Navigating Wage Negotiations: Do Companies Need to Engage Both Major and Minor Unions?

Negotiating with Multiple Unions Under the ID Act

If a company has two unions—one with a majority of employees and the other with fewer members—is it required to negotiate with both unions for a wage agreement under Section 12(3)/18(3) of the ID Act, or is negotiation with the major union sufficient and binding on the workers who are part of the minor union?

Assistance for Minor Unions in Disagreements

If the minor union disagrees with the settlement reached by the major union, what assistance will they receive if they file a case in the labor court/tribunal?

Kindly share your expert views.

Union Agreement and Conciliation Process

An agreement with a union is binding only on its members, so it is better to involve the Labour Officer and resolve the matter through the conciliation process. Such a settlement applies to all workmen. During conciliation, they may call the minority union and persuade them to come to an agreement.

Dealing with Majority and Minority Unions

If management has an approach to only deal with the majority union, then go ahead and sign a formal agreement with that union and implement it for all workmen. Let the minority union come up with its members' list who do not want the benefits of this agreement.

Importance of Involving Both Unions

It is better to implement a wage agreement involving both unions; otherwise, there could be strained relations that affect the congenial industrial relations necessary for the production process to proceed smoothly.

Dear friend,

If we critically analyze the scheme of the Industrial Disputes Act, 1947, with reference to its preamble, which is primarily the speedy and peaceful resolution of industrial disputes, we would accept the fact that the most preferred method of dispute resolution under the Act is the process of collective bargaining, inter alia, conciliation, arbitration, and adjudication.

The role of majority and minority groups in dispute resolution

Going deeper, when groups of workmen with the same community of interest stand divided in terms of their anticipated benefits from the methods of resolution, not only the employer but also the conciliator, arbitrator, or adjudicator is bound to determine the majority of the rivaling groups of workmen in addition to the equity and legality of the terms of the final resolution of the dispute. Only then would the resolution be workable.

Involvement of the conciliation officer

In this backdrop, when the workmen stand divided as majority and minority, it is better to involve the conciliation officer to arrive at a settlement under Section 12(3) of the ID Act, 1947, after signing a bilateral settlement under Section 18(1) to ensure the uniformity of service conditions and effective implementation of the final settlement. As mentioned earlier, the conciliation officer is bound to act as per the decision of the majority only, which can be in any ratio starting from 51:49. Once signed before the conciliation officer under the Act, the settlement becomes applicable to all workmen alike until it is replaced by another settlement after its expiration.

Dear Colleague,

This is a beautiful IR scenario that is commonly experienced by many industries in cases of key settlements/LTS like wages/bonus and so on. The reply from great personalities in the field like Umakanthan Sir, who has worked in this field for several decades, is very crisp and to the point.

When the workers are divided into multiple unions (more than one), there may be different percentages of membership, leading to major as well as minor membership scenarios. In case of no unanimity in accepting the settlement, it is always advisable to go for a Tripartite Settlement under Section 12(3) of the ID Act 1947. While both 18(1) and 12(3) settlements are equally good, there is a subtle difference in their applicability:

- 18(1) Settlements are applicable to parties to the settlement (meaning the union(s) signed).
- 12(3) Settlements are applicable to all parties to whom notice of conciliation under the ID Act 1947 is sent by the Conciliation Officer (meaning to all workers/all unions to whom notice by the conciliation officer is sent), as well as to the successors of both management and union.

Hence, it is better to go for a 12(3) settlement after reaching an 18(1) settlement with the majority union. Here, all the unions functioning in the factory will be issued a conciliation notice under the ID Act 1947, and once the settlement is concluded by the Conciliation Officer, it becomes applicable to all those unions and their workers for whom the notice was served, regardless of whether such minority unions take part in the conciliation or sign the settlement. This will be a good move.

Hello All, it is okay to discuss this now under the old laws. In the new Codes, the provision is that workers will elect their representatives, and they will negotiate with the employer. There will thus be no question of a majority union, recognized union, or minority union.

State-specific rules under the new codes

Under the new codes, the rules are to be made by each State, which they are in the process of making and will be completed soon.

Vibhakar Ramtirthkar.

Dear CiteHR Anonymous Member,

For kind attention: The Industrial Disputes Act of 1947 stands repealed.

The comments provided by our senior expert contributors, particularly Sir Umakanthan M, underscore valuable advice regarding the provisions of the ID Act of 1947, which has been repealed by the Industrial Relations Code of 2020. The IR Code of 2020 offers a comprehensive solution to the aforementioned scenario.

Trade Unions under the IR Code of 2020

Trade Unions, registered under Section 6 of the IR Code of 2020, will be eligible for consideration to be recognized as the "Negotiating Union" under Section 14. In cases where there are multiple Trade Unions, the one with 51% or more workers as its members, verified through the prescribed procedure, will be recognized by the Employer as the Negotiating Union. If there are multiple Trade Unions and none have 51% or more members duly verified, then the Employer will establish a Negotiating Council from amongst the representatives of registered Trade Unions with a minimum of 20% of workers as their members. For the remaining employees, there will be one representative for every 20% of workers as verified.

Engagement with the Negotiating Union or Council

Based on the provisions of Section 14 of the IR Code of 2020, it is evident that an Employer must engage in an agreement with the Negotiating Union or the Negotiating Council, and such agreements are valid for 3 years. Agreements must be reached by a majority of representatives.

The aforementioned provisions of the IR Code of 2020 offer adequate safeguards for both Employers and employees when entering into agreements.

I would appreciate further elaboration and understanding on matters related to the subject.

Regards,
Chandra Mani Lal Srivastava
Master Consultant
[Phone Number Removed For Privacy-Reasons]
Contract Management, Tender, Works, Service & IR Laws
Email: [Email Removed For Privacy Reasons]
New Delhi/26.02.2022/10:37 pm