial establishments.

Developments Since Independence

The pre-Independence developments in the field of industrial relations—operation of industrial relations and industrial disputes laws, establishment of tripartite bodies in the field of labour, strengthening of trade union movement, and successes of joint negotiations and bargaining forums, in particular industries or establishments—continued to influence the course of collective bargaining in post-Independence period also. In particular, increasing use of conciliation for settling industrial disputes brought the parties together to resolve their issues jointly and reach agreements. After Independence, certain new developments having a bearing on collective bargaining, took place at frequent intervals.

Formation and Strengthening of Workers’ and Employers’ Organizations

The post–Independence period witnessed the formation of new central federations of trade unions. In addition to the earlier central federations, that is, AITUC (1920) and INTUC (1947), other central federations of trade unions, such as HMS (1948), UTUC (1948), BMS (1955), CITU (1970), NLO (1972), UTUC-LS and TUCC came to be formed (see Chapter 5).With the formation of these central federations, the process of establishment of trade unions at the plant, region and industry levels was also accelerated. Along with the formation of trade unions at higher levels, the employers also started organizing and formed their associations and federations (see Chapter 10). As a result, joint negotiations and bargaining increasingly took place not only at the plant or establishment level, but also at industry, regional and national levels.

Formation of Industrial Committees

The post–Independence period also witnessed the formation of tripartite industrial committees to deliberate on the problems of particular industries. In 1948, industrial committees for plantations, coal mining, cotton textiles, cement, and tanneries and leather goods manufactories came to be formed. Subsequently, industrial committees were established for some other industries as well such as jute, chemicals, engineering, electricity (generation and distribution), road transport, building and construction, iron and steel, and mines other than coal. These committees deliberated over a number of matters of joint interests like wages, conditions of work, production, welfare amenities, retrenchment and closure, lay-off, bonus, standing orders, social security, contract labour, labour legislation and wider issues of industrial relations depending on the exigencies of situations prevailing in particular industries at particular points of time.

Policy Statements Soft

First five-year plan (1951–56) desired that the state should arm itself with powers for intervention in labour disputes, and ‘endeavour had to be made to encourage mutual settlement, collective bargaining and voluntary arbitration to the utmost extent and thereby, to reduce to the minimum, occasions for its intervention in industrial disputes and exercise of special powers’.25 The second five-year plan also emphasized ‘mutual negotiations as the effective mode of settling disputes’. Subsequent plans also laid emphasis on joint negotiations for resolving disputes.

Code of Discipline

The code of discipline adopted by the Indian Labour Conference in 1958 inter alia provided important guidelines relating to recognition of trade unions for the purpose of collective bargaining, settlement of industrial disputes, work-stoppages, redressal of grievances and unfair labour practices (see Chapter 12). The code, which the parties committed themselves to observe, has had a notable bearing on various aspects of industrial relations including collective bargaining in the country.

Central Wage Boards

The central wage boards, which came to be established on an ad hoc basis since 1957, owe their origin to the recommendations of the second five-year plan which observed, ‘Statistics of industrial disputes show that wages and allied matters are the major source of friction between employers and workers. The existing machinery for the settlement of disputes namely Industrial Tribunals, has not given full satisfaction to the parties concerned. A more acceptable machinery for settling wage disputes will be one which gives the parties themselves a more reasonable role in reaching decisions. An authority like a tripartite wage board, consisting of equal representatives of employers and workers and an independent chairman will probably ensure more acceptable decision. Such wage boards should be instituted for individual industries in diffeent areas’.26 In pursuance of these recommendations, tripartite Central Wage Boards came to be set up for a number of organized industries such as cotton textile, sugar, cement, jute, tea plantation, coffee plantation, rubber plantation, iron and steel, coal mining, iron ore mining, limestone and dolomite mining, engineering, ports and docks, heavy chemicals and fertilizers, leather and leather goods, electricity undertakings and road transport industry. All the wage boards were required to work out wage structure for the industry as a whole, but some of them were asked to deal with the questions of bonus, gratuity and hours of work also. The wage structure was to be worked out on the principle of ‘fair wage’ as set forth in the report of the Committee on Fair Wages, also a tripartite body constituted in 1948. After analysing the details of the working of central wage boards, P. R. N. Sinha came to the conclusion, ‘Throughout the operation of the wage board system, the employers and trade unions alone play the most important role. The determinations of wages, in particular, are the result of agreements actually arrived at between the employers’ and workers’ representatives, implying thereby that Wage Boards are nothing but forums of collective bargaining’.27 Although the institution of central wage boards subsequently fell into disuse, they gave a boost to joint negotiations on important issues like wages, dearness allowance and similar other subjects at the industry level.

The recommendations of the National Commissions on Labour in regard to pertinent aspects of collective bargaining such as determination of bargaining/negotiation agents, level of bargaining, subject matters, standing orders, strikes and lock-outs and certification of collective agreements have been discussed in Chapter 12.

Economic and Industrial Reforms

In 1991, the Government of India introduced basic changes in the economic and industrial policies. The broad features of the new policy have been privatization, liberalization and globalization. Some specific measures introduced in pursuance of these policies include substantial reduction in the coverage of industries for licensing and those hitherto exclusively reserved for the public sector, disinvestment of equity of selected public sector undertakings, liberalization of trade and exchange rate policies, and rationalization of customs and excise duties. Entrepreneurs were expected to become more competitive nationally and internationally. Most of the measures adopted in pursuance of these policies have been opposed by trade unions, very often, in combination, and they launched nationwide strikes and bandhs at frequent intervals. Employers in general, welcomed the policy of privatization and liberalization. Despite opposition from trade unions, the government continued to go ahead with the new measures.

Whatever might be the attitude of the trade unions and employers towards these measures, the process of privatization, liberalization and disinvestment of selected public sector undertakings continued. In view of these developments, the employers and their organizations have been vigorously demanding corresponding reforms in labour laws and less governmental intervention in industrial relations and personnel matters. Although the new economic and industrial policies started coming into operation since 1991, no corresponding amendments in labour laws were introduced. It was only in 1999, that the Government of India appointed the second National Commission on Labour, the terms of reference of which inter alia included, ‘to suggest rationalization of existing laws relating to labour in the organized sector so as to make them more relevant and appropriate in the changing context of globalization and opening up of the Indian economy’. The Commission submitted its report in June 2002. However, the impact of these developments is being noticed in certain specific areas with which both the employers and trade unions are directly concerned. Fierce competition and rapid technological changes have created the problem of redundancy on a very large scale. Besides, the industries have to face problems relating to skill-development and training, productivity and quality of products, retiral and unemployment benefits, and industrial unrest. With the diminishing role of the government in industrial and personnel management matters, the role of collective bargaining and joint negotiations for solving labour issues in industrial enterprises, is likely to become more prominent, but on a different footing.

COLLECTIVE AGREEMENTS

Collective agreements in India present complex varieties. Majority of collective agreements in the country are contracted at the plant level, but during more recent years, collective agreements have also taken place at industry, regional, company and corporate levels. The parties to such agreements generally prefer to bring them within the ambit of conciliation so that they may have a binding force. The enforcement of the Industrial Disputes Act, 1947, is the responsibility both of the central and state governments in respect of the industries or disputes under their respective jurisdictions. Collective agreements in industrial establishments within the sphere of state governments generally take place at the plant or other lower level, whereas those in the central sphere may relate, in addition to plant-level disputes, to disputes at the industry and national levels or those involving two or more states. Collective agreements or settlements in the states of Maharashtra and Gujarat are governed by state laws.

When studied in the light of the legislative framework and operation of tripartite forums and their conclusions at various levels, collective agreements in India may be classified into the following main categories:

  1. Agreements which have been drawn up after direct negotiations between the parties, and are purely voluntary in character for the purpose of implementation.
  2. Agreements which combine the elements of voluntariness and compulsion, that is, those negotiated by the parties, but registered before a conciliator as settlements.
  3. Agreements which acquire legal status because of successful discussion between the parties when the matters in dispute, were under reference to industrial tribunals/courts and could be considered sub judice, the agreements reached being recorded by the tribunals/courts as consent awards.
  4. Conclusions arrived at tripartite forums such as Indian Labour Conference, Standing Labour Committee, Industrial Committees and others. These generally deliberate on broad and important issues relating to labour or problems of industry.
  5. Standing orders jointly worked out before submission to the certifying officer for certification under the Industrial Employment (Standing Orders) Act, 1946. Standing orders deal with a number of important issues pertaining to terms and conditions of employment (see Chapter 22), which are covered in numerous collective agreements in the United States.

Statistics relating to industrial disputes resolved by different methods of settlement in the country (see Chapter 12) shows that during 1961–98, the percentage of disputes settled mutually by the parties constituted, with some exceptions, between 20 and 30 per cent of the total number of disputes. The proportion of disputes voluntarily resumed, normally varied between 20 and 50 per cent and that by governmental intervention mostly between 28 and 48 per cent. Even in the resolution of disputes by governmental intervention, the parties also play important roles. Thus, collective bargaining has played a very imporant role in resolving specific disputes in the country, but the use of conciliation machinery is more often involved for giving a binding character to the agreements.

A brief description of some pioneer comprehensive collective agreements is as follows:

  1. Agreements between Ahmedabad Mill Owners’ Association and Ahmedabad Textile Labour Association contracted at intervals. Important subject matters have included procedures for resolving disputes, bonus, wages, and others.
  2. Agreements between TISCO and the Tata Workers’ Union contracted from time-to-time, but the Agreement of 1956 is of particular significance, as it embodied for the first time in the country, closer association of employees with management (see Chapter 14). Other subjects covered in the agreements have included wages, gratuity, bonus, housing and welfare facilities, discipline, promotion, redressal of grievances, incentives and so on.
  3. Agreements between Bata Shoe Co. Ltd., Calcutta and Bata Mazdoor Union, Batanagar, (beginning from 1948 contracted at intervals). The subjects covered have comprised wages, allowances, bonus, hours of work, leave, bonus, strike and lock-out, standing orders, retiral benefits, disciplinary action and termination of service, grievances and others.
  4. Agreements between the Modi Spinning and Weaving Mills Co. Ltd, Modinagar and the Modi Spinning and Weaving Mills Karmchari Union Modinager (1956) covering mutual security, closer association of employees with management, productivity, promotion and grievance procedure.
  5. Agreements between Indian Aluminium Company Ltd., Belur Works and Indian Aluminium Belur Works Employees’ Union (1951, 1956 and 1961). The subjects included were rights and obligations of the parties, wages, production standards, bonus, welfare amenities, retiral benefits, gratuity, leave and holidays, joint consultation and redressal of grievances.
  6. Agreement between the Indian Tea Association and the Indian Tea Planters’ Association representing the employers and Hind Mazdoor Sabha and Indian National Trade Union Congress representing workers (1956) over the question of payment of bonus.
  7. Agreement between National Newsprint and Paper Mills Ltd., Nepanagar and Representatives of the Employees (1956) relating to wages, dearness allowance, bonus and formation of committees.
  8. Beginning from the 1960s, a number of comprehensive collective agreements were reached between Telco and Telco Workers’ Union, and after the change of name from Telco to Tata Motors Ltd. (2003), between Tata Motors Ltd. and Telco Workers’ Union. These agreements, which have been in the form of settlements covered many areas such as wage structure, benefits and facilities, productivity, discipline, job security, social security, incentives, pension, grievances, training and development, and so on.

Subsequently, a number of collective agreements came to be contracted at the company and industry levels. In the iron and steel industry, a Joint Wage Negotiating Committee consisting of representatives of employers and employees in both public and private sectors concluded a memorandum of agreement in 1970. The agreement covered wage structure and certain other conditions of service for employees for the whole industry. Another agreement in the industry was reached in 1974. In ports and docks, national level agreements took place in 1977 and 1981.

A number of settlements were reached in major ports from 1992 onwards at frequent intervals. Beginning from 1993, the Indian Commercial Pilots’ Association has entered into collective agreements with the management of Indian Airlines on such issues as flight and other allowances and certain other conditions of service. A long-term settlement between the Oil India Ltd. and five trade unions was signed in 1993, covering wages and working conditions.

In July 1992, the Cement Manufacturers’ Association and the major central federations of trade unions, namely, BMS, INTUC, HMS, CITU and AITUC signed a memorandum of settlement, governing wages and working conditions in the private and public sectors for a period of 4 years. In 1993, the Indian Banks Association signed separate settlements with three organizations of employees on pension and computerization. Two settlements were signed between the management of Air India and Indian Flight Engineers’ Association in 1993 on uniforms, and enhancement of allowances. In the coir industry of Kerala, a settlement covering wages and dearness allowances was signed in 1993 between the managements and Joint Action Council of Trade Unions.

A long-term settlement on wages and working conditions for workers in all the 11 major ports and 7 Dock Labour Boards was signed in December 1994. The settlement governed wages and allowances of over 100,000 workers for a period of 5 years. In the coal industry, a memorandum of settlement was signed between the Coal India Ltd. and three central federations of trade unions namely BMS, INTUC and AITUC in December 1995, covering pension and industrial dearness allowance. In 1995, settlements were also signed between Bharat Gold Mines and 17 trade unions on interim relief, ex gratia payment and dearness allowance; between Burn Standard Co. Ltd, Tamil Nadu Magnesite Ltd. and Dalmia Magnesite Corporation and trade unions of these companies; and between employers of jute mills of West Bengal and representatives of trade unions covering absorption of workers, wages and dearness allowance.

In 1997, a settlement between Airport Authority of India and Indian Airport Authority Employees’ Union was signed. The same year Pawan Hans Helicopters Ltd. and Pawan Hans Pilots’ Guild reached a settlement over certain conditions of work. In 1998, joint negotiations and conciliation took place in a number of industries or undertakings such as posts and telegraphs, major ports, coal mines, electronics, hospitals, banking, oil-fields, atomic energy and industries in public sector.

Most of the collective agreements contracted at various levels were modified at more or less regular intervals, and on the expiry of the period of their operation, fresh agreements with enlarged coverage were reached.

The foregoing clearly shows that collective bargaining in India presents a complex picture. While majority of agreements are still contracted at the plant level, the trend towards industry, corporate, company level and coalition bargaining have become frequent in more recent years. The parties to agreements generally prefer to contract agreements in the form of settlements, so that these may have a binding force. The conciliation machinery, both at the centre and in the states have been rendering useful services to bring the parties together, and induce them to reach agreements.

HURDLES TO COLLECTIVE BARGAINING IN INDIA

Ever since the dawn of Independence, collective bargaining in the country has continued to grow at a steady pace, but there have been hurdles in its way. Notable among these hurdles are as follows:

Voluntariness in Recognition of Unions

The recognition of trade unions for the purpose of bargaining has continued to be voluntary. There is no statutory compulsion for the employers to recognize representative unions. They are only under moral obligation to do so under the Code of Discipline (see Chapter 12). Although the Industrial Disputes Act, 1947, has made refusal to bargain collectively by the employer with a recognized union and for a recognized union with the employer an unfair labour practice, the provision does not have much significance in the absence of statutory obligation to recognize representative unions for the purpose of bargaining. Recognition of trade unions compulsorily, and clear-cut definitions of the roles of recognized and minority unions, will provide a sound basis for the growth of collective bargaining in the country. In this regard, the first National Commission on Labour recommended, ‘It would be desirable to make recognition compulsory under a central law in all undertakings employing 100 or more workers or where the capital invested is above a stipulated size. A trade union seeking recognition as a bargaining agent from an individual employer should have a membership of at least 30 per cent of workers in the establishment. The minimum membership should be 25 per cent if recognition is sought for an industry in a local area’.28 The second NCL (2002) has recommended compulsory recognition of representative trade unions and has worked out a comprehensive draft legislation covering various aspects of industrial relations. These have been given in some detail in Chapter 33.

Ineffective Procedure for the Determination of Representative Union

Even where the employers are willing to recognize the representative unions, the determination of the representative character of unions often becomes a very difficult task. For this purpose, the procedure of verification of membership has been widely used. The procedure of ‘secret ballot’, as is widely followed in Western countries is seldom used in India. There is no law on the subject in the country. The problem has become more acute on account of fierce rivalries and factionalism engulfing a large number of trade unions in the country. It is desirable to entrust the task to an impartial authority like National Labour Relations Board of USA, or Industrial Relations Commission recommended by the first National Commission on Labour, or Labour Relations Commission as recommended by the second National Commission on Labour (2002). It is also desirable to adopt the procedure of secret ballot rather than that of verification of membership figures (see Chapter 9).

Outside Leadership in Trade Unions

Outside leadership in the Indian trade union movement has also been a contributing factor. As explained in Chapter 8, a large number of trade unions are dominated by outside leaders who are also active workers of one political party or the other. The rivalry and factionalism of the political parties are also reflected in the trade unions. The result is that when a representative union having allegiance to one political party is recognized, the other unions affiliated to other political parties try to dislodge it and clamour for their own recognition. The situation becomes worse when a representative union recognized as bargaining agent, is opposed to the political party in power. Experience has also shown that a number of outside leaders do not have any interest in the affairs of the union, or in the aspirations of the workers whom they represent in bargaining. Thus, there is a need to build up strong internal leadership. The Central Board for Workers’ Education has been doing a commendable job in this direction.

Provision of Elaborate Adjudication Machineries

A network of adjudication machineries established under the Industrial Disputes Act, 1947, and some state acts in the form of Labour Courts, Tribunals, National Tribunals and Industrial Courts, have been in operation for more than half a century. Under these laws, the government is empowered to refer industrial disputes to these authorities, whether the parties like it or not. The adjudication awards are binding on the parties. Resort to strike or lock-out is prohibited during the pendency of disputes before these authorities and the period of operation of the awards. A large number of disputes are referred to these authorities every year and, during their pendency, it is very difficult for the parties to enter into negotiations, although they can jointly request the adjudication authorities to give consent awards. The working of adjudication machineries has revealed many deficiencies from various aspects. It was on account of these deficiencies that V. V. Giri was vehemently opposed to its use and favoured collective bargaining as most appropriate method of settling industrial disputes.

Restrictions on Strikes and Lock-outs

In collective bargaining, right to strike and lock-out is considered essential as the last weapon in the armoury of workers and employers, respectively. Collective bargaining without this right has little significance. In India, considerable restrictions have been imposed on the exercise of this right under the Industrial Disputes Act, 1947 (see Chapter 21), state industrial relations laws and also occasionally, enforced Essential Services Maintenance Act. Experience of the working of the industrial relations in the country shows that majority of strikes in the country have taken place in utter defiance of the statutory restrictions. In a recent decision, of 3 August 2003, the Supreme Court has observed that ‘the trade unions, which have a guaranteed right for collective bargaining, have no right to go on strike’, and that ‘government employees have no fundamental, legal or moral right to go on strike’. It is too early to depict the implications and effects of this decision.

Comprehensive Coverage of Labour Laws

A number of protective, social security and welfare laws have been in operation in the country. These laws cover a wide range of subjects of direct interests of industrial workers such as—to cite a few examples—hours of work, physical working conditions, wages, social security benefits, protection of service, personnel matters, welfare amenities and holidays, among others. Many of these are subjects of collective bargaining in a number of countries. On many occasions, the trade unions in India have pressurized the government to enact pro-labour laws. Only a few trade unions have succeeded in improving upon the minimum standards laid down under labour laws. Had the coverage of labour laws been narrow, the trade unions would have relied more on collective bargaining than on other methods.

Inadequate Unionization

In India, only a small percentage of workers has been organized on a regular basis. Available figures show that less than 15 per cent workers in India are organized, as against about 40 per cent in the United States and around 50 per cent in Great Britain. Side by side, the average size of Indian trade unions is very small when compared to the average size of unions in the United States, Great Britain, France and many other European countries. The financial condition of the Indian trade unions is also poor (see Chapter 6). Moreover, organizations of workers at the industry or regional level are confined only to few industries. These features are not congenial for the growth of collective bargaining in the country.

Other Factors

Some other factors inhibiting the growth of collective bargaining in India have been inadequacy of education among workers, unwillingness on the part of many employers to part with their freedom and to sit along with their workers on the bargaining table, poverty of the workers and masses, and inadequate capacity of the industry to pay.

Despite these hurdles, collective bargaining has increasingly acquired a prominent place in the industrial relations of the country. The policy of privatization and liberalization is likely to give it a boost in coming years.

GRIEVANCE AND GRIEVANCE PROCEDURE

In common usage the word ‘grievance’ denotes something that one thinks is unfair and that one complaints or protests about. In industrial relations and human resource management, the word is mainly used in the context of ‘grievance procedure’ which has acquired considerable significance as grievances not properly handled may lead to wider forms of confrontation. Grievance procedure constitutes an integral part of overwhelming number of collective agreements in the United States.

Meaning of Grievance

It will be relevant here to quote a few scholars who have tried to explain the connotation of the term. According to Michael J. Julius, grievance is ‘any discontent or dissatisfaction, whether expressed or not and whether valid or not, arising out of anything connected with the company that an employee thinks, believes or even feels is unfair, unjust or inequitable’.29 Dale Yoder, who views grievance in the context of its insertion in collective agreements, says, ‘A grievance is commonly defined as a written complaint filed by an employee and claiming unfair treatment. Most grievances arise out of the interpretation or application of the contract’.30 Paul Pigors and Charles A. Myers use three terms: ‘dissatisfaction’, ‘complaint’ and ‘grievance’ in order of their sequence in industrial relations. In their view ‘dissatisfaction’ is anything that disturbs an employee, whether or not he expresses his unrest in words. A ‘complaint’ is a written dissatisfaction brought to the attention of supervisor and, in the unionized firms, the shop steward. They say, ‘In the language of labour relations, and from management’s angle, a grievance is simply a complaint which has been formally presented, in writing, to a management representative or to a union official’.31

Without going into the intricacies of the various views and the contexts in which the word has been used, it will be sufficient here to indicate the basic nature of ‘grievance’ keeping in view the day-to-day experiences in the industrial organizations of the country.

In Chapter 11, two broad categories of industrial disputes have been distinguished—(i) disputes concerning interests or those relating to the creation of specific rights and (ii) disputes concerning implementation of these rights. Rights to the workers may flow from a wide variety of sources such as collective agreements and settlements, industrial awards, court decisions, labour laws and regulations, standing orders, tripartite conclusions, customary privileges and established norms of behaviour. Basically, feeling of denial of these rights by workers, whether actual, apprehended or imaginary, may be construed as grievance.

Specific Causes of Workers’ Grievances

As explained above, the rights of workers emanate from a variety of sources. As such, the specific causes of workers’ grievances may be numerous. Keeping in view the Indian situation, a checklist of the subject matters or causes of workers’ grievances is presented below.

  1. Wages and Compensation Matters
    1. Unfair individual wage-adjustment and fitment.
    2. Improper calculation of piece-wages.
    3. Errors in calculating wages and arrears.
    4. Unfair deductions from wages.
    5. Delay in wage-payment and its methods.
    6. Discrimination in payment of allowances.
    7. Withholding of increments and arrears.
  2. Working Conditions
    1. Unhealthy physical working conditions such as dirty workplace, insufficient lighting and ventilation, polluted environment, exposure to harmful dust, fumes, gas and substances.
    2. Non-supply of safety equipments.
    3. Non-observance of statutory requirements pertaining to health and safety.
    4. Improper maintenance of materials, machines and tools.
    5. Techniques of production and introduction of new methods.
  3. Personnel Matters
    1. Unfair lay-off and retrenchment.
    2. Prejudicial disciplinary action, victimization and wrongful dismissal.
    3. Discrimination in promotion and transfer and supersession.
    4. Inadequate maintenance of service-book and prejudicial entry.
    5. Difficulties in grant of leave.
    6. Wrongful superannuation and retirement.
    7. Unnecessary training.
  4. Supervision
    1. Favouritism by supervisor and foreman.
    2. Harsh treatment by supervisor and superior.
    3. Faulty instructions by supervisor.
    4. Uncalled for interference of supervisor impeding smooth work.
  5. Welfare Amenities and Services
    1. Infringement of statutory requirements relating to amenities at workplace.
    2. Inadequate maintenance of housing and related services like water supply and problems relating to drainage and repair.
    3. Improper maintenance of sanitary conveniences at the workplace.
    4. Unsatisfactory medical facilities.
    5. Defective maintenance of canteen, shelter-room and crèche, and supply of non-standard foodstuff in canteen.
  6. Relations with Co-workers
    1. Ill treatment by fellow workers on narrow considerations such as caste, religion, language and tribe.
    2. Physical assault and abusive language by a fellow workman or his group.
    3. Non-cooperation of fellow workman.
  7. Violation of specif ic provisions of collective agreements, settlements, standing orders, industrial awards, labour laws and regulations and customary privileges.

Types of Grievances

From the point of view of the genuineness or otherwise of the points of dissatisfaction, grievances may be classified into two broad categories, namely, (i) real grievances and (ii) imaginary grievances. Real grievances are those in which the workers have actually been deprived of their established rights and privileges, or the points of their dissatisfaction are genuine. On the other hand, imaginary grievances are those in which the workers have not really been denied their rightful claims in any way, but they feel that these have been denied.

From the point of view of their content, J. Roethlisberger and W. J. Dickson have classified grievances into three types. The first type of grievance relates to tangible objects which can be defined and tested by physical procedures. For example, a worker may be dissatisfied with the faulty machine and equipment, sub-standard materials supplied and so on. The second type is based partly on sensory experience and partly on subjective reactions. For example, a worker may feel uncomfortable with the temperature of the work-room, and considers his job difficult. Even with the same conditions, other workers do not have any complaint. This type of grievance is not easily verifiable by objective procedure as it is related to the worker’s background and his reactions to the prevailing conditions. The third type of grievance involves hopes and fears of the worker. It is rather difficult to verify it objectively. Its verification needs agreed consensus of the persons concerned. For example, a worker may have complaint over favouritism of the supervisor, low rate of remuneration, inadequate consideration of seniority and family testing of merit. Because of intermingling of facts and sentiments involved, this type is very difficult to evaluate and to deal with. The frequency of such grievances is, however, very high.32

What is a Grievance Procedure?

According to P. H. Casselman, grievance procedure is ‘the method and policy set up in an establishment to settle grievances on the part of an employee or group of employees’.33 He further says that a well planned grievance procedure provides: (i) a channel through which a worker may present his grievance, (ii) a procedure assuring a systematic handling of every grievance, (iii) a method whereby the dissatisfied employee can relieve his feelings and (iv) a means of assuring promptness in handling of grievances.34 In contrast to a haphazard or unplanned and informal method of handling grievances, grievance procedure provides for a planned and formal processing of employee grievances in an orderly manner. A grievance procedure specifies the steps involved, the persons to be associated at each step and the method of their selection, the manner in which grievances are to be placed, the extent of authority vested at each level, the sanction behind decisions and the rights and obligations of the parties.

Importance of Grievance Procedure

Establishment of grievance procedure in industrial or other organizations has several advantages, the more notable among these are as follows:

  1. It does away with the uncertainty involved in locating the authority or person to be approached for the redressal of the grievance. In absence of a formalized procedure, there will be no wonder if the aggrieved employee approaches the supervisor, departmental head, manager, union leader and fellow workers all at a time.
  2. Both the workers and the management are relieved of the tension and worry, which might otherwise, would have resulted from haphazard handling of grievances.
  3. As most grievance procedures involve the participation of workers’ representatives and those of the management, the decisions taken have a greater amount of acceptability. These also instil confidence in each other.
  4. A grievance procedure also contains elements of fairness and objectivity. In absence of the procedure, the decision of the authority empowered to take decisions may be arbitrary and biased.
  5. The procedure ensures uniformity in the handling of grievances. All concerned including the aggrieved workers, supervisors, managerial personnel and union leaders know well that grievances would be processed through the established channels, and no other method could be invoked.
  6. As the procedure is generally adopted under collective agreements, statutory provisions, tripartite conclusions or standing orders, it has also the element of permanence.
  7. Grievance procedure also minimizes the time and effort in the processing of grievances. Unplanned handling of grievances involves unnecessary wastage of time and energy.

Grievance Procedure in India

Prior to the enactment of the Industrial Employment (Standing Orders) Act, 1946, bipartite or unilateral arrangements for the redressal of grievances existed in a number of big-sized industrial establishments of the country. The enactment of the Industrial Employment (Standing Orders) Act, 1946, accelerated the pace of the establishment of the procedure even in medium and small-sized establishments. The Act, which normally applies to industrial establishments employing 100 or more workmen (which could be reduced by the central or state governments) requires the employers to frame standing orders on specified matters which inter alia include ‘means of redress for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants’, and get these certified by the Certifying Officer (see Chapter 22). When certified, the standing orders become legally enforceable. Besides, the duties assigned to Welfare Officers appointed under the Factories Act, 1948, include dealing with individual complaints of workers. An amendment of the Industrial Disputes Act, 1947, in 1982 provides for the constitution of a Grievance Settlement Authority by employers employing 50 or more workmen for the settlement of industrial disputes connected with individual workmen. No reference of any dispute is to be made to the conciliation or adjudication authorities or for arbitration unless the dispute has been referred to the Grievance Settlement Authority and its decision is not acceptable to any of the parties to the dispute.

Ever since the coming into force of the Industrial Employment (Standing Orders) Act, 1946, the pace of establishing grievance procedure in industrial establishments was accelerated but difficulties were encountered in its establishment in absence of specific guidelines. The Act, however, provides that so long as certified standing orders are not in operation, Model Standing Orders framed by the central or state government will be applicable. The Model Standing Orders framed under the central rules state, state, ‘All complaints arising out of employment including those relating unfair treatment or wrongful exaction on the part of the employer or his agent, shall be submitted to the manager or other person specified in this behalf with the right to appeal to the employer’.35 Thus, The Model Standing Orders lacked specific details.

The Model Grievance Procedure

The Code of Discipline adopted by the Indian Labour Conference in 1958 inter alia states that the managements and unions agree that ‘they will establish upon a mutually agreed basis a grievance procedure which will ensure a speedy and full investigation leading to settlement and that they will abide by various stages in the grievance procedure and take no arbitrary action which would bypass this procedure’ (see Chapter 12). Ultimately, the matter came up for consideration before the Indian Labour Conference which formed a sub-committee to work out the details. On the basis of the suggestions made by the sub-committee, the Indian Labour Conference adopted the Model Grievance Procedure in 1958.

The main contents of the Model Grievance Procedure are as follows:

  1. Grievance Machinery
    1. A grievance machinery will be required, to be set up in each undertaking to administer the grievance procedure.
    2. For the purpose of constituting a fresh grievance machinery, workers in each department or a group of departments in small undertakings, shall elect departmental representatives and forward the list to the management. Where unions in the undertaking are in a position to submit an agreed list, recourse to election is not necessary. Where works committees are functioning satisfactorily, the workers’ members may represent workers in the machinery.
    3. The management is required to designate the persons for each department who will be approached at the first stage and the departmental heads for handling grievances at the second stage. Two or three departmental representatives of workers and two or three departmental heads nominated by the management will constitute the grievance committee.
  2. Grievance Procedure

    The model grievance procedure suggests that while adaptations have to be made to meet special circumstances, the procedure normally envisaged in the handling of grievances should be as follows:

    1. An aggrieved employee is required first to present his grievance verbally in person to the officer designated by the management for the purpose. An answer will have to be given within 48 hours of the presentation of the complaint.
    2. If the worker is not satisfied with the decision of the officer or fails to receive an answer within the stipulated period, he will either personally or accompanied by his departmental representative, present his grievance to the head of the department concerned. The departmental head is required to give his answer within 3 days of the presentation of the grievance. In case of his failure to do so, the reason for delay has to be recorded.
    3. If the decision of the departmental head is unacceptable to the worker, it will, on the request of the worker, be forwarded to the grievance committee, which is required to send its recommendations to the manager within 7 days of the worker’s request. In the event of delay, the reasons have to be recorded. It will be incumbent on the management to implement the unanimous recommendations of the grievance committee.

      In the event of differences of opinion among the members of the grievance committee, the views of the members along with relevant papers have to be placed before the manager for final decision. In either case, the final decision of the management has to be communicated to the workman concerned, by the personnel officer within 3 days from the receipt of the recommendations of grievance committee.

    4. In case, the workman is not satisfied with the final decision of the management, he has the right to appeal to the management for revision. He has also the right to take a union official with him. The management is required to communicate its decision within 7 days of the workman’s revision petition.
    5. If no agreement is possible, the union and the management will refer the grievance to voluntary arbitration for decision.

The model grievance procedure also lays down the rights and obligations of workmen and persons associated with the procedure. The more notable among these are as follows:

  1. So long as the grievance is being processed under the procedure, the conciliation authority has to refrain from intervening.
  2. If a grievance arises out of an order given by the management, the order has ordinarily to be complied with before the concerned workman invokes the procedure.
  3. The workers’ representatives on the grievance committee have the right of access to relevant documents relating to the grievance, but the management may refuse to show confidential documents.
  4. There should be time limit within which an appeal can be made from one step to the other. The holidays intervening the period, are not to be counted.
  5. Management is required to provide the necessary clerical and other assistance for the smooth functioning of the grievance machinery.
  6. The above procedure is not to apply in case of any grievance arising out of discharge or dismissal of a workman. In such a case, the discharged or dismissed workman has the right to appeal either to the dismissing authority or to a senior authority specified by the management within a week from the date of discharge or dismissal, as the case may be.

Guiding Principles for Grievance Procedure

The model grievance procedure also contains some suggestions regarding the principles to be followed in a grievance procedure. It recognizes that it may not be possible to apply all these principles in respect of each and every industrial unit, but suggests that all units should endeavour to conform, as much as possible, to these principles. The main principles suggested under the Model Procedure are as follows:

  1. Conforming with Existing Legislation

    A grievance procedure is a part of the integrated scheme intended to promote satisfactory relations between employers and workers. The procedure should be designed to supplement the existing statutory provisions. Wherever practicable, it should make use of such machinery as is already provided by legislation. If a grievance arises out of an order of the management, the operation of the order need not be held up till the grievance machinery is completely exhausted.

     

  2. Need to Make the Machinery Simple and Expeditions

    (i) As far as possible, grievances should be settled at the lowest level. (ii) No matter should ordinarily be taken up at more than two levels. (iii) Different types of grievances may be referred to appropriate authorities. (iv) A grievance must be redressed as expeditiously as possible and towards this end, the employer, in consultation with workers should decide upon the time limit required for settling a grievance.

     

  3. Designation of Authorities:

    The workmen must know the authorities to be approached, and it should be incumbent on the management to designate the authorities to be contacted at various levels. The model procedure also recognizes that it will be useful to classify grievances as those arising from personal relationships, and others arising out of conditions of employment. In the former case, a grievance should be taken up, in the first instance, with the authority in the line management immediately above the officer against whom the complaint has been made. Other grievances should be taken up, in the first instance, with the authority designated by the management, and thereafter, a reference may be made to the grievance committee.

    The Model Grievance Procedure, the statutory provisions of the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947 and the guidelines contained in the Code of Discipline provided sufficient impetus to the establishment of grievance procedure in industrial establishments of the country. Besides, grievanceprocedure has also been established in a number of organized industries under collective agreements.

GRIEVANCE PROCEDURE IN SELECTED INDUSTRIAL ESTABLISHMENTS IN INDIA

Grievance Procedure in the Tata Motors Ltd.

The grievance procedure in operation in Tata Motors Ltd., Jamshedpur is in essence that laid down in the settlement of 1989 between TELCO and Telco Workers’ Union. The procedure specifies the issues on which grievances may arise and processed through the procedure. These includes issues relating to: (i) terms and conditions of employees in the day-to-day working, (ii) company rules such as promotion rules, (iii) discipline and conduct as between the management and the employees, (iv) punishment, (v) privileges or provisions of amenities and (vi) custom, usage and precedents. The procedure makes it clear that a collective agreement/settlement between the union and the company is excluded from the scope of the grievance procedure. Similarly, any decision of the grievance procedure machinery may be superseded by an agreement between the union and the company.

The grievance procedure in the company involves four main stages. These are described below.

Stage 1: In this stage the grievance has to be conveyed orally by the workman to the deputy superintendent/superintendent, who is required to investigate into the grievance and give his decision orally within 2 working days.

Stage 2: If the workman is not satisfied with the decision, he can raise the grievance in writing in the prescribed form within 7 days of the decision at the first stage. The form duly filled in has to be forwarded to the assistant manager/manager of the department, who is required to discuss the grievance with the workman and the deputy superintendent/superintendent concerned. He will make further investigation into the matter and will also hold discussions with the Union Committee Member of the department. The assistant manager/manager is required to give his reply in writing to the workman within 7 working days.

Stage 3: If the workman is not satisfied with the decision at Stage 2, he will be given another form which has to be duly filled in and submitted to the divisional manager through the head of the personnel department within 10 days of the decision at Stage 2. The divisional manager is required to refer the grievance to the Divisional Grievance Committee consisting of divisional manager as the chairman and 6 other members with equal representation from the management and the union. The divisional grievance committee will meet as often as necessary, but at least once a month.

The divisional grievance committee is required to examine the grievance expeditiously and submit its recommendations to the divisional head within 15 working days from the date of the receipt of the grievance. He is required to communicate the decision of the committee to the workman within 7 days after concurrence by the appropriate authority. The unanimous decision of the committee is final, unless objection is raised either by the management or the union within 3 days. When the recommendations of the committee are not unanimous or have works-wide implications or not acceptable to the management or the union, the fourth stage is invoked.

Stage 4: This stage involves referring of the grievance to the central works committee consisting of the chairman nominated by the company and 10 other members with equal representation from the management and the union. Appeal against discharge/dismissal has to be addressed to the chairman within 30 days of the order of discharge/dismissal. The central works committee is to confine itself to the determination of the issue on a purely objective basis. It is also required to carefully consider all relevant facts and obtain additional information, if needed. The central works committee will meet as often as necessary but at least once in 3 months.

The central works committee is required to examine the grievance expeditiously and submit its recommendations to the general manager within 15 working days from the date of receipt of the grievance. The decision of the committee has to be communicated to the workman through the concerned divisional manager. In case no unanimity is arrived at in the central works committee or where important principle or policy is involved and the management feels that the recommendations of the committee require further consideration, the matter may be discussed between the general manager of the company and the general secretary of the union.

Normally, the above procedure is to be strictly followed in respect of all individual or collective grievances of routine nature. In exceptional cases, however, grievances involving a number of workmen or those related to principle or policy or important matters needing immediate action may be taken up by the union with the general manager.36

Grievance Procedure in Larsen & Toubro Ltd., Powai Works, Mumbai

The grievance procedure in operation in Larsen & Toubro Ltd., Powai Works, Mumbai is based on the memorandum of settlement between the company and Bharatiya Kamgar Sena reached in May 2007. The settlement specifies three types of grievances, namely, A-1, A-2, A-3 and specifies separate grievance procedure for each of them.

  1. Grievance Procedure for A-1 Type of Grievances

    A-1 type of grievances includes those relating to the machinery, tools and equipment, working conditions, materials, assignment of work, transfer from one machine to another, unfair treatment by co-worker, classification, leave, etc. The stages involved in the procedure are as follows:

    Stage 1: A workman having a grievance will approach in the first instance his assistant foreman/foreman/supervisor and bring the matter to his notice verbally. The authority concerned is required to look into the matter and try to redress it, if possible, then and there. If the workman is not satisfied, he is required to institute the formal grievance procedure by presenting his grievance in writing in the prescribed form to the aforesaid authority, who will endeavour to redress the grievance as soon as possible. In case of his inability, he will forward the case paper with his remarks to the departmental head within 5 days of its receipt from the workman.

    Stage 2: The departmental head is required to investigate the matter himself and give a reply to the workman within 7 days. The departmental head at his discretion may consult the Powai works personnel. If the grievance is already under consideration of the works committee, the departmental head may refer the matter to the works committee for decision. If the workman is not satisfied with the decision of the departmental head, the matter will be referred to the deputy general manager/general manager.

    Stage 3: The deputy general manager/general manager is required to investigate into the matter himself and give a reply to the workman within 10 days. If the workman is not satisfied with the reply, he may take such constitutional measures as may be open to him.

    The union may take up the grievances of the workman with the joint general manager (Powai Services). In case the union is not satisfied with the outcome, it may take such constitutional measures as may be open to him.

     

  2. Grievance Procedure for A-2 Type of Grievances

    A-2 type of grievances relates to non-implementation of statutory provisions or terms of settlement, wrong calculation of wages, allowances, overtime, etc., welfare amenities such as canteen, medical facilities, transport, etc. Grievance procedure for this type of grievances also involves three stages.

    Stage 1: It is similar to that applicable to A-1 type of grievances, but the case paper is to be forwarded to the Powai works personnel.

    Stage 2: The Powai works personnel is required to investigate the case, call for further comments from the departmental head and give a reply within 5 days of the receipt of the grievance. If the workman is not satisfied with the reply, he may request the Powai works personnel to forward the matter to the joint general manager (Powai Services), which has to be complied with.

    Stage 3: The joint general manager/general manager is required to give his reply within 7 days. If the worker is still dissatisfied, he may take such constitutional measures as may be open to him.

     

  3. Grievance Procedure for A-3 Type of Grievances

    A-3 type of grievances relates to matters normally dealt with the charter of demands, such as, free or subsidized uniforms, safety shoes, gum boots, rain coats, milk, vitamin tablets, etc., wrongful extraction of work, unfair treatment by immediate supervisor and others brought up collectively by groups of workers. Grievance procedure for such grievances involves 4 stages.

    Stage 1: This stage is similar that applicable in the case of A-1 type of grievances.

    Stage 2: In this stage, the departmental head is required to investigate into the matter himself and give his reply to the workman within 7 days. In case the workman is not satisfied with the reply, the matter will be referred to the Powai Works personnel.

    Stage 3: This stage is similar to that applicable to Stage 2 of the A-2 type of grievances.

    Stage 4: This stage is similar to that applicable to Stage 3 of the A-2 type of grievances.37

    Thus, whereas there is a uniform grievance procedure in the Tata Motors Ltd., Jamshedpur applicable to all types of grievances, in the Larsen & Toubro Ltd., different types of grievance procedures are applicable for different categories of grievances. The grievance procedure in the Tata Motors Ltd., also covers disciplinary cases including discharge and dismissal, but those in operation in Larsen & Toubro are silent over the matter. Besides, in the Tata Motors Ltd., the union or its representatives are associated with the redressal of grievances at most of the stages, but in Larsen & Toubro Ltd., the role of the management is more predominant at most of the stages. The grievance procedures in both the companies set the time limit for the disposal of grievances at each stage and entrust the major responsibility for the redressal of grievances on to the immediate supervisor/foreman. The grievance procedures in operation in the two companies do not provide for arbitration at the apex of the procedures which is in sharp contrast to the procedures in operation in the United States, where arbitration constitutes the last step at almost all levels of grievances procedure.

GRIEVANCE PROCEDURE IN THE UNITED STATES

In the United States, there has been a long and strong tradition of establishing formal grievance procedures under collective agreements, the number of which is about 200,000 at present. Although there are variations in the structure of the procedures, these may be placed in two broad categories: (i) procedures prevalent in small and non-unionized firms, and (ii) those in operation in big and organized firms. The broad features of both the types of grievance procedures are described below.

Grievance Procedure in Small and Non-unionized Firms

In small and non-unionized firms, the procedure generally involves 2 to 4 steps.

 

Shop Steward

An official representative of a union or of the workers of an establishment appointed by the labour group to look after the collection of dues or to represent labour in the discussion of grievances with the employer.

Step 1: In Step 1, the aggrieved employee generally holds discussions with his fellow employees, shop representative or the immediate supervisor. If the employee becomes satisfied, the matter ends here. In case the employee is not satisfied with the outcome of the discussions, the grievance is taken to Step 2.

Step 2: In this step, the aggrieved employee puts his complaint in writing usually in prescribed form stating the time, place, nature of grievance and other relevant particulars, and places it before the immediate supervisor/foreman. He may take the help of the shop steward or fellow workers. The supervisor may turn down the grievance and refuse to take any action or may agree with the employee to refer the matter to arbitration for decision. If the employee is not satisfied with the response of the supervisor, recourse to Step 3 is taken.

Step 3: In this step, the matter may go the plant manager or grievance committee/shop committee consisting of representatives of employees and management. If the employee is not satisfied with the decision of the plant manager or recommendations of the committee, the parties may agree to refer the matter to arbitration by an impartial person.

Step 4: The last step in the procedure is recourse to arbitration. Both the parties generally commit themselves to abide by the award of the arbitrator. A decision to refer the grievance to arbitration may also be taken at Steps 2 and 3.

Grievance Procedure in Big and Unionized Firms

The preliminary steps in big and unionized firms and those in the small and non-unionized firms are more or less similar, but there are moderate variations in regard to the persons to be associated, composition of the committees and processes involved. However, subsequent steps in the unionized firms have their own distinct features. The most common steps in grievance procedure in big and unionized firms are described below.

Step 1: In this step, the employee having a grievance holds informal discussions with union representative in the shop or shop steward and immediate supervisor. If the supervisor does not agree to take action on the grievance or rejects the employee’s plea or the employee is dissatisfied with the discussions, the grievance is taken to Step 2.

Step 2: In this step, the grievance becomes formalized. The employee makes a written complaint to the immediate supervisor usually accompanied by the union representatives in the shop or shop steward. Generally, the complaint is made in a grievance form in which the employee furnishes the required particulars such as time, place and nature of offending action or situation. The supervisor has to give written answer within a specified period explaining the grounds on which the employee’s grievance was dismissed. If both the parties agree, the grievance may be referred to arbitration.

Step 3: In the unionized firms, this step generally involves reference of the grievance to a grievance committee or shop committee consisting of representatives of the management and trade union in the plant. The management’s representatives are generally from above the rank of first line supervisors. The committee endeavours to work out a solution, and if it satisfies the employee, the matter ends here. In case no agreement is reached, the representatives may decide to send the matter for arbitration or to take up the grievance in the next higher step.

Step 4: In this step, the grievance reaches the top level of the local management and the highest level of union officers in the plant who are generally known as business agents. The personnel/industrial relations manager is also associated with the settlement of grievance at this level. The managers are generally paralleled by union officials in a similar hierarchy. In many procedures, this is the final step with the option of referring the grievance to arbitration. The parties may agree to abide by the award of the arbitrator in advance. However, in many highly organized firms, the grievance may be processed in the next higher step.

Step 5: If the outcome of Step 4 does not succeed in satisfying the complainant, the grievance is referred to the top management at the corporate level and international or national level officers of the union. If no solution can be reached in the course of discussions, the only option left is to refer the grievance to arbitration.

Step 6: Voluntary arbitration is the last step in an overwhelming majority of grievance procedures in the United States. This is true for both the big and small firms and unionized and non-unionized industries. This step involves an appeal to an impartial arbitrator or umpire whose decision the parties agree in advance to accept as final and binding.

Ever since the establishment of collective bargaining on a firm basis, grievance procedures in the country have come to operate on a very wide scale. Although there are variations in details in particular establishments, they generally follow the basic pattern explained above. In both small and big firms, the role of the immediate supervisor/foreman at the bottom, and arbitration at the apex has been significant.

DESIRABLE FEATURES OF A SUCCESSFUL GRIEVANCE PROCEDURE

On the basis of the study of working of grievance procedures in the United States, scholars have tried to identify the desirable features of a successful grievance procedure. Pigors and Myers identify the following main features of a desirable grievance procedure.

  1. Fairness: All managerial personnel and supervisors associated with the handling of grievances must demonstrate fairness in their approach and action. They should refrain from having discriminatory and biased attitude towards the aggrieved employee and his grievance even though it may not be genuine. The management should recognize the employee’s right to make complaint and also his right to be represented by union officers. It is also desirable that the representatives of both the management and trade unions should be willing to refer the grievance to arbitration.
  2. Clarity: Another desirable feature of a successful grievance procedure is the element of clarity. There must be definite provisions relating to such issues as to whom the grievance has to be addressed, the manner in which the grievance is to be placed, the time limit for the completion of deliberations in each step and so on. Unless these provisions are set up, made known and consistently adhered to, it is unrealistic to expect that employees will cooperate by expressing their dissatisfactions to the appropriate authority, in the correct form, and at a suitable time.
  3. Simplicity: The grievance procedure should be simple so that employees, even the new ones, can easily understand it. This element is particularly desirable in the case of illiterate and less educated employees. There must be effective communication between the representatives of employees and those of the management.
  4. Promptness: Promptness in the disposal of grievances is important both for the aggrieved employee and the management. Lingering of the process may lead to accumulation of frustration and dissatisfaction in the employee. It may spread to fellow employees also. Delay in the disposal of a grievance magnifies dissatisfaction and ultimately other fellow employees also start developing mistrust in the management. Unnecessary delay in the disposal of one grievance may give birth to another and a sort of vicious circle is created.38

Prompt handling of grievances and adoption of workable grievance procedure is important for industrial undertakings in India, particularly in small- and medium-sized ones. In the industrial relations situation in the country characterized by preponderance of small- and medium-sized establishments, fragmented trade unions and union rivalry, inadequate development of bilateral collective bargaining, extensive governmental intervention in the domain of industrial relations and domination of trade unions by outsiders, effective and workable grievance procedures are all the more important.

SUMMARY
  1. Collective bargaining is the process in which the terms and conditions of employment are determined by negotiations between the employer and his workmen. The word ‘collective’ generally represents the workers’ side, who bargain mainly through trade unions or in combinations.
  2. Collective bargaining generally leads to the improvement in conditions of labour, raising of labour standards, putting a check on the autocracy of employers, promotion of durable industrial peace, enhancement of managerial efficiency and development of rules governing terms and conditions of employment in industry.
  3. The examination of the bargaining processes has led to the development of three important theories of collective bargaining: marketing theory, governmental theory and managerial theory. The marketing theory looks upon collective bargaining as a means of contracting for labour. The governmental theory views collective bargaining as a constitutional system in industry. The managerial theory regards collective bargaining as a method of business management.
  4. Collective bargaining may take place at various levels such as locality, area, region, industry and nation. The main factors influencing bargaining units and levels include structure of union organization, nature of ownership of enterprises, and the contents of industrial relations laws and governmental policy.
  5. Collective bargaining, which was initially confined mainly to the question of wages, has now come to cover wide varieties of subjects relating to the terms and conditions of employment such as wages and allowances, hours of work, physical working conditions, fringe benefits, incentive payments, welfare amenities, job security, social security, promotion, discipline, training, leave, technology and technological changes, productivity, environment and so forth. The subject matters of collective bargaining have expanded during the course of time and are still expanding.
  6. The main features of productivity bargaining are: (i) its concern with overall cost performance of the enterprise, (ii) being based primarily on management initiative, (iii) being a two-way process and presenting a win–win situation, (iv) being based on mutuality of interest and (v) its continuity as a process. The main benefits of productivity bargaining include: (i) its contribution towards changing the emphasis from confrontation to cooperation, (ii) reduction of irritating features in work-environment, (iii) more effective utilization of resources, (iv) development of employee participation and a problem-solving approach, (v) development of internal leadership in unions and (vi) ensuring enhanced earnings and benefits to workers.
  7. With a few exceptions, collective bargaining in India has developed mostly within the framework of labour laws and tripartite conclusions. The main legislative measures influencing the course of collective bargaining in the country have been: Industrial Disputes Act, 1947, Industrial Employment (Standing Orders) Act, 1946, state industrial relations laws and Trade Unions Act, 1926. The Code of Discipline has also considerably influenced certain aspects of collective bargaining in the country. Most collective agreements in the country take the form of ‘settlements’ resulting from conciliation proceedings. Settlements have a legally binding character, whereas bilateral collective agreements are not legally enforceable documents. In a way, tripartite bodies such as Indian Labour Conference, Standing Labour Committee, Industrial Committees and similar other bodies may also be said to be forums of bargaining.
  8. Grievance is any discontent or dissatisfaction, whether expressed or not and whether valid or not, arising out of anything connected with an enterprise that an employee thinks, believes or even feels is unfair, unjust or inequitable. Grievances generally arise from the actual or imaginary denial of rights available to workmen from various sources such as labour laws and regulations, collective agreements, standing orders, industrial awards, and customary privileges and practices. Like industrial disputes, grievances may arise on a number of issues. Grievances, if not properly handled, may give rise to wider confrontation and conflict.
  9. Grievance procedure is the method and policy set up in an establishment to settle grievances on the part of an employee or group of employees. Establishment of grievance procedure in industries has several advantages including its contributions to: (i) removal of uncertainty involved in locating the authority to be approached for redressal of grievance,(ii) relieving both the workers and management from tension and worry, (iii) encouragement to participation of workers’ representatives in taking decision, (iv) ensuring fairness and objectivity in taking decisions and (v) minimization of time and effort in the processing of grievances.
  10. The main impetus to the establishment of formal grievance procedure in Indian industries has come from the Industrial Employment (Standing) Orders, Act, 1946, Industrial Disputes Act, 1947, Code of Discipline (1958) and the resolutions of the Indian Labour Conference and Standing Labour Committee. With a few exceptions, grievance procedures in most of the industrial establishments in the country have been set up under settlements reached between the trade unions and management representatives in the course of conciliation proceedings. The particular procedures vary in detail, but most of these specify the grievances to be processed through the procedures, the stages involved (generally 3 to 4 in organized establishments) and the extent of association of workers’ representatives at various stages. However, unlike the practice in the United States, grievance procedures in the country do not generally provide for arbitration as the last step in any of the stages involved. In the United States, where grievance procedure constitutes an integral part of most of collective agreements, the steps involved in small and non-unionized firms vary between 2 and 4, and in big and unionized firms between 4 and 6.
QUESTIONS FOR REVIEW
  1. Define ‘collective bargaining’ and bring out its importance for workers, management and economy.
  2. Explain the factors influencing the units and levels of collective bargaining.
  3. Briefly describe the important theories of collective bargaining.
  4. Give a brief description of the growth of collective bargaining in India along with the hurdles in its way.
  5. Explain the characteristics of productivity bargaining, its advantages and limitations.
  6. What is ‘grievance procedure’? Explain its advantages and desirable features of a successful grievance procedure.
  7. Briefly describe the model grievance procedure adopted by the Indian Labour Conference.
  8. Describe in detail the grievance procedure in operation in an industrial establishment you are acquainted with. Suggest measures for making it more acceptable and effective.
KEY TERMS

 

Bargaining agent

Directive management

Bargaining unit

Feasibility study

Kaizen

Value stream mapping (VSM)

5-S

Shop steward

Case Study 1

What are the various levels of collective bargaining?

In 2005, the collective agreements were reached between the managements and trade unions in a number of industries across the country. Most of these agreements took the form of settlements under the Industrial Disputes Act, 1947. Some of these collective agreements included (i) Hindustan Motors Ltd. (Hooghly Works) and Hindustan Motors Workers’ Union. (ii) Jute Mill owners’ Association, West Bengal and West Bengal Jute Mills Workers’ Federation. (iii) Kolkata Printing Press Owners’ Association and Kolkata Printing Presses Employees’ Union. (iv) Port Trust of India and All India Port and Dock Workers’ Federation. (v) Jai Engineering Works, Belur and West Bengal Engineering Federation. (vi) Coal India Ltd. and Raniganj Coalfields Employers’ Union and (vii) Airport Authority of India and Indian Airport Authority Employees’ Union.

Questions

Why did most of the collective agreements take the form of settlements?

What was the level of collective agreement in the Hindustan Motors Ltd.?

How will you specify the levels of collective agreements in jute mills, printing presses and engineering works?

At what levels did the agreements in airports and coal mines take place?

Case Study 2

Different stages in grievance procedure

In a large-scale steel plant, the grievance procedure in operation specifies the subjects coming under the purview of the procedure. These include: amenities and services, compensation, fines, increment, leave, misconduct, discharge and dismissal, promotion, safety appliances, transfer, victimization and increment. The procedure provides for three stages through which grievances could be processed. In the first stage, the employee having a grievance is required to meet his supervisor/foreman and talk it over to him. If the worker is satisfied, the matter ends here. If he is not satisfied, he has to place his grievance in writing in the prescribed form to the supervisor/foreman who is required to give a written answer within 3 days.

If the worker is still dissatisfied, he may place his grievance in writing before the head of the department concerned. The head of the department is required to discuss the issue with the employee and the supervisor/foreman concerned and send his reply within 3 days of the receipt of the complaint.

If the worker is not satisfied with the outcome at this stage, he may appeal in writing to the zonal works committee within 15 days of the receipt of the complaint. Unanimous decision of the zonal works committee is final. If no unanimity is reached in the committee, the worker is free to make any constitutional measure open to him.

Questions

Why does the first stage provide only for oral discussions with the supervisor/foreman?

What is the significance of setting a time limit at every stage of the grievance procedure?

At which of the stages are the union’s representatives involved in the deliberations?

What is the status of arbitration in the procedure?

In what ways does the procedure in the steel plant differ from the model grievance procedure in regard to matters concerning discipline, discharge and dismissal?