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Labor-Management Relations: Collective Bargaining, Conciliation, and Industrial Harmony

Labor-Management Relations: Collective Bargaining, Conciliation, and Industrial Harmony


One of the most accepted ways to control labor-management relations and determine wage rates and work conditions is through collective bargaining. For the past 25 to 30 years, it has been acknowledged as one of the main methods of decision-making in democratic industrialized nations, distributing power among the political parties in the industrial government. In India, collective bargaining is still in its infancy and has had a negligible impact on industrial relations. Trade unionism has served as a breeding ground for numerous unions and inter-union competition, and there are no legal provisions designating unions as bargaining agents.

Contrarily, conciliation is a third-party-assisted process for settling workplace disputes. The parties to the disagreement still have the authority to make decisions, but a third party helps them during the negotiating process. Nevertheless, the labor policy of India after independence emphasizes tripartite approaches to industrial conflict resolution more than it does a formal process or formula for recognizing trade unions as negotiating representatives. The development of collective bargaining has been unequal among industries, regions, and units, contingent upon the attitude of employers and the negotiating power of workers. The negotiations between the labor and management representatives to settle disagreements peacefully and without the involvement of a third party are known as collective bargaining.[1]

In small businesses, salary structures and other issues are directly negotiated between the owners and employees. The people are the proprietors of public-sector enterprises, and their representatives exercise their authority. The ultimate goal of collective bargaining is to create industrial harmony, which also denotes a favorable outlook for both people and work. Effective collective bargaining necessitates the following: appropriate team selection, acknowledgment of the union as the bargaining agent, robust union and progressive management, mutual trust, adequate preparations, wage and welfare measure data, and a readiness to modify positions as needed.

Collective Bargaining, Legal Channels and Conciliation

The data suggest that 75% of employers in India use collective bargaining as a means of resolving disputes, although it is still in its early and organizational phases. This is more typical in the public sector than in the private sector, notably in public utility projects compared to private utility projects. Smaller businesses, especially those with less than 200 employees, tend to be more conservative and choose legal and constitutional channels for resolving conflicts. Conciliation is the process of mediating and encouraging the resolution of workplace disputes, according to the Workplace Disputes Act. The relevant government appoints conciliation officers to mediate and encourage the resolution of labor disputes. [2]Their authority is restricted to requesting and examining pertinent documents related to the labor dispute or confirming the execution of any award. If a solution is achieved, a memorandum of the settlement by the disputing parties is sent, along with a report by the conciliation officer, to the relevant government. If a settlement cannot be achieved, the conciliation officer delivers a comprehensive report outlining the procedures for gathering relevant facts and circumstances and facilitating settlement negotiations. Through the efforts of a third party, negotiations between employers and employees are maintained through the conciliation process. The goal is to avoid strikes as much as possible and use a third party to mediate conflicts. As an unbiased arbiter of the conflict between management and employees, a conciliation officer needs to be truthful, diligent, and neutral. The two main elements that will make conciliation successful are persistence and patience.

Conciliation as a Stimulant To Collective Bargaining 

In India, collective bargaining is quite common, but because of the Industrial Disputes Act of 1947, which does not give collective agreements legal status, conciliation frequently takes the stage. In 1956 and 1965, the Act was revised to incorporate settlements and written agreements that were recorded according to certain guidelines. Trade unions and employers must record a written agreement in a regulated format with the local conciliation offices. However, a written agreement and a settlement have the same binding force as this registration. All industrialized regions engage in the practice of turning collective bargaining agreements into settlements; about 45% of trade unions and 50% of businesses do the same. Collective agreements make up around 45% of the economic dispute settlements that the conciliation officers are said to have supported.[3] In many instances, conciliation catalyzes collective bargaining, enhancing its inherent strength.

Most companies have recognized one or more trade unions and both parties have established collective bargaining arrangements in the absence of a statutory collective bargaining agency. If the agreements are recognized by the industrial legislation and the statutory formula and method for trade union registration are established, these connections will become more solidified and institutionalized. The state should also amend the industrial relations legislation as needed and establish a legislative formula and procedure for trade union registration. Larger employers, especially in the private sector, are more likely to engage in collective bargaining, and independent ones participate in this activity to a greater extent than unions connected with other federations.[4]


[1] Patil, B. R., “Collective Bargaining and Conciliation in India.” Indian Journal of Industrial Relations, vol. 12, no. 1, 1976, pp. 41–60. JSTOR, Accessed February 7, 2024.

[2] Shenoy, P. D., and Jandhyala B. G. Tilak. “Collective Bargaining & Conciliation.” Indian Journal of Industrial Relations, vol. 17, no. 2, 1981, pp. 287–92. JSTOR, Accessed 7 Feb. 2024.

[3] Cramton, Peter, Morley Gunderson, and Joseph Tracy. "The effect of collective bargaining legislation on strikes and wages." Review of Economics and Statistics 81.3 (1999): 475-487.

[4] Noronha, Ernesto, and Premilla D’Cruz. "Mediation and Conciliation in Collective Labor Conflicts in India." Mediation in Collective Labor Conflicts (2019): 279-292.

  • Employers in India widely employ collective bargaining, especially in the public sector and utility projects.
  • In light of legal limitations, conciliation significantly contributes to settling workplace disputes in India.
  • The adoption of collective bargaining varies, with larger private sector employers showing more active engagement compared to smaller businesses.

BY : Vaishnavi Rastogi

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