haya.Learning made clear
Unit III · Strategic HRM and industrial relations
9 min readConcept sheetMCQ · theories, federations and bargaining types

Trade unions and collective bargaining

A trade union is a continuous association of wage earners to protect their interests. Collective bargaining lets unions and employers negotiate terms jointly instead of individually.

Webbs' definitionA continuous association of wage earners for maintaining or improving the conditions of their working lives
First union in IndiaMadras Labour Union, 1918, founded by B.P. Wadia
AITUC (1920)India's first central trade union organisation; Lala Lajpat Rai its first president
'Collective bargaining'Term coined by Beatrice Webb (then Potter) in 1891

Theories of trade unionism

TheoryProponentKey idea
Industrial democracySidney and Beatrice WebbUnions bring democracy into industry through collective bargaining
Revolutionary (class struggle)Karl MarxUnions are tools to overthrow capitalism
Job-conscious (scarcity of opportunity)Selig PerlmanWorkers unite because jobs are scarce, and unions control job opportunities
Reaction to the machineFrank TannenbaumUnions arise as workers' response to mechanisation and loss of control
Functional typesRobert HoxieBusiness, uplift, revolutionary, predatory and dependent unionism
GandhianMahatma GandhiTrusteeship and moral uplift; the Ahmedabad Textile Labour Association (Majoor Mahajan Sangh), 1920

Central trade union organisations

OrganisationFoundedLink
AITUC1920Oldest; now linked with the CPI
INTUC1947Indian National Congress
HMS1948Socialist in origin
BMS1955Founded by Dattopant Thengadi; linked with the RSS family
CITU1970CPI(M)

Union law and problems in India

  • The Trade Unions Act, 1926 provided for registering unions and gave them rights and immunities; it is now part of the Industrial Relations Code, 2020, in force from 21 November 2025.
  • Registered unions are immune from criminal conspiracy charges and civil suits for legitimate trade-union acts.
  • The IR Code provides for a negotiating union or negotiating council to bargain with the employer.
  • Weaknesses of Indian unions: multiplicity and rivalry, political affiliation, outside leadership, small size, weak finances and low membership.
  • Union security forms: closed shop, union shop, agency shop, open shop and check-off (dues deducted from pay).
  • India has not ratified the ILO's core conventions on freedom of association (C87) and collective bargaining (C98).

Collective bargaining

AspectKey points
MeaningNegotiation on wages and working conditions between employers and workers' organisations, aimed at a written agreement
Walton and McKersie (1965)Four sub-processes: distributive bargaining, integrative bargaining, attitudinal structuring, intra-organisational bargaining
Distributive vs integrativeWin-lose over a fixed pie vs win-win problem-solving that enlarges the pie
Chamberlain's three conceptsMarketing (sale of labour), governmental (industrial government) and managerial (joint decision-making)
LevelsPlant level, industry level, national level
AgreementsBipartite agreements, settlements reached in conciliation, consent awards, productivity agreements

The collective bargaining process

Disputes over how an agreement is applied go to grievance handling or arbitration.

How NET asks this

NET asks you to match union theories with proponents, order the central unions by founding year, and name Walton and McKersie's sub-processes of bargaining.

Exam angle

Typical MCQ: “Who coined the term 'collective bargaining'?” Beatrice Webb (then Potter), in 1891. Trap: the 'industrial democracy' view belongs to Sidney and Beatrice Webb together.

Typical MCQ: “Name Walton and McKersie's sub-processes of bargaining.” Distributive, integrative, attitudinal structuring and intra-organisational bargaining. Trap: there are four, not three.

Remember it

Central unions in order: AITUC 1920, INTUC 1947, HMS 1948, BMS 1955, CITU 1970: 'All Indians Hear Bold Calls'.