35 Trade Unions and Collective Bargaining

35.1 What is a Trade Union?

Sidney and Beatrice Webb, in The History of Trade Unionism (1894), gave the foundational definition: a trade union is “a continuous association of wage-earners for the purpose of maintaining or improving the conditions of their working lives”. The Webbs are the founders of British trade-union scholarship.

Working definitions

Author	Definition
Sidney & Beatrice Webb (1894)	“A continuous association of wage-earners for the purpose of maintaining or improving the conditions of their working lives.”
Indian Trade Unions Act 1926, Sec. 2(h)	“Any combination, whether temporary or permanent, formed primarily for the purpose of regulating relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business.”
Dale Yoder	“A continuing long-term association of employees, formed and maintained for the specific purpose of advancing and protecting the interests of members in their working relationships.”
G.D.H. Cole	“An association of workers in one or more occupations, an association carried on mainly for the purpose of protecting and advancing members’ economic interests in connection with their daily work.”
V.V. Giri	“Voluntary organisations of workers formed to promote and protect their interests by collective action.”

35.2 Functions of Trade Unions

Three classes of trade-union functions

Militant / Protective — bargain for better wages, conditions; strike when needed.
Fraternal / Welfare — mutual aid; education; recreation; cooperative stores.
Political — influence labour legislation; affiliate with political parties.
Social-responsibility / Community — community work, social causes (modern).

Hoxie’s classification of unions (1921)

Robert F. Hoxie in Trade Unionism in the United States (1921) classified unions by their orientation: Business unionism (pragmatic, wages-focused — AFL/Gompers) · Uplift unionism (broad social reform) · Revolutionary unionism (overthrow of capitalism — IWW) · Predatory unionism (corrupt; cosy with employer).

35.3 Theories of Trade Unionism

Major theories of trade unionism

Theory	Author	Core idea
Revolutionary theory	Karl Marx	Unions vehicles to overthrow capitalism
Webbs’ theory of Industrial Democracy	Sidney & Beatrice Webb (1897)	Unions create democracy in industry
Selig Perlman’s theory	Selig Perlman (1928)	“Job consciousness” — workers want job security, not revolution
Frank Tannenbaum’s theory	F. Tannenbaum	Unions are a response to dehumanisation of machine age
John Commons’ theory	J.R. Commons	Unions arise from extension of markets — separating workers from owners
Robert Hoxie’s theory	Hoxie	Functional types — business, uplift, revolutionary, predatory
Gandhian theory	M.K. Gandhi	Trusteeship; non-violent dispute resolution (Ahmedabad model, 1918)
Cole’s theory	G.D.H. Cole	Guild socialism — unions self-govern industry

35.4 Types of Trade Unions

Common types of trade unions

Type	Membership
Craft union	Same craft/trade across firms (e.g., plumbers, electricians)
Industrial union	All workers in an industry, regardless of craft (e.g., textile, railway)
General union	Workers across industries and crafts (e.g., UK’s GMB)
White-collar / Staff union	Clerical, technical, supervisory
Federation	Apex body of affiliated unions

By structure: Plant union (one plant) · Industry union (one industry across plants) · Federation (apex).

35.5 History of Trade Unions

Global trade-union milestones

Year	Milestone
1799-1800	UK Combination Acts — ban on unions
1824	UK Combination Acts repealed
1871	UK Trade Union Act — legal recognition
1886	American Federation of Labor (AFL) — Samuel Gompers
1919	International Labour Organisation (ILO) established
1949	International Confederation of Free Trade Unions (ICFTU)
2006	International Trade Union Confederation (ITUC) — merger of ICFTU + WCL

35.6 Trade Unions in India — History

Indian trade-union milestones

Year	Event
1875	First labour agitation — Sorabjee Shapoorjee Bengalee, Bombay
1890	Bombay Mill Hands Association — N.M. Lokhande — earliest workers’ body
1918	Madras Labour Union — B.P. Wadia — first modern industrial union; Ahmedabad Textile Labour Association (TLA) — Gandhi
1920	All India Trade Union Congress (AITUC) — N.M. Joshi, Lala Lajpat Rai (first president)
1926	Trade Unions Act — legal recognition
1947	Indian National Trade Union Congress (INTUC) — Congress-affiliated
1948	Hind Mazdoor Sabha (HMS) — Socialist-affiliated
1949	United Trade Union Congress (UTUC)
1955	Bharatiya Mazdoor Sangh (BMS) — Sangh Parivar-affiliated (D.B. Thengadi)
1970	Centre of Indian Trade Unions (CITU) — CPI(M)
2014	BMS reported as largest union (10.0 cr members claimed)

B.P. Wadia and the Madras Labour Union

Bomanji Pestonji Wadia’s Madras Labour Union (1918) was India’s first modern industrial union. After employees were prosecuted under English Common Law as “conspirators in restraint of trade,” the Buckingham Mills case prompted N.M. Joshi to push for the Trade Unions Act 1926 — granting registered unions legal status, immunities, and the right to collect funds.

35.7 Indian Trade Unions Act 1926 — Key Provisions

Trade Unions Act 1926 — quick reference

Registration — Sec. 4 — minimum 7 members for application; 10 % or 100 workmen, whichever is less for registration (2001 amendment).
Office bearers — at least half (50 %) must be persons actually employed in the industry (2001 amendment).
Immunities (Sec. 17 & 18) — civil and criminal immunity for trade-disputes actions; conspiracy in restraint of trade not punishable.
Funds — General Fund (Sec. 15) for ordinary union activity; Political Fund (Sec. 16) — separate, voluntary, for political objects (no compulsion on members).
Recognition — the 1926 Act does not mandate employer recognition; states have separate Recognition of Trade Unions laws (Maharashtra 1971, etc.).
Cancellation of registration — Sec. 10.

2001 Amendment

The Trade Unions (Amendment) Act 2001 raised the registration threshold from any 7 members to 10 % of workers or 100 workers (whichever is less) — to control proliferation of small unions; and required at least 50 % of office bearers to be employees of the establishment (was earlier one-third).

35.8 Central Trade Union Organisations (CTUOs)

The Ministry of Labour recognises 12 CTUOs (over 5 lakh verified membership). The major ones:

Major Indian Central Trade Unions

Union	Founded	Political alignment
AITUC — All India Trade Union Congress	1920	CPI
INTUC — Indian National Trade Union Congress	1947	INC
HMS — Hind Mazdoor Sabha	1948	Socialist
UTUC — United Trade Union Congress	1949	Forward Bloc / RSP
BMS — Bharatiya Mazdoor Sangh	1955	RSS-affiliated
CITU — Centre of Indian Trade Unions	1970	CPI(M)
AIUTUC — All India United Trade Union Centre	1970	SUCI
TUCC — Trade Unions Co-ordination Centre	1970	AIFB
AICCTU — All India Central Council of Trade Unions	1989	CPI(ML)
LPF — Labour Progressive Federation	1970	DMK
SEWA — Self-Employed Women’s Association	1972	Independent — Ela Bhatt (first union of women in informal sector)

35.9 Problems of Indian Trade Unions

Eight problems of Indian trade unionism

Multiplicity of unions — many unions in one establishment.
Inter-union rivalry — political affiliations.
Outside leadership — historically lawyers, politicians; not workers.
Small size and weak finances — most unions have under 500 members.
Politicisation — union as vote bank.
Low coverage — only ~10 % of workforce unionised; almost entirely organised sector.
Low informal-sector coverage — 90 % of India’s workforce.
Decline in numbers and influence — globalisation, contract labour, IT.

Outside leadership

N.M. Joshi, Lala Lajpat Rai, V.V. Giri, B.P. Wadia, Subhas Chandra Bose, Indulal Yagnik — most early union leaders were not workers. Tamil Nadu Recognition of Trade Unions Act (1981) and recent reforms try to restrict outside leadership to maximum prescribed proportion.

35.10 Collective Bargaining

The term “collective bargaining” was coined by Beatrice Webb in 1891 and developed in Industrial Democracy (1897) by Sidney and Beatrice Webb. It is the process by which an organised group of workers, through their representatives, negotiates with the employer on terms of employment.

Working definitions of CB

Author	Definition
Webbs (1897)	“A method by which trade unions protect and improve the conditions of their members’ working lives.”
ILO	“Negotiations about working conditions and terms of employment between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more representative workers’ organisations on the other, with a view to reaching agreement.”
Flippo	“A process in which the representatives of a labour organisation and the representatives of business organisation meet and attempt to negotiate a contract or agreement which specifies the nature of the employee-employer-union relationship.”
Richardson	“A process of discussion and negotiation between two parties — one or both of whom is a group of persons acting in concert.”

35.11 Features of Collective Bargaining

Eight features of collective bargaining

Collective — workers act as a group through union.
Bargaining — not dictation; give-and-take.
Bipartite — typically union and employer (state may help).
Dynamic — terms evolve over time.
Continuous — ongoing relationship, not a one-off transaction.
Voluntary — both sides come willingly.
Industrial democracy — workers participate in decisions affecting them.
Rule-making process — produces a Collective Bargaining Agreement (CBA).

35.12 ILO Conventions on Bargaining

Key ILO conventions on freedom of association and CB

Convention 87 (1948) — Freedom of Association and Protection of the Right to Organise.
Convention 98 (1949) — Right to Organise and Collective Bargaining.
Convention 154 (1981) — Collective Bargaining Convention.
India has not ratified C87 and C98 — a frequent PYQ point.

35.13 Types of Collective Bargaining

35.13.1 Walton-McKersie Behavioural Theory (1965)

Richard Walton and Robert McKersie, A Behavioral Theory of Labor Negotiations (1965), gave the seminal four-type framework:

Walton-McKersie four types of bargaining

Type	Nature
Distributive bargaining	Win-lose; zero-sum (wages, bonus)
Integrative bargaining	Win-win; mutual gains (training, productivity)
Attitudinal structuring	Shaping the relationship — trust, hostility
Intra-organisational bargaining	Within each side — union vs members, management vs principals

35.13.2 Other Type Classifications

Other classifications of collective bargaining

By level: Plant-level · Industry-level · Regional · National · Multi-employer.
By scope: Substantive (pay) · Procedural (how negotiations happen).
By style: Adversarial (positional) vs Cooperative (interest-based, Fisher-Ury 1981).
By outcome: Conjunctive (contractual) vs Cooperative (joint problem-solving) vs Productivity bargaining (Allan Flanders, 1964).
Concession bargaining — union accepts cuts in return for job security.
Composite bargaining — covers non-wage issues too (productivity, technology).
Pattern bargaining — settlement in one firm sets pattern for others.

35.14 Stages of Collective Bargaining

flowchart LR
  P[1. Preparation<br/>data, demands] --> N[2. Negotiation<br/>proposals & counter]
  N --> A[3. Agreement<br/>CBA signed]
  A --> I[4. Implementation<br/>communicate, comply]
  I --> R[5. Renewal<br/>before expiry]
    classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;

Stages of collective bargaining

Preparation — research, costing, demand framing, charter.
Discussion / Negotiation — opening positions, counter-offers, give-and-take.
Agreement — drafting and signing the CBA.
Ratification — by union members.
Implementation and administration — communication, compliance, grievance redressal.
Renewal / Renegotiation — before the CBA expires.

35.15 Pre-Conditions for Successful Bargaining

Pre-conditions for successful CB

Strong, representative union.
Mutual recognition of bargaining rights.
Equal bargaining power.
Good faith — willingness to compromise.
Authority to bind both sides.
Information sharing.
Trust built over time.
Legal framework that supports bargaining.

35.16 Fisher-Ury Principled Negotiation

Roger Fisher and William Ury of the Harvard Negotiation Project, in Getting to Yes (1981), proposed principled (interest-based) bargaining — four principles:

Fisher-Ury four principles

Separate the people from the problem.
Focus on interests, not positions.
Generate options for mutual gain.
Insist on objective criteria.

Plus the famous concept of BATNA — Best Alternative To a Negotiated Agreement — what one will do if negotiation fails.

35.17 Collective Bargaining in India

35.17.1 History of CB in India

Indian CB milestones

1918 — Ahmedabad Textile Labour Association (Gandhi) — early collective negotiation.
1956 — Bata Shoe Company–employees agreement at Batanagar — landmark.
1959 — TISCO-Tata Workers’ Union — historic 30-year agreement (Russi Mody era).
1969 — National Commission on Labour (Gajendragadkar) — recommended statutory recognition of bargaining agents.
2020 — IR Code introduced “Negotiating Union” and “Negotiating Council” (Sec. 14) for recognition of bargaining agent.

35.17.2 IR Code 2020 — Negotiating Union/Council

IR Code Negotiating Union / Council (Sec. 14)

Negotiating Union = sole bargaining agent if a union has 51 % or more of workers.
Negotiating Council = if no union has 51 %, a council of unions with 20 % + each.
Council bargains collectively on behalf of all workers.

35.17.3 National Commission on Labour Recommendations

The First NCL (1969, Gajendragadkar) and Second NCL (2002, Ravindra Varma) both recommended:

Statutory recognition of bargaining unions.
Secret-ballot verification of representativeness.
Compulsory bargaining in some sectors.
One union one industry principle (controversial).
Strengthening labour courts and tribunals.

35.18 Modern Trends in Trade Unions and CB

Twelve modern trends

Declining union density worldwide.
Gig and platform workers organising — IFAT, Uber drivers’ unions.
White-collar unions — IT, BPO (Forum for IT Employees, NDLF-IT).
Cross-border unionism — global framework agreements with MNCs (UNI Global, IndustriALL).
Social-movement unionism — link with broader civil society.
Worker collectives and cooperatives (Amul, SEWA model).
Single-table bargaining — all issues, one forum.
Interest-based bargaining (Fisher-Ury).
Two-tier contracts — different terms for new vs existing employees.
Concession bargaining in crises.
Data-driven negotiation — analytics on cost-of-living, wage trends.
ESG and sustainability clauses in CBAs.

35.19 Practice Questions

Q 01 Webbs Easy

"A continuous association of wage-earners for the purpose of maintaining or improving the conditions of their working lives" defines a trade union according to:

AG.D.H. Cole
BSidney & Beatrice Webb
CDale Yoder
DV.V. Giri

View solution

Correct Option: B

Sidney & Beatrice Webb, *History of Trade Unionism* (1894).

Q 02 TU Act Easy

The Indian Trade Unions Act was enacted in:

A1918
B1920
C1926
D1947

View solution

Correct Option: C

Trade Unions Act 1926. Following the Buckingham Mills case (Wadia).

Q 03 AITUC Medium

The All India Trade Union Congress (AITUC), India's oldest central trade union, was founded in:

A1918
B1920
C1926
D1947

View solution

Correct Option: B

AITUC — 1920. First president: Lala Lajpat Rai. N.M. Joshi was the general secretary.

Q 04 B.P. Wadia Hard

India's first modern industrial union — Madras Labour Union (1918) — was founded by:

AN.M. Joshi
BB.P. Wadia
CMahatma Gandhi
DV.V. Giri

View solution

Correct Option: B

Bomanji Pestonji Wadia — Madras Labour Union, 1918.

Q 05 Hoxie Hard

Hoxie's classification of unions (1921) does NOT include:

ABusiness unionism
BUplift unionism
CPredatory unionism
DBureaucratic unionism

View solution

Correct Option: D

Four: Business · Uplift · Revolutionary · Predatory. Bureaucratic is not Hoxie's.

Q 06 Perlman Hard

The "job consciousness" theory of trade unionism is associated with:

AKarl Marx
BSelig Perlman
CFrank Tannenbaum
DJohn Commons

View solution

Correct Option: B

Selig Perlman, *A Theory of the Labor Movement* (1928).

Q 07 2001 amendment Medium

After the 2001 amendment, registration of a trade union requires support of:

AAny 7 workers
B10 % of workers or 100, whichever is less
C25 % of workers
D50 % of workers

View solution

Correct Option: B

2001 amendment — 10 % or 100 workmen, whichever is less. Plus 50 % of office bearers must be employees.

Q 08 Walton-McKersie Medium

Walton & McKersie's (1965) four types of bargaining include all EXCEPT:

ADistributive
BIntegrative
CAttitudinal structuring
DCompositional

View solution

Correct Option: D

Four: Distributive · Integrative · Attitudinal · Intra-organisational.

Q 09 Webbs CB Medium

The term "collective bargaining" was coined in 1891 by:

ASidney Webb
BBeatrice Webb
CJohn Commons
DSamuel Gompers

View solution

Correct Option: B

Beatrice Webb coined the term in 1891.

Q 10 ILO Conv 98 Hard

ILO Convention 98 (1949) covers:

AMinimum wage
BFreedom of association
CRight to organise and collective bargaining
DSocial security minimums

View solution

Correct Option: C

C98 — Right to Organise and Collective Bargaining (1949). India has not ratified C87 and C98.

Q 11 BATNA Medium

"BATNA" — a key concept in principled negotiation — stands for:

ABest Alternative To a Negotiated Agreement
BBargaining Agency for Trade Union Action
CBilateral Approach To Negotiation Agreement
DBest Available Tactical Negotiation Approach

View solution

Correct Option: A

BATNA = Best Alternative To a Negotiated Agreement. Fisher & Ury, *Getting to Yes* (1981).

Q 12 BMS Medium

Bharatiya Mazdoor Sangh (BMS) was founded in 1955 by:

AD.B. Thengadi
BV.V. Giri
CN.M. Joshi
DLala Lajpat Rai

View solution

Correct Option: A

Dattopant Bapurao Thengadi — 23 July 1955.

Q 13 SEWA Medium

SEWA — Self-Employed Women's Association — was founded in 1972 by:

AEla Bhatt
BAruna Roy
CMedha Patkar
DIndira Jaisingh

View solution

Correct Option: A

Ela Bhatt — first union of women in the informal sector.

Q 14 IR Code Negotiating Union Hard

Under the IR Code 2020, a sole "Negotiating Union" requires support of at least:

A25 % of workers
B33 % of workers
C51 % of workers
D75 % of workers

View solution

Correct Option: C

51 %. If no union meets 51 %, a Negotiating Council is formed of unions with 20 %+ each.

Q 15 First NCL Hard

The First National Commission on Labour (1969) was chaired by:

AJustice Gajendragadkar
BRavindra Varma
CB.P. Adarkar
DV.V. Giri

View solution

Correct Option: A

Justice P.B. Gajendragadkar — First NCL 1969. Second NCL 2002 by Ravindra Varma.

Q 16 Political fund Hard

Under the Trade Unions Act 1926, contribution to a union's "Political Fund" (Sec. 16) is:

ACompulsory for all members
BVoluntary — no member can be compelled
CProhibited
DRequired only for office bearers

View solution

Correct Option: B

Voluntary — Sec. 16; no member can be compelled to contribute.

Q 17 TLA Hard

The Ahmedabad Textile Labour Association (TLA), founded in 1918, is associated with:

ALala Lajpat Rai
BM.K. Gandhi
CB.P. Wadia
DN.M. Joshi

View solution

Correct Option: B

Gandhi — Ahmedabad TLA, 1918; basis of Gandhian trusteeship and non-violent dispute resolution.

Q 18 Pattern bargaining Medium

A settlement in one large firm setting the template for similar settlements in other firms is called:

APattern bargaining
BConcession bargaining
CComposite bargaining
DIntegrative bargaining

View solution

Correct Option: A

Pattern bargaining — common in US auto and steel industries.

Q 19 Industrial union Easy

A union that organises *all* workers of an industry irrespective of craft is called:

ACraft union
BIndustrial union
CGeneral union
DWhite-collar union

View solution

Correct Option: B

Industrial union.

Q 20 Match unions Hard

Match the union with its founding year:

(i)	AITUC	(a)	1947
(ii)	INTUC	(b)	1948
(iii)	HMS	(c)	1920
(iv)	CITU	(d)	1970

A(i)-(c), (ii)-(a), (iii)-(b), (iv)-(d)
B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
C(i)-(d), (ii)-(b), (iii)-(a), (iv)-(c)
D(i)-(b), (ii)-(c), (iii)-(d), (iv)-(a)

View solution

Correct Option: A

AITUC 1920 · INTUC 1947 · HMS 1948 · CITU 1970.

35.19.1 Advanced Format Questions

AR 1Assertion-ReasonHard

A: India's Trade Unions Act 1926 grants legal status to unions.
R: Minimum 7 members can form a trade union (amended threshold).

ABoth true; R explains A
BBoth true; R does not explain A
CA true, R false
DA false, R true

View solution

Correct Option: B

AR 2Assertion-ReasonMedium

A: Collective bargaining is a negotiation between employer and union.
R: Walton & McKersie classified it into distributive, integrative, attitudinal and intra-organisational.

ABoth true; R explains A
BBoth true; R does not explain A
CA true, R false
DA false, R true

View solution

Correct Option: B

S 1Statement-basedMedium

Walton-McKersie CB types: (i) Distributive. (ii) Integrative. (iii) Attitudinal structuring. (iv) Intra-organisational.

AAll four
B(i) and (ii) only
C(iii) and (iv) only
D(i), (ii), (iii) only

View solution

Correct Option: A

S 2Statement-basedHard

Indian central trade unions: (i) INTUC (Congress). (ii) AITUC (CPI). (iii) CITU (CPI-M). (iv) BMS (RSS).

AAll four pairings correct
B(i) and (ii) only
C(iii) and (iv) only
D(ii) and (iv) only

View solution

Correct Option: A

35.20 Quick Recall

Quick recall

Webbs (1894) — foundational definition; History of Trade Unionism.
Definitions: Webbs · Indian TUA 1926 Sec. 2(h) · Yoder · Cole · V.V. Giri.
Functions: Militant · Welfare/Fraternal · Political · Social-responsibility.
Hoxie (1921) — Business · Uplift · Revolutionary · Predatory.
Theories: Marx (revolutionary) · Webbs (Industrial Democracy) · Perlman (Job consciousness 1928) · Tannenbaum (dehumanisation) · Commons (markets) · Hoxie (functional) · Gandhi (trusteeship) · Cole (guild socialism).
Types: Craft · Industrial · General · White-collar · Federation; Plant-Industry-National levels.
Indian milestones: 1918 — Madras Labour Union (B.P. Wadia) and Ahmedabad TLA (Gandhi) · 1920 — AITUC (Lajpat Rai, N.M. Joshi) · 1926 — Trade Unions Act · 1947 INTUC · 1948 HMS · 1955 BMS (D.B. Thengadi) · 1970 CITU · 1972 SEWA (Ela Bhatt).
TU Act 1926: Reg threshold (2001) — 10 % or 100; 50 % office bearers from establishment; Immunities Sec. 17-18; General Fund + voluntary Political Fund (Sec. 16).
12 CTUOs recognised by Ministry of Labour.
Problems: multiplicity · rivalry · outside leadership · small size · politicisation · low coverage.
CB term: Beatrice Webb coined 1891; Webbs developed 1897.
Definitions: Webbs · ILO · Flippo · Richardson.
ILO: C87 (1948) Freedom of Association · C98 (1949) Right to Organise & CB · C154 (1981). India has not ratified C87 and C98.
Walton-McKersie (1965): Distributive · Integrative · Attitudinal · Intra-organisational.
Other CB types: Conjunctive · Cooperative · Productivity (Flanders 1964) · Concession · Composite · Pattern · Adversarial vs Interest-based.
Stages: Preparation → Negotiation → Agreement → Ratification → Implementation → Renewal.
Fisher-Ury (1981, Getting to Yes) — 4 principles + BATNA.
India CB: 1918 Ahmedabad · 1956 Bata · 1959 TISCO-Tata Workers; NCL I 1969 (Gajendragadkar) · NCL II 2002 (Ravindra Varma).
IR Code 2020 Sec. 14: Negotiating Union ≥ 51 %; else Negotiating Council (≥ 20 % each).
Modern trends: declining density · gig workers organising · white-collar IT unions · global framework agreements · social-movement unionism · single-table · IBB · concession · ESG clauses.