Industrial Relations Management
Collective Bargaining – An Overview
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, base pay, overtime pay, work hours, shift length, work holidays, sick leave, vacation time, retirement benefits and health care benefits.
In the United States, collective bargaining takes place between labor union leaders and the management of the company that employs that union’s workers. The result of collective bargaining is called a collective bargaining agreement, and it establishes rules of employment for a set number of years. The cost of this employee representation is paid by union members in the form of dues. The collective bargaining process may involve antagonistic labor strikes or employee lockouts if the two sides are having trouble reaching an agreement.
In the United States, there are unions in both the private sector and the public sector. As of 2009, about 7.2% of private sector employees and 37% of public sector employees were unionized. Categories of workers that belong to unions include grocery store employees, airline employees, professional athletes, teachers, auto workers, postal workers, actors, farm workers, steel workers and many more.
A collective bargaining agreement is the ultimate goal of the collective bargaining process. Typically, the agreement establishes wages, hours, promotions, benefits, and other employment terms as well as procedures for handling disputes arising under it. Because the collective bargaining agreement cannot address every workplace issue that might arise in the future, unwritten customs and past practices, external law, and informal agreements are as important to the collective bargaining agreement as the written instrument itself.
Collective bargaining allows workers and employers to reach voluntary agreement on a wide range of topics. Even so, it is limited to some extent by federal and state laws. A collective bargaining agreement cannot accomplish by contract what the law prohibits. For example, a union and an employer cannot use collective bargaining to deprive employees of rights they would otherwise enjoy under laws such as the civil rights statutes. Collective bargaining also cannot be used to waive rights or obligations that laws impose on either party. For example, an employer may not use collective bargaining to reduce the level of safety standards it must follow under the occupational safety and health act. Furthermore, the collective bargaining agreement is not purely voluntary. One party's failure to reach agreement entitles the other to resort to certain legal tactics, such as strikes and lockouts, to apply economic pressure and force agreement. Moreover, unlike commercial contracts governed by state law, the collective bargaining agreement is governed almost exclusively by federal labor law, which determines the issues that require collective bargaining, the timing and method of bargaining, and the consequences of a failure to bargain properly or to adhere to a collective bargaining agreement.
Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment. It is called ‘collective’ because both the employer and the employee act as a group rather than as individuals. It is known as ‘bargaining’ because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations.
Thus collective bargaining:
- Is a collective process in which representatives of both the management and employees participate.
- Is a continuous process which aims at establishing stable relationships between the parties involved.
- Not only involves the bargaining agreement, but also involves the implementation of such an agreement.
- attempts in achieving discipline in the industry
- is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations
Nature of Collective Bargaining
The ILO Right to Organize and Collective Bargaining Convention (No. 98), 1949 describes collective bargaining as:
"Voluntary negotiation between employers or employers' organizations and workers' organizations, with a view to the regulation of terms and conditions of employment by collective agreements."
Collective bargaining could also be defined as negotiations relating to terms of employment and conditions of work between an employer, a group of employers or an employers' organization on the one hand, and representative workers' organizations on the other, with a view to reaching agreement.
There are several essential features of collective bargaining, all of which cannot be reflected in a single definition or description of the process:
Objects of Unions in Collective Bargaining
- It is not equivalent to collective agreements because collective bargaining refers to the process or means, and collective agreements to the possible result, of bargaining. Collective bargaining may not always lead to a collective agreement.
- It is a method used by trade unions to improve the terms and conditions of employment of their members.
- It seeks to restore the unequal bargaining position between employer and employee.
- Where it leads to an agreement, it modifies, rather than replaces, the individual contract of employment, because it does not create the employer-employee relationship.
- The process is bipartite, but in some developing countries the State plays a role in the form of a conciliator where disagreements occur, or where collective bargaining impinges on government policy.
The central focus of union activity is collective bargaining, the process of arriving at compromises which settle disputes between an employer and an organization of his employees. It is called collective bargaining because the employees, as a group, select representatives to meet and discuss differences with the employer.
The unions objects is Collective Bargaining may be the following:
- To establish and build up union recognition as an authority the work place.
- To raise workers standards of living and win a better share in company's profits.
- To express in practical terms the workers desire to be treated with due respect and to achieve democratic participation in decisions affecting their working conditions.
- To establish orderly practices for sharing in these decisions and to settle disputes this may arise in the day to day life of the company.
- To achieve broad general objectives such as defending and as promoting the interests throughout the country.
Negotiation is where union representatives, discuss with management, the issues which affect people working in an organization. There may be a difference of opinion between management and union members. Trade unions negotiate with the employers to find out a solution to these differences. Pay, working hours, holidays and changes to working practices are the sorts of issues that are negotiated. In many workplaces there is a formal agreement between the union and the company which states that the union has the right to negotiate with the employer. In these organizations, unions are said to be recognized for collective bargaining purposes.
FUNCTIONS OF COLLECTIVE BARGAINING
Collective bargaining is a technique of social change, some-times performing its function smoothly and at other times threatening to blow up. The performance of its function can be viewed under the following three headings.
- Collective bargaining acts as a technique of long-run social change, bringing rearrangements in power hierarchy of competing groups.
- Collective bargaining serves as peace treaty between two parties in continual conflict.
- Collective bargaining establishes a system of industrial jurisprudence, defining the rights and duties of the conflicting parties.
UNION GOALS IN COLLECTIVE BARGAINING
- Long Term Social Change:
Collective bargaining, in its broader aspects, is not confined solely to economic relations between employers and employees. Selig Perlman has defined it as a “technique whereby an inferior social class or group carries on a never slacking pressure for a bigger share in social sovereignty as well as for more welfare, security, and liberty for its individual member. Collective bargaining manifests itself equally in politics, legislation, court litigation, government administration, religion education and propaganda. When viewed as a process of social change, collective bargaining encompasses more than the direct clash between employers and trade unions. It refers to the rise in political and social power achieved by workers and their organization.
Thus collective bargaining is not an abstract class struggle in a Marxian sense, but it is rather pragmatic and concrete. The inferior class does not attempt to abolish the old ruling class, but merely to become equal with it. It aims to acquire a large measure of economic and political control over crucial decisions in the area of its most immediate interest and to be recognized in other areas of decision making.
Collective bargaining has no final form. It adapts- itself to the changing social, legal and economic environment. It has varied considerably from plant to plant and industry to industry, and also between and within unions. For example, a number of industrial unions have successfully bargained for higher bonus and Provident Fund benefit, why many unions in the construction industry have ignored these goals. Bargaining in some plants is characterized by comparatively frequent strikes, whereas in other plants there are long records of uninterrupted industrial peace.
Wage corners have enhanced their social and economic position in absolute terms and in relation to other groups and at same time, management has retained a large measure of power and dignity. These gains were not registered in one great revolutionary change, but rather step by step, with each clash between the opposing parties settled with a new compromise somewhat different from the previous settlement. In short, collective bargaining accomplishes long-run stability on the basis of day-to-day adjustments in relation between labor and management.
- Temporary Truce:
Collective bargaining may be viewed as a struggle between two opposing forces with the outcome depending on their relative strength. The inherent strength of each side is its ability to withstand a strike. This is partly an economic matter: To what extent can the union provide financial aid to the strikers? Can the workers find temporary jobs? How much will the employers’ sales be reduced. Will his position in the product market be permanently impaired? These are the economic factors on which the ability to withstand a strike depends. The ability to withstand a strike also depends on such non-economic factors as the loyalty of the workers to the union, their willingness to make personnel sacrifice to support its goals. The degree of loyalty, of course, is affected by the presence of factionalism within the union. For either the employer or the union, a belief that some basic principle is at stake, e.g. management right or union security, stiffens the will power of the antagonists. The compromise, then, is a temporary truce with neither side being completely satisfied with the results. Each would like to modify it at the earliest opportunity. Since the contract is always of limited duration, each begins immediately to prepare a new list of demands, including previously unsatisfied demands, and to build up its bargaining strength in anticipation of the next power skirmish.
- Industrial Jurisprudence:
Collective bargaining creates a system of industrial jurisprudence. It is a method of introducing civil rights into industry that is of requiring that management be conducted by rule rather than by arbitrary decisions. It establishes rules which define and restrict the traditional authority exercised by employers over their employees, placing part of the authority under joint control by union and management. Finally collective bargaining must never stagnate if it is to serve its role of adapting labor and management institutions, and their relative power positions, to the changing socioeconomic environment.
In approaching collective bargaining, a trade union has series of goals, some economic and some non-economic, not all of which can be won from the employer at one time. Furthermore, a number of the goals are in conflict with each other. Therefore, trade union decides to give priority to these goals, and for giving priority union may classify the goals. There are many ways of classifying the goals, trade union seek to achieve through collective bargaining. The two categories used here are economic and non- economic, they may also be classified according to the members as individuals opposed to the unions as an institution, according to leader versus rank and file, or according to intra-union interest groups, such as the young against the old or one group of skill against another. It follows, then, that the priority ranking of the demands by the union represents a compromise between the different pressures within the union. The compromise must, of course take into account the prevailing economic environment.
Determination of Goals
- Economic Goals
The unions major economic goal is to increase wages constantly. In general terms, this means “more and more than or as much as we can get.” This could mean the maximum wage rate or the maximum wage bill, or some variation of two. Generally, trade unions place greater emphasis on the wage rate than the total amount paid out in wages by an employer, because after a wage increase, multi-plant firm might close down its less efficient plants, and marginal firms might be forced out of business. This may cause unemployment. Therefore, the best technique to enhance the economic position of the members is through raising the wage rate. However, there are some exceptions to this, particularly in construction and clothing industries. For example, wage increases of house painters may have a significant affect on the do it yourself trend; or a wage in unionized clothing firm may shift employment to unorganized firms.
The fact that unions generally emphasize the wage rate rather than employment does not mean that union neglect the latter. However, the approach to this goal is usually not through wage rate adjustments, but rather through regulation of hours, seniority, and working rules. Thus, whenever unemployment increases significantly as a result of increase in wage rates, unions will propagandize and bargain for shorter work weeks rather than decreased wages.
Unions also attempt to enhance the employment of their members by devising and enforcing work rules. In many cases they try to place restrictions on production, limiting the type of machinery used and the speed at which the machinery is to be operated. In some instances the work rules are designed to protect the life and limb of the employees or to avoid “speed ups” and unhealthful working for the workers. In some instances what was originally necessary for the workers safety may, after a change in the methods of production become outdated. Never-the less, the union may still insist on the working rule in order to provide more jobs for the members. In deciding which economic goals to pursue most vigorously, unions must choose, then, between wages, hours, and working rules. More, fringe benefits should be included, since they add to the employer’s labor cost.
- Non-economic Goals
The social and psychological need center around the workers desire to express his individuality and at the time to be an accepted members of his social group. Workers, if they are to feel they have some distinct personal worth, must be able to complain to their employers without fear of reprisal. They want to be more than a lump of economic assets in a depersonalized enterprise. The workers feeling of security, of protection against arbitrary or spiteful action by his supervisor, are of no measurable value to him. For this reason union is worthwhile to many workers regardless of whether it is able to bring them higher wages than they otherwise would have received. It satisfies the need of feeling secure in their jobs and in their status as individual. The union also provides an opportunity for the worker to become active in social organization in association with his fellow workers as equals.
The second variety of non-economic goals sought through collective bargaining is aimed at protection of the union as an institution-. When an employer threatens to break a union or when a rival union attempts to raid its membership, the fight to protect itself becomes more urgent to a union than securing immediate wage increase.
Trade unions have a wide range of economic and non-economic goals. All goals of them cannot be won in one instance. All goals are in conflict with each other since employers are willing to make only limited number of concessions at any particular bargaining session. Therefore, unions have to determine priorities, are five factors which affect the priority of collective bargaining goals.
- Economic conditions relevant to the bargaining relationship
- Precedent of recent major agreements,
- Inter-union rivalry,
- Influence of international situation,
- Intra-union influence.
The relative importance of these factors varies from one bargaining situation to another.
THEORIES OF COLLECTIVE BARGAINING
- Economic Conditions
The cost of living is used by unions as an argument for higher wages during periods of rising prices. Although unions generally give more attention to money wages than real wages, a decline in real wages, resulting from cost of living, is always used as a potent argument for a wage increase, partly because it wins public support. But unions do not use this argument when prices are falling. The cost of living and the condition of firm in terms of ability to pay is used as a basis of setting terms of contract. Finally, since nothing succeeds like success, when a union feels that employer is vulnerable to a strike, e.g., if he is behind in filling his customers’ orders, it may decide that it is the appropriate time to win maximum concession.
- Precedent of Recent Major Agreements
A major agreement made in an industry does not guarantee that other unions will receive the same concessions; there will be variations around the precedent. Nevertheless, employers’ resistance to similar demands is lessened. Once an important employer makes a given concession, other employers are in less advantageous position to object it for public relations reasons. The employer may feel compelled to grant the demand in order to maintain the morale of his workers who are aware of the concessions granted by other employers. This will bold true even in firms which are not unionized. Furthermore, unionized employees would be more willing to withstand a long strike after other employers have granted what their employer refuses. The effect of recent major agreements cuts both ways. That is, it may cause some unions to accept less than the; might have been able to receive had no such precedent existed. The unions would have less public sympathy in striking for amounts greater than other unions have accepted.
- Inter-union Rivalry
The ability of a union leader to gain concessions at least equal to those won by other unions affect his status with his constituency, which of course is an important reason why major agreements affect settlements in other industries. However, inter-union rivalry has implications beyond merely following precedents. It may involve a struggle for power between leaders of two different unions, or perhaps leaders of two different factions of the same union. An ambitious local leader or regional director who wants to rise in the union hierarchy seeks to make greater gains than his rivals. To the extent that he influences the bargaining demands of his local or region, he gives priority to those demands which will enhance his position. In this way inter-union rivalry affect the determination of priority in collective bargaining goals.
- Influence of International Situation
The increase in the international’s control over bargain influences the choice between various union goals, tending to give greater emphasis to nationwide goals as opposed to strictly local goals. The international officers and representatives are generally shrewder and more mature bargainers; they are professionals. They have a better understanding of the employer’s ability to pay, of the impact of any bargaining demand on the entire industry. In some cases this will cause them to bargain for larger amounts, while in other cases they may seek less than the local desire, depending on the economic conditions affecting the industry at that time. When the international exercises a large amount of control in the bargaining, less emphasis is generally placed on such purely local issues as speed up of the production line, discharge of a single employee or setting the wage rate for a new job. It is not that the international is uninterested in these matters, but rather it sees them as matters of local importance and should be dealt with the local unions.
- Intra-union Influences
Intra-union influences also affect the priority of collective bargaining goals. Within the union there are many actual and potential areas of conflict between different interest groups. Different skill groups within the union are liable to disagree over pay-differentials; they may take different views, of technological changes within the plant, since each group is likely to be affected differently by such changes. A conflict may develop between the more productive and the less productive workers, the former favoring an incentive pay plan which would increase their earnings, the latter favoring, and straight time payment. Conflict between the shift and night shift over the amount of the differential are not uncommon; since the employer will grant only a limited total amount of monetary concessions, a larger night differential may mean a lower average wage for the day shift. The older workers would favor pension plans, whereas younger workers have little interest in these.
There are three important concepts on collective bargaining which have been discussed as follows:
CONSTITUENTS OF COLLECTIVE BARGAINING
- The Marketing Concept and the Agreement as a Contract
The marketing concept views collective bargaining as a contract for the sale of labor It is a market or exchange relationship and is justified on the ground that it gives assurance of voice on the part of the organized workers in the matter of sale. The same objective rules which apply to the construction of all commercial contracts, are invoked since the union-management relationship is concerned as a commercial one.
According to this theory, employees sell their individual labor only on terms collectively determined on the basis of contract which has been made through the process of collective bargaining. Thus, collective bargaining remains a means for employees to sell their manpower through a common agent.
The uncertainty of trade cycles, the spirit of mass production and competition for jobs make bargain a necessity. The trade union's collective action provided strength to the individual laborer. It enabled him to resist the pressure of circumstances in which he was placed and to face an unbalanced and disadvantageous situation created by the employer. The object of trade union policy through all the maze of conflicting and obscure regulations has been to give to each individual worker something of the indispensability of labor as a whole. This is also called the union approach to collective bargaining.
It cannot be said whether the workers attained a bargaining equality with employers. But, collective bargaining had given a new relationship under which it is difficult for the employer to dispense without facing the relatively bigger collective strength.
- The Governmental Concept and the Agreement as Law
The Governmental Concept views collective bargaining as a constitutional system in industry. It is a political relationship. The union shares sovereignty with management over the workers and, as their representative, uses that power in their interests. The application of the agreement is governed by a weighing of the relation of the provisions of the agreement to the needs and ethics of the particular case.
Thus, the Governmental concept/theory establishes a political relationship admitting the contractual nature of the bargaining relationship. The contract is viewed as a constitution, written by the point conference of union and management representatives in the form of a compromise or trade agreement. The agreement lays down the machinery for making executing and interpreting the laws for the industry. The right of initiative is circumscribed within a framework of legislation. Whenever, management fails to conform with the agreement of constitutional requirements, a judicial machinery is provided by the grievance procedure and arbitration. This creates a joint Industrial Government where the unions share sovereignty with management over the workers and defend their group affairs and joint autonomy from external interference.
- The Industrial Relations (managerial) Concept at Jointly Decided Directives
The industrial relations concept views collective bargaining a system of industrial governance. It is a functional relationship. Group Government substitutes the State Government. The union representatives get a hand in the managerial role. Discussions take place in good faith and agreements are arrived at. Joins with company officials in reaching decisions on matters in which both have vital interests. Thus, union representatives and the management meet each other to arrive at a mutual agreement which they cannot do alone. When the terms of agreement fail to provide the expected guidance to the parties, it is the joint objective and, not the terms, which must control. Hence, this theory recognizes the principle of mutuality, joint concern and the extension to workers of the corporate responsibilities.
To some extent, these approaches represent stages of development of the bargaining process itself. Early negotiations were a matter of simple contracting for the terms of sale of labor. Developments of the latter period led to the emergence of the Government theory.
There are three distinct steps in the process of collective bargaining;
- The creation of the trade agreement,
- The interpretation of the agreement, and
- The enforcement of the agreement.
Each of these steps has its particular character and him, and therefore, each requires a special kind of intellectual and moral activity and machinery.
PREREQUISITES OF COLLECTIVE BARGAINING
- The Creation of the Trade Agreement:
In 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. The coverage of collective bargaining is very uneven; in some industries almost all the workers are under agreement, while in others only a small portion of the employees of the firms are covered by the agreement. The negotiating process is the part of collective bargaining more likely to make headline news and attract public attention; wage increases are announced, ominous predictions about price increases are reduction in employment are made. And it is in the negotiating process that strikes and threats of strikes are most liable to occur, particular strikes which shut down an entire industry.
- The Interpretation of the Agreement:
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 imposible 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. Nevertheless, each case must somehow be settled. The spirit of the contract should not be violated. The methods that management and the union pointy adopt for this purpose constitute the administrative process.
- Enforcement of the Agreement:
Proper 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. However, new contracts may be written to meet the problems involved in the previous contract. Furthermore, as day-to-day problems are solved, they set precedents for handling similar problems in future. Such precedents are almost as important as the contract in controlling the working conditions. In short, collective bargaining is not an on-and-off relationship that is kept in cold storage except when new contracts are drafted. Rather it is continuously, going relationship that takes on new dimensions each day.
Collective bargaining could be an effective instrument in the settlement of disputes and advancement of the cause of labour if certain basic conditions are fulfilled. These basic conditions have been given as follows:
- Existence of a truly representative, enlightened and strong union functioning strictly on constitutional trade union lines.
- Existence of a progressive and strong management, conscious of its responsibilities to the owners of business, the employees, the consumers and the country.
- Unanimity on the basic objectives and recognition of mutual rights and obligations.
- Delegation of authority to local management, where there are several units of a company.
- Acceptance of a fact finding approach and willingness to use new techniques and tools for the solution of industrial problems.
It is, thus, obvious that collective bargaining can be an effective technique of settling industrial disputes where there is a spirit of give and take between the employers and the workers.
FORMS OF COLLECTIVE BARGAINING
At the outset it should be stated that there is a great deal of variation in the collective bargaining practices ranging from an informal oral agreement to very formal and detailed agreement. Collective Bargaining takes the following forms:
COLLECTIVE BARGAINING AGREEMENTS AT DIFFERENT LEVELS
- It may be a single plant bargaining, that is, bargaining may be between a single trade union. This type of collective bargaining prevails in the United States and India.
- It may be a multiple plant bargaining, that is, bargaining may be between a single factory or establishment having several plants and the workers employed in all these plants.
- It may be a multiple employer bargaining, that is, bargaining between all the trade unions of workers in the same industry through their federal organizations, and the employer‘s federation. This is possible both at the local and regional levels and is generally resorted to in the textile industry. In India, collective bargaining has been classified under four categories. These are:
- Agreements which are negotiated by officers during the course of conciliation proceedings and are called settlements under the Industrial Disputes Act.
- Agreements which are concluded by the parties themselves without reference to a Board of Conciliation and are signed by them. Copies of such agreements, however, are sent to appropriate governments and to conciliation officers.
- Agreements which are negotiated by the parties on a voluntary basis when disputes are sub judice and which are later submitted to industrial tribunals, labour courts or labour arbitrators for incorporation into the documents as parts of awards. These are known as consent awards.
- Agreements which are drawn up after direct negotiation between labour and management and are purely voluntary in character. These depend for their enforcement on moral force and on the goodwill and co-operation of the parties.
Collective bargaining agreements have been concluded at various levels in India—at plant level, industry level and national level.
At Plant Level:
A collective agreement at plant level is reached only for the plant for which it has been drafted, and its scope and extent are limited only to that particular unit or undertaking. The agreement generally provides for certain common norms of conduct with a view to regulating labour management relations and eliminating hatred and misunderstanding. It contains provisions for a quick and easy solution of those issues which require immediate and direct negotiation between the two parties, and lays down a framework for their future conduct if and when controversial issues arise. Since 1955, a number of plant level agreements have been reached. These include: The Bata Shoe Company Agreement, 1955,1958 and 1962; the Tata Iron & Steel Co. Agreement, 1956 and 1959; the Modi Spinning and Weaving Mills Company's Agreement of 1956; the National Newsprint Nepanagar Agreement of 1956; the Belur Agreement of 1956 (between the Aluminum Co. and its employees); The Metal Corporation of India Agreement of 1960 and 1961; the agreement reached between Caltex India and its workmen in 1959, and the one arrived at between the Hind Mercantile Corporation and the workers of the manganese mines at Chikangyakam Haiti, in 1968; the Bhilai Steel Plant and its workers.
At the Industry Level:
The best example of an industry level agreement is offered by the textile industry of Bombay and Ahmedabad. The agreements between the Ahmedabad Mill owners' Association and the Ahmedabad Textile Labour Association, which were signed on 27th June, 1955, laid down the procedure to be followed for the grant of bonus and the voluntary settlement of industrial disputes. The salient features of the first agreement are:
The agreement applied to all the member mills of the Association and contained terms for the determination and set dement of bonus claims for four years—from 1953 to 1957. It was agreed between the parties that the bonus would be payable only out of an "available surplus or profit" after all the charges had been provided for—charges for statutory depreciation and development rebate, taxes, reserves for rehabilitation, replacement and/or modernization of plant and machinery, including a fair return on paid-up capital. The fair return would be computed at 6 per cent on the paid-up capital in cash or otherwise, including bonus shares and reserves employed as working capital. The bonus would be paid to employees out of the available surplus or profit at a rate which would be not less than 4.8 per cent and not more than 25 per cent of the basic wages earned during a particular year.
The two Associations agreed that they would jointly determine the quantum of the available surplus or profit, and fix the quantum of bonus to be distributed by each mill. If mere was any difference of opinion between the two Associations, the matter would be referred for decision to the President of the Labour Appellate Tribunal or, if he was not available, to an umpire to be mutually agreed upon under the second agreement or, in his absence, to a person acceptable to both the parties; and that decision would be final and binding on both.
The second agreement provided that all future industrial disputes between the members of the two Associations would be settled by mutual negotiation, failing which by arbitration, and that they would not resort to any court proceedings for the purpose of resolving their disputes. If arbitration was agreed upon, each party would constitute a panel of arbitrators and also jointly nominate a panel of umpires consisting of not less than two and not more than five independent persons. Whenever there was an industrial dispute which had not been settled by mutual negotiation each party would nominate its own arbitrator from a Board of Arbitrators. This Board would select an umpire out of the panel or from among outsiders so that, in the event of a difference of opinion between the two arbitrators, their individual decisions might be referred to him for evaluation. The award given by the umpire would then be final and binding on both the parties.