Trade Unions –

Concept, Law, & Indian Context

Prof. K.R. Shyam Sundar
XLRI
 Basic Concepts – A Brief Discussion
• What are trade unions?
• Why Trade unions?
• Objectives & Functions of Trade Unions?
• Perspectives on Trade Unions
• Trade Unions, Collective Bargaining, Strikes –
An Introduction (FCB Framework)
• Goods & Bads of TU
• CONSTITUTION OF INDIA, LABOUR &
TRADE UNIONS – A BRIEF DISCUSSION
 Constitution of India & Labour

India is a sovereign, socialist, secular,

democratic republic to secure to all its
citizens:
Justice (social, economic and political)
Liberty (of thought, expression, belief,
faith & worship)
Fraternity
 Normative aspects
• Social justice: the courts to uphold legislation
 (a) to remove economic inequalities;
 (b) to provide a decent standard of living to the working
people;
 (c) to protect the interests of the weaker sections of the
society
• Socialistic concept:
• Democratic socialism aims to end poverty and inequality
of opportunity.
 Rights

Rights

Directive
Fundamental
Principles of
Rights
State Policy
 Fundamental Rights
 Equality before Law (14)
 Protection of certain rights regarding freedom of
speech, assembly, movement, profession, residence,
OF ASSOCIATION (19)
 Protection of life and personal liberty (21)
 Right to education (21-A)
 Prohibition of traffic in human beings & forced
labour (23)
 Prohibition of employment of children in factories,
construction industry, hazardous employment
 DPSP – PART - IV

 A social order for promotion of welfare of

people (38)
 Principles of policy on child labour, equal pay
for equal work (39)
 Right to work (including old age,
unemployment), to education (41)
 Just and humane conditions of work &
maternity relief (42)
 Living wage for workers (43)
 Participation of workers in management of
industries (43-A)
 Article 19 (1) F.R. in detail – NOT AN ABSOLUTE RIGHT

 All citizens SHALL have the right –

 (a) to freedom of speech and expression
 (b) to assemble peaceably and without arms
 (c) to form associations or unions, etc.
 (4) Nothing in the sub-clause (c) of 19 (1) SHALL affect
the operation of any existing law in so far as it
imposes, or prevent the State from making any law
imposing, in the
 interests of [sovereignty and integrity of India]or
 public order or morality,
 reasonable restrictions on the exercise of the right
conferred by the said sub-clause
 Legal Position on Right to Strike
• Even a very liberal interpretation of sub-cl. (c) of cl. (1)
of Art. 19 cannot lead to the conclusion that the trade
unions have a guaranteed right to an effective collective
bargaining or to strike, either as part of collective
bargaining or otherwise (All India Bank Employees v.
National Industrial Tribunal & ... on 28 August, 1961)
• Though not raised to the HIGH PEDASTAL of a
fundamental right, it is recognized as a mode of redress
for resolving the grievances of workers. But the right
strike is NOT ABSOLUTE under our industrial
jurisprudence and restrictions have been placed on it.”
(B. R. Singh and other….v. Union of India…SC,
September 1989)
 Fundamental right to demo Art. 19 (1) (b)
The operative word for the fundamental right to be
allowed is “peaceably and without arms”
It CANNOT be held in the property of the employer or
another
 Demonstration within the workplace is not allowed
Without damage to property or prevention of
workers’ entry to establishment or movement of
goods, etc.
The judiciary allows demonstrations/gate meetings
to be held at certain hours and -----metres away
from the main gate subject to conditions of peace
and non-obstruction
 ILO – Some Basics

It was created in 1919 by Part XIII of the

Versailles Peace Treaty ending World War
I
Tripartite body of UN
• Originally 45 to presently 185 member
countries
• Social Justice leads to global peace

11/19/2023 xlri.ac.in - lecture 12

 Philadelphia Declaration & ILO Principles*
 Labour is not a commodity (no commodification)
 Freedom of Expression & Association are essential to
progress
 Poverty constitutes a danger to prosperity
everywhere
 The war against want requires to be carried on with
unrelenting vigor within each nation, and by
continuous and concerted international effort in
which
 the representatives of workers and employees
enjoying equal status with those of govts. in free
discussion and democratic decision with a view to the
promotion of the common
11/19/2023
welfare
xlri.ac.in - lecture 13
 Structure of International Rules & Norms in Labour Field

International Rules & Norms

ILO Conventions ILO Recommendations

11/19/2023 xlri.ac.in - lecture 14

 C. 87 – FoA & the Right to Organise Convention, 1948
 Provides for the right of workers and employers WITHOUT
any distinction to establish and join organisations of their
OWN CHOOSING and WITHOUT prior authorization
 Their organisations have the right to form or join federations
& confederations including at the international level
 No arbitrary dissolution or suspension by an admin agency
 They have the right to draw up their own constitutions and
rules
 Elect their reps and org their activities without any
interference – subject to lawful exercise
 The organisations should respect the laws of the land to
secure these rights
 Union Security Arrangement
• Closed Shop – a Case Study (Sulzon Motors,
Mumbai)
• Union Shop
• Agency Shop
 Closed Shop – An Example
• Film Employees Federation of South India (FEFSI),
representing cine workers in Kollywood, went on
strike in August-September 2017
• FEFSI had several conflicts with the Tamilnadu Film
Producers’ Council (TNPC) over the issue of engaging
non-union workers in their production
• TNPC said that it will employ any person who agreed
to their conditions even if they were non-members
• FEFSI considers this as an attempt to break the
unions that have stood guarantee for wage
payments to workers in an industry that is notorious
for defaults
Democracy in TU - elections
• To elect office-bearers in the TU
• To elect a recognised TU for collective bargaining purposes
(secret ballot)
• To elect representatives for various bi-partite bodies in a
firm (works committee, department councils, etc.)
• To take decision whether to go on strike or not
• To vet the collective agreement draft
 Union Structure
• Craft union (blue collar)
• Occupational unions (Pilots, air traffic controllers, janitors, etc.)/Technicians
(Acrobats, Stuntpersons)
• Professional unions (doctors, teachers, IT professionals, photographers, etc.)
• White collar unions (clerical, stenographers, office staff, etc.)
• Industrial unions (Industry-cum-region)
• General unions (cut across boundaries of occupation or industry)
• Enterprise unions (unaffiliated/affiliated)
• Political unions (only affiliated)
• National/Regional
• Cultural (Bharatiya Mazdoor Sangh)
• State Sponsored (All China Federation of Trade Unions)
• Gender (the Tamil Nadu Textile and Common Labourers Union, TTCU (in garment
industry) (
https://www.ethicaltrade.org/blog/charting-rise-women-only-trade-union-india)
• Activity – based (SEWA)
• Social Identity (Caste)
• Managerial trade unions
 Why managerial trade unions?

• https://www.freepressjournal.in/business/wal
mart-india-sacks-50-top-executives-across-divi
sions-in-its-headquarters
• Brief History of TU movement
 Trade Union Movement in India
• First labour union is Madras Labour Union formed in 1918
• First central trade union (CTU) formed was ALL INDIA TRADE
UNION CONGRESS (AITUC) in 1920
• During the freedom movement political parties like the
Indian National Congress (INC) & others organized workers so
as to widen the freedom movement base
• At the same time, workers benefited from the support from
political parties, other outside leaders from missionary
organisations, people with Left/Socialist Ideologies, social
activists, lawyers and others
• This led to two strong features of trade union movement:
POLITICAL UNIONS AND DOMINANCE OF OUTSIDE
LEADERSHIP
• The Communist Party of India was formed in the mid-1920s.
• AITUC had during the 1920s and 1930s three groups – Congress, Socialists
and Radicals
• As a result, during 1930s – two-three splits took place due to political and
ideological reasons and reunion also took place – political (ideological) and
leadership factors played an important role
• 1939-early1947 – AITUC was dominated by communists due largely to the
absence of major leaders from the Congress party as they were all
imprisoned due to Quit India and other political protests and the
Communists occupied the important positions of the Executive Committee
(EC) of AITUC
• Early 1947 – When congress leaders returned after being freed, they found
much to their dislike the dominance of Communist ideology and leaders
• Sardar Patel and others decided to form a CTU which will be along the
ideology of Congress – INDIAN NATIONAL TRADE UNION CONGRESS (INTUC)
was formed in 1947
• During the WW-II, Dr. Ambedkar’s party and M. N. Roy in the early 1940s
floated the INDIAN FEDERATION OF LABOUR
• So at the time of Independence India had these trade unions
• After Independence: AITUC split and the splinter organizations split and
joined and split and rejoined owing to political factors
• Hind Mazdoor Sabha (HMS), Hind Mazdoor Panchayat (HMP), United
Trade Union Congress (UTUC), United Trade Union Congress (Lenin-
Sarani, L-S, now known as All India United Trade Union Centre (AIUTUC),
etc. were formed owing to political splits and leadership differences
• 1956, Bharatiya Mazdoor Sangh (BMS) was formed professing the
ideology of Hindutva as most of the trade unions were led by and
subscribed Western educated people and Western ideologies
• 1961-61 – Indo-China War broke out
• The Communist movement had two elements, the USSR-led and China-
led and CPI in India had these two elements (Sino-Soviet Split and conflict
in the 1950s)
• The China-led Communists supported China in the War and they were
jailed and the others did not
• CPI was formally split owing to this and Nehru (Congress)-USSR interface
and some supporting Congress’ economic policies in 1964
• AITUC got split in 1970 and the Centre of Indian Trade Unions (CITU) was
formed
• In the meanwhile in some regions regional
political parties emerged stronger, e.g. DMK in
Tamil Nadu and Shiv Sena in Maharashtra
• DMK won the Assembly elections in 1967
elections and Congress was routed
• DMK formed its labour wing, Labour Progressive
Federation (LPF) in the late 1960s
• Shiv Sena formed – Bhartiya Kamgar Sena (BKS)
• In the late 1960s, the Congress party split and the
INTUC split – in Tamil Nadu Trade Union Congress
and National Labour Union were formed
• All India Central Council of Trade Unions (AICCTU)
attached to CPI (Marxist-Leninist) Liberation was formed
• Self-employed working women formed SEWA in the early
1970s following the trade union-cum-cooperative models
• In the meanwhile, charismatic individual union leaders
like Kuchelar (Madras), R.J. Mehta (Bombay), Dr. Datta
Samant (Bombay), George Fernandes (Bombay) formed
their labour wings as independent trade unions – they
had their own methods of working and they did not
believe in political unionism – though Dr. Datta Samant
formed a political party (Kamgar Ahadi )which was not a
success – they all resorted to violence and unusual
methods of negotiations which earned them a great
following but short lived.
• Later each political party split due to
ideological differences or personality
differences (MGR broke away from DMK and
formed ANNA DRAVIDA MUNNETRA
KAZHAGHAM, ADMK, later it became
AIADMK; Sharad Pawar and Sangma split from
Congress; Mamta Banerjee did, Shiv Sena
split, etc. Correspondingly political unions split
and were formed.
• SO: SPLITS = f(ideology, political parties,
personalities differences)
• Independent or enterprise unions emerged as an alternative to
political unions
• These are based and limited to a company – say, Blue Star, Asian
Paints, Hindustan Lever, Dr. Reddy’s, Engine Valves, etc.
• Enterprise unions promoted high union coverage while the political
unions did not
• Political unions had macro level voices while the enterprise unions
had micro focus
• Enterprise unions usually had insider union leaders or preferred an
outsider without his/her political ideology – for e.g. A.S.
Sounderajan of CPI(M) is the leader of several unions in Tamil
Nadu, e.g. Hyundai, Foxconn, English Electric, etc. but the workers
do NOT subscribe to the CPI (M) ideology
• Political unions leverage national level or regional level political
power and have a high mobilisation potential
• Enterprise unions have higher internal cohesion but poor macro
level voices
Labour is on the Concurrent List of Constitution
of India – Central and State laws
 TRADE UNIONS ACT, 1926

• An Act to provide for the

registration of TUs and in certain
respects to define the law
relating to registered trade
unions
 Trade Unions - definition
• A TU is a continuous association of wage-
earners for the purpose of maintaining or
improving the conditions of their working lives
• TU Act – any combination, whether temporary
or permanent, formed primarily for the purpose
of regulating relations between workmen &
employers or between workmen & workmen,
between employers & employers or for
imposing any restrictive conditions on the
conduct of any trade or business….
Category Included (Yes) or Excluded (No)

Those who work in Army, Navy and Air No (not employed in trade or industry
Force and Police Service or officers of
Prison
Employed mainly in managerial and Yes (employed in trade or industry)
administrative capacity and supervisors
exercising functions of managerial nature

Contract Workers Yes (an employee does not cease to be an

employee merely because she is employed
thru intermediaries)

Age restrictions >15 years - unless the Rules provide

otherwise;
For office-bearers = > 18 years
Badli workers Yes

Whether an employee as a result of No

cessation of employment would lose his
right to continue as a member of the
trade union.
 Why Registration If Voluntary?
• Under the Trade Unions Act, 1926, an unregistered
trade union or a trade union whose registration has
been cancelled has no manner of right whatsoever.
• Rights available under several labour laws have been
limited to only those trade unions which are
registered under this Act
• The registration gives a stamp of due formation of the
Trade Union and assures the mind of the employer
that the Trade Union is an authenticated body.
• The names and occupation of whose office-bearers
also become known
 Privileges of REGISTERED TU (RTU)
 No office-bearer or member of a REGD TU shall be liable for
punishment under sub-sec (2) of S. 120 B of the IPC in
respect of any agreement made between the members for
the PURPOSE OF FURTHERING ANY SUCH OBJECT of the TU
as is specified in S.15
 Criminal conspiracy means – an agreement to commit an
offence, an overt act done in pursuance of an agreement
between 2 or more persons to do an illegal act by illegal
means
 No suit or legal proceeding in any civil court against RTU for
acts in furtherance of a trade dispute – on grounds of
breach of contract, interferes with business, or employer of
other persons
 Immunity Available to office-bearers and members of RTU
 The Act does not deal with recognition of trade unions

• The TU Act provides for registration and NOT

recognition
• Registration versus Recognition
• As a general principle that no association has
a fundamental right to be recognised
• Recognition of a trade union is, by and large,
a matter of agreement Where it THERE IS NO
LEGAL STIPULATION FOR THE SAME
• except in some states like Maharashtra where
there has been legislation for recognition
Minimum membership for Registration S.4
• Subject to a minimum of 7 members, minimum
membership required for registration of a trade union shall
be at least 10% or 100 workmen (WHICHEVER IS LESS)
engaged or employed in the establishment or industry as
members ON THE DATE OF MAKING APPLICATION FOR
REGISTRATION (2001 amendment)
• s. – 9 A (2001) – A registered TU SHALL at ALL TIMES
CONTINUE to have NOT < 10% or 100 of the workmen,
whichever is LESS, subject to a minimum of 7 engaged or
employed in an establishment or industry with which it is
connected AS ITS MEMBERS
• A registered TU collects subscriptions for General Fund and
Political Fund (subscription to the former is compulsory and
for the latter voluntary)
 % of outside leaders – Not < ½ of the office
bearers in the unorganised sector
 In other sectors – not more than 1/3rd or 5
whichever is less
 An employee who has retired or has been
retrenched shall not be considered as
OUTSIDER for the purpose of holding office in
the TU
 A member of Council of Ministers or a person
holding an office of profit in the Union or State
shall not be a part of the Executive Committee
 Insider/Outsider
• S.22 of the Trade Unions Act,
1926 allows outsiders to be office-
bearers of registered trade union
(1/3 for the organised sector)
Leadership • Insider – persons actually engaged
or employed in an industry in
which the trade union is
functioning
Internal Outside
• An employee who is retired or has
been retrenched are NOT
Outside leader elected
outsiders according to the Act
Within the firm or Leader with political by workers without
retired ideology subscribing to his/her
political ideology
• A member of Council of Ministers
or a person holding an office of
profit in the Union or State shall
not be a part of the Executive
Committee
 Debate
• Insiders Vs. Outsiders?
• Political leaders?
• How many unions can the outsider hold
positions?
• TU activity during Office Hours – as a right?
 ULPs by Employers & Trade Unions- 5th Schedule, ID act

By Employers By Trade Unions

• To interfere/coerce/restrain – • Illegal strike

formation/joining a TU/conduct of CB
(in various ways, e.g. dismissal, • Coerce workmen on UM
lockout/closure, etc. • Stage actions – go-slow,
• Establish or financially or otherwise
support employer-sponsored TU
gherao, squatting, etc.
• Discrimination on grounds of UM • Stage demo at residence of
• Victimisation actions/Partiality employers or mgt
• Abolish regular work • Refuse to bargain coll in
• Mala fide transfer
good faith with employer
• Failure to implement
award/settlement/agreement • Damage to property
• To refuse to bargain collectively in • Violence, etc. (8 actions)
GOOD FAITH with recog TU (16
actions)

Sunday, November 19, 2023 K.R. Shyam Sundar, XLRI 40

 TU Recognition (TUR)
TUR

Non- VOLUNTARY
LAW
Legal ACTION
BY EMPLOYERS

Code of
NATIONAL STATE
Discipline

TU SOME
ACT STATES

ONLY REGISTRATION &

NO RECOGNITION
 THREE METHODS OF TU RECOGNITION

• VERIFICATION OF UNION MEMBERSHIP

METHOD
• CHECK OFF METHOD
• SECRET BALLOT METHOD
 TRADE UNION RECOGNITION

* SOME STATE LAWS ON TRADE UNION

RECOGNITION
 MRTU & PULP ACT, 1971
 A trade union having membership of 30% of total No. of
employees in an undertaking is eligible for recognition
subject to fulfilment of some eligibility conditions
 Recognition granted by Industrial Court
 Follows sole bargaining Agent model
 Cancellation of Recognition if Union membership falls
below 30% for 6 months/for illegal strike/cancellation
of registration under TU Act/commit any Unfair labour
practice under the Act
 Recognition for 2 years
 Follows membership verification method
 WEST BENGAL (CHAP III-A), 1998
Eligibility conditions:
 functioning as a REGISTERED TRADE UNION at
least for 6 months
 UNION MEMBERSHIP is open for ALL workers
 meeting of Executive Committee – every 3
months
 any registered trade union can apply for
recognition
 if already one exists, wait for 2 years
 WEST BENGAL
 if there are > one Trade union
 election by Secret Ballot
 ALL WORKMEN with 120 days of service are VOTERS
 Trade union securing > 50% of votes by workers in
firm/industry – SOLE Collective Bargaining AGENT
 if none gets > 50%
 then not < 15% (10% for industry) in a firm as
constituents of Joint Bargaining Council (JBC)
 in JBC – a trade union securing > 40% - Principal
Bargaining AGENT (PBA)
 In the case of PBA, no settlement without it
 Recognition is for 2 YEARS
 Rights of Recognised TU
• To raise ID & enter into Collective Agreement
• To collect membership fees or any other dues within
the premises of the establishment
• To have the facility of a notice board on the premises
• For the purpose of prevention or settlement of
Industrial Disputes to hold discussions with union
membership within the premises of the
establishment
• To meet & discuss with the employer or any other
person for the said reason
• To nominate its representatives on non-statutory bi-
partite committees
 Rights of Minority Unions
• Minority unions enjoy the right to represent
individual grievances relating to discharge,
dismissal and other conditions of service of
THEIR members and to participate in the
domestic/departmental inquiry concerning
their members
 Features or problems of Trade Unions
• Uneven growth
• Small size
• Financial weakness
• Multiplicity
• Rivalry
• Leadership
• Political association
• Recognition
 HR/IR POLICIES
• UNION RECOGNITION
• ALTERNATIVES TO UNIONS
• UNION AVOIDANCE – RELOCATION
• UNION RESISTANCE
• ANTI-UNIONISM – AGGRESSION
• NO UNION – BOTH DEMAND / SUPPLY
 Managerial Strategies reg. TU
 Recognize
 Refusal to recognize
 De-recognition – Air India/Indian Airlines (countless!) (by Law or by Employers
citing regulations)
Recognition with some conditions
 Refusal to recognize outsider-led TU – Maruti
 Refusal to recognize unacceptable political affiliation – Pricol
 Political reasons – ruling party (political patronage) – Foxconn
Non-Union and Union Avoidance Strategies
 Negotiations with Workers’ Committee and not with Union (Comstar Automotive
Technologies, Chennai (Aug. 2011), Hyundai Motors (now company union
formed)
 Pay Union Premium Wage
 Create Teams/Sponsored Committees/Grievance Redressal Procedure/HR policies
 Relocate to NON-UNION AREAS/STATES
 Employ Precarious Workers
Harassment Strategies:
 TU/CB AVOIDANCE
• (a) reduction of the share of permanent/regular workers (by various ways like
freeze on the strength, non-filling up vacancies arising due to natural ways like
resignations or retirement or death),
• (b) increase in the share of non-permanent or non-regular workers such as
temporary, fixed term contract workers, non-statutory trainees and so on
• (c) adoption of capital-intensive technologies to minimize employing permanent
workers,
• (d) outsourcing of activities by creating a supply chain which is often deep to
cover unregulated and unregistered units and even home-based workers,
• (e) granting impressive increases in compensation during collective bargaining
by meagre increases in basic pay and dearness allowances and high rises in
other allowances (to avoid increased social security burden which is based upon
basic pay and dearness allowance),
• (f) hiring workers for a period less than 240 days to avoid legal trappings as
arising out of the ID Act, fire them, give a gap of a day or so and rehire them and
this cycle continues interminably

11/19/2023 Quote with Acknowledgement 52

 Employers’ Organisations (EO)
• Earliest EO IS Bombay Mill Owners’
Association in 1875 followed by Jute Mills
Association in 1887
• Later on EOs were established according to
the industry, viz. cotton textiles, sugar, tea,
etc.
• With the passage of TU Act in 1926 and the
Trade Disputes Act, 1929, EO recognised their
role in IR
 Legal forms of EO
Companies Act (non- Society Registration Act, TU Act
profit organisations can 1860
register)

Federation of Indian Southern India Employers’ Federation of

Chamber of Commerce Millowners’ Association India (EFI)
& Industry (SIMA) EF of Southern India
Associated Chamber of Indian Tea Planters’ (EFSI),
Commerce & Industry, Association, Indian Jute Mills
Bombay Chambers of United Planters’ Association, etc.
Commerce and Industry, Association of Southern
etc. India (UPASI)
Standing Conference on
Public Enterprises
(SCOPE)
 EO

EO

Trade Multi-
IR
Bodies Advocacy

Pure Trade Business

IR
(tax/Export) Related
 EO (Important Orgnisations)
1) Employers’ Federation of India (EFI) (large firms, originally)
2) All India Organisation of Industrial Employers (AIOE) (both in 1933)
(large firms, originally)
3) All India Manufacturers’ Organisation (AIMO) (1941) (SMEs)
4) Associated Chamber of Commerce & Industry of India
(ASSOCHAM) (1913 with jurisdiction in Ceylon and later in 1932
only India, 1964 the present name)
5) Confederation of Indian Industries (CII)
6) Standing Conference of Public Enterprises (SCOPE) (1950s)
EFI+AIOE = Council of Indian Employers (in 1956)
Later SCOPE joined CIE
CIE is affiliated to the International Organization of Employers (IOE)
7) FICCI and other Chambers of Commerce (1927)
8) National Association of Software and Service Companies (NASSCOM)
 Origin, Functions, etc.
• Like AITUC, EFI/AIOE came into existence so as to
facilitate selection of employers’ delegates to
attend the International Labour Conference (ILC)
at ILO
• EO – Local (district) (Thane Manufacturers’
Association, Mumbai)
• State or region – Bombay Millowners’ Association
• Region – SIMA, EFSI
• Apex – EFI, AIOE, CII
 Functions
1) To develop healthy and stable IR
2) To promote CB at different levels
3) Act as a lobby group to secure fav laws & oppose unfav laws
4) To protect the interests of employers engaged in industry, trade and
commerce
5) To foster co-op between EO
6) To participate in tripartite bodies in India (ILC, those created under
labour laws like EPFO) (see next slide)
7) To represent India in the ILC in ILO, Geneva
8) To maintain harmonious relations between management and labour
9) Support all proposals which increase productivity and take care of
labour welfare
10) To collect and disseminate information to members
11) Provide advice to members
12) To exchange information between the EO
 Representation, Mem
1) Indian Labour Conference (ILC) (Non-
statutory)
2) ESIC (statutory)
3) EPFO (statutory)
4) National Council for Vocational Training
(Statutory)
5) National Productivity Council (voluntary)
IMPACT OF GLOBALIZATION ON TRADE UNIONS?