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Author: Astha Rai, B.A.,LL.B. from New Law College, Bharti Vidyapeeth Deemed University, Pune


The industrial sector has evolved to great lengths since World War II and has transformed for the better and worse. Here we are going to emphasise one of the emerging concepts in the said field, called, Collective bargaining- a form of dispute resolution mechanism between the Company/Industry and the labour/trade union. There seemed to be no effective mechanism or guaranteed procedure to resolve disagreements between industries and their workers before the emergence of collective bargaining. Now, collective bargaining is not just a mere tool for industrial governance but is a part of collective contract compliance and a crucial part of labour law, globally. The primary objective of this article is to provide a succinct overview of the structure and procedure of collective bargaining and how to reach an agreement.

Concept of Collective Bargaining

Beatrice Potter originated the concept of collective bargaining, as indicated in her publications The Co-operative Movement in 1891 and Industrial Democracy in 1897, where it was classified as an alternative to individual negotiation. The term "collective" refers to unified initiative rather than individual action. In comparison to the entire workforce, an individual worker's viewpoint is insubstantial. As a result, collective action is needed to establish acceptable parameters for all employees' grievances, a balance that may be unduly skewed. It entails representational action on behalf of a group whereas the term "bargaining" is synonymous with negotiation, in this context.

Preconditions for Collective Bargaining

Certain conditions need to be satisfied for a successful collective bargain to take place which are as follows:

1. A strong worker's union/trade union since if the workers' association is shaky, corporations can argue that it does not represent workers and refuse to move ahead. Collective bargaining will not be likely to succeed unless workers can create compelling and stable unions.

2. Acknowledgement of unions of both workers and employers' is essential for a successful negotiation to take place.

3. Mutual consent of both the parties for initiation of such negotiation proceedings.

4. Determining the level of bargaining, such as whether the transactions are limited to the enterprise, industrial, regional, or national level. In each scenario, the implementation, compliance, and enforcement clauses vary.

5. Classifying the ambit and content of Negotiation, or the matters that will be addressed during the process.

Forms of Collective Bargaining

1. Single Plant Bargaining: Bargaining could take place between a single employer and a single union in this arrangement. In both the United States and India, this kind is prevalent. It’s prevalent in the United States of America, Canada, Japan and India, among others.

2. Multiple Plants Bargaining: In this format, Bargaining may take place between a single corporation with multiple plants and workers employed in all of those plants. Workers negotiate with the common employer through various unions in this scenario.

3. Multiple Employer Bargaining: In this form of bargaining, all unions in a given industry bargain with the employer's federation in that industry through their federation. Both at the local and regional levels, it is conceivable. The textile sector in India is one example of this type of industry-­wide negotiation.

Procedure/ Process

To begin, one must meet the pre-requisites listed above to effectively negotiate the conditions.

1. Registration of Trade Union: The first step to move forward with such negotiation is to register the trade union by Section 4 of the Trade Unions Act, 1926, which states that any seven or more members of a Trade Union may seek for registration under this Act by signing their names to the Trade Union's regulations and otherwise conforming with the Act's registration criteria. On the date of application for registration, at least 10% or one hundred of the workmen engaged or employed in the establishment or industry with which it is associated are members of such Trade Union. Then, in line with Section 5 of the Act, an application for registration is submitted to the Registrar. Once the union has been acknowledged as the bargaining representative, each employee is protected by the negotiated contract and is required to obey the regulations.

2. Charter of demands: After fulfilment of the pre-requisites, the trade union will inform them about the commencement of collective bargaining negotiations. The trade union delegates will next prepare a charter of demands that will comprise of the problems such as pay and allowances, bonuses, working hours, benefits, holidays, and other concerns associated with employment and workplace conditions. In limited circumstances, an employer can also notify and commence negotiations with a trade union. When numerous unions are involved, the employer normally prefers a common charter of demands, but individual unions are free to submit their charters.

3. Initiation of Negotiations: After the trade union has submitted the charter of demands, the next step of the process is negotiation. To achieve a mutual understanding, both the employer and the trade union will make efforts to offer settlement proposals to their benefit. Although, before the initiation of negotiation proceedings, both the parties prepare by gathering information, devising policies, and determining a bargaining strategy. If no feasible solution to the parties' disputes can be found, even with the aid of a third party, the trade union may opt to go on strike. Furthermore, if there are multiple trade unions involved, the negotiations will take longer than usual.

4. Collective Bargaining Agreement: Thereafter, a collective bargaining agreement will be put in place and finalised, outlining the terms of employment as well as the working arrangements and atmosphere for the workforce in the sector. It might be drafted as a bipartite agreement, a settlement memorandum, or a consent award.

Now in case, the negotiations fail, here’s the procedure that will follow:

5. Strikes: The union has the choice of going on a strike if both parties are unable to strike a deal due to mutual disagreement, as specified under the Industrial Disputes Act 1947. Nonetheless, the IDA conjointly offers that the general public utility sector staff should provide six weeks’ notice of a strike, and will strike after fourteen days from the date of providing the notice.

6. Conciliation: When the conciliation officer will get a notice of strike or lockout, the process of conciliation commences. The state government may assign a conciliation officer to probe the claims, mediate, and facilitate resolution during the cooling-off period (fourteen days duration after the serving of the notice). During the pendency of such conciliation, employees are forbidden from protesting. The said proceeding can end up with either a settlement offer or no settlement offer or the case being sent to the labour court or an industrial tribunal.

In case, the case gets referred to the labour court or tribunal then according to Section 7A of the Act, prolonged industrial conflicts including strikes and lockouts, be resolved by a state's labour court or industrial tribunal whereas Section 7B establishes national tribunals to address grievances involving national interests or matters involving more than two countries.

Types of Collective Bargaining Agreement

Now that we are familiar with the procedure of collective bargaining negotiations, it is crucial to have a look at the types of the collective bargaining agreement. In India, collective bargaining agreements are primarily divided into three categories.

1. Bipartite Agreements are drafted as a result of mutual agreement between the employer and the workers union and are legally binding as per the Industrial Disputes Act.

3. Settlements, unlike bipartite agreements, are tripartite since they are reached through a conciliation process including the employer, the labour union, and the conciliation officer. It should be highlighted that such an agreement is the result of specific disagreements. If the officer believes that the parties' positions have been reconciled and that an agreement is possible during the reconciliation process, he may exit. If the parties reach an agreement after the officer's departure, it is reported to the officer during a certain time frame and the issue is settled.

4. Consent Awards are agreements signed while a dispute is being adjudicated by the adjudicatory authority. The authority's award includes such an agreement, which, despite being formed voluntarily by the parties, becomes legally binding under the authority's award.


By providing employers with an authorised and represented partner with whom to negotiate, the agreement creates channels for resolving conflicts at both the factory and sectoral levels. These techniques are expected to minimise the occurrence of industrial action such as strikes. Three key acts together establish a framework in which sector unions and management can engage in collective bargaining. The Trade Union Act (1926), and the Industrial Employment Act (1948) and the IDA are the three statutes of consideration. These three statutes viewed combined, allow employees to establish unions and bargain with employers on matters involving their employees and physical work environment conditions.


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