GURU NANAK INSTITUE OF MANAGEMENT STUDIES

SUBJECT
INDUSTRIAL RELATIONS

TOPIC
ROLE PLAY ON COLLECTIVE BARGAINING

SUBMITTED TO
PROF. CHANNPREET KAUR

SUBMITTED BY
MMS – HR (A)
HARMEET KAUR 13

KRISHNAKANT DEOKAR 15

SONAL GADKARI 19

JAPJI KAUR 44

KULJEET KAUR 55
INTRODUCTION

The relationship between employers, managers and workers can oftentimes be tenuous. The field
of industrial relations studies such relationships in an attempt to better understand how to
negotiate between the needs and desires of employers and those of workers. Such negotiations
oftentimes happen in the process known as collective bargaining.

INDUSTRIAL RELATIONS

Industrial Relations can be framed in a variety of ways. One can view employer-employee
relations as primarily co-beneficial wherein conflicts of interest sometimes arise, but, for the
most part, the two parties work toward common goals, such as the success of a business. One can
view the several levels of an industry, making up a pluralistic group of interests. Finally, one can
take a primarily Marxist approach, viewing the relationship between employers and employees
as primarily one of exploitation necessitates constant struggle.

COLLECTIVE BARGAINING

Collective bargaining is a type of negotiation used by employees to work with their employers.
During a collective bargaining period, workers' representatives approach the employer and
attempt to negotiate a contract which both sides can agree with. Typical issues covered in a labor
contract are hours, wages, benefits, working conditions, and the rules of the workplace. Once
both sides have reached a contract that they find agreeable, it is signed and kept in place for a set
period of time, most commonly three years. The final contract is called a collective bargaining
agreement, to reflect the fact that it is the result of a collective bargaining effort.

Collective bargaining is a process of voluntary negotiation between employers and trade unions
aimed at reaching agreements which regulate working conditions. Collective agreements usually
set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms
and rights to participate in workplace or company affairs.

The union may negotiate with a single employer (who is typically representing a company's
shareholders) or may negotiate with a federation of businesses, depending on the country, to
reach an industry wide agreement. A collective agreement functions as a labor contract between
an employer and one or more unions. Collective bargaining consists of the process of negotiation
between representatives of a union and employers (generally represented by management, in
some countries by an employers' organization) in respect of the terms and conditions of
employment of employees, such as wages, hours of work, working conditions and grievance-
procedures, and about the rights and responsibilities of trade unions. The parties often refer to the
result of the negotiation as a collective bargaining agreement (CBA) or as a collective
employment agreement (CEA).
MULTIPLEX ISSUE

India has roughly 11,000 screens out of which around 800 screens are multiplex screens.
However, the revenue share is highly skewed in favour of multiplexes which generate around
50% of overall theatrical revenues.

According to Prakash Chafalkar, of the Multiplex Association of India, of the 11,394 screens in
the country, 800-odd are part of multiplex chains. They sell tickets at anywhere between Rs 120-
150 against the all-India average of Rs 30-50. Overall, theatre revenues accounted for 76 per cent
(or Rs 9,700 crore) of the Rs 12,600 crore that Indian films made in 2008. According to Kapur,
multiplexes bring in 55-60 per cent of a film’s theatre revenues, while the remainder comes from
the 10,500-odd single screens.

Hence, the producers-distributors want a bigger share of revenue-share pie from the multiplexes
now. As, it’s a known fact the Mumbai territory brings in the highest amount of revenues for
industry. But in Maharashtra, due to Government waiver, multiplex chains save all of the 45%
entertainment tax — which goes into their pockets only. From the rest of 55% money, the
revenues used to be split in the ratio of 48% for first week, 40% for second week and less than
35% for third week. [These ratios are valid all across India, not just for Maharashtra]. The reason
for the standoff was that producers-distributors now wanted 50-50 revenue share for all the
weeks.

In an analysis done on 18th April 2009, Indian Television tried to gauge the financial impact of a
long running standoff on both the parties. It estimated a loss of Rs. 850-900 million for the
industry in case the strike lasted for over a month. The losses should turn out to be bigger now.

In a further analysis on 30th May 2009, they tried to analyse both parties’ stands, jotting down
pros and cons of their currents stands and ramifications of any potential reconciliation efforts.
From the movie industry front, folks were more or less united with Aamir Khan even going upto
the extent of asking his fans to avoid his own movie “Raakh”, which was being released in single
screen theatres.
When, finally, the issue got settled on 12th June 2009, and the terms on which the final
agreement with multiplex owners was that, giving producers a 50% share of box office takings
in the first week, 42.5% in the second and 37.5% in the third, with the final week yielding 30%.
The terms that have been amiably agreed upon by all national multiplex chains are: 50, 42.5,
37.5 and 30 for the first four weeks respectively for all movies irrespective of the budget, star
cast etc. In case a movie collects more than Rs 17.50 crores (net) at the top six multiplex chains
(excluding single screens and independent multiplex chains collections), then the terms will be
as follows: 52.5:48, 45:55, 38:62 and 30:70 (up by 2.5 per cent for the first two weeks).
However, if a film released with more than 500 prints collects less than Rs 10 crores across
multiplexes, a rebate of 2.5 per cent for the second and third week will be given to the plexes
by the producers & distributors. The net box office collections figure of Rs 17.50 crores will be
reviewed every six months.

The settlement also allows for a 2.5% swing either way in the event the films make above
Rs17.5 crore or less than Rs10 crore. In case of the latter, the films are released with at least
500 prints.

Some people have been left over voicing over three other equally important concerns of the
industry. First of these issues is Accounts settlement. Ideally, the producer should get his share of
money within a week or two of the ticket sales, but multiplex chains usually take 2-3 months
sometimes taking upto 7-8 months for settlements. So, even though as the Indian Media and
Entertainment industry tries to scale up to global standards, the business practices still confirm to
Unorganized sector behaviour.

The other issue is control over release strategy of movies. Since each print usually costs Rs.
60,000 to the distributor, Distributors usually want to release movies only in select locations so
as to maximize their revenues. For e.g. release a movie in Cinemax Versova and Fame
Lokhandawala but not in Mulund. But this would hurt the theatrical collections of buyer
multiplex chain for its Mulund location. Hence, the standard practice is to have buffet approach
— either the producer/distributor has to agree to provide copies to all the screen of Exhibitor
chain, or face zero presence in that chain. But then, in heat of the moment and mounting losses,
probably no one bothered to discuss nitty gritties.

The final issue concerns with the quoted amount of theatrical revenues itself.

The real issue is not what the share distribution of the pie is, the real issue is what exactly the pie
*is*. Many producers and distributors quote inflated collection figures in trade papers which are
very different than what is actually being indicated by the multiplex collection feeds. This is not
to speak of internal squabbles between the producers and distributors themselves once it’s time
to split the presumed overflows.

One of the facts that, single-screen theatres (which in turn, means small towns and villages also)
have been totally ignored out of this discussion, as if they don’t matter -- a space which has
resulted in rise of Bhojpuri and Regional Cinema. Also, the amount of disorganization in
industry is appalling and leads to loss of scale in terms of revenue potential and production
qualities. The main reason of being present here is to entertain people and make money and if
despite all these no-settlements or settlements, the industry continues to make pathetic movies
and deliver flops after flops, the audiences will hardly care for them.

CONCLUSION

The collective bargaining structure and the mode adopted by parties within a particular system
are strong indicators of the approach to the labour relationship within that system. A study of
bargaining structures within different systems is, therefore, a sound basis for comparison and
analysis.