1. Meaning

Collective bargaining for pay equity means negotiations between an employer and workers or their recognised trade union to ensure that employees receive fair and non-discriminatory remuneration for the same work or work of equal value.

Pay equity is broader than simply giving everyone the same salary. It seeks to identify and remove unjustified differences based on factors such as gender, classification, employment status, or other irrelevant considerations, while allowing legitimate differences based on qualifications, experience, responsibility, skill, performance, or the nature of work.

In India, the principle of equal pay is constitutionally recognised through Article 39(d) and has been read with Articles 14 and 16 in appropriate cases. The Supreme Court's leading decision is Randhir Singh v. Union of India.

2. Legal Basis of Pay Equity in India

Article 14 – Equality before law

Article 14 prohibits arbitrary discrimination.

Where employees performing substantially similar work are placed in different pay structures without a rational basis, the difference may raise an equality issue.

Article 16 – Equality in public employment

Article 16 is particularly important for employees working under the State.

Article 39(d) – Equal pay for equal work

Article 39(d) directs the State to secure equal pay for equal work for both men and women.

In Randhir Singh, the Supreme Court held that the principle of equal pay for equal work is a constitutional goal and can be applied in appropriate cases through Articles 14 and 16.

3. Collective Bargaining and Pay Equity

Collective bargaining gives workers a mechanism to negotiate pay-related issues collectively instead of employees individually challenging unequal pay.

A recognised trade union may negotiate regarding:

• basic salary;
• pay scales;
• allowances;
• bonuses;
• increments;
• overtime rates;
• promotion-related pay;
• contractual workers' wages;
• gender pay differences;
• equal remuneration;
• classification of jobs;
• wage revision;
• benefits and incentives.

The Industrial Relations Code, 2020 provides the statutory framework concerning trade unions, collective bargaining and industrial disputes. It also treats an employer's refusal to bargain collectively in good faith with a recognised trade union as an unfair labour practice.

4. Equal Pay Does Not Mean Identical Pay in Every Situation

This is an important limitation.

Two employees may have the same designation but legitimately receive different remuneration if there is a rational basis, such as:

• higher qualifications;
• greater experience;
• higher responsibility;
• different duties;
• different working conditions;
• additional skills;
• performance-related compensation;
• legitimate seniority-based progression.

In Randhir Singh, the Supreme Court specifically recognised that employees performing dissimilar functions or having materially different powers, duties and responsibilities cannot claim identical pay merely because their designations or ranks are similar.

Therefore:

Same designation ≠ automatically same pay.

The real inquiry is generally into the nature, duties, responsibilities, qualifications and conditions of work.

5. Role of Trade Unions

Trade unions play a central role in collective bargaining for pay equity.

A union can:

1. collect salary information;
2. identify unjustified pay differences;
3. compare jobs with similar duties;
4. demand transparent wage structures;
5. negotiate revised pay scales;
6. seek arrears where appropriate;
7. negotiate removal of discriminatory allowances;
8. demand equal treatment of similarly situated workers;
9. raise an industrial dispute if negotiations fail;
10. pursue statutory remedies where applicable.

Collective bargaining therefore transforms individual complaints into a structured industrial-relations process.

6. Pay Audit Before Collective Bargaining

An effective union should ideally conduct a pay-equity audit before negotiations.

The audit may compare:

The purpose is to distinguish legitimate pay differentiation from unjustified pay discrimination.

7. Pay Equity and Gender

Gender pay equity is one of the most important areas of collective bargaining.

Historically, Indian law specifically addressed equal remuneration for men and women. The Equal Remuneration Act, 1976 required equal remuneration for men and women workers performing the same work or work of a similar nature and prohibited certain forms of discrimination.

The wage-equality principle has subsequently been incorporated into the modern labour-law framework.

A collective bargaining agreement may therefore address:

• equal starting salaries;
• equal increments;
• equal overtime rates;
• maternity-related career impact;
• promotion opportunities;
• allowances;
• bonus structures;
• performance incentives.

8. Pay Equity and Contract Workers

Another difficult issue is where permanent employees and contract workers perform substantially similar work.

A union may argue that workers performing essentially the same work should not be placed at an unjustifiably lower remuneration level merely because of their contractual classification.

However, courts generally examine the actual nature of the work and the legal relationship, rather than applying a blanket rule that every contractual worker must receive exactly the same salary as every permanent employee.

The burden therefore depends heavily on the factual circumstances.

9. Good-Faith Bargaining

Collective bargaining is not merely a demand by workers followed by an automatic obligation on the employer to accept the demand.

The process requires meaningful negotiation.

An employer should:

• recognise the bargaining representative where legally required;
• participate in negotiations;
• provide relevant information where appropriate;
• consider pay-equity claims;
• give rational reasons for rejecting proposals;
• avoid discriminatory treatment of union members;
• comply with settlements and awards.

The Industrial Relations Code specifically identifies refusal to bargain collectively in good faith with recognised trade unions as an unfair labour practice.

10. Collective Bargaining Agreement

A successful negotiation may result in a settlement containing provisions such as:

“Employees performing work of substantially equal value shall receive remuneration determined according to uniform and non-discriminatory criteria.”

The agreement may establish:

• common pay grades;
• objective job evaluation;
• salary bands;
• transparent increments;
• seniority rules;
• performance criteria;
• equal allowance structures;
• periodic pay-equity audits;
• grievance procedures.

Such provisions reduce the possibility of arbitrary salary differences in the future.

11. When Collective Bargaining Fails

If negotiations fail, workers may have several possible legal routes depending on the circumstances:

1. internal grievance procedure;
2. conciliation;
3. raising an industrial dispute;
4. adjudication before the competent industrial tribunal;
5. proceedings under applicable wage/equality legislation;
6. constitutional remedies in appropriate cases, particularly against State action.

The appropriate remedy depends on whether the employer is a private entity or the State, the status of the workers, and the precise nature of the pay dispute.

12. Important Case Laws

1. Randhir Singh v. Union of India, (1982) 1 SCC 618

Principle:
The Supreme Court recognised equal pay for equal work as a constitutional goal derived from Articles 14 and 16 read with Article 39(d).

The Court explained that persons doing identical work should not ordinarily be subjected to arbitrary differences in pay merely because they belong to different departments.

Importance for collective bargaining:
A union can rely on the constitutional principle when negotiating against an unjustified wage classification, particularly in public employment.

2. D.S. Nakara v. Union of India, (1983) 1 SCC 305

Principle:
The Supreme Court emphasised equality and non-arbitrariness in matters concerning government employees and pensioners.

Importance:
The case demonstrates that classifications affecting financial benefits must have a rational basis and cannot be arbitrary.

3. Mackinnon Mackenzie & Co. Ltd. v. Audrey D'Costa, (1987) 2 SCC 469

Principle:
The Supreme Court dealt directly with gender-based wage discrimination and held that women employees could not be paid less than men where they performed the same or similar work merely because of sex.

Importance:
This is one of the most important Indian authorities for gender pay equity and is highly relevant to collective bargaining demands concerning women's remuneration.

4. State of Punjab v. Jagjit Singh, (2017) 1 SCC 148

Principle:
The Supreme Court recognised the principle of equal pay for equal work in the context of temporary employees where the relevant work and responsibilities were comparable to those of regular employees.

The Court stressed that the comparison must be based on the nature of duties and responsibilities, not merely job titles.

Importance:
Highly relevant to collective bargaining involving temporary, casual and contractual workers.

5. State of Haryana v. Charanjit Singh, (2006) 9 SCC 321

Principle:
The Supreme Court explained that the principle of equal pay for equal work is not automatically applicable simply because two groups perform superficially similar jobs.

The claimant must establish sufficient similarity in duties, responsibilities and other relevant factors.

Importance:
It provides an important limitation on pay-equity claims.

6. Federation of All India Customs & Central Excise Stenographers v. Union of India, (1988) 3 SCC 91

Principle:
The Supreme Court examined claims for equal pay based upon similarity of duties and responsibilities.

The Court emphasised that functional similarity is important when determining whether different pay scales are discriminatory.

Importance:
The case is useful when unions compare employees performing similar work under different classifications.

7. State of U.P. v. J.P. Chaurasia, (1989) 1 SCC 121

Principle:
The Supreme Court held that equal pay claims require consideration of factors such as duties, responsibilities, qualifications and the nature of work.

Importance:
It prevents employees from relying solely on job designation while demanding identical pay.

8. Haryana State Electricity Board v. Gulshan Lal, (2009) 9 SCC 607

Principle:
The Supreme Court reiterated that equal pay depends upon substantial equality in the nature of duties and responsibilities and cannot be established merely through similarity of designations.

Importance:
It is useful in evaluating whether a proposed collective bargaining demand for equal pay has a legally sustainable factual foundation.

13. Practical Example

Suppose a company has:

• 100 male production workers;
• 80 female production workers;
• both groups perform substantially identical duties;
• same working hours;
• same qualifications;
• same responsibility;
• same productivity standards.

But male workers receive ₹25,000 per month, while female workers receive ₹21,000 without any legitimate explanation.

The union could:

1. conduct a pay audit;
2. collect employment and wage records;
3. compare duties and qualifications;
4. identify the unexplained ₹4,000 difference;
5. raise the issue during collective bargaining;
6. demand equalisation of wages;
7. negotiate payment of appropriate arrears;
8. incorporate a non-discrimination clause into the settlement;
9. use statutory dispute-resolution mechanisms if negotiations fail.

14. Difference Between Equal Pay and Pay Equity

Equal Pay

Focuses primarily on whether workers doing the same or substantially similar work receive equal remuneration.

Pay Equity

Is broader and examines whether the entire compensation structure produces unjustified disparities.

For example, two employees might have the same basic salary but different:

• allowances;
• bonuses;
• incentives;
• overtime opportunities;
• promotion-linked benefits.

A genuine pay-equity analysis therefore examines total remuneration, not just basic salary.

15. Legal Significance Under the Current Labour Framework

The Industrial Relations Code, 2020 provides the modern framework for trade unions and collective bargaining. It expressly identifies refusal by an employer to bargain collectively in good faith with a recognised trade union as an unfair labour practice.

The wage-equality framework must also be read with the Code on Wages, 2019, which consolidates legislation concerning wages and contains provisions relating to discrimination in wages on grounds including gender.

Thus, collective bargaining for pay equity operates through the interaction of:

Constitutional equality principles + wage legislation + industrial-relations law + collective agreements + judicial decisions.

Conclusion

Collective bargaining for pay equity is a mechanism through which workers collectively seek fair, transparent and non-discriminatory remuneration. It is particularly important for addressing gender pay gaps, unjustified wage classifications, contractual-worker disparities and unequal allowances.

The strongest legal foundation comes from the principle of equal pay for equal work, recognised constitutionally in Randhir Singh, while cases such as Mackinnon Mackenzie, Jagjit Singh, Charanjit Singh and J.P. Chaurasia explain when a pay difference is legally unjustified and when differences may legitimately exist.

The key point is that pay equity does not require identical salaries in every situation. The comparison must consider the actual duties, responsibilities, qualifications, working conditions and other relevant factors. Collective bargaining provides the practical mechanism for converting these equality principles into transparent wage structures and enforceable workplace settlements