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 has more than one union?
c) In the context of Maharashtra, what does it mean for a union to be 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 the coming months, do we need to renew the wages agreement again in this scenario?
f) Where is the BIR Act applicable, and what is the difference between the BIR Act and the Industrial Dispute Act in terms of their scope?
g) Can contract workers go straight into the wages agreement with the principal employer?
Please guide. Thanks in advance.
From India, Nagpur
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7I 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 has more than one union?
c) In the context of Maharashtra, what does it mean for a union to be 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 the coming months, do we need to renew the wages agreement again in this scenario?
f) Where is the BIR Act applicable, and what is the difference between the BIR Act and the Industrial Dispute Act in terms of their scope?
g) Can contract workers go straight into the wages agreement with the principal employer?
Please guide. Thanks in advance.
From India, Nagpur
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On the legal point of view, entering into a wage agreement with the union is recommended, as the same was signed before a conciliation officer who checks the legality of the agreement on both sides and validates it. If any contravention occurs during the period of the agreement, the affected party can approach the legal forum for their remedy.
With regard to two unions, the management has to find out which union has the majority of workers so that the management can enter into an agreement with the negotiating union. There is a well-proven method called the check-off system whereby the majority union can be identified by the management. All benefits and wage revisions have to be given to other union workers as well, in line with the signed union workers. There should not be partiality in this regard.
Irrespective of the fact that you pay more than minimum wages, you need to go for a wage agreement with the union. Paying minimum wages does not justify not entering into a wage agreement.
For contract workers, they can be treated separately, and the rates of wages can be increased based on discussions with the contractor. The contractor and the company can agree to extend increased wages to contract workers. When you include contract workers in the regular worker wage agreement, the contract you are utilizing is a sham contract that will not be valid under the law. Either you convert them into regular workers and enter an agreement, or you keep them separate and enter into an agreement with the contractor regarding the wages for contract workers.
From India, New Delhi
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With regard to two unions, the management has to find out which union has the majority of workers so that the management can enter into an agreement with the negotiating union. There is a well-proven method called the check-off system whereby the majority union can be identified by the management. All benefits and wage revisions have to be given to other union workers as well, in line with the signed union workers. There should not be partiality in this regard.
Irrespective of the fact that you pay more than minimum wages, you need to go for a wage agreement with the union. Paying minimum wages does not justify not entering into a wage agreement.
For contract workers, they can be treated separately, and the rates of wages can be increased based on discussions with the contractor. The contractor and the company can agree to extend increased wages to contract workers. When you include contract workers in the regular worker wage agreement, the contract you are utilizing is a sham contract that will not be valid under the law. Either you convert them into regular workers and enter an agreement, or you keep them separate and enter into an agreement with the contractor regarding the wages for contract workers.
From India, New Delhi
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Dear Sir,
Before addressing the queries, it is necessary to clarify whether you are covered under the Bombay Industrial Relations Act of 1947 or the ID Act of 1947. This distinction is crucial as it significantly impacts the approach that needs to be taken. The Bombay Industrial Relations Act is a specialized legislation that applies to specific industries in designated areas within the state of Maharashtra. Under this act, there is a provision for a Representative Union, which must have a minimum of 25% membership. In cases where there are multiple unions meeting this membership threshold, the union with the majority membership, as determined by the Registrar, holds the sole bargaining power.
On the other hand, the ID Act does not contain a similar provision. Consequently, the approach and legal position concerning these two acts would vary significantly.
Thank you.
From India, Mumbai
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Before addressing the queries, it is necessary to clarify whether you are covered under the Bombay Industrial Relations Act of 1947 or the ID Act of 1947. This distinction is crucial as it significantly impacts the approach that needs to be taken. The Bombay Industrial Relations Act is a specialized legislation that applies to specific industries in designated areas within the state of Maharashtra. Under this act, there is a provision for a Representative Union, which must have a minimum of 25% membership. In cases where there are multiple unions meeting this membership threshold, the union with the majority membership, as determined by the Registrar, holds the sole bargaining power.
On the other hand, the ID Act does not contain a similar provision. Consequently, the approach and legal position concerning these two acts would vary significantly.
Thank you.
From India, Mumbai
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Dear Colleague,
I am attempting to reply to your queries verbatim as follows:
a) Yes, it is in the utmost interest of industrial peace to bargain and enter into periodic wage agreements with the majority/recognized union. It is mandatory to do so at least in Maharashtra if the 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 an amicable agreement, you will have to face industrial unrest manifesting in strikes, work stoppages, violence, and breakdown in operations.
b) In a multi-union situation, the labor authorities under the MRTP Act referred to above will have to decide which union has the majority through a secret ballot or check-off method as considered appropriate. The company plays no role in any decision relating to recognition except to facilitate the government labor commissioner's office to hold elections on the premises or provide logistics support.
However, this picture will change after the new law on the Industrial Relations Code is implemented. In a multi-union situation, it provides for a Negotiating Council formed out of the functioning unions.
c) The 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 the rest of the industries, the Industrial Disputes Act applies to the settlement of industrial disputes, individual and collective.
Under the Indian Trade Unions Act, each union has to be registered as per the prescribed provisions.
d) Both the BIR and ID Acts govern 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 the prevailing wage structure in comparable concerns in the industry and region as well as the financial capacity to bear the burden.
f) Principal employers should refrain from negotiating directly with the contractors' union and work behind the scenes to facilitate wage settlement between the contractor and their unions.
Regards,
Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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I am attempting to reply to your queries verbatim as follows:
a) Yes, it is in the utmost interest of industrial peace to bargain and enter into periodic wage agreements with the majority/recognized union. It is mandatory to do so at least in Maharashtra if the 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 an amicable agreement, you will have to face industrial unrest manifesting in strikes, work stoppages, violence, and breakdown in operations.
b) In a multi-union situation, the labor authorities under the MRTP Act referred to above will have to decide which union has the majority through a secret ballot or check-off method as considered appropriate. The company plays no role in any decision relating to recognition except to facilitate the government labor commissioner's office to hold elections on the premises or provide logistics support.
However, this picture will change after the new law on the Industrial Relations Code is implemented. In a multi-union situation, it provides for a Negotiating Council formed out of the functioning unions.
c) The 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 the rest of the industries, the Industrial Disputes Act applies to the settlement of industrial disputes, individual and collective.
Under the Indian Trade Unions Act, each union has to be registered as per the prescribed provisions.
d) Both the BIR and ID Acts govern 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 the prevailing wage structure in comparable concerns in the industry and region as well as the financial capacity to bear the burden.
f) Principal employers should refrain from negotiating directly with the contractors' union and work behind the scenes to facilitate wage settlement between the contractor and their unions.
Regards,
Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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