CASE STUDY

Submitted to: Prepared by:

Ms. Jiveta Chaudhry Neeti Som (066)
Pooja Sachdeva(074)
MBA IIIA
 Contents

 Acknowledgement
 Certificate
 Theoretical framework
 Case summary
 Solution
 Annexure
 ACKNOWLEDGEMENT

It is our duty to record our sincere thanks and

deep

sense of gratitude to our respected teacher

Ms. Jiveta Chaudhry

for her valuable guidance interest and

constant encouragement for the fulfillment of

the

report.
 CERTIFICATE

THIS IS TO CERTIFY THAT THIS REPORT HAS

BEEN

PREPARED BY

NEETI SOM & POOJA SACHDEVA

UNDER MY GUIDANCE

AND TO MY SATISFACTION.

IT IS BASED ON THEIR OWN EFFORTS.

THEORETICAL FRAMEWORK

WHAT IS COLLECTIVE BARGAINING??

Collective bargaining is process of joint decision making and basically
represents a democratic way of life in industry. It is the process of negotiation
between firm’s and workers’ representatives for the purpose of establishing
mutually agreeable conditions of employment. It is a technique adopted by two
parties to reach an understanding acceptable to both through the process of
discussion and negotiation.

ILO has defined collective bargaining as, negotiation about working conditions
and terms of employment between an employer and a group of employees or
one or more employee, organization with a view to reaching an agreement
wherein the terms serve as a code of defining the rights and obligations of each
party in their employment/industrial relations with one another.

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.

FEATURES
Randle observes “a tree is known by its fruit. Collective bargaining may best
be known by its characteristics.” The main characteristics of collective
bargaining are:
1- Collective Process: The representatives of both the management and the
employees participate in it. Employer is represented by its delegates and , on the
other side, employees are represented by their trade union. Both the groups sit
together at the negotiating table and reach at some agreement acceptable to both.
2- Continuous Process : It is a continuous process. It does not commence with
negotiations and end with an agreement. It establishes regular and stable
relationship between the parties involved. It involves not only the negotiation of the
contract, but also the administration or application of the contract also.It is a
process that goes on for 365 days of the year.
3- Flexible and Mobile: 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.
4- Bipartite Process: C.B. 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 give – and –take rather than a take-it-or-leave it method of
arriving at the settlement of a dispute.
5- Dynamic: C.B. is a dynamic process because the way agreements are arrived at,
the way they are implemented, the mental make-up of parties involved keeps
changing. As a result, the concept itself changes, grows and expands overtime. It is
scientific, factual and systematic.
6- Industrial Democracy: It is based on the principle of industrial democracy
where the labour union represents the workers in negotiations with the employer or
employers. It is a joint formulation of company policy on all matters affecting the
labour.
7- Complementary Process : C.B. is essentially a complementary process, i.e.,
each party needs something which the other party has, namely, labour can put
greater productive effort and management has the capacity to pay for that effort and
to organize and guide it for achieving the organizational objectives.
8- It is an Art: Collective bargaining is an art , an advanced form of human
relations.
9- Discipline in Industry: C.B. is an attempt in achieving and maintaining
discipline in the industry.
10- Industrial Juris prudence: It is an effective step in promoting industrial
jurisprudence.
IMPORTANCE OF COLLECTIVE BARGAINING

Importance to employees
Collective bargaining develops a sense of self respect and responsibility
among the employees.

• It increases the strength of the workforce, thereby, increasing their

bargaining capacity as a group.
• Collective bargaining increases the morale and productivity of employees.

• It restricts management’s freedom for arbitrary action against the

employees. Moreover, unilateral actions by the employer are also
discouraged.

• Effective collective bargaining machinery strengthens the trade unions

movement.

• The workers feel motivated as they can approach the management on

various matters and bargain for higher benefits.

• It helps in securing a prompt and fair settlement of grievances. 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.
Importance to employers
1. It becomes easier for the management to resolve issues at the bargaining
level rather than taking up complaints of individual workers.
Scope of Collective Bargaining

There is no standard specification of what should not be included, although certain

issues are often sought to be excluded from C.B. and retained for discussion and
disposal by the management.

As the bargaining relationship matures and the two parties grow in mutual trust and
confidence, the agreement acts as a framework for peacefully settling day-to-day
disputes. And when the new contracts are negotiated, additional subjects are
brought under collective bargaining.

The contract provisions may be divided into four categories :

--- union security
--- worker security
--- economic factors
---management protection.

Union security : A union security clause means the extent to which the contract
protects the union in holding its membership. This clause may vary from mere
recognition at one extreme to the ‘closed shop’ at the other. In many contracts, a
“check-off’’ clause is also included, which requires the employer to deduct the
union dues from the employee’s pay and forward them directly to the union.
Worker security : This clause provides for seniority protection, covering
promotion, job assignment and lay-off.
Economic factors : The economic items include wages and the fringe benefits.
The issues covered under agreements can be grouped in three categories:
a) employment and working conditions;
b) labour welfare, labour recruitment and management matters;
c) organizational matters.

The first two which cover wages, bonus, D.A., retirement benefits, working hours,
holidays with leave, supply of subsidized items like food, transport, housing, etc.
are worker- interest oriented.
The last category comprising union recognition, exclusive bargaining rights, check-
off schemes, workers participation in management, etc. are union-interest oriented
matters.

Stages And Bargaining Process

The C.B. process generally starts as soon as the charter of demands is presented by
the trade unions on behalf of their members to the management. The provisions of
existing agreement continue till a new agreement is signed and enforced.
Usually , there are two stages in collective bargaining :
[A] The negotiation stage
[B] The stage of contract administration.
PRINCIPLES OF COLLECTIVE BARGAINING
For union and management
 Collective bargaining should be made an educational as well as a bargaining
process.
 It should be looked upon as the means of finding the best possible solution
and nt as the means of acquiring as much as one can while conceding the
minimum.
 Both the parties to a dispute should command the respect of each other and
should have enough bargaining power to enforce the terms of the agreement
that may be arrived at.
 The two parties should meticulously observe and abide by all the national
and state laws which are applicable to collective bargaining.

For the management

 The management must develop and consistently follow a realistic labour
policy, which should be accepted and implemented by all its representatives.
 The management must grant recognition to it without any reservations and
accept it as a constructive force in the organization and the industry.
 The management should deal only with one trade union in the organization.
 While weighing the economic consequences of collective bargaining, the
management should place greater emphasis on social considerations.

For the trade union

 In view of the rights granted to organized labor, it is essential that trade
unions should eliminate racketeering and other undemocratic practices
within their own organization.
  Trade unions and their members have an obligation to assist the management
in the elimination of waste and in improving the quality and quantity of
production.
 Trade unions should resort to strikes only when all other methods of settling
a dispute have failed to bring about satisfactory results.
GRIEVANCE
Definition:
According to Michael Jucius, “ A grievance can be any discontent or
dissatisfaction, whether expressed or not, whether valid or not, and arising out of
anything connected with the company that an employee thinks, believes, or even
feels as unfair, unjust, or inequitable.”

ILO defines a grievance as a complaint of one or more workers related to:

- Wages and allowance
- Conditions of work
- Interpretation of service conditions covering such as OT, Leave, Transfer,
Promotion, Seniority, Job Assignment & Termination of Service”

The National Commission on Labour Observed that “Complaints affecting one or

more individual workers in respect of their workers
- Wage payments, OT, Leave, Transfer Promotion, Seniority, Work Assignment &
Discharges Constitute Grievances”.
The causes of grievances may be broadly classified into the following categories:
(1) Grievances resulting from working conditions

(i) Improper matching of the worker with the job.

(ii) Changes in schedules or procedures.
(iii) Non-availability of proper tools, machines and equipment for doing the job.
(iv) Unreasonably high production standards.
(v) Poor working conditions.
(vi) Bad employer – employee relationship, etc.
(2) Grievances resulting from management policy
(i) Wage payment and job rates.
(ii) Leave.
(iii) Overtime.
(iv) Seniority and Promotional.
(v) Transfer.
(vi) Disciplinary action.
(vii) Lack of employee development plan.
(viii) Lack of role clarity.

(3) Grievances resulting from personal maladjustment

(i) Over – ambition.
(ii) Excessive self-esteem or what we better know as ego.
(iii) Impractical attitude to life etc.

EFFECTS OF GRIEVANCES:
Frustration
Alienation
De-motivation
Slackness
Low Productivity
Increase in Wastage & Costs
Absenteeism
 In discipline
Labour unrest
ESTABLISHING A GRIEVANCE PROCEDURE.
The following principles should be observed while laying down a procedure:
(1) A grievance should be dealt with in the first instance at the lowest level: that is,
an employee should raise his grievance with his immediate superior.
(2) It must be made clear to the employee what line of appeal is available. If he
cannot get satisfaction from his immediate superior, he should know the next
higher authority to which he can go.
(3) Since delay causes frustration and tempers may rise and rumors spread around
the work, it is essential that grievances should be dealt with speedily.
(4) The grievance procedure should be set up with the participation of the
employees and it should be applicable to all in the organisation. The policies and
rules regarding grievances should be laid down after taking inputs from the
employees and it should be uniformly applicable to all in the organisation. It should
be agreed that there would be no recourse to the official machinery of conciliation
unless the procedure has been carried out and there is still dissatisfaction, and
moreover, there must be no direct action on either side, which might prejudice the
case or raise tempers while the grievance is being investigated.

Open door policy:

Under this policy, any employee can take his grievance to the chief boss and talk
over the problem. As the name suggests, the management keeps its doors open for
the employees to share their problems. It is said that this policy can remove the
cause of grievance quickly. Though this policy appears to the attractive, it has some
prerequisites.
The open door policy is workable only in small organizations. In big organizations,
the top management does not have the time to attend to innumerable routine
grievances daily that is the work of lower-level mangers.
Under this policy, the front-line supervisor who should be the first man to know
about the grievances of his subordinates is bypassed. This provokes him in two
ways. First, he thinks the man who skipped him is disrespectful. Secondly, he fears
that he will incur his superior’s displeasure because of his failure to handle his
subordinates will interpret this.
Step-Ladder Procedure
Under the step-ladder procedure, the employee with a grievance has to proceed step
by step unless he is able to redress his grievance. According to the Model
Grievance Procedure, an aggrieved employee shall first present his grievance
verbally in person to the officer designated by the management for this purpose. An
answer shall be given within 48 hours. If he is dissatisfied with the answer, the
worker will present his grievance to the head of the department, who will give his
answer within 3 days. If the worker is dissatisfied with the answer, he may ask that
his grievance should be referred to the Grievance Committee, which shall make its
recommendations within 7 days to the manger. The management must implement
unanimous recommendations of this committee. A dissatisfied worker can apply to
the management for a revision of its decision within on week’s time.
STEP 1

Filling of written
complaint STEP 2

Supervisor or
Foreman STEP 3

Head of STEP 4
department

Joint grievance
committee

STEP 5
Chief executive

LAST
STEP Voluntary arbitration

SETTLEMENT

Step – ladder Grievance Procedure

MODEL GRIEVANCE PROCEDURE
The Model Grievance Procedure was formulated in pursuance to the Code of
discipline adopted by the 16th Session of the Indian Labour Conference in 1958.
Most of the grievance procedures now a day are built around the Model Grievance
Procedure with certain changes to suit the size and special requirements of an
enterprise. The model Grievance Procedure provides for five successive time-
bound steps. These are as under:
(1) An aggrieved employee shall first present his grievance verbally in person to the
officer designated by the Management for this purpose. An answer shall be given to
him within 48 hours of the presentation of the complaint.
(2) If the worker is not satisfied with the decision of this officer or fails to receive
an answer within the stipulated period, he shall in person or by his departmental
representative, if required, present his grievance to the head of the department
designated by the management for this purpose. And he will get the answer within
3 days of the presentation of his grievance.
(3) If the decision of the departmental head is unsatisfactory, the aggrieved worker
may request the forwarding of his grievance to the Grievance Committee, which
shall make its recommendations to the management within 7 days of the worker’s
request. The final decision of the management shall be communicated to the worker
within the stipulated period (3 days) by the Personnel Officer.
(4) A revision of his grievance can be done if the decision is not satisfactory. The
management shall communicate its decision within a week.
(5) If no agreement is possible the union and the Management may refer the
grievance to voluntary arbitration within a week from the date of receipt by the
worker of the management’s decision.
In the above-mentioned procedure the following points should be noted:
• Calculating the various time intervals under the above clauses, holidays shall not
be included.

• The Management shall provide the necessary clerical and other assistance for the
smooth functioning of the grievance machinery.

• During the working time, the concerned person may go for enquiry with the
Labour/personnel Officer, provided the he has taken permission from his
supervisor. Hence he may not suffer any loss of payment.

GRIEVANCE MACHINERY
For the purpose of constituting a fresh grievance machinery, workers in each
department and each shift elect from among themselves, and for a period of not less
than 1 year at a time departmental representatives and forward the list of persons so
elected to the management. Correspondingly, the management shall designate the
persons for each department who shall be approached at the first stage and the
departmental heads at the second stage. Two or three of the departmental
representatives of workers and two or three departmental heads nominated by the
management constitute the Grievance Committee.
 CASE SUMMARY
This case is related to The Andhra Pradesh State Road Transport Corporation which
is a state owned passenger transport company. The pay scales in the corporation are
determined on the basis of mutual agreement between the management and the
recognized trade union. The scales are revised once in three years. The corporation
has both the grievance machinery and the collective bargaining machinery to
resolve employee problems.
An agreement had come into force from September, 1988 in which the pay scale of
the class II drivers was enhanced from Rs. 600 – 900 to Rs. 900 – 1600. The
agreement further said that the pay scales of the drivers drawing the scale of Rs.
600 – 1200 will be fixed in the scale of Rs. 900 – 1600.
Now the corporation had absorbed 10 drivers who were with the private passenger
transport companies upon the nationalization of that rout at a pay scale of Rs. 600 -
1200.
When these drivers demanded the increased pay scale they were refused and told
that only the drivers drawing the pay scale of Rs. 600 – 1200 were eligible for the
raise. The drivers then took up the matter with their immediate superior who was a
foreman. They were told to raise this issue in collective bargaining with the help of
trade union leaders as it was a policy issue. The trade union included this item in
their draft agenda but the collective bargaining committee deleted this it saying that
this issue can be settled through grievance machinery as only 10 drivers out of
3000 of the corporation are concerned with this issue.
THE PROBLEMS:
 WAGE RELATED PROBLEM : The new hires demand a pay equivalent to
that given to the existing employees as per the policy of the company.
 CLASSIFICATION OF PROBLEM: The employees are not sure whether to
take up the matter to the grievance committee or the collective bargaining
committee. The collective bargaining committee has also asked them to go to
the grievance committee only because only 10 out of the 3000 employees are
concerned.
 AMBIGUOUS TERMS OF THE AGREEMENT: Even though the
agreement mentions that “the pay scales of the drivers drawing the scale of
Rs. 600 – 1200 will be fixed in the scale of Rs. 900 – 1600” , it says nothing
about the employees that will be hired in future for the same category of
drivers.

QUESTIONS:
Ques 1. Who is correct? The personnel department or the foreman or the
collective bargaining committee?
Sol. We will have to first understand the view point of each of the party:
1. The personnel department has fixed the pay in accordance with the
literal interpretation of the agreement which states that “ pay scales of
the drivers drawing the scale of Rs. 600 – 1200 will be fixed in the
scale of Rs. 900 – 1600”. Since the personnel department is concerned
with the implementation of the wage policy it is, to some extent, not at
fault.
Also , as per The Employment Exchanges (Compulsory Notification
Act 1959) the organization must have advertised for the vacancy
 mentioning the eligibility as well as the pay scales. If it had been done
so and the drivers knew about the wage before joining the
organization, then the drivers’ demands are unjustified.

2. The foreman based on his knowledge recommended the drivers to go

to the union as the matter is concerned with the employee welfare
related to the wages, an area in which he actually doesn’t have an
authority

3. The collective bargaining committee here showed a rather narrow

approach towards the employee’ grievance. They deleted the issue
from their agenda only because the matter, right now concerned only
10 employees. They failed to see the problem from a long term
perspective since the problem shall remain there even if new drivers
join the organization.

In our view, the foreman is indeed correct as the problem arose mainly
because of the agreement.

Ques 2. Where do you place this issue for redressal?

Ans. We would say that the issue should be taken to the Grievance
committee first. If the issue remains unsolved then it certainly needs to be
resolved by the collective bargaining committee since the agreement that
came into effect needs to be reviewed.
Ques 3. How do you redress this grievance?
Ans. The problem if not solved through the Grievance Committee would be
taken to the collective bargaining committee. The committee can then try to
resolve the matter with the management in accordance to the provision of the
arbitration that must have been incorporated in the agreement.
Another solution could be that for a period till the policy is next reviewed i.e.
3 years the trade union could pay some amount to the drivers out of their
own funds the provision of which is made under The Trade Unions Act 1926
sec. 15 and then after 3 years when the scales are revised the trade union can
bring into light the ambiguities of the statement.

If the drivers or the union are still not satisfied with the solution then the
matter could be taken to the conciliation board and then to the industrial
tribunal under The Industrial Disputes Act, 1947