Importance of Collective Bargaining in Manufacturing Industry

By Garima Saxena, 3EA
Importance of Collective Bargaining in Manufacturing Industry

Industrial Relations can be defined, in a restricted sense as the relations between management and union or between representatives of employee and representatives of employers. Under collective bargaining, the aim from management point of view is to achieve the best results with least inputs, improve returns on capital and offer incentives and strive for mutual cooperation. From trade union/workers perspective aim is to improve wages, secure redressal of grievances and gain control over work.

Hindustan Zinc Ltd. is India's largest and world's second largest zinc miner. It is a subsidiary of Vedanta Resources Pvt. Ltd. Company. Company operates through segments which includes mining and smelting of zinc, lead, silver. Its zinc-lead smelters include Dariba Smelting Complex, Chanderiya Lead-Zinc Smelting Complex. HZL has operations in over seven sulphuric acid plants, a silver refinery plant and five captive power plants in the state of Rajasthan, India. The Company also has wind power plants in the states of Rajasthan, Gujarat, Karnataka, Tamilnadu and Maharashtra. It has workforce of 7000 employees in which 1700 are business professionals from different educational background.

In 1992, the Agnigundala Lead Project of Hindustan Zinc Ltd faced a strike. In due course of settlement, management passed an order converting the order of dismissal into an order of discharge and soon there were protests and the labour went on strike again. Soon the guilty labour filed a Writ Petition challenging the order of Management converting the order of dismissal into an order of discharge. When that writ petition came up for hearing it was brought to the notice of the Court by the learned counsel for the Management that the reference made by the Central Government is pending before the Industrial Tribunal (Central), Hyderabad. But the labour and union however claimed that no dispute existed between the Management and the Workmen. Thus Court dismissed the writ petition observing that it was open to the labourer to raise the aforesaid plea before the Industrial Tribunal where the reference was still pending.

After the termination of reference, the guilty labourer here sought for reinstatement with his wages and other benefits, which management declined. The Tribunal's findings claimed to be simply observational and no Award was passed neither was the management obligated to reinstate the labourer. The Tribunal Court also said, "The workers and their counsel may take appropriate action in the given circumstances and as the Tribunal is not the implementation authority, I can only forward his application to the Hon'ble High Court as and when the records are called for". But the papers were returned.

Sooner it was contended by Learned Counsel that management was clearly in error in not implementing the settlement or understanding and it played fraud on the Union and the Workmen. It is pointed out that when initially an order of dismissal was passed by the Superintendent (Mines) following a domestic enquiry, there was a strike by all the workers which was a helpless position and referred the matter to the Asst. Labour Commissioner for conciliation. The Asst. Labour Commissioner reported that conciliation proceedings failed.

Seeing that there was tremendous labour unrest, the Management invited the Asst. Labour Commissioner stating that there is a possibility of resolving the issue. In order to see that the workmen went back to duty and the strike was called off, a promise was held out by the Management that if guilty labourer filed an appeal, the Management would award punishment other than dismissal, discharge or removal from service. The Union as well as the workmen relied on the honest implementation of the understanding but the Management went back on the same. Learned Counsel submitted that the understanding reached is a settlement within the meaning of Section 2(p) of the Industrial Disputes Act.

Learned Counsel then sought to justify the action taken by the Management by advancing a number of technical pleas. It is contended that the officers of the Management who negotiated for a settlement and who signed on the minutes of understanding have no right to reach that understanding and make a commitment that if an appeal is filed before the Chairman-cum-Managing Director he would be awarded a punishment other than dismissal, discharge or removal from service. It is submitted that the officers have no right to prejudge the action that would be taken by the Chairman-cum-Managing Director and consequently the minutes cannot bind the Management. Finally, it was alleged that was not a settlement within the meaning of Section 2(p).

Learned Counsel for the Respondent urged that the minutes of discussions cannot be held to be 'settlement' within the meaning of Section 2(P) of the Act .

"S. 2(p): "Settlement" means a settlement arrived at in the course of a conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the conciliation officer.

Even if the agreement was arrived at after the conciliation proceedings ended, still Section provides that every written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceedings should be regarded as a settlement, provided it has been signed by the parties. In the present case they were duly signed by four representatives of the employer and the office bearers of the Union. The only criticism is that the written agreement is not in the prescribed form 'H' and a copy thereof has not also been sent to the officers concerned. There is no substance in the criticism that the minutes are not in the prescribed form when the contents of the minutes wholly conform to the requirements. This contention is, therefore, rejected. The next criticism was that copies of the minutes were not forwarded to the officers concerned. It must be borne in mind that transmission of copies to higher authorities is merely a procedural requirement to keep them informed of the development in any dispute concerning the employer and the workmen.

As a result, the guilty labourer also the petitioner here was reinstated within one week from the date of receipt of a copy of this order. He was entitled to claim continuity of service and all consequential benefits, monetary and otherwise. The writ petition is allowed to the extent indicated above and the management paid to the petitioner costs assessed at Rs. 2,000/- within seven days from the date of receipt of a copy of the order. (IndiaKanoon)

This case was picked to give a holistic view of the problem from both employer and employee perspective and the importance of collective bargaining in Industrial Relations. In this case, the system is divided into management and workers. Conflicts between the two parties are considered unavoidable and necessary. Each party can exercise economic as well as political power influence job control, rules and regulations governing the workplace. In a nutshell, collective bargaining perspective is based on the notion that a system is comprised of different individuals, each with its own interests, objectives and leadership. Such a composition of individuals in a system leads to tensions and competing claims which should be tactfully handled to foster collaboration amongst all.

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Article by: Garima Saxena, 3EA