COLLECTIVE BARGANING

The conflict between the management and the employee is inherent in an industrial
society. One argues for more investment and profits while the other argues for better standard
of living. These two conflicting interests can be adjusted temporarily through the principle of
"give and take", The principle of give and take has been infused in the principle of collective
bargaining. The phrase "collective bargaining" was coined by British labor reformers Sidney
and Beatrice Webb of Great Britain which was the “home of collective bargaining” in the
1890. The idea of collective bargaining emerged as a result of industrial conflict and growth
of trade union movement and was first given currency in the United States by Samuel
Crompers. In India the first collective bargaining agreement was conducted in 1920 at the
instance of Mahatma Gandhi to regulate labour management relation between a group of
employers and their workers in the textile industry in Ahmadabad

Gokulesh Petroleum P. Ltd. vs Himalaya R. Shah on 26 February,

CITATION: 2000 (84) FLR 641,
FACTS: The petitioner is the owner of Gokulesh Petrol Pump and had employed
respondent Himalaya R. Shah. His services were terminated with effect from 9.7.94 without
complying with the provisions of the Industrial Disputes Act as to the retrenchment. His
services were continuous for a period of more than one year. This dispute was referred to the
Labour Court, Ahmedabad. At the time of hearing it was urged by the petitioner employer
that by written compromise dated 25.7.97 the dispute has been settled out of Court. The
workman had accepted in full and final settlement of his claim a sum of Rs. 7301/- which was
paid to him and therefore no dispute survives. A compromise deed executed on stamp of Rs.
20/- which was purchased on 24.7.95 signed by the workmen and one Pankaj R. Muravala
authorised representative of the employer and an affidavit on Rs. 10/- stamp of the same date
sworn by the workman before the notary acknowledging the fact of compromise and receipt
of payment was filed. Compromise deed was also verified by Notary. The fact that these
documents contained the signatures of the workmen were not denied. However it was
asserted that the signatures were obtained under duress and it was not a compromise with the
free will of the workman therefore not binding on him. He also denied to have received any
consideration stated in the document. The Labour Court found that the document in question
was executed under duress and was not in proper form inasmuch as it was not attested by two
witnesses and it has not been arrived at before the Court but outside the Court is not binding.
On examining the case of the workman on the merit of termination order, finding it to be a
case of illegal retrenchment, the Labour Court ordered reinstatement with 50% backwages by
his award dated 3.12.97. That award is under challenge in this petition.

ISSUES:
Whether employer has appeared in person before conciliation officer is wholly irrelevant to
consider the validity of plea of consent under coercion or of free will, during the course of
pending proceeding before Labour Court?
REASONING:
In the context of Section 2-A where the dispute is individual the right of an individual to
withdraw from the dispute at his free will by negotiating the terms which is best suited to him
in individual capacity obviously cannot be put to same stress to which settlement arrived at
between the union representing all or majority of workmen and employer to safeguard the
interest of a body of workmen which requires greater amount of caution and sanctity of
procedure so as to make it a fair process making it binding on to those also who may not have
participated in the proceedings and who may not have agreed to such process.

The non-recognition of the compromise between the disputing parties to an individual

disputes under which one may agree to withdraw from the dispute recognising that no dispute
exist between them that need adjudication, as incompetent is not warranted. Agreement in the
present case if otherwise found to be voluntary and not contrary to law, merely is, not to seek
adjudication of dispute to resurrect the employer employee relationship which is already put
to an end in 1994. Construed in proper prospective such agreement or compromise does not
fall within the purview of settlement envisaged under Section 2(p) of Industrial Disputes Act,
to invite applicability of rules as to form and procedure of communication.

CONCLUSION: For the reasons mentioned the impugned award of the Labour Court is set
aside. The Labour Court is directed to decide the dispute afresh in accordance with law
keeping in view the observations made above. If so required by the parties the parties may be
permitted to lead further evidence subject to the condition that party leading evidence shall,
whether producing oral evidence by documentary, tender such evidence simultaneously with
the request for taking further evidence, about the question of voluntary nature of the
compromise deed and affidavit, which has been executed by the workmen and the
representative of the employer on 25.7.95 with right of the other side to produce evidence.
The award shall be made within a period of six months.

MYSORE KIRLOSKAR MAZDOOR SANG

VS
MANAGEMENT OF MYSORE KIRLOSKAR LTD., AND ANOTHER
CITATION: (1959) ILLJ 329 Kan
FACTS OF THE CASE:
The second respondent is a registered trade union. It enjoys the majority support of the
workmen. The practice was that the union which enjoys the majority support is recognised by
the management as the sole collective bargaining agent for a period of three years. The
referendum by the secret ballot is held once in three years to determine which union enjoys
the confidence of the workmen. The petitioner-union was the recognised union during the
period 1994-96. In 1997, the second respondent on the basis of a referendum enjoyed the
majority support of the workmen and was accordingly recognised by the management. The
respondent-management was engaged in the manufacture of lathes and CMC machines. It has
its main factory at Harihar where around 1,800 workmen are employed. There is another unit
at Hubli which also is engaged in the manufacture of lathes and machines. There are about
448 workers employed at Hubli unit of the respondent-management. The electoral college for
the purpose of collective bargaining consists of workmen of Harihar and Hubli units. The
majority union is elected on the basis of a referendum. The majority union represents both
Harihar and Hubli units. Wage settlements are signed by the majority union which is binding
on all the workmen. Therefore, the settled position is that the union elected in the referendum
would represent the workmen of Harihar and Hubli unit. There is no separate referendum or
recognition for Hubli unit. The management addressed a letter that due to heavy losses they
are going to shift the unit from hubli to Harihar. The respondent-union was invited for
bilateral discussions. meetings were held in Harihar and Hubli to ascertain the views of the
workers and to save the employment of the workmen by avoiding closure of the factory. It is
submitted that keeping the employees' interest the respondent-Union agreed in principle for
shifting Hubli Unit to Harihar subject to certain favourable package being worked out with
the management. This was the unanimous decision of the Committee of the respondent-
Union. After discussions the union and the management entered into a settlement on 8-10-
1999 which provided for Disturbance Allowance of Rs. 5,500/- (non-refundable) and Rs.
5,000/- interest free loan recoverable in 25 instalments, dormitory facility for two months and
joining time of 12 days etc., for those opting to report at Harihar and Rs. 1,85,000/- as VRS
benefits for those workmen for the early Voluntary Retirement Scheme. The petitioner had
already raised a dispute before the Labour Authorities and subsequently all the unions were
notified of the proceedings. The respondent-union participated in the conciliation proceedings
held on various dates. The conciliation officer suggested to the management to increase the
non-refundable loan from Rs. 5,500/- to Rs. 10,000/-. The management accepted the same
and the settlement was finalised and signed on 6-12-1999. The petitioner-union and another
union belonging to CITU refused to sign the settlement.

ISSUES:
1. Whether both the units at Hubli and Harihar could be treated as a single unit for the
purpose of collective bargaining by the union.
2. whether a settlement entered into under Section 18(3) of the Industrial Disputes Act
between the recognised union and the management is binding on the minority union.

REASONING:
It is common ground that this was the practice that was being followed within the
knowledge of the petitioner-Union. It is also common ground that when the petitioner-Union
was the recognised union during the period 1994-96 it was on the basis that the unit at Hubli
and Harihar were treated as a single unit for the purpose of collective bargaining. In fact it
was the petitioner-Union that was the representative of the workmen during the period 1994-
96. Therefore, it is not permissible for the petitioner to state that the units should be divided
and that a separate secret ballet should have been held for the unit at Hubli when it is
established that by practice and by agreement that both Hubli and Harihar were to be
represented as a single unit for the purpose of collective bargaining. therefore, the collective
bargaining for the purpose of this settlement can be done only by the union that commands
the majority in both Hubli and Harihar. In this case, admittedly, the 2nd respondent-Union is
the recognised union to enter into any settlement.

Section 18 contemplates two categories of settlement. 18(1) is a settlement arrived at

outside the conciliation proceedings. Section 18(3) settlement is arrived at in the course of
conciliation proceedings. A settlement under Section 18(1) may not bind all parties except
those who are parties to the settlement. But a settlement under Section 18(3) has an extended
application and is binding on all parties to the Industrial Dispute. A 18(3) settlement is
binding on all workmen of the establishment even though they belong to the minority union
which had objected to the settlement. In this case, the facts would indicate that the company
had incurred heavy loss and that the unit at Hubli had become unviable. In these
circumstances, the management proposed to shift the Hubli unit to Harihar. The union was
invited for bilateral discussions. The management also suggested remedial measures to avoid
the threat of retrenchment. The management put up a notice informing all the workmen about
the proposal to shift the Hubli unit to Harihar for consolidation of the business at Harihar for
manufacturing operations. The recognised union felt that it was in the paramount interest to
save employment by avoiding closure of the factory at Hubli. The workmen were fully
consulted before the settlement was arrived at. The conciliation was held in an impartial
manner and reasonable opportunities were given to all the parties including that of the
petitioner. The petitioner also filed its objections and the objections of the petitioner was
considered by the conciliation officer. In fact all the workmen at Hubli were to be
accommodated at Harihar.

CONCLUSION:
The petitioner is not the majority union, the petitioner cannot be a spoilt-sport in
raking up this issue having once earlier represented both the units. Therefore, hold that the
collective bargaining for the purpose of this settlement can be done only by the union that
commands the majority in both Hubli and Harihar. In this case, admittedly, the 2nd
respondent-Union is the recognised union to enter into any settlement. According to section
18(3) of the act the settlement is binding.

Hillson And Dinshaw Ltd. vs P.G. Pednekar And Ors.

CITATION: (2002) IIILLJ 77 Bom
FACTS:
The respondent workman who was in the employment of the appellant company, was
retrenched from employment along with other 4 employees vide notice dated April 27, 1995.
The respondent workman was given retrenchment compensation of Rs. 1,14,115 by cheque
and there is no dispute that the workman has accepted and encashed the said cheque. The
workman thereafter approached the Transport and Dock Workers Union, which is the
appellant in Appeal Lodging No. 519 of 2001 and the Union served notice dated May 9, 1995
to the employer. The union also wrote to the Assistant Labour Commissioner. The appellant
company and the union thereafter signed a settlement dated December 28, 1995 under
Section 18(1) read with Section 2(p) of the Industrial Disputes Act, 1947. According to this
settlement the appellant company had offered to reinstate 4 out of 5 workmen, as one had
expired, including respondent workman with immediate effect with continuity of service.
However, the union had given up the claim of the respondent workman and two others on the
ground that they were in gainful employment and no more interested in the employment with
the employer. It was agreed by the union that the aforesaid 3 workmen would be treated as
having lost their lien over the employment with the company and the 4th workman Shri
Fernandes who was unemployed would be employed with immediate effect. On June 7, 1996
the respondent workman approached the Asst. Labour Commissioner making a grievance that
he had never given up his claim for reinstatement and that he had not given up his lien on
employment and the dispute should be referred for adjudication. Accordingly a reference was
made to the Central Government Industrial Tribunal. The Tribunal held inter alia that the
settlement dated December 28, 1995 is binding on the respondent workman and the reference
was answered against the workman. Being aggrieved the respondent workman filed a writ
petition which was allowed by the learned Judge by the impugned order.

ISSUES:
Whether the action of the management of Hillson and DinshaW Ltd. Mumbai in not
reinstating Shri P.G. Pednekar who is senior among the retrenched employees in the same
category is just, proper and legal? If not, to what relief the workman is entitled to?

REASONING:
In the instant case it is not disputed that the settlement arrived by the union with the appellant
company was not in the course of conciliation proceedings. Therefore, it would be binding on
the parties to the agreement namely the appellant company on the one hand and the union
representing the respondent workman who was its member. In the circumstances, the
respondent workman also would be ordinarily bound by the settlement entered into by his
representative union with the company unless it is shown that the said settlement was ex facie
unfair, unjust or mala fide. No such case was even alleged, much less made out by the
respondent workman either before the Tribunal or before the learned single Judge. It is
interesting to note that before the learned single Judge the only argument put forward on
behalf of the respondent workman was that, he was not a party to the settlement and his
consent was not taken by the union and, therefore, it was not binding on him. Once it is kept
in view that the industrial dispute was raised by the union on behalf of the retrenched,
workmen including respondent workman, and it was an industrial dispute covered by Section
2(k) it cannot be held that the settlement which was entered into under Section 2(p) read
with Section 18(1) of the Act is not binding on the individual workman.

CONCLUSION:
The learned single Judge held that under Section 18(1) of the Act settlement is intended to be
binding only on the signatories or parties to the settlement and as the respondent workman
was not signatory to the settlement it was not binding on him. The learned Judge therefore
directed the appellant-company to reinstate the workman and so far as back wages are
concerned directed the union to pay the amount of back wages on the ground that the union
alone was responsible for the loss of back wages of the workman. For the reasons mentioned,
it is not possible to sustain the finding of the learned single Judge that the settlement was not
binding on the respondent workman on the, ground that the workman was not a signatory to
the settlement. In the present case the reference is in respect of the action of the management
in not re-employing the workman and it does not relate to the retrenchment or layoff and,
therefore, Chapter V-B which contains this provision has no application. In the result appeals
are allowed. Order of the learned single Judge is set aside.

POONA MAZDOOR SABHA Vs G.K. DHUTIA AND ANR.

CITATION: AIR 1956 Bom 743
FACTS OF THE CASE:
There was a dispute between the second opponent company and its workers with regard to
wages, dear-ness allowance, leave facilities etc. and a meeting of the workers was called
where one Mahadik was authorised by his co-workers to make representations to the second
opponent company with regard to their demands. The second opponent company wanted to
negotiate with the workers who had a representative capacity and therefore the Government
Labour Officer was approached to hold a meeting at which representatives of the workers
would be elected under his supervision. Accordingly a meeting was-held on at which five
workmen were elected by the workers present to be their representatives. The second
opponent company and the elected representatives of the workers wrote a letter to the
conciliation officer to the effect that they had come to a negotiated agreement in regard to the
demand relating to wages, dearness allowance and leave facilities and that they desired to
sign a memorandum of settlement before him. Both the parties appeared before the
conciliation officer, the first opponent, and produced before him a draft agreement. This draft
agreement was considered by the conciliation officer and he explained to the elected
representatives of the workers in Marathi the various terms of the agreement, the agreement
having been drafted in English. The conciliation officer then adjourned the proceedings,
advising the elected representatives to consult the other workers and their advisers before
coming to a final decision in the matter. The elected representatives then saw the first
opponent in the afternoon and approved of the draft agreement as was modified. Thereupon a
memo settlement was prepared in the prescribed form and was signed by the parties. on 1-4-
1955 the petitioner Union was formed and it was registered on 1-6-1955, and on 23-6-1955
the Union made certain demands upon the second opponent company, which demands were
the subject matter of the settlement already arrived at. As the employer company, the second
opponent, was not prepared to concede these demands, the petitioner approached the first
opponent to initiate conciliation proceedings under the Industrial Disputes Act. The first
opponent refused to do the same hence the petitioner filed a writ petition

ISSUE:
Whether it can be said that the industrial dispute has ended because the parties to the dispute
have come to a private agreement?

REASONING:
The only settlement between the parties which is binding is the settlement arrived at through
the instrumentality of the conciliation officer. That is clear from the provisions of Section
19(3). It is only that settlement upon which the law has put its imprimatur and to which the
law has given sanctity and which the law has made binding. Industrial law takes no notice of
any private settlement or agreement arrived at between the parties in the course of an
industrial dispute. Such r private agreement belongs to the realm of contract; it may give rise
to contractual rights; but then we are dealing with Industrial law it has no sanction
whatsoever, and therefore in the eye of the industrial law, in our opinion, an industrial dispute
does not end until a settlement is arrived at, which settlement has been given a binding effect
under the provisions of Section 19(2), and such a settlement can only be arrived at when
conciliation proceedings are held under Section 12. Therefore, it would not be true to say that
the industrial dispute ended with the settlement arrived at between the parties on 7-4-1955,
that the conciliation officer had no jurisdiction to record the settlement, & that in raising
another dispute in June 1955

CONCLUSION:
Although the conciliation officer has a discretion, it is obvious that that discretion
cannot be arbitrarily or capriciously exercised, and if we had agreed with the contention put
forward by Mr. Bhandare then we would certainly have required the conciliation officer to
consider the question on merits and exercise his discretion as required by the statute. But
inasmuch we have taken the view that conciliation proceedings cannot be initiated when there
is a settlement in force, the question of the exercise of the discretion of the conciliation
officer does not arise. Accordingly the petition is dismissed.

Kamal Leather Karamchari Sangathan v. Liberty Footwear Company

CITATION: AIR 1990 SC 247

FACTS OF THE CASE:

The respondent-1 is a registered partnership firm carrying on its trading activities in leather
footwears at Karnal and some other places under the name and style of 'Liberty Footwear
Company'.It had a serious dispute with the workers. The workers' union complained that the
management has illegally terminated more than 200 workers. The respondent denied that
claim and asserted that the persons whose services were alleged to have been terminated were
not its employees at the material time. This dispute however, remained unsettled and the
workers went on strike which took a violent turn. The management had to lay off certain
workers and that added fuel to the fire. The agitation of the workers before the factory
premises created law and order problem attracting the police to intervene. The Labour
Commissioner and other top officials of the District arrived and they initiated conciliation
proceedings. The then Labour Minister and the Public Health Minister of the State Govern-
ment were also alerted. They also came and extended their good offices to bring about a
settlement. They succeeded in their efforts. The parties entered into an agreement containing
the terms of settlement of their dispute. On behalf of the management, the agreement was
signed by respondents 1, 7 and 8. On behalf of the workers, it was signed by the President
and Secretary of the workers' union. It was mutually agreed that a committee consisting of
five persons, two from the management and two from the union with the Deputy
Commissioner, Karnal as the President should be constituted. They would be the arbitrators
to determine the said dispute. The committee of arbitrators was accordingly constituted. The
Committee gave its award. Which led to a litigation. The management did not reinstate the
workers. It challenged the validity of the award by way of writ petition in the High Court.

ISSUE:
whether non-publication of the arbitration agreement as required under subsec. (3) of sec. 10-
A, renders the arbitral award invalid and unenforceable?

REASONING:
The parties entered into the above agreement and referred the dispute for arbitration under
sec. 10-A of the Act.

1. Where any industrial dispute exists or is apprehended and the employer and the
workmen agree to refer the dispute to arbitration, they may, at any time before the
dispute has been referred under sec. 10 to a Labour Court or Tribunal or National
Tribunal, by a written agreement, refer the dispute to arbitration and the reference
shall be to such person or persons (including the presiding officer of a Labour Court
or Tribunal or National Tribunal) as an arbitrator or arbi- trators as may be specified
in the arbitration agreement.
2. An arbitration agreement referred to in sub-sec. (1) shall be in such form and
shall be signed by the parties thereto in such manner as may be prescribed.
3. A copy of the arbitration agreement shall be forwarded to the appropriate Government
and the conciliation officer and the appropriate Government shall, within (one month)
from the date of the receipt of such copy, publish the same in the Official Gazette.
4. The arbitrator or arbitrators shall inves- tigate the dispute and submit to the appropri-
ate Government the arbitration award signed by the arbitrator or all the arbitrators, as
the case may be.
This is with regard to advantages of voluntary arbitration. There is another aspect which was
perhaps not realised by the State Government when it referred the dispute under section
10(1). Section 10 and 10-A of the Act are the alter- native remedies to settle an industrial
dispute. An industrial dispute can either be referred to an Industrial Tribunal for adjudication
under section 10, or the parties can enter into an arbitration agreement and refer it to an
arbitrator under section 10-A. But once the parties have chosen their remedy under section
10-A the Government cannot refer that dispute for adjudication under section 10. The said
reference made by the Government under section 10(1) cannot, therefore, be sustained.

(i) The State Government shall publish condition No. '3' in the arbitration agreement
in the Government Gazette within four weeks from today.
(ii) The agreement containing condition No. '3' stands referred to the Industrial
Tribunal, Haryana at Ambala for passing arbitration award in accordance with
law;
 (iii) The reference made under section 10(1) of the Act to the Industrial Tribunal is
quashed; and
(iv) The management shall with- draw the aforesaid Letters Patent Appeal and the
Writ Petition pending in the High Court within three weeks from today failing
which the High Court shall dispose them of as having become infructuous.

CONCLUSION:
The principle in this case regarding collective bargaining is that Collective bargaining is a
technique by which dispute as to conditions of employment is resolved amicably by
agreement rather than coercion