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Dear Seniors, I would request to share your views on the following points.

a) Is it compulsory to enter into a wage agreement with the union in the establishment.
b) What if the factory/establishment having more than one union
c) In the context of Maharashtra what is mean by union registered under the BIR act.
d) Which act governs the wages agreement is it the BIR act or the industrial dispute act.
e) Since my establishment is paying much more than the minimum wages and our current wages agreement is going to end in coming months so in this scenario we we again need to renew the wages agreement.
f) Where the BIR act is Applicable and what is the difference between the BIR act and industrial dispute and his scope.
g) Can contract workers go straight in the wages agreement with the principal employer.

Plz guide. Thanks in advance.

From India, Nagpur

On the legal point of view, entering wage agreement with union is recommended as the same was signed before a conciliation officer who checks for legality of the agreement on both side and validate. If any contravention during the period of agreement the affected party can approach the legal forum for their remedy.

With regard to two unions, The management has to find out which is union is having majority of workers so that The Management can enter agreement with the negotiating union. There is well proven method called check off system where by majority union can be found out by the Management. All benefits and wage revisions has to be given to other union workers also in par with the signed union workers. There shall not be a partiality on this.

Irrespective of the fact that you pay more than minimum wages, you need to go for wage agreement with the union. Paying minimum wages does not form a reason for not entering the wage agreement.

For contract workers, they can be treated separately and the rates of wages can be increased based on the discussion with the contractor. The contractor and the company can go for agreement for extending increased wages to contract workmen. When you include contract worker in the regular worker wage agreement the contract which you are entertaining is a sham contract and which will not stand before any law. Either you convert them in to regular worker and enter agreement or else you keep them as separate and enter an agreement with contractor with regards to the wages for contract workers.

From India, New Delhi

Dear Sir,
Before dealing with the queries, it is to be clarified as to whether you are covered as per the Bombay Industrial Relations Act 1947 or the ID Act 1947, as it makes a lot of difference in the approach to be adopted. Bombay Industrial Relations Act is a special legislation covering certain industries in notified areas in the state of Maharashtra, there is a provision of Representative Union (enjoying at least 25% membership and in case of more than one union with that membership then the Union with majority membership as determined by the Registrar) and the Representative union has the sole bargaining power. Since there is no similar provision in ID Act, the approach & legal position would greatly vary between them

From India, Mumbai
Nagarkar Vinayak L

Dear Colleague,

I am attempting to reply your queries in verbatim as well follows:

a) Yes, it is in the utmost interest of industrial peace to bargain and enter into periodic wage agreement with the majority/ recognized union. It is mandatory do so at least in Maharashtra if provisions of the BIR Act are applicable or where the union Is declared as recognized under the Maharashtra Recognition of trade unions and prevention of unfair labour practices Act.

If you choose not to bargain and enter into amicable agreement , you will have to face industrial unrest manifesting in strikes, work stoppages, violence and break down in operations.

b) In multi- union situation , the labour authorities under the the Mritu and Pulp Act referred to above, will have to decide which union has majority through secret ballot or check off method as considered appropriate. The company plays no role in any decision relating to the recognition except to facilitate Govt labour commissioner's office to hold elections on the premises or give logistics support.

However, this picture will change after the new law on Industrial Relations code is implemented. In multi - union situation, it provides for Negotiating Council formed out of the functioning unions.

c) BIR Act applies to certain specified industries such as Power generation, Textile, Sugar operatives etc in Maharashtra. The Act provides for registered, representative, and recognition of unions functioning in the specified industries and their rights.

For rest of the industries, the Industrial Disputes Act applies for the settlement of industrial disputes , individual and collective.

Under the Indian Trade Union's Act, each union has to be registered as per the prescrIbed provisions

d) BIR and ID Act, both govern for the wage agreements in the specified respective industries.

e) The unions can bargain for better wages and service conditions than the minimum wages. The criteria will be prevailing wage structure in comparable concerns in the industry and region as well as financial capacity to bear the burden.

g). Principal employer should refrain from negotiating with the Contractors' union directly and work behind the scene to facilitate wage settlement between the Contractor and his union/s.


Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

Dear Elite Citehr leaders Greetings. Thanks for your wonderful reply. Your feedback is great and cherishing the knowledge in this elite forum
From India, New Delhi
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