Sudha Industries LTD

COLLECTIVE BARGAINING
CASE STUDY
A State Road Transport Corporation has been providing passenger
transportation facilities since 1966. It has been extending its operations
from one' region to another by nationalising the private passenger
transport companies in a phased manner. Presently it is operating its
services in 80% of the routes in the State. It nationalised two routes in
East Godavari District in the State in October, 1999. Normally it
absorbes all the employees working in passenger transport companies
before nationalisation and fixes their wages at par with the scales of
similar categories of jobs in the corporation.
The pay scale in the corporation are determined on the basis of mutual
agreement between the management and the recognised trade union.
The scales are revised once in three years and the recent agreement
came into force with effect from September, 1999. There are two
classes in the drivers category i.e., Class I (drivers working on long
distance buses) and Class II (drivers working on short distance routes).
The pay scale of Class II drivers is enhanced from Rs. 2,800-4,200 to Rs.
4,000-6,000 (with effect from September, 1999) in consequence to the
latest agreement. The agreement further says that the pay scales of
the drivers drawing pay in the scale ofRs. 2,800-4,200 will be fixed
in the scale of Rs. 4,000-6,000.
The Corporation absorbed 10 drivers who were with the private
passenger transport companies consequent upon the recent
nationalisation of two routes. The personnel department fixed
the scale of these 10 drivers in the scale of Rs. 2,800~4,200 and it
rejected their pleas of fixing their pay in the scale of Rs. 4,000-
6,000 saying that only the drivers drawing the scale of Rs. 2,800-
4,200 are now eligible to draw the new scale of Rs. 4,000-6,000.
The Corporation has set up both the grievance machinery and the
collective bargaining machinery to resolve employee problems.
These drivers submitted this issue to the foreman who is their
immediate superior. The foreman told them to raise this issue in
collective bargaining with the help of Trade Union leaders as it is
a policy issue. These drivers approached the Trade Union leaders
and persuaded them to take up the issue. The Trade Union
leaders included this item in the draft agenda of the forthcoming
meeting of the collective bargaining committee. But the collective
bargaining committee deleted this item from the draft agenda
saying that this issue can be settled though grievance mac".hinery
as only 10 drivers out of 3,000 drivers of the Corporation are
concerned with this issue.
Questions
Ques 1. Who is correct? The personnel department or the foreman or the
collective bargaining committee?
Sol. We will have to first understand the view point of each of the party:
1. The personnel department has fixed the pay in accordance with the
literal interpretation of the agreement which states that “ pay scales of
the drivers drawing the scale of Rs. 2800 – 4200 will be fixed in the
scale of Rs. 4000 – 6000”. Since the personnel department is
concerned with the implementation of the wage policy it is, to some
extent, not at fault.
Also , as per The Employment Exchanges (Compulsory Notification
Act 1959) the organization must have advertised for the vacancy
mentioning the eligibility as well as the pay scales. If it had been done
so and the drivers knew about the wage before joining the
organization, then the drivers’ demands are unjustified.
2. The foreman based on his knowledge recommended the drivers to go

to the union as the matter is concerned with the employee welfare
related to the wages, an area in which he actually doesn’t have an
authority
3. The collective bargaining committee here showed a rather narrow

approach towards the employee’ grievance. They deleted the issue
from their agenda only because the matter, right now concerned only
10 employees. They failed to see the problem from a long term
perspective since the problem shall remain there even if new drivers
join the organization.
In our view, the foreman is indeed correct as the problem arose mainly
because of the agreement.
Ques 2. Where do you place this issue for redressal?

Ans. We would say that the issue should be taken to the Grievance
committee first. If the issue remains unsolved then it certainly needs to be
resolved by the collective bargaining committee since the agreement that
came into effect needs to be reviewed.
Ques 3. How do you redress this grievance?

Ans. The problem if not solved through the Grievance Committee would be
taken to the collective bargaining committee. The committee can then try to
resolve the matter with the management in accordance to the provision of
the arbitration that must have been incorporated in the agreement.
Another solution could be that for a period till the policy is next reviewed
i.e. 3 years the trade union could pay some amount to the drivers out of their
own funds the provision of which is made under The Trade Unions Act 1926
sec. 15 and then after 3 years when the scales are revised the trade union can
bring into light the ambiguities of the statement.
If the drivers or the union are still not satisfied with the solution then the
matter could be taken to the conciliation board and then to the industrial
tribunal under The Industrial Disputes Act, 1947.

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COLLECTIVE BARGAINING

2. The foreman based on his knowledge recommended the drivers to go

3. The collective bargaining committee here showed a rather narrow

Ques 2. Where do you place this issue for redressal?

Ques 3. How do you redress this grievance?

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