Is It Legal to Start Union Wage Discussions Before the Agreement Expires?

Dear Sirs,

We have a union with whom we have a 3-year agreement that will expire on 31st March 2016. However, the union representative wants to start discussions before the said agreement expires. I just want to know, is it lawful?

Isn't it obvious?

Your agreement/settlement expires in March. Do you think the new agreement will just automatically fall into place? Are you accepting all union demands and making none of your own? It takes months of negotiations to reach a settlement. Naturally, you need to start before. If you start after the expiry, you will eventually have to pay the arrears with interest, perhaps.

Why don't you refresh yourself by going through Section 19 of the ID Act, 1947, which deals with the period of operation of settlements and awards? The demand of the union is quite lawful. Like our learned friend Saswata Banerjee observed, it would be better to start negotiations well in advance before the expiry of the current settlement, not only from the perspective of arrears but also from the point of view of cordial industrial relations. Ask the union to submit a formal charter of demands, study them carefully in the backdrop of the reasonableness of the demands, your financial position, counter-demands, if any, that could be placed before the union, etc., and arrange for bilateral negotiations forthwith.

Regards

Proactive Union Negotiations

Negotiating with the union will indicate that management is proactive and serious about industrial relations. Trade unions will also have time to prepare their charter of demands.

One must remember that wage settlements can be a precursor to improved morale and productivity and can be safely settled within the four walls of the factory. Negotiations should never be in the spirit or mindset of "mazdoor-malik." Both are stakeholders in the progress of the company.

So, go ahead and get ready for a win-win wage negotiation and do not wait until the agreement expires. Management can talk about aspects like variable pay linked to productivity. Workmen see what is there for them, and management sees how to keep it within the budget. But when both parties have mutual confidence, things become easier.

Before starting the negotiations with the union, it is good to understand what the company needs from the union. We can obtain it after the expiration of the long settlement. Arrears can be avoided, and production can be started early, benefiting the company.