What is Collective bargaining?

•Collective bargaining, the ongoing process of negotiation between representatives of workers

and employers to establish the conditions of employment. The collectively determined
agreement may cover not only wages but hiring practices, layoffs, promotions, job functions,
working conditions and hours, worker discipline and termination, and benefit programs.

•Collective bargaining is the process of negotiating the terms of employment between an employer
and a group of workers. The terms of employment are likely to include items such as conditions of
employment, working conditions, and other workplace rules, as well as base pay, overtime pay,
work hours, shift length, work holidays, sick leave, vacation time, retirement benefits, and health
care benefits.
.
 What is Collective bargaining?
“all negotiations which take place between an employer, a group of employers or one or more
employers' organizations, on the one hand, and one or more workers' organizations, on the other, for:

(a) determining working conditions and terms of employment; and/or

(b) regulating relations between employers and workers; and/or

(c) regulating relations between employers or their organizations and a workers' organization or
workers' organizations.”
Collective Bargaining Involves:
(i) Negotiations
(ii) Drafting
(iii) Administration
(iv) Interpretation of documents written by employers, employees and the union representatives
(v) Organizational Trade Unions with open mind.
 Features of Collective Bargaining:
1. It is a Group Action:
Collective bargaining is a group action as opposed to individual action. Both the parties of settlement
are represented by their groups.
2. It is a Continuous Process:
Collective bargaining is a continuous process and does not end with one agreement. It provides a
mechanism for continuing and organized relationship between management and trade union. It is a
process that goes on for 365 days of the year.
3. It is a Bipartite Process:
Collective bargaining is a two party process. Both the parties—employers and employees—
collectively take some action. There is no intervention of any third party. It is mutual given-and-take
rather than take-it-or-leave-it method of arriving at the settlement of a dispute.
4. It is a Process:
Collective bargaining is a process in the sense that it consists of a number of steps. The starting point
is the presentation of charter of demands by the workers and the last step is the reaching of an
agreement, or a contract which would serve as the basic law governing labor-management relations
over a period of time in an enterprise.
5. It is Flexible and Mobile and not Fixed or Static:
It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for
compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties is
reached.
6. It is Industrial Democracy at Work:
Collective bargaining is based on the principle of industrial democracy where the labor union
represents the workers in negotiations with the employer or employers.
 Constituents of Collective Bargaining:
(1) The creation of the trade agreement- negotiating the contract, a union and management present
their demands to each other, compromise their differences, and agree on the conditions under which
the workers are to be employed for the duration of the contract.

(2) The interpretation of the agreement, and-The administrative process is the day-to-day
application of the provisions of the contract to the work situation. At the time of writing the contract,
it is impossible to foresee all the special problems which will arise in applying its provisions.
Sometimes, it is a matter of differing interpretations of specific clause in the contract, sometimes; it is
a question of whether the dispute is even covered by the contract.

(3) The enforcement of the agreement.-roper and timely enforcement of the contract is very
essential for the success of collective bargaining. If a contract is enforced in such way that it reduces
or nullifies the benefits expected by the parties, it will defeat basic purpose of collective bargaining.
It may give rise to fresh industrial disputes. Hence, in the enforcement of the contract the spirit of the
contract should not be violated.
 Importance of collective bargaining
1. Increase the economic strength of unions and management.
2. Establish uniform conditions of employment with a view to avoiding industrial disputes and
maintaining stable peace in the industry.
3. Secure a prompt and fair settlement of grievances.
4. Avoids interruptions in work which follow strikes, go-slow tactics and similar coercive activities;
5. Lay down fair rates of wages and norms of working conditions;
6. Achieve an efficient operation of the plant;
7. Promote the stability and prosperity of the industry;
8. Provides a method or the regulation of the conditions of employment of those who are directly
concerned about them;
10. It creates new and varied procedures for the solution of the problems as and when they arise-
à problems which vex industrial relations; and its form can be adjusted to meet new situations. Since
basic standards are laid down, the employee is assured that he will be required to work under the
stipulated audit;
11. 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.
12. As a vehicle of industrial peace, collective bargaining has no equal. It is the most important and
significant aspect of labor-management relations, and extends the democratic principle from the
political to the industrial field.
13. It builds up a system of industrial jurisprudence by introducing civil rights in industry. In other
words, it ensures that management is conducted by rules rather than by arbitrary decisions;
 Need for Collective Bargaining
(a) A high degree at collective bargaining as measured in terms of the proportion of workers covered
by collective agreements;
(b) Qualitative conduct of the parties to collective bargaining both before a situation warranting
negotiations develops and the methods followed at the time of arriving at agreements;
(c) The right priorities assigned to different methods in the agreement and their changing pattern over
time; and
(d) A structure of bargaining with emphasis on central bargaining which is purported to give some
order and stability to labor management relations.
 Types of Collective Bargaining
Distributive Bargaining-
Focuses on dividing a fixed set of resources (e.g., wages, benefits).Often seen as a win-lose approach
where one party's gain is the other's loss.

Integrative Bargaining- Aims to create a win-win outcome by finding solutions beneficial to both
parties. Focuses on shared interests rather than opposing positions (e.g., improving productivity or
working conditions).

Concessionary Bargaining-
Occurs when workers agree to give up certain benefits (e.g., reduced wages, fewer benefits) to help
the employer during financial difficulties.
Typically seen during economic downturns or company crises.

Productivity Bargaining-

Negotiations are tied to improvements in productivity. Employers might offer incentives, such as
higher pay, for greater efficiency or performance.

Composite Bargaining- Deals with broader concerns beyond wages, such as job security, health,
safety, and work-life balance. Common in more progressive labor relations contexts.
What happens in Collective Bargaining
Collective Bargaining in India:
 Objectives of collective bargaining

1. Negotiation Team
2. Preparation of Demands
3. Negotiating Procedure
4. Bargaining Strategy
5. Preparation of Agreement
6. Administration of Agreement
 The process of collective bargaining involves six major steps:
Step # 1. Preparing for Negotiations:
Preparing for negotiations involves preparation before negotiation with the other parties to reach to
an agreement Both the parties involved in collective bargaining should prepare before going for
negotiation so that there can be proper negotiation at the time of discussion. The preparation would
include the issue, parties involved, causes, costs and impacts. This would bring confidence in the
participating parties and would result in effective negotiation. This is the first step of the process.
Step # 2. Identifying Bargaining Issues:
Before going for negotiation, the issue and possible related areas for discussion are to be identified.
The knowledge regarding these issues must be collected. All detailed information should be wife the
negotiator. During discussion, the confusions can be avoided. The negotiator on the basis of through
knowledge of the issue for discussion would proper and effective discussion and the problem solution
would become very easy.
Step # 3. Negotiations Procedure:
ADVERTISEMENTS:
The negotiation procedure means how the negotiation would take place. Negotiation procedure is the
method of negotiation. It would show that the activities are to be performed, who would perform and
sequence and timing of the activities. This would clear the position in mind of negotiator and would
bring confidence in his mind.
 The process of collective bargaining involves six major steps:
Step # 4. Reaching the Agreement:
The negotiation process begins when the concerned parties meet and submit their demand on the
table to the other parties. It starts with submission of the demands of the trade union to the
management. The negotiation starts with the submission and bargaining takes place. Through
discussion they reach to an agreement. Negotiation completes with a mutually acceptable agreement.
Step # 5. Ratifying the Agreement:
During discussion whatever they have discussed and reach to an agreement that is to be ratified by
both the parties. Once the agreement is ratified, the issue of difference or conflict is over and
negotiation comes to an aid. Without acceptance of the agreement the negotiation cannot be
completed.
Step # 6. Administration of the Agreement:
Once the agreement is accepted and signed, the agreement will be administered as per the terms and
conditions of the agreement. In future, the work would be performed according to the ratified
agreement. If doubt is there then the agreement in written would be referred.
 The Industrial Employment (Standing Orders) Act, 1961
1. Short title, extent and application.—
(1) This Act may be called the Industrial Employment (Standing Orders) Act, 1946.
(2) It extends to 1 [the whole of India
[(3) It applies to every industrial establishment wherein one hundred or more workmen are
employed, or were employed on any day of the preceding twelve months: Provided that the
appropriate Government may, after giving not less than two months’ notice of its intention so to
do, by notification in the Official Gazette, apply the provisions of this Act to any industrial
establishment employing such number of persons less than one hundred as may be specified in the
notification.
[(4) Nothing in this Act shall apply to—(i) any industry to which the provisions of Chapter VII of
the Bombay Industrial Relations Act, 1946 (Bombay Act 11 of 1947) apply; or
(ii) any industrial establishment to which the provisions of the Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 (Madhya Pradesh Act 26 of 1961) apply: Provided that
notwithstanding anything contained in the Madhya Pradesh Industrial Employment (Standing
Orders) Act, 1961 (Madhya Pradesh Act 26 of 1961), the provisions of this Act shall apply to all
industrial establishments under the control of the Central Government.] State Amendments.
2. Interpretation.—In this Act, unless there is anything repugnant in the subject or context,—
6 [(a) “appellate authority” means an authority appointed by the appropriate Government by

notification in the Official Gazette to exercise in such area as may be specified in the notification
the functions of an appellate authority under this Act: Provided that in relation to an appeal pending
before an Industrial Court or other authority immediately before the commencement of the
Industrial Employment (Standing Orders) Amendment Act, 1963 (39 of 1963), that court or
authority shall be deemed to be the appellate authority;]
(b) “appropriate Government” means in respect of industrial establishments under the control
of the Central Government or a 7 [Railway administration] or in a major port, mine or oil-field,
the Central Government, and in all other cases, the State Government: 8 [Provided that where
any question arises as to whether any industrial establishment is under the control of the Central
Government, that Government may, either on a reference made to it by the employer or the workman
or a trade union or other representative body of the workmen, or on its own motion and after giving
the parties an opportunity of being heard, decide the question and such decision shall be final and
binding on the parties;]
9 [(c) “Certifying Officer” means a Labour Commissioner or a Regional Labour Commissioner,

and includes any other officer appointed by the appropriate Government, by notification in the
Official Gazette, to perform all or any of the functions of a Certifying Officer under this Act;]
(d) “employer” means the owner of an industrial establishment to which this Act for the time
being applies, and includes—(i) in a factory, any person named under 10 [clause (f) of sub-
section (1) of section 7, of the Factories Act, 1948 (63 of 1948)], as manager of the factory;
(ii) in any industrial establishment under the control of any department of any Government in India,
the authority appointed by such Government in this behalf, or where no authority is so appointed, the
head of the department;
(iii) in any other industrial establishment, any person responsible to the owner for the supervision and
control of the industrial establishment;
(e) “industrial establishment” means—(i) an industrial establishment as defined in clause (ii) of section 2 of the
Payment of Wages Act, 1936 (4 of 1936), or
11 [(ii) a factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948), or]

(iii) a railway as defined in clause (4) of section 2 of the Indian Railways Act, 1890 (9 of 1890), or
(iv) the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial
establishment, employs workmen;
(f) “prescribed” means prescribed by rules made by the appropriate Government under this Act;
(g) “standing orders” means rules relating to matters set out in the Schedule;
(h) “trade union” means a trade union for the time being registered under the Indian Trade Unions Act, 1926 (16 of
1926);
[(i) “wages” and “workman” have the meanings respectively assigned to them in clauses (rr) and (s) of section 2 of
the Industrial Disputes Act, 1947 (14 of 1947)]. State amendments Andhra Pradesh.—In section 2, in clause (e), after
sub-clause (iv), insert the following, namely:— “or,(v) such other establishment, as the State Government may, by
notification in the Andhra Pradesh Gazette, specify in this behalf, which does not fall within any of sub-clauses (i) to
(iv), and in respect of which the State Government is the appropriate Government.
(i) before clause (a), insert the following clause, namely:— “(1a) ‘amendments’ mean in relation to the model
standing orders any amendments proposed to such orders under section 3 and includes any alterations,
variations or additions proposed thereto;”
(ii) in clause (d), for sub-clause (iii), substitute the following sub-clause, namely:— “(iii) in any other industrial
establishment—(a) any person responsible to the owner for the supervisions and control of the industrial
establishment;
(b) where a person who, for the purpose of fulfilling a contract with the owner of the industrial establishment,
employs workmen on the premises of the establishment for the execution of the whole or any part of any work
which is ordinarily part of such establishment then in relation to such workmen, the owner of the industrial
establishment;
(iii) in clause (e), delete sub-clause (iv);
(iv) after clause (e), insert the following clauses, namely:— “(ee) ‘model standing orders’ mean standing orders
prescribed under section 15;
❑(ef) ‘modification’ includes in relation to a standing order, any alteration, variation, addition or
deletion in, or to, such order;” [Vide Bombay Act 21 of 1958, sec. 5 (15-1-1959); Act 11 of 1960,
sec. 87 (w.e.f. 1-5-1960)]. Tamil Nadu.—In section 2, to clause (e), add the following proviso,
namely:— “Provided that the State Government may, in relation to industrial establishments in respect
of which it is the appropriate Government, appoint by notification in the Official Gazette, any officer
subordinate to the Labour Commissioner to exercise in such areas as may be specified in the
notification, the functions of a certifying officer under this Act, and any officer appointed as
aforesaid may exercise those functions, whether or not the Labour Commissioner is absent.”
3. Submission of draft standing orders.—(1) Within six months from the date on which this Act
becomes applicable to an industrial establishment, the employer shall submit to the Certifying
Officer five copies of the draft standing orders proposed by him for adoption in his industrial
establishment.
(2) Provision shall be made in such draft for every matter set out in the Schedule which may be
applicable to the industrial establishment, and where model standing orders have been prescribed,
shall be, so far as is practicable, in conformity with such model.
(3) The draft standing orders submitted under this section shall be accompanied by a statement
giving prescribed particulars of the workmen employed in the industrial establishment including the
name of the trade union, if any, to which they belong.
(4) Subject to such conditions as may be prescribed, a group of employers in similar industrial
establishments may submit a joint draft of standing orders under this section. state amendment
Maharashtra: Gujarat.—(i) In section 3, for sub-section (1), substitute the following sub-section,
namely:— “(1) Within six months from the date on which the model standing orders apply to any
industrial establishment under section 2A,
4. Conditions for certification of standing orders.—Standing orders shall be certifiable under this
Act if—(a) provision is made therein for every matter set out in the Schedule which is applicable to
the industrial establishment, and
(b) the standing orders are otherwise in conformity with the provisions of this Act, and it 13 [shall be
the function] of the Certifying Officer or appellate authority to adjudicate upon the fairness or
reasonableness of the provisions of any standing orders. state amendment Maharashtra: Gujarat.—
Delete section 4. [Vide Bombay Act 21 of 1958, sec. 8
5. Certification of standing orders.—(1) On receipt of the draft under section 3, the Certifying
Officer shall forward a copy thereof to the trade union, if any, of the workmen, or where there is
no such trade union, to the workmen in such manner as may be prescribed, together with a
notice in the prescribed form requiring objections, if any, which the workmen may desire to
make to the draft standing orders to be submitted to him within fifteen days from the receipt of
the notice.
(2) After giving the employer and the trade union or such other representatives of the workmen
as may be prescribed, an opportunity of being heard, the Certifying Officer shall decide whether
or not any modification of or addition to the draft submitted by the employer is necessary to
render the draft standing orders certifiable under this Act, and shall make an order in writing
accordingly.
(3) The Certifying Officer shall thereupon certify the draft standing orders, after making any
modifications therein which his order under sub-section (2) may require, and shall within seven
days thereafter send copies of the certified standing orders authenticated in the prescribed manner
and of his order under sub-section (2) to the employer and to the trade union or other prescribed
representatives of the workmen. state amendment Maharashtra: Gujarat.—(i) In section 5, in
sub-section (1),—(a) after the words “as may be prescribed”, insert “or the employer, as the case
may be”, and after the word “workmen” where it occurs for the third time, insert “or employer“;
(b) for the words “draft standing orders”, substitute the words “draft amendments”.(ii) in sub-
section (2),—(a) after the words “giving the employer”, insert “the workmen submitting the
amendments”;
(b) delete the words “or addition to”;
(c) for the words “the draft submitted by the employer is necessary to render the draft standing
orders certifiable under this Act“, substitute “the draft submitted under sub-section (1) of section 3 is
necessary”.
(iii) in sub-section (3),—(a) for the words “certify the draft standing orders”, substitute “certify the
draft amendments”;
(b) for the words “certified standing orders”, substitute “model standing orders together with
copies of the certified amendments thereof”.
(iv) in the marginal note, for the words “standing orders”, substitute the word “amendments”.
6. Appeals.—(1) 14 [Any employer, workmen, trade union or other prescribed representatives of
the workmen] aggrieved by the order of the Certifying Officer under sub-section (2) of section 5
may, within 15 [thirty days] from the date on which copies are sent under sub-section (3) of that
section, appeal to the appellate authority, and the appellate authority, whose decision shall be final,
shall by order in writing confirm the standing orders either in the form certified by the Certifying
Officer or after amending the said standing orders by making such modifications thereof or additions
thereto as it thinks necessary to render the standing orders certifiable under this Act.
(2) The appellate authority shall, within seven days of its order under sub-section (1), send
copies thereof of the Certifying Officer, to the employer and to the trade union or other
prescribed representatives of the workmen, accompanied, unless it has confirmed without
amendment the standing orders as certified by the Certifying Officer, by copies of the standing
orders as certified by it and authenticated in the prescribed manner. state amendment Maharashtra:
Gujarat.—In section 6,—(i) in sub-section (1) for the portion beginning with “confirm the standing
orders” and ending with “certifiable under this Act”, substitute the following, namely:— “confirm the
amendments either in the form certified by the Certifying Officer or after further modifying the same
as the appellate authority thinks necessary.“
(ii) in sub-section (2),—(a) for “unless it has confirmed without amendment the standing orders”,
substitute “unless it has confirmed without further modifications the amendments“;
(b) for “by copies of the standing orders”, substitute “by copies of the model standing orders
together with the amendments”.
Date of operation of standing orders.—Standing orders shall, unless an appeal is preferred under
section 6, come into operation on the expiry of thirty days from the date on which authenticated
copies thereof are sent under sub-section (3) of section 5, or where an appeal as aforesaid is preferred,
on the expiry of seven days from the date on which copies of the order of the appellate authority are
sent under sub-section (2) of section 6. state amendments Maharashtra: Gujarat.—In section 7 and in
the marginal note thereto, after the words “standing orders”, insert the words “or amendments”.

8. Register of standing orders.—A copy of all standing orders as finally certified under this Act
shall be filed by the Certifying Officer in a register in the prescribed form maintained for the
purpose, and the Certifying Officer shall furnish a copy thereof to any person applying therefore
on payment of the prescribed fee. state amendment Maharashtra: Gujarat.—In section 8,—(i) after
the words “all standing orders”, insert the words “or model standing orders together with all the
amendments”;
(ii) in the marginal note, after the words “standing orders”, insert “and model standing orders together
with all certified amendments”.
9. Posting of standing orders.—The text of the standing orders as finally certified under this Act shall
be prominently posted by the employer in English and in the language understood by the majority
of his workmen on special boards to be maintained for the purpose at or near the entrance through
which the majority of the workmen enter the industrial establishment and in all departments thereof
where the workmen are employed. state amendment Maharashtra: Gujarat.—In section 9,—(i) after the
words “standing orders”, insert the words “or model standing orders together with all the amendments”;
(ii) in the marginal note, after the words “standing orders”, insert the words “and model standing
orders together with all certified amendments”.
Duration and modification of standing orders.—(1) Standing orders finally certified
under this Act shall not, except on agreement between the employer and the
workmen, [or a trade union or other representative body of the workmen] be liable to
modification until the expiry of six months from the date on which the standing orders or
the last modifications thereof came into operation.
[(2) Subject to the provisions of sub-section (1), an employer or workman 16 [or a trade
union or other representative body of the workmen] may apply to the Certifying Officer
to have the standing orders modified and such application shall be accompanied by five
copies of the modifications proposed to be made, and where such modifications are proposed
to be made by agreement between the employer and the workmen 16 [or a trade union or other
representative body of the workmen] a certified copy of that agreement shall be filed along
with the application.]
(3) The foregoing provisions of this Act shall apply in respect of an application under sub-
section (2) as they apply to the certification of the first standing orders.
[(4) Nothing contained in sub-section (2) shall apply to an industrial establishment in
respect of which the appropriate Government is the Government of the State of Gujarat
or the Government of the State of Maharashtra.] state amendments Maharashtra:
Gujarat
[10A. Payment of subsistence allowance.—(1) Where any workmen is suspended by the
employer pending investigation or inquiry into complaints or charges of misconduct
against him, the employer shall pay to such workman subsistence allowance—(a) at the
rate of fifty per cent. of the wages which the workman was entitled to immediately
preceding the date of such suspension, for the first ninety days of suspension; and
(b) at the rate of seventy-five per cent. of such wages for the remaining period of
suspension if the delay in the completion of disciplinary proceedings against such
workman is not directly attributable to the conduct of such workman.
(2) If any dispute arises regarding the subsistence allowance payable to a workman
under sub-section (1) the workman or the employer concerned may refer the dispute to the
Labour Court, constituted under the Industrial Disputes Act, 1947 (14 of 1947), within the
local limits of whose jurisdiction the industrial establishment wherein such workman is
employed is situate and the Labour Court to which the dispute is so referred shall,
after giving the parties an opportunity of being heard, decide the dispute and such
decision shall be final and binding on the parties.
(3) Notwithstanding anything contained in the foregoing provisions of this section, where
provisions relating to payment of subsistence allowance under any other law for the time
being in force in any State are more beneficial than the provisions of this section, the
provisions of such other law shall be applicable to the payment of subsistence allowance in
that State.]
11. Certifying Officers and appellate authorities to have powers of civil court.— 21 [(1) ] Every
Certifying Officer and appellate authority shall have all the powers of a Civil Court for the
purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses, and
compelling the discovery and production of documents, and shall be deemed to be a civil court
within the meaning of 22 [sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of
1974)].
23 [(2) Clerical or arithmetical mistakes in any order passed by a Certifying Officer or

appellate authority, or errors arising therein from any accidental slip or omission may, at any
time, be corrected by that Officer or authority or the successor in office of such Officer or authority,
as the case may be.]
12. Oral evidence in contradiction of standing orders not admissible.—No oral evidence having
the effect of adding to or otherwise varying or contradicting standing orders as finally certified
under this Act shall be admitted in any Court. state amendment Maharashtra: Gujarat.—(i) In
section 12, for the words “standing orders as finally certified under this Act”, substitute the words
“standing orders or the model standing orders, or model standing orders with all the amendments as
finally certified under this Act, as the case may be“.
(ii) in the marginal note, for the words “standing orders” substitute “standing orders, etc.”
12A. Temporary application of model standing orders.—(1) Notwithstanding anything
contained in sections 3 to 12, for the period commencing on the date on which this Act
becomes applicable to an industrial establishment and ending with the date on which the
standing orders as finally certified under this Act come into operation under section 7 in that
establishment, the prescribed model standing orders shall be deemed to be adopted in that
establishment, and the provisions of section 9, sub-section (2) of section 13 and section 13A shall
apply to such model standing orders as they apply to the standing orders so certified.
(2) Nothing contained in sub-section (1) shall apply to an industrial establishment in respect of
which the appropriate Government is the Government of the State of Gujarat or the
Government of the State of Maharashtra.]
13. Penalties and procedure.—(1) An employer who fails to submit draft standing orders as
required by section 3, or who modifies his standing orders otherwise than in accordance with
section 10, shall be punishable with fine which may extend to five thousand rupees, and in the
case of a continuing offence with a further fine which may extend to two hundred rupees for
every day after the first during which the offence continues.
(2) An employer who does any act in contravention of the standing orders finally certified under
this Act or his industrial establishment shall be punishable with fine which may extend to one
hundred rupees, and in the case of a continuing offence with a further fine which may extend to twenty-
five rupees for every day after the first during which the offence continues.
(3) No prosecution for an offence punishable under this section shall be instituted except with the
previous sanction of the appropriate Government.
(4) No Court inferior to that of 1[a Metropolitan Magistrate or Judicial Magistrate of the second
class] shall try any offence under this section. state amendments Madhya Pradesh.—In section 13,
after sub-section (4), insert the following sub-sections, namely:— “(5) A Court taking cognizance of an
offence under sub-section (2) shall state upon the summons to be served on the accused person that
he—(a) may appear by pleader and not in person; or
(b) may, by a specified date prior to the hearing of the charge, plead guilty to the charge by registered
letter acknowledgment due and remit to the Court such sum as the Court may, subject to the maximum
limit of fine prescribed for the said offence, specify.
(6) Where an accused person pleads guilty and remits the sum in accordance with the provisions of
sub-section (5), no further proceedings in respect of the offence shall be taken against him.
(7) Nothing contained in this section shall apply to the continuing offence referred to in sub-
section
13A. Interpretation, etc., of standing orders.—If any question arises as to the
application or interpretation of a standing order certified under this Act, any
employer or workman 27 [or a trade union or other representative body of the
workmen] may refer the question to any one of the Labour Courts constituted
under the Industrial Disputes Act, 1947 (14 of 1947), and specified for the disposal of
such proceeding by the appropriate Government by notification in the Official Gazette,
and the Labour Court to which the question is so referred shall after giving the parties an
opportunity of being heard, decide the question and such decision shall be final and
binding on the parties.]
13B. Act not to apply to certain industrial establishments.—Nothing in this Act shall
apply to an industrial establishment in so far as the workmen employed therein are
persons to whom the Fundamental and Supplementary Rules, Civil Services
(Classification, Control and Appeal) Rules, Civil Services (Temporary Services)
Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Service
(Classification, Control and Appeal) Rules or the Indian Railway Establishment
Code or any other rules or regulations as may be notified in this behalf by the
appropriate Government in the Official Gazette, apply.]
14. Power to exempt.—The appropriate Government may by notification in the Official
Gazette exempt, conditionally or unconditionally, any industrial establishment or
class of industrial establishments from all or any of the provisions of this Act.
[14A. Delegation of powers.—The appropriate Government may, by notification in the
Official Gazette, direct that any power exercisable by it under this Act or any rules
made thereunder shall, in relation to such matters and subject to such conditions, if
any, as may be specified in the direction, be exercisable also—(a) where the appropriate
Government is the Central Government, by such officer or authority subordinate to the
Central Government or by the State Government or by such officer or authority
subordinate to the State Government, as may be specified in the notification.
(b) where the appropriate Government is a State Government, by such officer or
authority subordinate to the State Government as may be specified in the notification.]
15. Power to make rules.—(1) The appropriate Government may, after previous publication, by
notification in the Official Gazette, make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules
may—(a) prescribe additional matters to be included in the Schedule, and the procedure to
be followed in modifying standing orders certified under this Act in accordance with any such
addition;
(b) set out model standing orders for the purposes of this Act;
(c) prescribe the procedure of Certifying Officers and appellate authorities;
(d) prescribe the fee which may be charged for copies of standing orders entered in the
register of standing orders;
(e) provide for any other matter which is to be or may be prescribed: Provided that before
any rules are made under clause (a) representatives of both employers and workmen shall be
consulted by the appropriate Government.
Every rule made by the Central Government under this section shall be laid as soon as may be
after it is made, before each House of Parliament while it is in session for a total period of thirty
days which may be comprised in one session.
31 [in two or more successive sessions, and if, before the expiry of the session immediately

following the session or the successive sessions aforesaid] both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified form or be of no effect, as the case may be; so
however that any such modification or annulment shall be without prejudice to the validity of
anything previously done under that rule.]
(b) in clause (d), for the words “copies of standing orders entered in the register of standing
orders”, substitute “copies of standing orders or model standing orders together with all the
amendments filed in the register under section 8
1. Classification of workmen, e.g., whether permanent, temporary, apprentices,
probationers, or badlis.
2. Manner of intimating to workmen periods and hours of work, holidays, pay-days
and wage rates.
3. Shift working.
4. Attendance and late coming.
5. Conditions of, procedure in applying for, and the authority which may grant
leave and holidays.
6. Requirement to enter premises by certain gates, an liability to search.
7. Closing and reporting of sections of the industrial establishment, temporary
stoppages of work and the rights and liabilities of he employer and workmen
arising there from.
8. Termination of employment, and the notice thereof to be given by employer and
workmen.
9. Suspension or dismissal for misconduct, and acts or omissions which constitute
misconduct.
10. Means of redress for workmen against unfair treatment or wrongful exactions
by the employer or his agents or servants. 11. Any other matter which may be
prescribed.
Industrial dispute - Prevention and settlement
OBJECTIVE- After completion of this chapter the student will be able to
Understand Machinery for prevention and Settlement of Industrial Disputes in India.

2.4.2 Preventive Machineries used for Handling Industrial Disputes in India

1 Worker’s Participation in Management
2 Collective Bargaining
3 Grievance Procedure
4 Tripartite Bodies
5 Code of Discipline
6 Standing Orders
Grievance Settlement Authorities
1 Works committees
2 Conciliation Authorities
3 Boards of Conciliation
4 Court of enquiry
5 Labour courts
6 Industrial Tribunals
7. National Tribunal
8. Arbitration
9 Joint Management Council
TIRPARTIES BODIES

The purpose of tripartite consultative machinery is to bring the parties together for
mutual settlement of differences in a spirit of cooperation and goodwill. These
committees have been constitute to suggest ways and means to prevent disputes.
It includes Indian Labour Conference, Standing Labour Committee, Industrial
Committees and Tripartite Committee on International Labour Organisation
Conventions. The representatives of workers and employers are nominated to these
bodies by the Central Government in consultation with all India organisations of
workers and employers.

Purpose of Tripartite Body:

a. Bring the aggravated parties together for mutual settlement of differences, and
encourage a spirit of cooperation and goodwill.
b. b. Promote uniformity in labor laws and legislation.
c. Discuss all matters of All India importance as between employers and employees.
d. Determine a plan for settlement for all disputes.
Code of Discipline:

The code of Discipline provides for that:

1. Strikes and lockouts cannot be declared without prior notice.
2. No party should take any direct action without consulting the other.
3. The existing machinery for the settlement of disputes should be followed
GRIEVANCE SETTLEMENT AUTHORITIES

1 Works committees:
•Works committees are purely consultative in nature and have been regarded as the most effective
agency for the prevention of industrial disputes. This committee represents workers and
employers. Under the Industrial Disputes Act 1947, works committees exist in industrial
establishments in which one hundred or more workmen are employed during the previous year.
•It is the duty of the works Committee to promote measures for securing and preserving amity and
good relations between the employers and workers. It also deals with certain matters viz.
Condition of work, amenities, safety and accident prevention, educational and recreational
facilities.

•THE OBJECTIVES OF WORKS COMMITTEES ARE TO:

•1. Remove the causes of friction in the day-to-day work situation.
•2. Foster amity and harmonious relationship between the parties.
• 3. Create an atmosphere for voluntary settlement of disputes and frictions.
Conciliation Authorities:-

The duties of conciliation officer are given below:

(i) He has to evolve a fair and amicable settlement of the dispute. In case of public utility service,
he must hold conciliation proceedings in the prescribed manner.
(ii) He shall send a report to the government if a dispute is settled in the course of conciliation
proceedings along with the charter of the settlement signed by the parties.
(iii) Where no settlement is reached, conciliation officer sends a report to the government
indicating the steps taken by him for ascertaining the facts, circumstances relating to dispute
and the reasons on account of which settlement within 14 days of the commencement of the
conciliation proceedings.

Boards of Conciliation:
The duties of the board include:

(a) To investigate the dispute and all matters affecting the merits and do everything fit for the
purpose of inducing the parties to reach a fair and amicable settlement.
(b) A report has to be sent to the government by the board if a dispute has been settled or not
within two months of the date on which the disputes were referred to it.

Court of Enquiry:
Duties of the Court: it is the duty of the Court of Inquiry into matters referred to it and submit its
report to the appropriate Government ordinarily within six months from the commencement
of its inquiry. This period is, however, not mandatory and the report even after the said period
would not be invalid.
Labour courts:
The appropriate government may, by notification in the official gazette constitute one or more
labour courts for adjudication of Industrial disputes relating to any matters specified in the second
schedule of Industrial Disputes Act.
They are:
1. Dismissal or discharge or grant of relief to workmen wrongfully dismissed.
2. Illegality or otherwise of a strike or lockout. Withdrawal of any customary concession or
privileges.
3. 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 referring such a
dispute, submit its report to the appropriate government. A labour court consists of one person
only, who is normally a sitting or an ex-judge of a High Court. It may be constituted by the
appropriate Government for adjudication of disputes which are mentioned in the second
schedule of the Act.
The issues referred to a labour court may include:
(i) The propriety or legality of an order passed by an employer under the Standing Orders
(ii) (ii) The application and interpretation of Standing Orders.
(iii) Discharge and dismissal of workmen and grant of relief to them.
(iv) Withdrawal of any statutory concession or privilege.
(v) Illegality or otherwise of any strike or lockout.
(vi) All matters not specified in the third schedule of Industrial Disputes Act, 1947. (It deals with
the jurisdiction of Industrial Tribunals).
The government sets up Labour Courts to deal with matters such as:
i) The propriety or legality of an order passed by an employer under the standing orders.
ii) The application and interpretation of standing orders passed.
iii) Discharge or dismissal of workmen including reinstatement, grant of relief to workers who are
wrongfully dismissed.
iv) Withdrawal of any customary concession of privilege
v) Illegality or otherwise of a strike or lockout, and all other matters not specified in the third
schedule
Industrial Tribunals: 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.

National Tribunal:
A National tribunals is constituted by the Central government for Industrial Disputes involving
question of national importance. The Central Government may constitute a national tribunal for
adjudication of disputes as mentioned in the second and third schedules of the Act or any other
matter not mentioned therein provided in its opinion the industrial dispute involves “questions of
national importance” or “the industrial dispute is of such a nature that undertakings established in
more than one state are likely to be affected by such a dispute”.
Arbitration:

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 judgment.

There are two types of arbitration: 1. 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

2. 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.
Joint Management Council : In India, the joint management council (JMC) came into existence
due to the provisions in this regard made by the Industrial Policy Resolution, 1956. These councils
were set up to enable workers to participate in management and infuse a spirit of cooperation
between the workers and the management.

The salient features of the JMCs are as follows:

(i) The scheme is a voluntary one.
(ii) The minimum and maximum number of its members are 6 and 12 respectively consisting of
equal number of representatives of workers and employers.
(iii) The JMCs deal with matters like information sharing, consultative, and administrative.
(iv) The decisions taken by the JMC should be unanimous ones.
(v) The JMCs can be set up in the units employing 500 or more persons and having strong trade
unions
-Grievance Procedure:
-Grievances are symptoms of conflicts in the enterprise. So, they should be handled very
promptly and efficiently.
-Coping with grievances forms an important part of a manager’s job.
-The manner in which he deals with grievances determines his efficiency in dealing with
the subordinates.

-A manager is successful if he is able to build a team of satisfied workers by removing their

grievances.
- This would help in the prevention of industrial disputes in the organization.

-A grievance procedure specifies the steps involved, the persons to be associated at each
step and the method of their selection, the manner in which grievances are to be placed,
the extent of authority vested at each level, the sanction behind decisions and the rights
and obligations of the parties.
Importance of Grievance Procedure:

1.It does away with the uncertainty involved in locating the authority or person to be
approached for the redressal of the grievance.
2. Both the workers and the management are relieved of the tension and worry, which
might otherwise, would have resulted from haphazard handling of grievances.
3. As most grievance procedures involve the participation of workers’ representatives
and those of the management, the decisions taken have a greater amount of acceptability.
These also instill confidence in each other.
4. A grievance procedure also contains elements of fairness and objectivity. In absence of
the procedure, the decision of the authority empowered to take decisions may be
arbitrary and biased.
5. The procedure ensures uniformity in the handling of grievances. All concerned
including the aggrieved workers, supervisors, managerial personnel and union leaders
know well that grievances would be processed through the established channels, and no
other method could be invoked.
6. As the procedure is generally adopted under collective agreements, statutory
provisions, tripartite conclusions or standing orders, it has also the element of
permanence.
7. Grievance procedure also minimizes the time and effort in the processing of
grievances. Unplanned handling of grievances involves unnecessary wastage of time and
energy
 Participative Management
•Participative (or participatory) management, otherwise known as employee involvement or
participative decision making, encourages the involvement of stakeholders at all levels of an
organization in the analysis of problems, development of strategies, and implementation of
solutions.
• Employees are invited to share in the decision-making process of the firm by participating in
activities such as setting goals, determining work schedules, and making suggestions. Other
forms of participative management include increasing the responsibility of employees (job
enrichment); forming self-managed teams, quality circles, or quality-of-work-life committees;
and soliciting survey feedback.
•

The four processes include:

•Information sharing, which is concerned with keeping employees informed about the economic
status of the company.
•Training, which involves raising the skill levels of employees and offering development
opportunities that allow them to apply new skills to make effective decisions regarding the
organization as a whole.
•Employee decision making, which can take many forms, from determining work schedules to
deciding on budgets or processes.
•Rewards, which should be tied to suggestions and ideas as well as performance.
 Features of Participative Management
❑Ethical Dimensions: Participatory management has ethical dimensions and based on morals,
principles and values. In this form of management, every one is treated equally when it comes to
organizational decision making. It is based on employee empowerment, responsibility sharing and
delegation of authority.
❑Proper Channel of Communication: Participative form of management encourages two-way
communication. It is not only management that decides what employees need to do but it also
encourages employees to participate in decision making and give ideas and suggestions to make
organizational processes better and more efficient. They are allowed to share their problems, views,
ideas and feedback with their managers.
❑Empowers Employees: Participative style of management gives employees a chance to participate
in management processes. They are encouraged to come up with their views. Gone are the days when
employees were bossed around by their managers. Now they are to be treated like co-workers. This
provides a higher status to employees as they also have a say in decision making.
❑Recognition of Human Dignity: In this form of management, all employees are treated equally
irrespective of their designations when it comes to giving ideas and suggestions for organizational
decision making process. Employees are no more the servants of managers but are the most important
assets of an organization.
❑Psychological Satisfaction to Employees: Most of our lives are spent at workplace. It is important
for everyone to have psychological satisfaction as far as our employment is concerned. Commitment
from the organization, respecting the dignity of individuals and co-determining the company policies
are some of the features of participative management that provide psychological satisfaction to
employees.
 Benefits of Participative Management
❑Innovation and increased efficiency:
❑Timeliness:
❑Employee satisfaction and Motivation:
❑Product quality:
❑Less supervision requirements:
❑Better grievance redressal:
❑Hiring Flexibility:
 Advantages of Participative Management
❑ Increase in Productivity:
❑ Job Satisfaction:
❑ Motivation:
❑ Improved Quality:
❑ Reduced Costs:
 Disadvantages of Participative Management
❑Decision making slows down: Participative management stands for increased participation and
when there are many people involved in decision making, the process definitely slows down. Inputs
and feedback starts pouring from each side. It takes time to verify the accuracy of measurements
which means that decision making will be slowed down.
❑Security Issue: The security issue in participative management also arises from the fact that since
early stages too many people are known to lots of facts and information. This information may
transform into critical information in the later stages. There is thus a greater apprehension of
information being leaked out.
❑The advantages seem to outnumber the disadvantages. This however is no assurance that one
should blindly adopt it for his/her organization. Organizations are different and therefore the culture,
the human resources. A deep understanding of both is required in order to ascertain a decision making
style and adopt the same.
 What is Employee Empowerment?
•When someone is empowered, they have the ability to accomplish something ー and they
know it, giving them the confidence needed to succeed. Employee empowerment refers to
the manner in which companies provide their employees with anything and everything they
need to succeed.
•This involves far more than simple resource allocation, however. Companies that are
interested in empowering employees should act on the following:
•Give employees a voice by regularly soliciting and acting on their feedback.
•Provide opportunities for employees to grow through more autonomy, additional
responsibilities, or even an entirely new role.
•Recognize employees frequently to increase their engagement and confidence in their own
abilities.
•And, of course, provide employees with the tools, training, and authority they need to
excel.
 Methods of Workers Participation In Management

•Worker’s participation is a system where workers and management share important

information with each other and participate in decision taking. Workers’ participation in
management is an essential ingredient of Industrial democracy. The concept of workers’
participation in management is based on Human Relations approach to Management which
brought about a new set of values to labor and management.

•1. Participation at the Board level:

•2. Participation through ownership:
•3 . Participation through complete control:
•4. Participation through Staff and Works Councils :
 The benefits of employee empowerment
•Motivated employees
•Greater trust in leadership
•Improved creativity
•A stronger bottom line

4 steps for empowering employees in the workplace

1. Show employees that their feedback matters
2. Recognize to empower
3. Provide opportunities for professional growth — and the necessary support
4. Make empowerment part of your organization’s culture and vision