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INDEX

Sr.no Topics Page

Number

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Certificate

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Acknowledgement

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Executive Summary

Are the unions successful?

In The Early Days of capitalism employers, in their struggle for maximum profits, were able to act with almost

complete ruthlessness in their treatment of workers. They could take advantage of every rise of unemployment

or inflow of immigrant workers to reduce wages to a bare minimum, using the lock-out if necessary to starve

workers into submission. They imposed excessive hours of labour and ordered temporary extensions of normal

hours without giving overtime pay. They employed workers in overcrowded and unsanitary factories and

workshops, and exposed them to frequent accidents from dangerous machinery. They introduced new working

processes and machinery at will, often replacing men by lower-paid women and children. Factory discipline

was like that of a military force, and workers who `mutinied' could be sacked and, by arrangement with other

employers, blacklisted, so that they could not get work elsewhere. Employers accepted no responsibility for

payment of wages during sickness, and workers sacked or disabled had to rely on their own resources.

Trade unions were formed to resist these pressures. The basic idea was that, by combining together, workers

could get better terms, protect individuals against victimisation and provide payments out of union funds during

strikes or lockouts.

As the immediate consequence of successful union action was to reduce the employers' profits, their reaction

was predictable and they did everything they could to crush the unions. They got the government and

Parliament to declare the unions illegal organisations under laws carrying savage penalties. They declared that

British industry would be ruined by the unions and the workers would become unemployed. They had the

backing of the church and of most economists in their anti-union campaign, yet so desperate was the condition

of the workers that unions went on being formed and operating. Unable to suppress them the government

finally, in 1824, made them legal.

In the century and a half that followed, alongside the establishment and growing membership of unions, and in

spite of periodical set-backs and many unsuccessful strikes, wages have risen and working conditions have been

improved. The question is to what extent has this been the result of trade union action? From the outset there

were politicians and economists who urged the workers not to form unions because they were unnecessary;

wages, they said, would be raised anyway by the employers when they could afford it. That argument is still

being put.

The editor of The Times carried the argument a stage further. In an editorial (2 September 1978) he declared

that if all British unions had been dissolved in 1973, investment and production would have been higher and the

purchasing power of British wages "would be about double" what it actually was in 1978.

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Introduction to Industrial Relations and Trade Unions

THE TRADE UNIONS ACT, 1926

An Act to provide for the registration of Trade Unions and in certain respects to define the lawrelating to registered Trade Unions WHEREAS it is expedient to provide for the registration of

Trade Unions and incertain respects to define the law relating to registered Trade Unions

It is hereby enacted as follows:

PRELIMINARY

1. Short title, extent and commencement

(1) This Act may be called the Trade Unions Act, 1926.

(2) It extends to the whole of India

(3) It shall come into force on such date as the Central Government may by notification in the

Official Gazette, appoint.

2. Definitions

In this Act 7[the appropriate Government means, in relation to Trade Unions whose objects are

not confined to one State, the Central Government, and in relation to other Trade Unions, the State

Government, and], unless there is anything repugnant in the subject or context,"executive" means

the body, by whatever name called, to which the management of the affairs of a Trade Union is

entrusted

(b) [office-bearer]", in the case of a Trade Union, includes any member of the executive thereof, but

does not include an auditor;

(c)"prescribed" means prescribed by regulations made under this Act;

(d) "registered office" means that office of a Trade Union which is registered under this Act as the

head office thereof;

(e) "registered Trade Union" means a Trade Union registered under this Act;

f) "Registrar" means

(i) Registrar of Trade Unions appointed by the appropriate Government under section 3,

and includes any Additional or Deputy Registrar of Trade Unions; and

(ii) in relation to any Trade Union, the Registrar appointed for the State in which the head

or registered office, as the case may be, of the Trade Union is situated

(g) "trade dispute" means any dispute between employers and workmen or between workmen and

workmen, or between employers and employers which is connected with the employment or non-

employment, or the terms of employment or the conditions of labour, of any person, and

"workmen" means all persons employed in trade or industry whether or not in the employment of

the employer with whom the trade dispute arises; and

(h)"Trade Union" means any combination, whether temporary or permanent, formed primarily for

the purpose of regulating the relations between workmen and employers or between workmen andworkmen, or between employers and employers, or for imposing restrictive conditions on the

conduct of any trade or business, and includes any federation of two or more Trade Unions:

Provided that this Act shall not affect

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(I) any agreement between partners as to their own business;

(ii) any agreement between an employer and those employed by him as to such

employment; or

(iii) any agreement in consideration of the sale of the good-will of a

business or of instruction in any profession, trade or handicraft

Trade unions are a major force for social change and have been so throughout their history. The first craft-

based unions were established in the mid 1800s, and they came together into broader-based confederations a

little later: the British Trades Union Congress was formerly established in the 1860s; and the French

Confdration Gnrale du Travail, the Swedish Landsorganisationen i Sverige, the Belgian Fdration

Gnrale du Travail de Belgique and the forerunner of the German Deutscher Gewerkschaftsbund were all

founded in the 1890s.

In some countries unions have been marginalised or outlawed by fascist or military dictatorships but they

have survived to become essential elements of modern democratic societies. Run by members for members,

they constitute the largest voluntary organisations in Europe.

Trade unions have traditionally provided a series of benefits for their members. In early days this took the

form of provident funds to guarantee incomes for workers faced with ill health, unemployment and old age.

Now that these functions have generally been taken over by the State, they provide other benefits, such as

legal advice and vocational training.

Trade unions have been particularly engaged in defending workers direct interests in the workplace,

primarily by means of collective bargaining, where they negotiate with employers over wages and working

conditions. To support their positions when these negotiations break down or do not provide satisfactoryresults, they may organise strikes.

In addition, trade unions endeavour to influence the political debate to ensure that legislation and political

decisions are favourable to the interests of their members or workers as a whole. To this end they may pursue

campaigns, undertake lobbying, or support individual political parties.All in all trade unions are concerned

with a wide range of economic and social issues from pay and conditions to workers rights

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MODELS OF TRADE UNIONISM

Europe exhibits the wide range of characteristics to be expected from a diverse set of nations with different

histories of both industrial development and unionisation. Although categories vary, it is generally accepted

that there are four main models of industrial relations systems currently in the Member States of the

European Union Nordic corporatism, social partnership, liberal pluralism and state-centred. The twenty-seven EU Member States are often divided into six groups: Scandinavian, Continental, Anglo-Saxon,

Southern, Eastern New Member States (NMS) and Mediterranean New Member States (NMS). It is also

generally accepted that these models and groupings are only indicative. The two sets fit together, as follows:

Scandinavian countries follow the Nordic corporatism model (Denmark, Finland and Sweden)

Most of the Continental group, plus Slovenia from the Eastern New Member States, have some form

of social partnership (Austria, Belgium, Germany, Luxembourg, Netherlands and Slovenia)

The Anglo-Saxon Member States and Mediterranean New Member States follow the liberal

pluralism model (Ireland, UK, Cyprus, Malta)

the Southern group, together with France, has state-centred systems (France, Greece, Italy, Portugal

and Spain)

Eastern New Member States can fit into several different categories, often showing characteristics

of both liberal pluralism and state-centred systems.

The Nordic corporatism model features high levels of trade union membership, negotiations at

industry-level (sectoral) and relatively centralised bargaining arrangements. The high union density

means that collective agreements apply to the vast majority of workers, and government interventionis not needed to ensure this. Generally social groups are more integrated into the system than in

countries with other models.

Social partnership relies on most employers being members of associations, as well as unions being members

of confederations. This is because the model depends on strong negotiating parties who can make

agreements stick. There are differences between countries using this model for example, in Germany,

which has a strong federal structure, the national government plays less part in bargaining than in Austria or

the Netherlands. As long-term employees in industries with large firms tend to form stronger bargaining

units, there is a tendency for these sectors to win better conditions than others.

Industrial relations in a liberal pluralist system are largely based at company level and can be confrontational

(Irelands social pacts are an exception to this). While government does not consult much with social

partners, it limits its own scope for legislation, so that there is generally less law concerning the labour

market, social protection etc. Union density rates tend to be lower and, therefore, collective bargaining

coverage restricted, as negotiations are not centralised and there is no legal means of extending company-

level deals industry-wide.

Governments in the state-centred model act with more impunity than those engaging in social partnership,

but they still seek to accommodate unions and employers. If they miscalculate, there may often be social

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confrontation, as industrial relations have more in common with the confrontational process in the liberal

systems rather than the consensual approach of corporatism and social partnership. Union density is often

lower in these countries, but collective bargaining coverage may be wider because of the potential for

extension of agreements to non-unionised workplace both by law and via employers associations

TRADE UNION MEMBERSHIP IN EU COUNTRIES

As can be seen from figures in Table 1 on the next page, published by the Amsterdam Institute for Advanced

Labour Studies, net trade union membership in EU countries for 2006 varied significantly from one country

to another, from 77,400 in Malta to 7,086,000 in the United Kingdom.

A more telling indicator of trade union strength can be gleaned from the figures for trade union density net

union membership as a proportion of wage and salary earners in employment. In 2006, for example, Sweden

and Finland had a figure of over 70%, whereas the figures for Estonia, France, Latvia and Poland were under

15%. Malta, the country with the lowest overall membership figures, had a density of 50%, which is higher

than the United Kingdom, with a figure of 29%; so the figures quoted in the previous paragraph need to be

interpreted with some care.

What is clear however is that the figures show an overall decline in trade union density during the period

2000 to 2006, most notably in the countries of Central and Eastern Europe. There are some exceptions to this

trend however Belgium and, very marginally, Malta.

Net union membership Figures and Density9


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Country Membership

Figures

Union Density

(2000) in %

Union Density

(2006) in %Belgium 1072500 36.5 31.7

Bulgaria 1959000 49.3 54.1Cyprus 550000 24.6 21.3

Czech Republic 182700 70.1 62.1Denmark 845000 29.5 21.0Estonia 1745400 74.2 69.4Finland 79100 20.3 13.2France 1520000 75.0 71.7

Germany 1777900 8.3 8.0Greece 6719800 24.6 20.7

Hungary 640000 28.9 23.01Ireland 593000 40.8 35.3

Italy 5568600 34.7 33.4Latvia 150000 29.3 16.1Lihuria 18000 21.4 14.4

Luxembourg 121000 43.7 40.4Malta 77400 56.8 57.4

Netherlands 1530000 22.6 21.5Poland 1584000 2.6 14.4

Portugal 700000 22.9 18.1Romania 1750000 46.1 33.7

Slovakia 473000 36.3 23.6Slovania 300000 42.8 41.3

Spain 2348000 16.7 14.6Sweden 2931000 80.1 75.0

United Kingdom 7086000 30.3 29.0

There are however other measures of union strength. In France, for example, net union membership and also

union density are relatively low, but a larger number of workers participate in elections to works councils

and to industrial tribunals and vote for different trade union candidates. In fact 4.8 million voted in elections

to industrial tribunals in 2008. In another example, Belgium, there are elections to works councils and health

and safety committees. In both of these countries the capacity to get things done through mobilising popular

protest and action remains considerable.

Industrial relations has become one of the most delicate and complex problems of modern industrial

society. Industrial progress is impossible without cooperation of labors and harmonious relationships.

Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and

employers (managed)

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CONCEPT OF INDUSTRIAL RELATIONS

The term Industrial Relations comprises of two terms: Industry and Relations. Industry refers to

any productive activity in which an individual (or a group of individuals) is (are) engaged. By relations

we mean the relationships that exist within the industry between the employer and his workmen.The Term Industrial Relations explains the relationship between employees & management which stem

directly or indirectly from union employer relationship.

Industrial relations are the relationships between employees and employers within the organizational

settings. The field of industrial relations looks at the relationship between management and workers,

particularly groups of workers represented by a union. Industrial relations are basically the interactions

between employers, employees and the government, and the institutions and associations through which such

Interactions are mediated

The term industrial relations has a broad as well as a narrow outlook. Originally, industrial relations was

broadly defined to include the relationships and interactions between employers and employees. From this

perspective, industrial relations covers all aspects of the employment relationship, including human resource

management, employee relations, and union-management (or labor) relations. Now its meaning has become

more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective

bargaining, trade unionism, and labor-management relations, while human resource management is a

separate, largely distinct field that deals with non union employment relationships and the personnelpractices and policies of Employees.

The relationships which arise at and out of the workplace generally include the relationships between

individual workers, the relationships between workers and their employer, the relationships between

employers, the relationships employers and workers have with the organizations formed to promote their

respective interests, and the relations between those organizations, at all levels. industrial relations also

includes the processes through which these relationships are expressed (such as, collective bargaining,

workers participation in decision-making, and grievance and dispute settlement), and the management of

conflict between employers, workers and trade unions, when it arises.

An industrial relations system consists of the whole gamut of relationships between employees and

employees and employers which are managed by the means of conflict and cooperation.

A sound industrial relations system is one in which relationships between management and employees (and

their representatives) on the one hand, and between them and the State on the other, are more harmonious

and cooperative than conflictual and creates an environment conducive to economic efficiency and the

motivation, productivity and development of the employee and generates employee loyalty and mutualtrust.

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ACTORS IN THE IR SYSTEM

Three main parties are directly involved in industrial relations:

Employers: Employers possess certain rights vis--vis labors. They have the right to hire and fire them.

Management can also affect workers interests by exercising their right to relocate, close or merge the

factory or to introduce technological changes.

Employees: Workers seek to improve the terms and conditions of their employment. They exchange views

with management and voice their grievances. They also want to share decision making powers of

management. Workers generally unite to form unions against the management and get support from these

unions.

Government: The central and state government influences and regulates industrial relations through laws,

rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.

SCOPE

The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it means

that the employer, employee relationship confines itself to the relationship that emerges out of the day to

day association of the management and the labor. In its wider sense, industrial relations include the

relationship between an employee and an employer in the course of the running of an industry and may

project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and

disposition of profits among others.

The scope orindustrial relationsis quite vast. The main issues involved here include the following:

1. Collective bargaining

2. Machinery for settlement of industrial disputes

3. Standing orders

4. Workers participation in management

5. Unfair labor practices

The main objectives ofindustrial relations system are:-

To safeguard the interest of labor and management by securing the highest level of mutual

understanding and good-will among all those sections in the industry which participate in the

process of production.

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To avoid industrial conflict or strife and develop harmonious relations, which are an essential

factor in the productivity of workers and the industrial progress of a country.

To raise productivity to a higher level in an era of full employment by lessening the tendency to

high turnover and frequency absenteeism.

To establish and promote the growth of an industrial democracy based on labor partnership in the

sharing of profits and of managerial decisions, so that ban individuals personality may grow its full

stature for the benefit of the industry and of the country as well.

To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable

wages, improved living and working conditions, said fringe benefits.

To improve the economic conditions of workers in the existing state of industrial managements

and political government.

Socialization of industries by making the state itself a major employer

Vesting of a proprietary interest of the workers in the industries in which they are employed.

Existence of Trade Unions

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The existence of a strong and recognized trade union is a pre-requisite to industrial peace. Decisions taken

through the process of collective bargaining and negotiations between employer and unions are more

influential. Trade unions play an important role and are helpful in effective communication between the

workers and the management. They provide the advice and support to ensure that the differences of opinion

do not turn into major conflicts. The central function of a trade union is to represent people at work. But

they also have a wider role in protecting their interests. They also play an important educational role,organizing courses for their members on a wide range of matters. Seeking a healthy and safe working

environment is also prominent feature of union activity.

Trade unions help in accelerated pace of economic development in many ways as follows:

By helping in the recruitment and selection of workers.

By inculcating discipline among the workforce

By enabling settlement of industrial disputes in a rational manner

By helping social adjustments. Workers have to adjust themselves to the new working conditions,

the new rules and policies. Workers coming from different backgrounds may become disorganized,

unsatisfied and frustrated. Unions help them in such adjustment.

Trade unions are a part of society and as such, have to take into consideration the national integration as

well. Some important social responsibilities of trade unions include:

promoting and maintaining national integration by reducing the number of industrial disputes

incorporating a sense of corporate social responsibility in workers

achieving industrial peace

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Phases of Trade Union and Industrial Relations Post and Pre Independence

The Trade union in India developed quite slowly compared to western nations. Indian Trade Union can be

divided into 3 phases

The First Phase (1850-1900)

During this phase the inception of trade unions took place. During this period, the working and living

conditions of the labor were poor and their working hours were long. Capitalists were only interested in their

productivity and profitability. In addition, the wages were also low and general economic conditions were poor

in industries. In order to regulate the working hours and other service conditions of the Indian textile laborers,

the Indian Factories Act was enacted in 1881. As a result, employment of child labor was prohibited.

The growth of trade union movement was slow in this phase and later on the Indian Factory Act of 1881 was

amended in 1891. Many strikes took place in the two decades following 1880 in all industrial cities. These

strikes taught workers to understand the power of united action even though there was no union in real terms.

Small associations like Bombay Mill-Hands Association came up by this time.

The Second Phase (1900-1946)

This phase was characterized by the development of organized trade unions and political movements of the

working class. Between 1918 and 1923, many unions came into existence in the country. At Ahmedabad, underthe guidance of Mahatma Gandhi, occupational unions like spinners unions and weavers unions were formed.

A strike was launched by these unions under the leadership of Mahatma Gandhi who turned it into a satyagrah.

These unions federated into industrial union known as Textile Labor Association in 1920.In 1920, the First

National Trade union organization (The All India Trade Union Congress (AITUC)) was established. Many of

the leaders of this organization were leaders of the national Movement. In 1926, Trade union law came up with

the efforts of Mr. N N Joshi that became operative from 1927. During 1928, All India Trade Union Federation

(AITUF) was formed.

The third phase began with the emergence of independent India (in 1947). The partition of country affected the

trade union movement particularly Bengal and Punjab. By 1949, four central trade union organizations were

functioning in the country:

1. The All India Trade Union Congress,

2. The Indian National Trade Union Congress,

3. The Hindu Mazdoor Sangh, and

4. The United Trade Union Congress

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The working class movement was also politicized along the lines of political parties. For instance Indian

national trade Union Congress (INTUC) is the trade union arm of the Congress Party. The AITUC is the trade

union arm of the Communist Party of India. Besides workers, white-collar employees, supervisors and

managers are also organized by the trade unions, as for example in the Banking , Insurance and Petroleum

industries.

Trade Union in India

The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor markets consist

of three sectors:

1. The rural workers, who constitute about 60 per cent of the workforce.

2. Organized sector, which employs 8 per cent of workforce, and

3. The urban informal sector (which includes the growing software industry and other services, not

included in the formal sector) which constitutes the rest 32 per cent of the workforce.

There are 12 Trade Unions which still exist In India: They are

1. All India Trade Union Congress (AITUC)

2. Bharatiya Mazdoor Sangh (BMS)

3. Centre of Indian Trade Unions (CITU)

4. Hind Mazdoor Kisan Panchayat (HMKP)

5. Hind Mazdoor Sabha (HMS)

6. Indian Federation of Free Trade Unions (IFFTU)

7. Indian National Trade Union Congress (INTUC)

8. National Front of Indian Trade Unions (NFITU)

9. National Labor Organization (NLO)

10. Trade Unions Co-ordination Centre (TUCC)

11. United Trade Union Congress (UTUC) and

United Trade Union Congress - Lenin Sarani (UTUC - LS)

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Trade union developments

The First Unions, or "combinations" as they were also called, were mostly local and confined to skilled

workers, a fact which is well brought out in the name trade union. Many were unions of artisans or

"tradesmen"; workers who, through serving a long apprenticeship, had acquired a skilled trade.

Although in 1824 they ceased to be illegal institutions, their legal status was still precarious. There was no

protection for their funds, and other laws could be used against them, as in 1834 when six Dorchester farm

workers-the Tolpuddle Martyrs-were sentenced to seven years' transportation to Australia for "illegal oath-

taking".

Britain was at this time in the early stages of the industrial revolution which threw together thousands of

workers, especially in the textile manufacturing districts of the North and Midlands, so creating for the first

time an urban factory proletariat. These workers began to organise, too, but their unions tended to take a

different form from those of the craft workers.

Many of the weavers who worked in the new factories had once been independent producers, working on their

own in their cottages. They felt very acutely the indignity of working for an employer in his factory, and did not

hesitate to denounce their new status for what it was-wage slavery. It was at this time that the slogan "abolition

of the wages system" was first put forward. Unfortunately, but understandably enough in the conditions of the

time, most of the opponents of the wages system looked backwards rather than forwards, favouring the

establishment of cooperative communities. In time, as the number of workers who had known the comparative

freedom of not being a wage-worker decreased, the slogan "abolition of the wages system" came to be replacedby the demand for "a fair day's wage for a fair day's work"

This remains to this day the typical trade union demand, and it well expresses the limitations of trade unionism.

For, as we shall see, there is nothing fair about the wages system since it is precisely through this system that

the working class is exploited by the class which owns and controls the means of wealth production and

distribution. The demand for "a fair day's wage for a fair day's work" implies acceptance of the wages system as

a permanent social institution. Acceptance in fact of the ownership of the means of production by a minority

class.

What is a "fair wage'? Wages are the price of the commodity labour-power. This, like the prices of other

commodities, tends to fluctuate around a point determined by its value. A "fair wage" can be understood as a

wage equal to the value of the worker's labour-power, ie. the amount of commodities (means of subsistence)

required to provide his particular energies

This, however, is not to be understood to mean that the value of labour-power is a fixed amount and that the

standards of living about which wages fluctuate today are the same as they were when trade unions were first

being formed. The value of labourpower can rise as well as fall, and over the years it has been materially raised.

In the early days of capitalism when unions did not exist or were very weak, if the number of workers seeking

jobs exceeded the demand the depressing effect on wages was immediate. The competition of individual

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workers for jobs enabled employers to take full advantage of their strengthened position. If, however, the

workers unite and agree not to sell their labour-power below a certain price, the effect of individual competition

for jobs can be, at least in part, overcome. Organised workers can ensure that the wage they get is the current

value of their labour-power and, at times when the demand for labour-power exceeds the supply, they can

temporarily push wages above the current value of labour power or even, in the longer term, raise its value. This

was, and still is, the economic logic for the working class of trade union organisation.

The unions were originally formed on a local basis by groups of workers who had to fight against the hostility

of the employers and the State to get them established and to keep them going. Since those days trade unions

have come a long way. They have even themselves become investors in capitalist industry. Today the unions

are to an extent encouraged by employers as a means of introducing some order into what is now called

"industrial relations" and are well-integrated into the administration of the State. The TUC is often consulted

When certain legislative changes are proposed. Trade union leaders sit on government committees and on the

boards of nationalised industries. Some are knighted or retire to the House of Lords.

Employers have come to learn that trade unions can be useful to them. Now only a few employers and eccentric

capitalists are anti-union. Most employers, especially the bigger ones, including the nationalised industries and

the government, accept trade unions as "social partners" whose joint task it is to see that industry runs smoothly

and with a minimum of industrial trouble. Employers have had to come to terms with trade unions and strikes.

In return for recognition (sole bargaining rights, compulsory union membership and sometimes the deduction of

dues from wages and representation on various joint committees) trade unions are expected to keep their

members in order and, if necessary, discipline them: for example, if they interrupt production by going on

unofficial strike. Most unions in Britain today are prepared to accept such a deal.

The question arises to what extent can modern trade unions still be regarded as democratic organisations, in the

sense of being run by and for the workers. That the unions do provide a service for their members cannot be

denied. What is relevant in this context is the extent to which trade unions are run by their members. Most

unions have formal democratic constitutions which provide for a wide degree of membership participation and

democratic control. In practice however, these provisions are sometimes ineffective and actual control of many

unions is in the hands of a well- entrenched full time leadership.

It is these leaders who frequently collaborate with the State and Employees in the administration of Capitalism

who get involved in supporting political parties and governments which act against the interest of the working

class.But it would be wrong to write off the unions as anti-working-class organisations. The union has indeed

tended to become an institution apart from its members; but the policy of a union is still influenced by the views

of its members. A union is only as strong as its members. For without their participation at the place of work,

and without their willingness to go on strike or take some other form of industrial action, a union would be in a

weakened position with regard to the employer.

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Even though unions have sometimes strayed from this basic role but can be pressurised by their members into

fulfilling it, they are useful to the working class. They provide a minimum of protection against the pressures on

wage levels that always exist under capitalism.

During the last century and a half, more and more workers have joined trade unions. Local unions have- been

largely replaced by national organisations and, by a process of amalgamation, unions have grown in size, with aconsequent reduction in their number. In 1896 a combined membership of 1,500,000 were in 1,300 separate

unions: in 1978 over 13,000,000 trade unionists were organised in more than 500 unions; but about eighty per

cent of the total membership belonged to twenty-six unions each with a membership above 100,000. More than

half the wage and salary earners are now in unions.

At first it was the "manual" workers who formed trade unions. Other workers, supposing themselves to be

socially above the working class, held aloof. Latterly their attitude has changed. Teachers, civil servants, local

government staff, doctors, nurses, bank clerks, and technical, scientific and managerial workers have

increasingly become unionised.

In 1868 the Trades Union Congress was formed as the national representative body. While most trade unions

are not affiliated to the TUC it includes all the larger ones, and all but about a million of trade union

membership.

A similar growth of trade unions took place in other countries, owing much to the encouragement given by the

formation in 1864 of the International Working-men's Association. Arising out of meetings between French and

English workers a Committee was formed on which Karl Marx played a prominent part. The Preamble to its

rules proclaimed as its aim the emancipation of the working class and attributed the failure of previous efforts

aiming at that end to "the want of solidarity between the manifold divi-sions of labour in each country, and ...

the absence of a fraternal bond of union between the working classes of different countries".

Although the First International lasted for only a few years it left behind unions in many countries which

appreciated the need for international organisation, leading in 1901 to the formation of the International

Federation of Trade Unions representing for each country national federations like the TUC. At the same time

international organisations were formed representing unions in particular industries, such as the miners, the

transport workers, engineering workers, etc.

After the communist Party seized power in Russia in 1917, the position of the International Federation of Trade

Unions and its associates trade internationals was challenged by the Red International of Labour Unions

which was dominated by the Russian government through the Communist International.

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At the end of World War II an attempt was made to combine the rival organizations in the World Federation of

Trade Unions but four years later, in 1949, British and other Organizations withdrew on the grounds that the

Russia dominated organizations were not genuine trade unions that the WFTU used by the Russian government

To promote its political policies.. The International Confederation of Free Trade Unions was then formed in

rivalry to the WFTU and both organisations continue to operate in their separate group of countries.

The so-called trade unions in Russia and countries under Russian domination are little more than governmental

bodies primarily concerned with giving effect to government industrial policies and increasing production. They

are not under the control of the members, and cannot exercise independent influence on wage bargaining.

Strikes are illegal though from time to time they do take place and are savagely repressed. In many ways the

workers in. those countries are in the same position as were British workers before unions were legalised in

1824. It was during the years before 1824, when workers learned how to organise in unions despite the

opposition of the employers and repression by the government, that the foundations were laid for working class

organisation both industrial and political. It was the first victory of the organised workers; only a beginning but

never since then has it been possible for the capitalist class wholly to put the clock back. It was an opening

phase of the modern class struggle, continuing through the nineteenth century and spreading to other countries

as capitalism developed. Whatever the mistaken policies adopted by the unions from time to time, working

class organisation on the industrial field in the struggle against the employers was an indispensable means by

which workers gradually began to learn how to deal with capitalist exploitation.

It remains the obvious line of advance for workers in Russia and other countries in which employers and

governments still resort to crude methods of repression comparable with those of early British capitalism.

With the formation of the trade union internationals the established unions undertook the task of promoting

trade unionism in the less developed countries, giving great financial and organisational aid. This bore fruit in

the growing practice of unions giving support to strikes in other countries; but it has failed to meet the

requirements of the working class because of the limited nature of the trade union concept of internationalism.

While able to grasp the need for solidarity against the employers, the internationally linked unions have

continued to give first place to the supposed obligation of workers to support "their" government and "their

nation". The two world wars saw them lining up behind their national governments and disregarding their

common interest with their fellow trade unionists in other countries.

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The limitations of trade unions

Company Shareholders (and the government in respect of nationalised industries) invest capital for the

purpose of making a profit. It is not their aim to produce as much as is technically possible or to employ as

many workers as possible. The amount of goods capitalists allow the workers to produce at any time islimited to the amount they expect can be sold at a profit, and their aim at all times is to employ as few

workers as possible for the given output: the lower their wages the larger the profit the capitalists will gain.

Not all members of the working class are employed in direct production. Goods have to be circulated and

sold before profit can be realised. Therefore many workers are necessarily engaged in distribution,

commerce, finance and the complex administration of capitalism. This is the situation in which trade

unions operate.

When and where workers are unorganised the employer can impose excessive hours and intensity of work,

and drive wages down to the bare subsistence level. With trade union organisation, workers can defend

themselves against unrestricted exploitation; but always subject to the over-riding condition that production

remains profitable to the employers.

Karl Marx, who analysed in detail the workings of the capitalist system summarised the position:

"As to profits, there exists no law which determines their minimum. We cannot say what is the ultimate

limit of their decrease ... Because, although we can fix the minimum of wages, we cannot fix their

maximum. We can only say that, the limits of the working day being given, the maximum of profit

corresponds to the physical minimum of wages; and that wages being given, the maximum of profit

corresponds to such a prolongation of the working day as is compatible with the physical forces of the

labourer.

The maximum of profit is therefore limited by the physical minimum of wages and the physical maximum

of the working day. It is evident that between the two limits of this maximumrate of profit an immense

scale of variations is possible. The fixation of its actual degree is only settled by the continuous struggle

between capital and labour, the capitalist constantly tending to reduce wages to their physical minimum,

and to extend the working day to its physical maximum, while the working man constantly presses in the

opposite direction.

The matter resolves' itself into a question of the respective powers of the combatants." (Value, Price and

Profit, Chapter XIV.) Trade unions seek to strengthen their position by accumulating funds to be paid out

as strike pay. The employers counter this by combining to give financial aid to companies resisting strikes.

In the 1971 engineering dispute, when the union called selective strikes, the employers had a fund to help

the companies affected. It was reported to have amounted to 2,000,000.

At its conference in 1979 the Confederation of British Industries approved the setting up of a permanent

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fund of this kind. Based on experience in other countries it will be on an insurance basis. Participating

companies will pay into the fund and will be able to draw on it to meet part of the loss they suffer through

interruption of production during strikes.

The trade union weapon for bringing pressure to bear on the employer is the strike, by means of which

production is halted. It is however effective only when market conditions are such that the employer cansell at a profit all that is produced. At such times he will either make concessions to avoid a strike or

quickly settle if a strike is declared.

At a time of trade depression, either general or affecting a particular industry, the situation is reversed.

Then it is the employer who, unable to sell at a profit, curtails production, goes in for short-time working or

dismissal of his workers. In the recession which began in 1974 scores of factories employing hundreds of

thousands of workers were closed down, temporarily or permanently, by companies and nationalised

industries.

Among the companies and government-controlled industries which shut down plants were the Goodyear

and Dunlop tyre companies, the Singer Sewing Machine Co, Courtaulds, Pye Engineering, British Leyland,

British Shipbuilders, the British Steel Corporation and the Coal Board. In addition many organisations

permanently reduced staff, including the newspapers and British Rail. A South Wales official of the

National Union of Mineworkers criticised "Labour governments for closing down more pits than Tory

governments" (Financial Times, 19 Jan. '79). In an interview in 1974 Mr Hugh Scanlon (now Lord

Scanlon), President of the Amalgamated Union of Engineering workers,summed up the situation:

"The union movement is only strong as long as there is relatively full employment ... as long as there is not

a crisis of capitalism. I've never fooled myself that once the economic boot goes on the other foot, those

who preach about getting round the table to settle our disputes would be as ruthless once again as they were

in the thirties". (Sunday Times, 12 May 1974.)

The financial framework in which trade unions operate in a depression year is shown by the official

estimate of total wages, salaries and profits in 1975. Against a total of 59,000 million for wages and

salaries the trading profits of companies and surpluses of nationalised industries came to a combined total

of only 13,382 million, thus limiting the scope for possible wage increases by even the most militant trade

union action. The employers have another weapon at their disposal-the displacement of workers by

machinery. In their competition with each other the market goes to those who produce and sell more

cheaply. If a new machine (or new industrial process) enables an employer to get the same output with

fewer workers, and provided that the overall costs of the new method are less than existing costs, the

employer will seek to make the changeover and reduce his labour force, notwithstanding strenuous trade

union opposition. Whether it is worth while making the change depends on the level of wages. If wages are

low the new machines are not installed. Marx pointed out that in his day much labour-saving machinery

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manufactured in Britain was not used here at all because of the low level of British wages. It was produced

for export to America where, with higher wage levels, it could be used profitably. The economist Mr Roger

Nightingale attributes the recent big imports of machinery into Britain to the operation of this factor of

wage levels: "The real cost of labour has risen by anything up to six per cent during the past year as wages

have moved ahead much more rapidly than prices. So the pressures on a firm to avoid taking on new labour

and to expand output instead by the installation of better machinery has increased. And if the pound isstrong as well, then the pressure to buy that machinery from abroad is even greater." (Evening Standard, 11

June 1979.) It will be seen therefore that one limitation on trade union action comes from the wage

increases trade unions obtain. As Marx put it: "Strikes have regularly given rise to invention and to the

application of new machinery" (Poverty o f Philosophy, Chapter Ii, Section V).

It is, however, important to notice that while, at any given time, there is a limit to the wage increase a union

can hope to get by a strike, this does not mean that wages are permanently held down to that level. As the

workers' average output goes on increasing (in recent years at an estimated two per cent a year) the unions

can resume their pressure at a later date under more favourable market conditions and obtain some part of

the increase. Strikes in recent years have demonstrated how workers who are not directly concerned with

production, e.g. firemen, hospital workers, dustmen, teachers, social workers and postmen, find they are

handicapped in their militant action by their indirect connection with the productive process. Although

their strikes can cause great public inconvenience it is the effect on trade and profit that ultimately

determines the length of a strike and the success of the strike weapon. The authorities-who are relieved of

the need to pay wages to the strikers-will often be prepared to resist indefinitely, while they use all the

propaganda channels available to stir up public hostility against the strikers. Another disadvantage for

many service workers is that the nature of their job often makes it a practical possibility for the government

to use troops for strike breaking.

While it is capitalism itself which limits what trade union action can achieve, some loss of effectiveness

also arises from the way in which, historically, unions have come to be organised. Often the workers

employed by a particular company and the workers in an industry are organised on occupational lines, in

separate unions. This has the result that wage claims and strikes can fail to make maximum impact because

not all the unions are involved in the action.

It also sometimes happens that different unions are competing to recruit the same workers so that some

strikes are not directly against the employer but to settle demarcation disputes between unions.

Each of the more than 500 unions is organised to promote the interests of its own members only, and it is

on rare occasions that union action gives regard to the common interest of the working class against the

employers. What, then, can be said about the potentialities and limitations of trade union action?

Something Marx wrote about it is as true now as it was a hundred years ago:

"The working class ought not to exaggerate to themselves the ultimate working of these everyday

struggles. They ought not to forget that they are fighting with effects ... that they are applying palliatives,

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not currying the malady.

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Trade Unions are not political organisations, their main activity being in the industrial field; but because of their

interest in trade union law and the laws governing employment, it was inevitable that they would seek political

remedies through one or other of the political parties. The earliest unions were illegal bodies; but as they could

not be suppressed, employers had to come to terms with them and governments had to bring them under the

law.

Before they were legalised in 1824 some employers "accepted and worked with them-sometimes, it has been

suggested, out of fear. Others went so far as to make collective agreements with their workpeople" (Two

Centuries of Trade Unionism, TUC, 1952). It was a magistrate who indicated the government's dilemma when

he said: "These combinations are mischievous and dangerous but it is very difficult to know how to deal with

them". Governments are still trying to solve the problem.

There emerged at that time a pattern which has continued to the present day; of unions pressing for relaxations

of the law and of the Courts or the government periodically tightening the law against the unions, only to have

it relaxed again by a succeeding government. It was largely the unions' concern with the law that led in 1868 to

the formation of the TUC and in 1906 of the Labour Party largely based on affiliated unions.

Some of the early unions had the declared aim of abolishing capitalism but this was short-lived, and after the

middle of the nineteenth century they settled down to wage-bargaining and the provision of strike pay and

unemployment and other benefits. They had accepted that it was their function to work within capitalism, not to

try to overthrow it. If some unions still have "socialism" as their object, it is only nationalisation (State

capitalism) that they have in mind. Typical of the trade union issues thrown up from time to time was the

decision of the magistrates in 1867 that unions were still illegal, and therefore a union could not bring

proceedings against a branch treasurer who had withheld union money.

"Thus the officers of the great national Trade Unions found their societies deprived of the legal status which

they imagined they had acquired and saw themselves once more destitute of any legal protection for their

accumulated funds" (History of Trade Unionism, Sydney and Beatrice Webb, 1920 edition, p. 262).

After enquiry by a Royal Commission in 1874 the law was amended by a Tory government.

Following the decision of a court awarding damages to the Taff Vale railway company against a railwaymen's

union after a strike, the law was amended again in 1906; and again in 1913 over a Court decision (the Osborne

Judgement) holding that political ex-penditure by a trade union was illegal. On these two occasions it was a

Liberal government which amended the law.

In 1927, after the general strike, a Tory government enacted the Trade Disputes and Trade Unions Act

restricting union activities. This was repealed by the Labour government in 1946.

In 1971, the Tory government imposed new restrictions under the Industrial Relations Act which the Labour

government repealed when it came to power in 1974.

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One issue which has repeatedly occupied the Courts and Parliament is the law on picketing. A strike is effective

to the extent that it brings production to a halt and from the first unions tried, by persuasion and sometimes by

force, to prevent blacklegs from carrying on at work. The law eventually took the form, as in the 1974 Trade

Union and Labour Relations Act, of permitting one or more persons to picket "for the purpose only of

peacefully obtaining or communicating information, or peacefully persuading any person to work or abstain

from working". It ruled out the use of force and picketing at a worker's home. Unions attempted to get roundthis by "mass picketing" as in the Grunwick strike (1977). Here the majority of the workers under pressure from

their employer refused to strike, and after many months the strike was called off. Mass picketing, if unimpeded,

could have shut the works down but large numbers of police were brought in to prevent it, and on one occasion

there were seventy arrests.

Another issue has been about so-called secondary picketing, that is bringing pressure on the employer involved

in the dispute by picketing other employers who are supplying the employer in question. It was on this that the

Labour Prime Minister, Mr Callaghan, up held the legal right of a worker to cross picket lines "if he disagrees

with the arguments put to him", and also admitted that instructions had been given to the police to enforce the

law. He threatened that the government might be forced to introduce new legislation to shackle the trade unions

(Financial Times, 24 January 1979). He hoped however to get the unions themselves to agree to a code of

practice making legislation unnecessary.

At one time the Tories completely opposed the closed shop. Their Trade Disputes and Trade Unions Act 1927

prohibited closed shop agreements in the local government service; but by 1979 they had moved away from

total opposition. The Secretary of State for Employment, Mr James Prior, in an interview given before the

general election rejected the demand by some Tory MPs to ban the closed shop entirely.

"I am absolutely convinced that would be the wrong way to proceed. It would be flying in the face of the

evidence of the past few years of how industry works. Most firms want it because they are dealing with one

group representing the whole work force. We are right to say the closed shop is here to stay but we can modify

it by law" (Sunday Telegraph, 18 February 1979).

The Tory government's Employment Bill, 1980* amending Trade Union law, was in line with Mr Prior's

forecast in not abolishing the closed shop. It provided, however, that if a new closed shop is not supported by a

suggested 80 per cent of the workers covered by it, workers losing their jobs because of refusal to join a union

will be able to claim compensation from the employer for "unfair dismissal" if refusal to join is based on

grounds of conscience or deeply held personal convictions. To encourage unions to hold secret ballots for the

election of officials, alteration of rules and strike decisions the government, under the new law, will give

financial assistance towards the cost.

With regard to picketing, the Tory Manifesto at the 1979 General Election haf pledged the Incoming

government to ensure that the protection of the law is available to those concerned in the dispute but who can

suffer severely frem secondary action (picketing, blacking and backloading).

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The amending legislation provided that picketing, in order to be lawful, must not go beyond peaceful persuasion

and must be at or near the strikers' place of work; thus ruling out "secondary picketing", as, for example, of

striking lorry drivers picketing at the docks.

*At the time of printing this pamphlet the Employment Bill was still being debated in Parliament and had not

reached the Statute Book.

Trade unions and their members have long been protected by law against employers' claims for damages for

losses caused by strikes. The Labour government in 1976 extended this protection against employers' claims for

damages, to cover trade union action against employers not themselves involved in the dispute; and the House

of Lords early in 1980 ruled that this protected the steel workers' union in dispute with the British Steel

Corporation, when it extended the strike to the private steel companies with which the union was not in dispute.

While not entirely depriving unions of this widened protection the amending legislation limited it to employers

who are "first suppliers and first customers", doing substantial business with the company involved in the

dispute.

Companies which consider that they fall outside the defined area will have to take steps by applying to the

Courts for an injunction to stop trade union action as it affects themselves, or making a claim through the

Courts for damages.

The government announced that these amendments to trade union law were only a first step, and that a new bill

would be presented in a later session of Parliament. Voicing the TUC's total opposition to the amending

legislation, Mr Len Murray, TUC General Secretary, anticipated its repeal by a future government:

"I am absolutely convinced that this legislation if it becomes law, will have to be removed by Parliament itself;

and I would guess that the reasons for that will be the reaction, resentment and pressures of employers as much

as unions" (The Times, 8 December 1979).

Why do different governments take differing attitudes on trade union law? When unions were first legalised it

had become obvious that they could not be stamped out and another way of dealing with them had to be tried.

There were even economists who advised the government that if unions were permitted workers would soon

discover that they were useless to raise wages above their "natural" level and would give them up. However the

workers knew better than the economists.

Sometimes divisions in the ruling class played a part. Some Tory landowners were not at all averse to

embarrassing the manufacturing capitalists in the Liberal Party, as they showed by amending the law in 1876.

Later, when workers had got the vote (for which the unions had campaigned), it became a matter of calculating

electoral advantage; whether to appeal to the trade union voters or "to stand up to the unions". The Tories won

the 1979 election in spite of whatever support they may have lost by promising further restrictive legislation;

but they also sought to attract trade union support by promising "free wage-bargaining".

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During the nineteenth century trade union "politics" had been concerned with securing amendments of the law

which would make it easier for them to function. With the formation of the Labour Party and the prospect of a

Labour government the unions were persuaded they were entering into a new era. In place of Liberal and Tory

governments which backed the employers they expected a Labour government would back the workers against

the employers. They were encouraged in this belief by Labour Party propaganda. Clement Attlee, before he

became Prime Minister in the Labour governments 1945-51, had pledged his Party to "work to reduce thepurchasing power of the wealthier classes, while by wage increases ... it will extend the purchasing power of the

masses". He promised the abolition of rich and poor, "an equalitarian society", and indeed the establishment of

Socialism. Experience under successive Labour governments (the first was in 1924) dashed the hopes of the

unions. Labour governments took on the administration of capitalism, and came up against the inexorable law

of that system, that in the long run production continues only while it is profitable. This requires that wages

shall be low enough to leave a profit margin. Faced with strikes which threatened this, Labour governments

(like Liberal and Tory governments), have declared a state of emergency and used troops to break strikes. Since

1945 Labour governments, like Tory governments, have tried to limit wage increases; sometimes by persuasion

and agreement with the TUC; sometimes by a "wage freeze" as in 1966; sometimes, as in the Spring of 1979,

by trying to hold wage increases to 5 per cent against a rise in the cost of living of nearly double that amount.

Even in the narrower field of trade union law the Wilson Labour government 1966-70 found itself in conflict

with the unions. Based on a government White Paper, In Place o f Strife, an Industrial Relations Bill was

proposed which met a storm of protest from the unions. (The Bill in a modified form was still before Parliament

when the government went out of office in 1970.) The lesson is plain. In the struggle of the working class

against the employers, it is not in the workers' interest that their unions should affiliate to or support the Labour

Party, or any other political party which is committed to administering the capitalist system.

In order to be effective, trade unions have to seek to organise all workers irrespective of the fact that they are

divided in their political views. (At the May 1979 general election more workers, and possibly more trade

unionists, voted Tory and Liberal than voted Labour.) Tying the unions to one or other of the parties of

capitalism promotes division not unity. Workers join trade unions in recognition of their common interest

against the employers. They need to learn that no matter which political party is in power its weight will be

thrown in support of the employers against them in their struggles. In the long run trade unions must recognise

that the industrial struggle is inevitable but it is only a rearguard action. They must see that it is in their class

interest to abolish capitalism and establish Socialism.

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COLLECTIVE BARGAINING

Collective bargaining is largely differentiated by the level at which it is held: national (cross-sectoral), industry

(sectoral) or company; the subjects covered (e.g. pay, hours, training etc.) and the length of time that the

agreement lasts for. Although the types of industrial relations systems (see the four different models above)

have a great influence on the kind of agreements concluded, there are also variations between countries in the

same group and changes from year to year.

An important indicator of overall impact of collective bargaining is to be found in the notion of coverage the

proportion of workers within the labour force actually covered by, and therefore benefitting from, the different

collective agreements. As can be seen from the figures in Table 2 on the next page, there is relative stability in

terms of collective bargaining coverage for the period 20002006, with the exception of some countries, where

coverage has declined significantly Greece, Hungary and Slovakia. Some countries, for example, Austria,

Belgium, Finland, France, Sweden and Spain, have a very high level of coverage, while Bulgaria, Hungary,

United Kingdom and the three Baltic states, have a relatively low level.

Characteristics of Trade Union.

It is a group process, wherein one group, representing the employers, and the other, representing the

employees, sit together to negotiate terms of employment

Negotiations form an important aspect of the process of collective bargaining i.e., there is considerable

scope for discussion, compromise or mutual give and take in collective bargaining.

Collective bargaining is a formalized process by which employers and independent trade unions

negotiate terms and conditions of employment and the ways in which certain employment-related

issues are to be regulated at national, organizational and workplace levels.

Collective bargaining is a process in the sense that it consists of a number of steps. It begins with the

presentation of the charter of demands and ends with reaching an agreement, which would serve as the

basic law governing labor management relations over a period of time in an enterprise. Moreover, it is

flexible process and not fixed or static. Mutual trust and understanding serve as the by products of

harmonious relations between the two parties.

It a bipartite process. This means there are always two parties involved in the process of collective

bargaining. The negotiations generally take place between the employees and the management. It is a

form of participation.

Collective bargaining is a complementary process i.e. each party needs something that the other party

has; labor can increase productivity and management can pay better for their efforts.

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Collective bargaining tends to improve the relations between workers and the union on the one hand

and the employer on the other.

Collective Bargaining is continuous process. It enables industrial democracy to be effective. It uses

cooperation and consensus for settling disputes rather than conflict and confrontation.

Collective bargaining takes into account day to day changes, policies, potentialities, capacities and

interests.

It is a political activity frequently undertaken by professional negotiators

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Collective Bargaining Process

Collective bargaining generally includes negotiations between the two parties (employees representatives

and employers representatives). Collective bargaining consists of negotiations between an employer and agroup of employees that determine the conditions of employment. Often employees are represented in the

bargaining by a union or other labor organization. The result of collective bargaining procedure is called

the collective bargaining agreement (CBA). Collective agreements may be in the form of procedural

agreements or substantive agreements. Procedural agreements deal with the relationship between workers

and management and the procedures to be adopted for resolving individual or group disputes.

This will normally include procedures in respect of individual grievances, disputes and discipline.

Frequently, procedural agreements are put into the company rule book which provides information on the

overall terms and conditions of employment and codes of behavior. A substantive agreement deals with

specific issues, such as basic pay, overtime premiums, bonus arrangements, holiday entitlements, hours of

work, etc. In many companies, agreements have a fixed time scale and a collective bargaining process will

review the procedural agreement when negotiations take place on pay and conditions of employment.

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team should

consist of representatives of both the parties with adequate knowledge and skills for negotiation. In

this phase both the employers representatives and the union examine their own situation in order

to develop the issues that they believe will be most important. The first thing to be done is to

determine whether there is actually any reason to negotiate at all. A correct understanding of the

main issues to be covered and intimate knowledge of operations, working conditions, production

norms and other relevant conditions is required.

2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process well

begun is half done and this is no less true in case of collective bargaining. An environment of

mutual trust and understanding is also created so that the collective bargaining agreement would be

reached.

3. Propose: This phase involves the initial opening statements and the possible options that exist to

resolve them. In a word, this phase could be described as brainstorming. The exchange of

messages takes place and opinion of both the parties is sought.

4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the

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time when what ifs and supposals are set forth and the drafting of agreements take place.

5. Settlement: Once the parties are through with the bargaining process, a consensual agreement is

reached upon wherein both the parties agree to a common decision regarding the problem or the

issue. This stage is described as consisting of effective joint implementation of the agreement

through shared visions, strategic planning and negotiated change.

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IMPORTANCE OF COLLECTIVE BARGAINING

a. Collective bargaining includes not only negotiations between the employers and unions but also

includes the process of resolving labor-management conflicts. Thus, collective bargaining is,

essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method of

introducing civil rights in the industry, that is, the management should be conducted by rules rather

than arbitrary decision making. It establishes rules which define and restrict the traditional

authority exercised by the management.

Importance to employees

Collective bargaining develops a sense of self respect and responsibility among the employees.

b. It increases the strength of the workforce, thereby, increasing their bargaining capacity as a group.

c. Collective bargaining increases the morale and productivity of employees.

d. It restricts managements freedom for arbitrary action against the employees. Moreover, unilateral

actions by the employer are also discouraged.

e. Effective collective bargaining machinery strengthens the trade unions movement.

f. The workers feel motivated as they can approach the management on various matters and bargain

for higher benefits.

g. It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for the

adjustment of wages and employment conditions to economic and technological changes in the

industry, as a result of which the chances for conflicts are reduced.

Importance to employers

1. It becomes easier for the management to resolve issues at the bargaining level rather than taking up

complaints of individual workers.

2. Collective bargaining tends to promote a sense of job security among employees and thereby tends

to reduce the cost of labor turnover to management.

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3. Collective bargaining opens up the channel of communication between the workers and the

management and increases worker participation in decision making.

4. Collective bargaining plays a vital role in settling and preventing industrial disputes.

Importance to society

1. Collective bargaining leads to industrial peace in the country

2. It results in establishment of a harmonious industrial climate which supports which helps the pace

of a nations efforts towards economic and social development since the obstacles to such a

development can be reduced considerably.

3. The discrimination and exploitation of workers is constantly being checked.

4. It provides a method or the regulation of the conditions of employment of those who are directly

concerned about them.

Levels of collective bargaining

Collective Bargaining operates at 3 levels. They are

1) National Level

2) Sector/Industrial Level

3) Company/ Enterprise Level

Economy-wide (national) bargaining: is a bipartite or tripartite form of negotiation between union

confederations, central employer associations and government agencies. It aims at providing a floor for

lower-level bargaining on the terms of employment, often taking into account macroeconomic goals.

Sectoral bargaining, which aims at the standardization of the terms of employment in one industry,

includes a range of bargaining patterns. Bargaining may be either broadly or narrowly defined in terms of

the industrial activities covered and may be either split up according to territorial subunits or conducted

nationally.

.

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The third bargaining level involves the company and/or establishment. As a supplementary type of

bargaining, it emphasizes the point that bargaining levels need not be mutually exclusive.

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Table on Collective Bargaining Coverage in Various Countries

Country 2000 (In %) 2006

Austria 99.0 99.9

Belgium 96.0 96.0

Bulgaria 25.0 Nd

Cyprus Nd 75.0

Czech Republic 46.7 44.0

Denmark 80.0 82.0

Estonia 22.0 22.0

Finland 90.0 86.0

Germany 63.0 63.0

Greece 80.0 85.0

Hungary 52.0 35.0

Ireland Nd Nd

Italy 80.0 80.0

Latvia 20.0 20.0

Lutharia 16.0 12.0

Luxembourg 60.0 60.0

Malta 57.0 57.0

Netherlands 86.0 82.0

Poland 43.0 35.0

Portugal 69.0 62.0

Romania Nd Nd

Slovakia 44.0 35.0

Slovenia 100.0 100.0

Spain 80.0 80.0

Sweden 91.0 92.0

United Kingdom 36.3 36.3

Collective bargaining coverage is considered as a good indicator for the strength and impact of trade unions in

the labour market. There are other reasons however the existence of multi-sectoral employers organisations

and the readiness of governments to declare agreements binding more generally.

The level of collective bargaining differs greatly from one country to another. Collective bargaining at national

crosss-sectoral level is normally carried out in countries such as Belgium Greece, Hungary, Ireland, Romania,

Slovenia and Spain. National sectoral bargaining is prevalent in most Western European countries and several

Central and Eastern European countries; in the countries quoted above it often takes place as an extension of

national cross-sectoral bargaining. In countries such as Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta,

Poland and the UK, companylevel bargaining is widespread.

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Trends in Collective Bargaining appear to be heading towards decentralisation, as there is increasing pressure,

particularly from employers, to adopt more flexible bargaining agendas

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STRIKES

Strike action is generally, but not always, a last resort for unions and is used when collective bargaining

avenues have been exhausted. Article 28 of the Charter of Fundamental Rights of the European Union

recognises the right of workers and their organisations to negotiate and conclude collective agreements at the

appropriate levels and, in the case of conflicts of interest, to take collective action to defend their interests,

including strike action.

At the national level the right or freedom to take strike is guaranteed by the constitution in most countries by the

European Union. The expectations are Austria, Luxembourg, Malta, Netherlands.Ireland. UK. In germany the

Finland the right deserves from freedom of association. Where this is not the case, collective action is generally

regulated by legislation and/or case law, or in some countries, Denmark, Finland, Sweden and Ireland, by the social

partners themselves, by means of collective agreements

There are different regulatory systems for different types of strike action in different countries. For example, political

strikes, which are often directed against the government and go beyond simple workplace demands, are generally

prohibited, except in Denmark, Finland, Ireland and Italy. On the other hand, solidarity action, supporting other

workers already on strike, is considered legal under certain conditions in most countries, with the exception of

Latvia, Luxembourg, the Netherlands and the UK. Picketing, whereby strikers outside the workplace attempt to stop

other workers from working and persuade them to join the action, is legal in some countries only.

Statistics on strike action are normally collected in the form of the number of strikes, the number of strikers and the

number of working days lost through strike action. The figures in Table 3 provide some information about trends

within each country in terms of working days lost by strike action.

The figures show that relatively, many working days were lost in Austria in 2003, when there was considerable

opposition to public pension reform plans and railway restructuring, but not thereafter; the same went for Sweden in

2003, but on this occasion the conflict centred on pay for blue-collar municipal workers; the figures were relatively

high for France in 2003 and again in 2005; Spain had a particularly high level in 2004, as did the United Kingdom,

albeit to lesser extent; Belgium and Finland had a relatively high level in 2005. Some countries, Latvia and Lithuania

for example, are more or less strike free.

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INDUSTRIAL DISPUTES

Causes of Industrial Disputes:

The causes of industrial disputes can be broadly classified into two categories: economic and non-

economic causes. The economic causes will include issues relating to compensation like wages, bonus,

allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and

retrenchments. The non economic factors will include victimization of workers, ill treatment by staff

members, sympathetic strikes, political factors, indiscipline etc.

1) Wages and allowances: Since the cost of living index is increasing, workers generally bargain for

higher wages to meet the rising cost of living index and to increase their standards of living. In 2002,

21.4% of disputes were caused by demand

of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to

26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.

2) Personnel and retrenchment: The personnel and retrenchment have also been an important factor

which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those

caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could beseen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were

caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and

only 0.4% were caused by retrenchment.

Indiscipline and violence: From the given table, it is evident that the number of disputes caused by

indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline,

which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes were caused

due to indiscipline respectively. During the year 2003, indiscipline accounted for the highest percentage

(36.9%) of the total time-loss of all disputes, followed by cause-groups wage and allowance and personnel

with 20.4% and11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for

40.4% of disputes.

3.) Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the disputes were

because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005 respectively.

4.) Leave and working hours: Leaves and working hours have not been so important causes of industrial

disputes. During 2002, 0.5% of the disputes were because of leave and hours of work while this percentage

increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and working

hours.

5.)Miscellaneous: The miscellaneous Factors Include

Inter/Intra Union Rivalry

Charter of Demands

Work Load

Standing orders/ Rules and Services/Safety measures

Non Implementation of Rewards and agreements

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Analysis of Industrial Relations

The number of industrial disputes in country has shown slow but steady fall over the past ten years. In

1998, the total number of disputes was 1097 which fell by more than half to 440 in 2006.It is being

estimated that this trend will continue in 2007 as well. To support this, only 45 cases of disputes have

been recorded during the first four months of 2007. This significant decline is attributed to the serious

attempts made by industries to improve industrial relations with their workers. However, a deeper look at

the data reveals that the number of mandays (i.e., the industrial unit of production equal to the work one

person can produce in a day) lost due to disputes has not come down as significantly. The country, on an

average, lost 25.4 million mandays of work annually between 1998and 2006 which might have affected

its industrial output. More than 2.14 lakh man days were due to work stoppages in 23 industrial disputes

during January to March 2007. Through there has been a decline in the number of strikes, the country stllwitnessed some major stries between 2004 and 2006,like those in Honda, Escorts, Apollo, and S Kumars

factories and in SBI bank

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On analyzing the data sector wise, it is clear that the private sector has witnessed greater number of

disputes as compared to the public sector. In 2005, only 57 disputes were recorded in public sector which

resulted in a wage loss of 79 Crores. In contrast to this, 399 disputes were recorded in the private sector. In

the recent past, maximum number of disputes has been recorded in the manufacturing, agriculture and

mining and quarrying industries.

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STRIKES

A strike is a very powerful weapon used by trade unions and other labour associations to get their

demands accepted. It generally involves quitting of work by a group of workers for the purpose of

bringing the pressure on their employer so that their demands get accepted. When workers collectively

cease to work in a particular industry, they are said to be on strike.

According to Industrial Disputes Act 1947, a strike is a cessation of work by a body of persons

employed in an industry acting in combination; or a concerted refusal of any number of persons who are

or have been so employed to continue to work or to accept employment; or a refusal under a common

understanding of any number of such persons to continue to work or to accept employment.

This definition throws light on a few aspects of a strike. Firstly, a strike is a referred to as stoppage of work

by a group of workers employed in a particular industry. Secondly, it also includes the refusal of a

numbeof employees to continue work under their employer.

In a strike, a group of workers agree to stop working to protest against something they think is unfair where

they work. Labors withhold their services in order to pressurize their employment or government to meet

their demands. Demands made by strikers can range from asking for higher wages or better benefits to

seeking changes in the workplace environment. Strikes sometim

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