Prerequisites of Successful Collective Bargaining

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:

  1. Existence of a truly representative, enlightened and strong union functioning strictly on constitutional trade union lines.
  2. Existence of a progressive and strong management, conscious of its responsibilities to the owners of business, the employees, the consumers and the country.
  3. Unanimity on the basic objectives and recognition of mutual rights and obligations.
  4. Delegation of authority to local management, where there are several units of a company.
  5. 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.


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:

  • 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.

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