Industrial Relations II: Collective Bargaining, Workers' Participation in Management, Grievance Handling and Disciplinary Action, and the Codes of Discipline and Conduct

Collective bargaining is negotiation about terms and conditions of employment between an employer, a group of employers or an employers' organisation on one side and one or more workers' organisations on the other, with a view to reaching agreement. The phrase is credited to Beatrice Potter (later Webb) in 1891, and Sidney and Beatrice Webb developed it in Industrial Democracy (1897), where they set it beside mutual insurance and legal enactment as the methods of trade unionism. The ILO's Collective Bargaining Convention, 1981 (No. 154) defines it as all negotiations between employers and workers' organisations for determining working conditions and terms of employment, regulating relations between employers and workers, and regulating relations between employers and their organisations and workers' organisations. Neil Chamberlain distinguished three views of what bargaining is: the marketing theory (the sale of labour on collective terms, a contract), the governmental theory (a constitution for the workplace, with the union sharing sovereignty in making and applying rules) and the managerial or industrial-relations theory (joint decision-making on matters of common concern).

Richard Walton and Robert McKersie (A Behavioral Theory of Labor Negotiations, 1965) identified four subprocesses in every negotiation: distributive bargaining (dividing a fixed sum, win–lose, as over wages), integrative bargaining (solving problems for joint gain, win–win, as over safety or productivity), attitudinal structuring (shaping the relationship and the parties' attitudes to each other) and intra-organisational bargaining (reaching consensus within each side, between negotiators and their constituents). Prerequisites for effective bargaining are a strong and representative union, its recognition by the employer, willingness on both sides to bargain in good faith, freedom from unfair labour practices, and an agreed machinery for implementing and interpreting the agreement. The process runs from the union's charter of demands and management's preparation, through negotiation (with offers, counter-offers and concessions), to the agreement, its implementation and its administration through the grievance procedure until the next round.

In India collective bargaining developed late and in the shadow of compulsory adjudication. The Ahmedabad textile agreements from 1918 and the Tata Iron and Steel agreements are early landmarks; V. V. Giri as Labour Minister (1952–54) argued for bargaining over adjudication. Bargaining takes place at the plant level (most common in the private sector), at the industry-cum-region level (textiles in Bombay and Ahmedabad) and at the national industry level (banking through the Indian Banks' Association; steel through the National Joint Committee for the Steel Industry; coal through the Joint Bipartite Committee for the Coal Industry; ports and docks). The Industrial Disputes Act 1947 gives two kinds of settlement. A settlement arrived at in the course of conciliation proceedings, under section 18(3), binds all the parties to the dispute and all present and future workmen of the establishment; a settlement arrived at by agreement between the employer and workmen otherwise than in conciliation, under section 18(1), binds only the parties to the agreement. That is why unions and employers often sign a bipartite agreement before the conciliation officer, converting it into a 12(3) settlement.

Who bargains was long unsettled, because the central Trade Unions Act 1926 registers unions but does not require an employer to recognise one; recognition rested on the Code of Discipline (1958) and on state laws such as Maharashtra's Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971. The Industrial Relations Code 2020 settles it for the first time in central law: where there is only one registered trade union in an industrial establishment, the employer must recognise it as the sole negotiating union; where there are several, the union with the support of 51 per cent or more of the workers on the muster roll is recognised as the sole negotiating union; and where no union has 51 per cent, a negotiating council is formed of representatives of the unions that each have the support of at least 20 per cent of the workers.

Workers' participation in management (WPM) gives workers or their representatives a share in decisions that were formerly management's alone. Its degrees range from information-sharing, through consultation and joint decision-making (co-decision), to self-management, and its forms from suggestion schemes and quality circles through joint councils and works councils to worker directors on the board. West Germany's co-determination (Mitbestimmung) laws gave workers seats on supervisory boards and works councils with legal rights of co-decision; Yugoslavia's workers' councils (from 1950) were the self-management model. In India the Directive Principle in Article 43A, inserted by the Constitution (Forty-second Amendment) Act 1976, directs the state to take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.

A grievance is any dissatisfaction or feeling of injustice, expressed or not, that an employee has about his employment relationship and that he brings to management's notice; the ILO describes it as a complaint of one or more workers about wages, allowances, conditions of work or the interpretation of service rules. A grievance is individual and concerns the application of existing terms; when it is taken up collectively and concerns new terms, it becomes an industrial dispute. Causes are wages and incentives, working conditions, supervision, promotion and transfer, leave, seniority, discipline and the violation of agreements or standing orders. An effective procedure is written and known, simple, prompt (with time limits at each step), step-by-step, provides for representation by a union or co-worker, and ends in voluntary arbitration.

India's Model Grievance Procedure was adopted with the Code of Discipline (1958). It moves the grievance up a ladder: first to the officer designated by management, who must answer promptly (within 48 hours); then to the departmental head; then to a bipartite grievance committee of management and union representatives; then to management for a final decision; and finally, if the worker is still dissatisfied, to voluntary arbitration. Statute followed later. Section 9C, inserted into the Industrial Disputes Act in 2010, requires a Grievance Redressal Committee in every industrial establishment employing 20 or more workmen, with equal representation of employer and workmen and not more than six members; the Industrial Relations Code 2020 keeps the committee for establishments with 20 or more workers and allows up to ten members.

Discipline is the orderly conduct of employees in accordance with the rules; indiscipline is its breach, and misconduct is the breach that the standing orders define and punish (theft, fraud, wilful insubordination, habitual absence or late attendance, riotous or disorderly behaviour, taking bribes, habitual neglect of work, participation in an illegal strike). Douglas McGregor's "hot-stove rule" says discipline should be like touching a hot stove: immediate, with warning, consistent and impersonal. Progressive discipline moves from oral warning to written warning to suspension to discharge; positive discipline stresses counselling and self-correction. The procedure that courts require is built on natural justice — audi alteram partem (hear the other side) and nemo judex in causa sua (no one should judge his own cause): a specific charge-sheet; an opportunity to explain; a domestic enquiry by an impartial enquiry officer, with the right to see the evidence, cross-examine witnesses, produce defence witnesses and be assisted by a co-worker; a reasoned finding; a punishment proportionate to the misconduct; and a right of appeal. Punishments are minor (warning, censure, fine, withholding of increment) or major (demotion, discharge, dismissal). A worker suspended pending enquiry is entitled under section 10A of the Standing Orders Act to subsistence allowance of 50 per cent of wages for the first ninety days and 75 per cent thereafter, if the delay is not his fault. Section 11A of the Industrial Disputes Act (inserted in 1971) empowers labour courts and tribunals to set aside a discharge or dismissal and to substitute a lesser punishment.

Alongside the law India built a voluntary framework. The Code of Discipline, adopted by the Indian Labour Conference in 1958, bound managements and unions not to take unilateral action, to use the existing machinery for settling disputes, not to strike or lock out without notice, to avoid litigation and go-slow tactics, to settle disputes by negotiation, conciliation and voluntary arbitration, to set up a grievance procedure, and to take no action against workers without due process; it also set the criteria for recognising unions. The Inter-Union Code of Conduct, agreed in 1958 by the four central organisations of the day (INTUC, AITUC, HMS and UTUC), declared that every employee is free to join the union of his choice, that there should be no dual membership, that unions should function democratically with regular elections, that there should be no violence, coercion or intimidation in inter-union dealings, and that casteism, communalism and provincialism should be shunned. Both codes depended on goodwill and were widely ignored, but they shaped later law: recognition, grievance procedure and unfair labour practices all passed from them into statute.