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INDUSTRY OVERVIEW

All immovable properties including land, structures on it and other natural resources can be

classified as real estate. It is also referred as realty. All types of residential, commercial and

industrial properties fall under this domain. Real estate involves the purchase, sale and

development of land, residential and non-residential buildings. The major players in this

sector are the realtors, builders, brokers, buyers and sellers. The activities of the real estate

sector encompass the housing and construction sectors also.

With its huge growth potential in the market, real estate sector has emerged as a major

field of business in recent time. The real estate sector in India has assumed growing

importance with the liberalization of the economy. The consequent increase in the business

growth opportunities and migration of the labor force has, in turn, increased the demand for

commercial and housing space, especially rental housing. The development and expansion in

the real estate sector is influenced by the developments in the retail, hospitality and

entertainment (e.g., hotels, resorts, cinema theaters ) industries, economic services (e.g.

hospitals, schools ) and information technology (IT) enabled services (like call centers ) etc.

and vice versa.

The real estate sector is a major employment driver. It is the second largest employer

next only to agriculture. All this is due to the chain of backward and forward linkages that the

sector has with the other sectors of the economy, especially with the housing and construction

sector. About 250 ancillary industries such as cement, steel, brick, timber, building materials,

etc. are totally dependent upon the real estate industry.

The real estate sector in India is flourishing rapidly and widely with a growth rate of about 30

percent each year. The division is like - about 80 percent of the real estate development in

India has been in the field of residential housing and the remaining 20 percent includes office,

shopping malls, entertainment centres, hotels, multiplexes and hospitals. Indias booming

outsourcing business industry and consumption-led growth are contributing significantly to

its real estate growth. The outsourcing business houses including call centres, technical

consultancy services, and medical transcription units and programming houses constituted

around 10 million square feet of real estate growth in India till 2003. In last couple of years

the share of commercial sector in the overall real estate growth has been more prominent.

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Considering the advantages of significantly lower cost of operations in India, several

multinational companies across the globe are expressing their willingness and desire to shift

their operations to India. According to a 2003 estimated records, the demand for office space

by the over expanding IT and IT- enabled service sectors in India would be around 66 million

square feet, in the next five years. These multinational companies have realized the fact that

in order to expand and flourish their business, the skilled Indian work force can be of great

use to them. So they need to provide the Indian professionals with all the facilities of modern

life starting from housing to entertainment, so that they can give their best in the work place

and at the same time be happy with their standard of living. This trend has set off the

development of world class entertainment centres and business centres, across the country,

thereby bringing a radical change in the lives of urban population in India. The growing

demand of sky scrapers in all the metropolitan cities across the country has changed the

image Indian skyline. There is an estimated requirement of 80 million housing units over the

next 15 years and 2000 sq. ft. of office space over the next five years. For the purpose of

increasing the investment required to plug the aforementioned supply deficits, the

government, has allowed the Foreign Direct Investment (FDI) up to 100% in the specified

real estate projects including townships, built-up infrastructure and construction development

projects. In December 2007, The Security and Exchange Board of India (SEBI), which is the

domestic stock market regulator has issued the draft regulations clearing the way for

introduction of Real Estate Investment Trusts in India. This beneficiary step taken by the

government is expected to favourably serve the booming real estate market, by functioning as

an alternative source for satisfying the capital needs of the sector.

The relatively crucial development potential of real estate industry, coupled by the

encouraging and favourable FDI regulations and increasing focus from the private equity

sector has created substantial investment and significant growth opportunities for the real

estate companies.

As this springing up realty sector is getting on into a stable and sustainable economic

sector, three key trends, which are likely to shape its future, are emerging:

a) Increased focus on execution risks

b) Increased investments in mixed-use development projects with a view to extract the

maximum synergic benefit

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c) Syndication among real estate developers on execution of big- ticket development

projects, i.e., shift from competition to partnership.

The sustainability of growth in the real estate sector is due to its strong and intensive demand

by various other sectors like:

i) Rapid expansion of IT and IT-enabled services and also the business outsourcing industry

including both the knowledge process outsourcing and the clinical testing outsourcing.

ii) Extensive development and acceptance of shopping malls as one stop destination for the

consumers.

iii) Growing popularity of the special economic zones as preferred destinations for both the

manufacturing as well as service industries.

Current trends

The Indian real estate sectors contribution to GDP has declined from 10.6% in the year

2010-2011 to 6.5% in the year 2012. With rising costs of inputs and high cost of funds, the

industry is facing dire consequences.

Few reasons leading to the situation are as follows

Raising funds is a key challenge as the recent performance of the industry in the global

markets has made the banks and the institutional lenders more cautious.

Real estate is the fourth largest sector in terms of FDI inflows in the country. According to

Department of industrial production and policy report, the FDI inflows in the housing and

real estate sector received USD 2935 million, USD 1227million and USD 731million in the

years 2009-2010, 2010-2011 and 2011-2012 respectively. The decline is due to the

unfavorable economic environment in the US and euro zone.

The industry is witnessing a significant rise in input cost as a result of inflation. The impact

is severe as the industry is highly capital and labor intensive in nature. This is also leading to

a high debt to equity ratio.

RBI as a measure to address the rising inflation increased the repo rates a number of times in

the recent past. A major deterrent for home loan buyers is the increase in prime lending rate

at commercial banks and other housing finance institutions which in turn impacted the sales.

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However the huge supply and demand gap in Indian real estate market still exists due to the

increasing middle class population.

The budget 2012 focused more on affordable housing concept. External Commercial

Borrowings are allowed for low cost affordable housing projects, with lower interest cost for

developers. The government also reduced withholding tax on External commercial

Borrowings from 20 percent to 5 percent for three years. This works as a relief for

developers looking at affordable housing projects but will not help the high end projects and

commercial real estate.

The government on the other hand insisted on compulsory reservation of 20 percent of the

developed property for affordable housing which may pinch the pockets of developers, it is

expected that the burden in turn will be passed on to the rest 80 percent.

An increase in service tax by 2 percent will also increase the cost for developers.

Projects and properties in tier 2 and tier 3 cities are expected to register a relatively higher

rate of growth where as the prices in tier 1 cities are exorbitantly higher which is also an

indicator for a speculative bubble and a need for market correction. According to National

housing board, the correction in tier 1 cities started showing a decline in their prices. The

global house price index survey by Knight Frank consultants shows that India ranks third

amongst countries where prices have appreciated in the past year by 12 percent. The survey is

conducted among 53 countries. Brazil ranks first by showing an increase of 23.5 percent

followed by Estonia by 13.5 percent. The report also states that the property prices have seen

their weakest annual performances globally since the depth of recession in 2009.

There are many prospective home buyers who are deterring their plans for investment waiting

for correction in prices and decrease in interest rates. The year 2011 also witnessed a higher

vacancy rates and the trend continued in the first quarter of 2012.

Lack of industry status, absence of a single regulator, lack of transparency, delayed project

approvals by the concerned authorities are further adding to the anguish.

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Top ten preferred localities-Delhi

Rank 1 Dwarka

Rank 2 Vasant Kunj

Rank 3 Mayur Vihar Ph-I

Rank 4 Vasundhara Encl.

Rank 5 Saket

Rank 6 Sarita Vihar

Rank 7 Janakpuri

Rank 8 Malviya Nagar

Rank 9 Paschim Vihar

Rank 10 Patparganj

Availability of projects at lesser values, metro connectivity and good road infrastructure were

the key reasons, said Kamal D Patil of Landmark Real Home.

"Vasundhara and Indraprastha Extension offer comparatively lower rates for property, which

is the main reason for consistent rise in values quarter-on-quarter," Patil said.

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South Delhi localities saw a healthy jump in values, contrary to the previous quarter.

Safdarjung Enclave, Panchsheel Enclave, East of Kailash, Greater Kailash I, II and Shivalik

witnessed a rise in the range of 6-14% this quarter.

Vikas Thapar of Realty Expert said that although demand has not increased significantly, yet

the improvement in market sentiment in the hope of a fall in interest rates and inflation early

this year led to a hike in values.

"These areas have well managed colonies, good roads, social infrastructure and presence of

shopping areas in the vicinity That's why these localities have seen a better rise in values

compared to others," Thapar added.

Most residential space that is witnessing a good demand in these localities is in the size range

of 1,500-2,000 sq ft area, he said.

RENT MONITOR

The rental market in Delhi showed a healthy rise across most localities in the Jan-Mar 2012

quarter. Areas with comparatively lower rental values, metro connectivity and good

infrastructure saw a better increase compared to other areas.

Sectors in Dwarka saw a rise in the range of 9-15%, primarily on account of increased

number of working professionals in Noida wanting to live in comparatively affordable

apartments for rent.

Realtor Prakash said the main reason why these sectors are seeing a rise in values is because

of increased demand and less supply. "Rental prices in Noida have increased too fast in the

recent past, forcing professionals to migrate to affordable areas like Dwarka," he said.

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In South Delhi, localities like Gulmohar Park, Kailash Colony, Jangpura Extension, Sarvodya

Enclave, Panchsheel Enclave and Lajpat Nagar-III saw a rise of 12-25% in this quarter,

Realtor Vikas Thapar said that the rental market in South Delhi is doing good on account ofsimilar supply-demand ratio in addition to metro connectivity across these areas. "There has

been an increase in the supply of unauthorised colonies in some of these areas which has led

to a demand-supply match."

Thapar added that the trend of giving apartments on rent has evolved in recent times in South

Delhi. "Majority of the people moving here are families, with a budget of Rs 15,000-30,000

per month," he said.

Localities in East Delhisuch aslndraprastha Extension and Vasundhara Enclave saw a rise of

6% and 7% respectively.

Abhishek Kakkar of Realty Planner Pvt. Ltd said that after the metro, these localities have

seen migration of people from Noida due to high rental prices.

JAN-MAR 2012

Delhi City Index went up by 9%

Asking values remained high in anticipation of fafl in interest rate

Dwarka remained the top most preferred area

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2&3BHK was highest in demand

"These localities now have all facilities such as presence of malls, grocery stores for daily

needs, schools, colleges and. hospitals , so that is also encouraging," Kakkar added.

YIELD METER

Vasundhara Enclave posted the highest gross yield primarily on account of higher

percentage increase in rental values over capital values

Greater Kailash II posted the lowest gross yield. This is primarily attributed to

percentage increase in average capital values and stable rental values

RESEARCH METHODOLOGY

Research is a systematic method of finding solutions to problems. It is essentially an

investigation, a recording and an analysis of evidence for the purpose of gaining

knowledge. According to Clifford woody, research comprises of defining and

redefining problem, formulating hypothesis or suggested solutions, collecting,

organizing and evaluating data, reaching conclusions, testing conclusions to

determine whether they fit the formulated hypothesis

Research Design

Research design is the plan for the conduct of actual research investigation. Such

design provides guideline for the researcher to keep a track on his actions and to

know that he is moving in the right direction on data collection.

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AIM AND OBJECTIVES

2. The aim and objectives of this study can be enumerated as under :-

(a) To analyse the role of the Unions in fulfilling the desired

objectives, i.e., the level of satisfaction derived after joining Trade

Unions.

(b) To analyze the motives of Indian Workers in joining or refraining

from joining Trade Unions.

(c) To obtain an insight into the activities for progression of workers

and related issues emerging thereof.

SCOPE

3. The scope of the study encompasses the following :-

(a) The emphasis of the study will essentially be on the functional

aspects of the Unions and their activities.

(b) The study will also aim at understanding the dynamics involved in

the organization and activities involved.

(c) The study will not encompass specific issues related to various

factors governing employment attributes.

Data Sources

a. Primary Data:-

Primary data are the data gathered for the specific research project and are

directly taken from the very source of information.

Responses of Employees through Questionnaire.

Personal Interview with the Employees of Maruti and SAIL

b. Secondary Data:-

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Secondary data are the data, which already exists and were collected for some

other purpose or for similar previous studies. Secondary data were proved to be

instrumental in structuring the questions to be asked for collecting primary data.

Various books on Industrial relations.

Websites

Maruti & SAIL annual reports and brochures.

Journals

Sample Design

A sample design is a finite plan for obtaining a sample from a

given population. Simple random sampling is used for this study.

a) Sample population

It is segment to Executive class and Non-executive class employees of Maruti

& SAIL.

b) Sampling unit

The sample unit consists of all Executives and Non Executives of Maruti &SAIL.

c) Sample size

Large sample gives more reliable results than small samples. However it is

not necessary to sample the entire population or even a substantial portion to

achieve reliable result. After considering time constraint and cost

effectiveness for the project total 50 peoples are surveyed.

. There are three types of employees:

Workmen

Supervisors

Executives

Research Instrument

The two main research instruments in collecting primary data are:

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A. personnel Interview

B. Questionnaire

A) Personnel Interview:

It is one of the important sources to collect primary data. Through personnel

interview interviewer can ask question according to research requirement. Data

which is collect by personnel interview is more reliable than other sources.

B) Questionnaire:

Questionnaires consist of a set of questions presented to the respondent for their

answer. Because of its flexibility the questionnaire is by far the most common

instrument used to gather primary data. Questionnaire needs to be carefully

developed and tested before they are actually used on a large scale.

THEORETICAL REVIEW

Industrial relation means the relationship between employers and employees in course of

employment in industrial organisations. However, the concept of Industrial Relations has a broader

meaning. In a broad sense, the term Industrial Relations includes the relationship between the

various unions, between the state and the unions as well as those between the various employers

and the government. Relations of all those associated in an industry may be called Industrial

Relations.

According to International Labour Organisation, Industrial relations comprise

relationships between the state on one hand and the employers and employees organisation on

the other, and the relationship among the occupational organisations themselves.

Definition:According to J.T. Dunlop, Industrial relations are the complex interrelations among

managers, workers and agencies of the government

Features of Industrial Relations:

1. Industrial relations are outcomes of employment relationships in an industrial enterprise.

These relations cannot exist without the two parties namely employers and employees.

2. Industrial relations system creates rules and regulations to maintain harmonious relations.

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3. The government intervenes to shape the industrial relations through laws, rules,

agreements, terms, charters etc.

4. Several parties are involved in the Industrial relations system. The main parties are

employers and their associations, employees and their unions and the government. These

three parties interact within economic and social environment to shape the Industrialrelations structure.

5. Industrial relations are a dynamic and developing concept, not a static one. They undergo

changes with changing structure and scenario of the industry as and when change occurs.

6. Industrial relations include both individual relations and collective relationships.

Objectives of Industrial Relations:

1. To maintain industrial democracy based on participation of labour in the management and

gains of industry.

2. To raise productivity by reducing tendency of high labour turnover and absenteeism.

3. To ensure workers participation in management of the company by giving them a fair say in

decision-making and framing policies.

4. To establish a proper channel of communication.

5. To increase the morale and discipline of the employees.

6. To safeguard the interests of the labour as well as management by securing the highest level

of mutual understanding and goodwill between all sections in an industry.

7. To avoid all forms of industrial conflicts so as to ensure industrial peace by providing better

living and working standards for the workers.

8. To bring about government control over such industrial units which are running at a loss for

protecting the livelihood of the employees.

Importance of Industrial Relations:

1. Uninterrupted Production: The most important benefit of industrial benefits is that it

ensures continuity of production. This means continuous employment for all involved right

from managers to workers. There is uninterrupted flow of income for all. Smooth running of

industries is important for manufacturers, if their products are perishable goods and to

consumers if the goods are for mass consumption (essential commodities, food grains etc.).

Good industrial relations bring industrial peace which in turn tends to increase production.

2. Reduction in Industrial disputes: Good Industrial relations reduce Industrial disputes.

Strikes, grievances and lockouts are some of the reflections of Industrial unrest. Industrial

peace helps in promoting co-operation and increasing production. Thus good Industrial

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relations help in establishing Industrial democracy, discipline and a conducive workplace

environment.

3. High morale: Good Industrial relations improve the morale of the employees and motivate

the worker workers to work more and better.

4. Reduced wastage: Good Industrial relations are maintained on the basis of co-operation and

recognition of each other. It helps to reduce wastage of material, manpower and costs.

5. Contributes to economic growth and development.

Causes of poor Industrial Relations:

1. Economic causes: Often poor wages and poor working conditions are the main causes for

unhealthy relations between management and labour. Unauthorised deductions from

wages, lack of fringe benefits, absence of promotion opportunities, faulty incentive schemesare other economic causes. Other causes for Industrial conflicts are inadequate

infrastructure, worn-out plant and machinery, poor layout, unsatisfactory maintenance etc.

2. Organisational causes: Faulty communications system, unfair practices, non-recognition of

trade unions and labour laws are also some other causes of poor relations in industry.

3. Social causes: Uninteresting nature of work is the main social cause of poor Industrial

relations. Dissatisfaction with job and personal life culminates into Industrial conflicts.

4. Psychological causes: Lack of job security, non-recognition of merit and performance, poor

interpersonal relations are the psychological reasons for unsatisfactory employer-employee

relations.

5. Political causes: Multiple unions, inter-union rivalry weaken the trade unions. Defective

trade unions system prevailing in the country has been one of the most responsible causes

for Industrial disputes in the country.

Industrial DisputesIndustrial disputes are organised protests against existing terms of

employment or conditions of work. According to the Industrial Dispute Act, 1947, an Industrial

dispute means

Any dispute or difference between employer and employer or between employer and workmen or

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

terms of employment or with the conditions of labour of any person

In practice, Industrial dispute mainly refers to the strife between employers and their

employees. An Industrial dispute is not a personal dispute of any one person. It generally affects a

large number of workers community having common interests.

Prevention of Industrial Disputes:

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The consequences of an Industrial dispute will be harmful to the owners of industries, workers,

economy and the nation as a whole, which results in loss of productivity, profits, market share and

even closure of the plant. Hence, Industrial disputes need to be averted by all means.

Prevention of Industrial disputes is a pro-active approach in which an organisation

undertakes various actions through which the occurrence of Industrial disputes is prevented. Like

the old saying goes, prevention is better then cure.

1. Model Standing Orders: Standing orders define and regulate terms and conditions ofemployment and bring about uniformity in them. They also specify the duties and

responsibilities of both employers and employees thereby regulating standards of their

behaviour. Therefore, standing orders can be a good basis for maintaining harmonious

relations between employees and employers.

Under Industrial Dispute Act, 1947, every factory employing 100 workers or more is required

to frame standing orders in consultation with the workers. These orders must be certified

and displayed properly by the employer for the information of the workers.

2. Code of Industrial discipline: The code of Industrial discipline defines duties and

responsibilities of employers and workers. The objectives of the code are:

To secure settlement of disputes by negotiation, conciliation and voluntary

arbitration.

To eliminate all forms of coercion, intimidation and violence.

To maintain discipline in the industry.

To avoid work stoppage.

To promote constructive co-operation between the parties concerned at all levels.

Methods forprevention of

Industrial Disputes

Model StandingOrders

Code of Discipline Works Committee

Labour

Welfare

Officers

Collective BargainingJoint Management

CouncilsSuggestion Schemes Tripartite Bodies Joint Councils

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3. Works Committee: The Industrial Dispute Act, 1947 has provided for the establishment of

works committees. In case of any industrial establishment in which 100 or more workers are

employed, a works committee consisting of employees and workers is to be constituted; it

shall be the duty of the Works Committee to promote measures for securing and preserving

amity and good relations among the employees and workers.

4. Joint Management Councils:

5. Suggestion Schemes:

6. Joint Councils:

7. Collective Bargaining: Collective Bargaining is a process in which the representatives of the

employer and of the employees meet and attempt to negotiate a contract governing the

employer-employee-union relationships. Collective Bargaining involves discussion and

negotiation between two groups as to the terms and conditions of employment.

8. Labour welfare officer: The factories Act, 1948 provides for the appointment of a labour

welfare officer in every factory employing 500 or more workers. The officer looks after all

facilities in the factory provided for the health, safety and welfare of workers. He maintains

liaison with both the employer and the workers, thereby serving as a communication link

and contributing towards healthy industrial relations through proper administration of

standing orders, grievance procedure etc.

9. Tripartite bodies: Several tripartite bodies have been constituted at central, national and

state levels. The India labour conference, standing labour committees, Wage Boards and

Industries Committees operate at the central level. At the state level, State Labour Advisory

Boards have been set up. All these bodies play an important role in reaching agreements on

various labour-related issues. The recommendations given by these bodies are however

advisory in nature and not statutory.

Machinery for settlement of Industrial Disputes:

1. Conciliation: Conciliation refers to the process by which representatives of employees and

employers are brought together before a third party with a view to discuss, reconcile their

differences and arrive at an agreement through mutual consent. The third party acts as a

facilitator in this process. Conciliation is a type of state intervention in settling the Industrial

Disputes. The Industrial Disputes Act empowers the Central & State governments to appoint

conciliation officers and a Board of Conciliation as and when the situation demands.

Conciliation Officer: The appropriate government may, by notification in the official gazette,

appoint such number of persons as it thinks fit to be the conciliation officer. The duties of a

conciliation officer are:

a) To hold conciliation proceedings with a view to arrive at amicable settlement between

the parties concerned.

b) To investigate the dispute in order to bring about the settlement between the partiesconcerned.

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c) To send a report and memorandum of settlement to the appropriate government.

d) To send a report to the government stating forth the steps taken by him in case no

settlement has been reached at.

The conciliation officer however has no power to force a settlement. Hecan only persuade and assist the parties to reach an agreement. The Industrial Disputes

Act prohibits strikes and lockouts during that time when the conciliation proceedings are

in progress.

2. Arbitration: A process in which a neutral third party listens to the disputing parties, gathers

information about the dispute, and then takes a decision which is binding on both the

parties. The conciliator simply assists the parties to come to a settlement, whereas the

arbitrator listens to both the parties and then gives his judgement.

Advantages of Arbitration:

It is established by the parties themselves and therefore both parties have goodfaith in the arbitration process.

The process in informal and flexible in nature.

It is based on mutual consent of the parties and therefore helps in building healthy

Industrial Relations.

Disadvantages:

Delay often occurs in settlement of disputes.

Arbitration is an expensive procedure and the expenses are to be shared by thelabour and the management.

Judgement can become arbitrary when the arbitrator is incompetent or biased.

There are two types of arbitration:

a) Voluntary Arbitration: In voluntary arbitration the arbitrator is appointed by both

the parties through mutual consent and the arbitrator acts only when the dispute is

referred to him.

b) Compulsory Arbitration: Implies that the parties are required to refer the dispute to

the arbitrator whether they like him or not. Usually, when the parties fail to arrive at

a settlement voluntarily, or when there is some other strong reason, the appropriate

government can force the parties to refer the dispute to an arbitrator.

3. Adjudication: Adjudication is the ultimate legal remedy for settlement of Industrial Dispute.

Adjudication means intervention of a legal authority appointed by the government to make

a settlement which is binding on both the parties. In other words adjudication means a

mandatory settlement of an Industrial dispute by a labour court or a tribunal. For the

purpose of adjudication, the Industrial Disputes Act provides a 3-tier machinery:

a) Labour court

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b) Industrial Tribunal

c) National Tribunal

a) Labour Court: The appropriate government may, by notification in the official gazette

constitute one or more labour courts for adjudication of Industrial disputes relating toany matters specified in the second schedule of Industrial Disputes Act. They are:

Dismissal or discharge or grant of relief to workmen wrongfully dismissed.

Illegality or otherwise of a strike or lockout.

Withdrawal of any customary concession or privileges.

Where an Industrial dispute has been referred to a labour court for adjudication, it shall hold

its proceedings expeditiously and shall, within the period specified in the order referringsuch a dispute, submit its report to the appropriate government.

b) Industrial Tribunal: The appropriate government may, by notification in the official

gazette, constitute one or more Industrial Tribunals for the adjudication of Industrial

disputes relating to the following matters:

Wages

Compensatory and other allowances

Hours of work and rest intervals

Leave with wages and holidays

Bonus, profit-sharing, PF etc.

Rules of discipline

Retrenchment of workmen

Working shifts other than in accordance with standing orders

It is the duty of the Industrial Tribunal to hold its proceedings expeditiously and to submit

its report to the appropriate government within the specified time.

c) National Tribunal: The central government may, by notification in the official gazette,

constitute one or more National Tribunals for the adjudication of Industrial Disputes in

Matters of National importance

Matters which are of a nature such that industries in more than one state are

likely to be interested in, or are affected by the outcome of the dispute.

It is the duty of the National Tribunal to hold its proceedings expeditiously and to submit its

report to the central government within the stipulated time.

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Collective Bargaining

Good relations between the employer and employees are essential for the success of industry. In

order to maintain good relations, it is necessary that industrial disputes are settled quickly and

amicably. One of the efficient methods of resolving industrial disputes and deciding the employment

conditions is Collective Bargaining. Industrial disputes essentially refer to differences or conflicts

between employers and employees.

Collective Bargaining is a process in which the management and employee

representatives meet and negotiate the terms and conditions of employment for mutual benefit.

Collective bargaining involves discussion and negotiation between two groups as to the terms and

conditions of employment. It is termed Collective because both the employers negotiators and the

employees act as a group rather than individuals. It is known as Bargaining because the method of

reaching an agreement involves proposals and counter-proposals, offers and counter offers. There

should be no outsiders involved in the process of collective bargaining.

According to Walton and McKersie the process of Collective Bargaining consists of four types of

activities:

1) Distributive Bargaining: It involves haggling over the distribution of surplus. Various

activities involved in this activity are wages, salaries, bonus and other financial issues. In this

activity, both the parties face a win/lose situation.

2) Integrative Bargaining: Also known as Interest-Based Bargaining, issues which are not

damaging to either party are discussed. It is a negotiation strategy in which both the parties

collaborate to find a win-win solution to their problems. This strategy focuses on developing

mutually beneficial agreements based on the interests of the disputants. Issues brought up

may be better job evaluation procedures, better performance appraisal methods or training

programmes etc.

3) Attitudinal structuring: Attitudinal structuring refers to efforts by negotiators to shape their

opponents' perceptions about the nature of the issues to be negotiated. By cultivating an

atmosphere of friendliness, mutual respect, trust, and cooperation, negotiators can

encourage their opponents to view issues largely in integrative terms and participate in joint

problem solving. This activity involves shaping and reshaping some perceptions liketrust/distrust, friendliness/hostility, co-operative/non-cooperative between the labour and

management. When there is a backlog of bitterness between both the parties, attitudinal

structuring is required to maintain smooth and harmonious industrial relations.

4) Intra-Organisational Bargaining: It is a type of manoeuvring to achieve consensus among

the workers and management. Even within the union there may be differences between

different groups as may be the case with the management. Intra-organisational consensus is

required for the smooth acceptance of the outcome of Collective Bargaining.

Objectives of Collective Bargaining:

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1. To maintain cordial relations between the employer and employees.

2. To protect the interests of the workers through collective action and by preventing unilateral

actions from being taken by the employer.

3. To ensure the participation of trade unions in industry.

4. To avoid the need for government intervention as collective bargaining is a voluntary

collective process.

5. To promote Industrial democracy.

Characteristics of Collective Bargaining:

1. It is a group or collective action as opposed to individual action. It is initiated through therepresentatives of the employees.

2. It is a flexible and dynamic process where-in no party adopts a rigid attitude.

3. It is a continuous process, which provides a mechanism for continuous negotiations and

discussions between management and the trade unions.

4. It is a voluntary process without any third-party intervention. Both workers and

management voluntarily participate in the negotiations, discuss and arrive at a solution. That

is why it is known as a bipartite process where workers representatives and management

get an opportunity for clear, face-to-face communication.

5. It ensures industrial democracy at the workplace; it is a self-run government in action.

6. It is a two-way process. It is a mutual give and take rather than a take home allmethod of

arriving at a solution to a dispute.

Process of Collective Bargaining

Preparation for Negotiation

Identifying issues for Bargaining

Negotiation

Negotiated Agreement

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