Union‐Type Effects on Bargaining Outcomes in Indian Manufacturing

DOIhttp://doi.org/10.1111/j.1467-8543.1987.tb00711.x
AuthorDebashish Bhattacherjee
Publication Date01 Jul 1987
British Journal
of
Industrial Relations
25:2
July
1987
0007-1080
$3.00
Union-Type Effects on Bargaining
Outcomes in Indian Manufacturing
Debashish Bhattacherjee
*
INTRODUCTION
Earlier approaches to the study of unions in developing societies speculated
about the eventual trajectories of the union movements in these countries
(Dunlop, 1958; Kerr
et al.
1960; Sturmthall, 1966). Specifically, researchers
asked whether the labour relations system
of
the developing countries would
converge to the ‘Anglo-Saxon’ model
of
collective bargaining and indepen-
dent trade unionism as their national economies developed, or would they,
as a result of specific institutional factors and unique historical circum-
stances, remain essentially a model
of
political unionism, with increasing
state intervention in the determination of industrial relations outcomes
(Galenson, 1959; Millen, 1963; Kilby, 1967).
These macro-institutional approaches have been criticised by Bates
(1970) for not being supported by the available historical evidence’, and by
Kassalow (1978A), who pointed out that what researchers ,missed in the
fifties and sixties was the rising strength of enterprise and/or plant-based
unionism that emerged in many developing countries in the early seventies.
These independent unions often arose as a result
of
the ineffectiveness
of
bureaucratic trade unionism.
While industrial sociologists studied individual worker responses to
different types
of
unionism (see for example, Form, 1973) and institutional
labour economists estimated union wage effects (see for example, House
and Rempel, 1976), no study, as far as the author is aware, directly tested for
union-type
effects on bargaining outcomes in LDC labour markets.
A
recent
exception is Ian Roxborough’s (1984) pioneering study
of
union-types in the
Mexican automobile industry. Dichotomising unions in the industry into
‘official’ unions (those tied to dominant political parties) and ‘independent’
unions (largely formed in the 1970s as breakaway movements from the
official union federations), Roxborough explicitly hypothesises, for various
reasons, that the independent unions will secure higher wage increases and
fringe benefits than the official unions.*
*Doctoral student at the Institute
of
Labor and Industrial Relations, University
of
Illinois at
Urbana-Champaign.
248
British Journal
of
Industrial Relations
The present study is in the tradition
of
Roxborough’s (1984) work
as
applied to the Indian case. It represents an advance over the former, insofar
as
it
uses multiple regression techniques and generates results that include a
wide range of industries. Using a unique data set comprising of 119 recently
negotiated plant-level agreements from the relatively advanced manufac-
turing sector of Greater Bombay and Pune, this paper estimates union-type
effects on average monthly pay and on two measures of fringes for blue-
collar workers. The union-type construct is dichotomised into: (1) ‘external’
unions,
i.e.,
those explicitly affiliated to an external trade union federation,
the latter typically affiliated to an established political party, and (2)
‘independent’ plant-based unions. Presently called employees’ unions in the
Greater Bombay area, these unions are typically run and managed by
workers internal to the plant.
HISTORICAL BACKGROUND
To
identify the broad structural shifts that have occurred in the Indian
industrial relations system and in the Bombay trade union movement since
1947,
I
segment the evolution of urban labour relations in India into three
periods
(or
phases)
of
unionism.
The first period (1947 to the early 1960s) witnessed the rise and dominance
of
state-sponsored unions typically having little direct control over the actual
bargaining process, but exerting an indirect influence on wages and working
conditions through their political links with ruling parties. This period saw
the growth
of
legalism, consultationism, and was a period when ‘respon-
sible’ trade unionism was promoted subject to the maintenance
of
industrial
peace (Johri, 1967). Although legislation designed to promote collective
bargaining was drafted and debated at length during this period, none were
enacted (Kennedy, 19.58). State intervention in the determination
of
wages
and working conditions was the effective norm during this period (Punekar,
1966; Jackson, 1972).
The first phase of unionism in Bombay is associated with the cotton textile
industry, a subject that received considerable academic attention in the west
(Morris, 195.5; 196.5; James, 19.58).
To
combat the growing communist
influence in the industry’s union movement, the ruling Congress Party
sponsored its own union and granted it
de
fucto
exclusive bargaining rights
by imposing an industry-wide bargaining structure. In the newly emerging
engineering industries, the right to unionise had to be fought for, and the
communist All-India Trade Union Congress was largely responsible for
laying the foundations of trade union organisations in the city (Pendse,
1981). In the mid-19.50s, a period
of
relative economic growth, legalism and
consultationism enveloped the Bombay labour relations system. This era of
‘responsible’ unionism, and
of
recourse to the state’s conciliation machinery
was personified by the
Engineering Mazdoor
Sabhu,
a union affiliated to the
Socialist Party. It acquired a substantial worker following, as it effectively

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