PROJECT OF LABOUR LAW - I

TOPIC:-
TRADE UNIONS DEMOCRACY
IN INDIA

SUBMITTED TO: - SUBMITTED BY:-

Dr. SC ROY NAME: HIMANSHU AGGARWAL

(FACULTY OF LABOUR LAW) ROLL NO:-1410

COURSE: - BBA-LLB

ACKNOWLEDGEMENT

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Writing a project is one of the most significant academic
challenges, I have ever faced. Though this project has been
presented by me but there are many people who remained in
veil, who gave their all support and helped me to complete
this project.

First of all I am very grateful to my subject teacher Dr. SC

Roy without the kind support of whom and help the
completion of the project was a herculean task for me. He
donated his valuable time from his busy schedule to help me
to complete this project and suggested me from where and
how to collect data.

I am very thankful to the librarian who provided me several

books on this topic which proved beneficial in completing
this project.

I acknowledge my friends who gave their valuable and

meticulous advice which was very useful and could not be
ignored in writing the project.

Last but not the least, I am very much thankful to my parents

and family, who always stand aside me and helped me a lot in
accessing all sorts of resources.

I thank all of them!

Himanshu Aggarwal
R.No.-1410
Semester- 4th

B.B.A LL.B

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CHANAKYA NATIONAL LAW UNIVERSITY

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 TABLE OF CONTENTS

INTRODUCTION......................................................................................................................5
OBJECTIVES:-..........................................................................................................................6
RESEARCH METHODOLOGY:-.............................................................................................7
HYPOTHESIS:-.........................................................................................................................7
TRADE UNION.........................................................................................................................8
Objectives of trade unions:.....................................................................................................8
Functions of a Trade Union:...................................................................................................9
Trade Union as an Organisation:............................................................................................9
TRADE UNION MOVEMENT IN INDIA.............................................................................10
FORMATION AND REGISTRATION OF TRADE UNION IN INDIA................................12
1. Appointment of Registrars............................................................................................12
2. Mode of Registration.....................................................................................................12
3. Application for Registration..........................................................................................12
4. Provisions to Be Contained In the Rules of a Trade Union:.........................................13
5. Power to Call For Further Particulars and To Require Alterations of Names:..............13
6. Registration...................................................................................................................13
7. Certificate of Registration.............................................................................................14
8. Cancellation of Registration..........................................................................................14
9. Registered Office...........................................................................................................14
10. Incorporation of Registered Trade Union..................................................................14
RIGHTS AND LIABILITIES OF REGISTERED TRADE UNIONS....................................15
TRADE UNION CHALLENGES IN INDIA..........................................................................17
1. Uneven Growth Of Unionism.......................................................................................17
2. Small Size of Unions.....................................................................................................18
3. Financial Weakness.......................................................................................................19
4. Multiplicity of Trade Unions.........................................................................................20
5. Intra-Union Rivalry.......................................................................................................21
6. Leadership Issue............................................................................................................22
7. Politicalisation...............................................................................................................22
8. Democracy and Leadership...........................................................................................23

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 9. Management Attitude....................................................................................................23
10. Statutory Support.......................................................................................................24
11. Illiteracy and Ignorance.............................................................................................24
ROLE OF TRADE UNION IN INDUSTRIAL RELATIONS................................................25
1. Collective Bargaining....................................................................................................25
2. Employee Welfare.........................................................................................................26
3. Unfair Practices.............................................................................................................26
4. Legislation.....................................................................................................................26
ADVANTAGES OF LABOR UNIONS FOR AN ORGANIZATION....................................27
1. Simpler Negotiations.....................................................................................................27
2. Employee Satisfaction...................................................................................................27
3. Less Turnover................................................................................................................27
4. Easier to Make Changes................................................................................................28
HR'S ROLE IN MAINTAINING EFFECTIVE WORKING RELATIONSHIPS WITH
UNIONS...................................................................................................................................29
1. Labor Agreement...........................................................................................................29
2. Grievances.....................................................................................................................29
3. Interest-Based Bargaining.............................................................................................29
4. Communication.............................................................................................................30
CONCLUSION........................................................................................................................31
BIBLIOGRAPHY....................................................................................................................32
1. BOOKS:-.......................................................................................................................32
2. WEBSITES:-.................................................................................................................32

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 INTRODUCTION

A trade union or labour union is an organization of workers who have banded together to
achieve common goals in key areas such as wages, hours, and working conditions, forming a
cartel of labour. India has the largest number of trade unions. But they have developed very
slowly. In spite of the slow growth, the unions brought about some economic, political and
social betterment of the workers. Economically, they have improved the lot of the workers.
Politically, the unionism has produced a mighty secular anti-imperialist, anti-capitalist,
equalitarian and socialistic force of national economy. Trade unionism has not influenced a
variety of industries. The degree of unionization varies widely from industry to industry.
Though trade unions are of various sizes with thousands of members, yet, most of the unions
are still characterized by their small size and small membership. Majority of Indian labour is
illiterate, ignorant and poor. They are exploited by unscrupulous trade union leaders, which
result in the following problems. In a democracy, political influence of trade unionism cannot
be avoided.

One of the basic objectives of trade unionism is to promote industrial democracy. This
objective is achieved when trade union is an organization of the workers in practice, this
rarely happens and instead less participation, openness and transparency. Decision making is
centralized Elections are often postponed and positions are filled repeatedly by nominations,
rank and file are pampered with promises and seldom get near top decision-making process.
Positions get worse when unions are guided by outside leader and regulated by the policies or
political parties. Absence of democratic leadership reduces the effectiveness of trade unions
and prevents the development of Trade Union from among the workers within the industries.
The disadvantages of outside leadership are obsession with political ideology or and personal
interest, lack of intimate knowledges of working conditions and workers problem, lack of
stake in the survival of organization and commitment, pre-occupation with many unions;
some studies have showed that a particular political leader was president of 20 odd unions in
Bombay.

Political scientists and sociologists trying to understand union politics have concentrated on
formal constitutional provisions, elections, officer turnover, and the existence of structured

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groups within the unions as indicators of trade union democracy. A consequence of this
approach has been the emergence of theories which have little wider applicability beyond the
empirical situation to which they are tailored. While most scholars have assumed that
membership participation is essential to democratic union organization, they have failed to
develop a theory based explicitly on this. This paper, drawing from material on trade unions
in South India, suggests that a theory of trade union democracy based on membership
participation in union affairs offers promise of a comparative approach.

Indian constitution considers formation of association as a fundamental right. Indian Trade

Union Act allows any seven workers to join together and form a Trade union. Both give rise
these file to formation of multiple trade unions which goes against the very concept of
unionism-the unity workers. No central legislation now exists which makes it compulsory for
management to recognize more than one unions or not to recognize anyone. This has further
weakened the trade union and their bargaining power. The Indian Trade Union Act further
allows 50 per cent of officer-bearers from outside the organization and 10 per cent of
leadership from outside. This provision resulted politicalisation, and remote control of union
activities from outside the organizations. Even the code of discipline only recommend
recognition of trade union as a voluntary action. Recognition of trade union causes rivalry
from others who are not recognized. This problem can be tackled by bringing out
comprehensive central legislation covering all aspects such as Recognition, Multiplicity,
outside leadership, etc.

OBJECTIVES:-
To Study & Understand the Concept of Trade Union.

To Study the historical background of the Trade Union.

To Study the very purpose why the need of Trade Union arises.

To Study the 21st Century Trade Union Challenges in India.

To Study the Trade Union democracy in India.

To Study about ILO and Trade Union.

To Study Relevant Case Laws to Understand Its Evolution

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 RESEARCH METHODOLOGY:-
In this project, the researcher has relied on the Doctrinal Method, which is primarily based
upon books, news, articles etc. A comprehensive study is made in order to arrive at analytical
& critical support of the arguments. The segments are structured and written actively. The
writing style is descriptive as well as analytical. This project has been done after a thorough
research based upon intrinsic and extrinsic aspect of the assigned topic.

HYPOTHESIS:-
The researcher presumed before the commencement of the research work that trade union
play a very important role in an organisation. As when the workers are united than they have
collective bargaining position in the form of trade union which a single individual cannot
achieve. Also labour union is an organization of workers who have banded together to
achieve common goals in key areas such as wages, hours, and working conditions, forming a
cartel of labour

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 TRADE UNION
The paper attempts an evaluation of trade union democracy in India as it operates in the light
of theory and the mechanisms it postulates for effective democracy. The available limited
data suggests that democratic mechanisms are absent in actual practice in unions for the
reasons of

Low membership participation,

Centralised top-level decision making and
Presence of large status gap between leadership and membership.

Given the present legal and constitutional set-up of trade unions at this juncture, it may be
necessary to evolve and implement certain legislative measures to promote internal
democracy of unions; worker's education programmes may also be geared up to the task
of improving worker participation in union decisions.

A trade union is a combination of persons. Whether temporary or permanent, primarily for

the purpose of regulating the relations between workers and employers or between workers
for imposing restrictive conditions on the conduct of any trade or business and includes the
federations of two or more trade unions as per Sec. 2(6) Trade Unions Act, 1926.

A Trade Union is an organisation of workers, acting collectively, who seek to protect and
promote their mutual interests through collective bargaining.

Objectives of trade unions:

a) Ensure Security of Workers:

This involves continued employment of workers, prevent retrenchment, lay off or lock-outs.
Restrict application of fire or dismissal or discharge and VRS.

b) Obtain Better Economic Returns:

This involves wages hike at periodic intervals, bonus at higher rate, other admissible
allowances, subsidized canteen and transport facilities.

c) Secure Power To Influence Management:

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This involves workers participation in management, decision making, role of union in policy
decisions affecting workers, and staff members.

d) Secure Power To Influence Government:

This involves influence on government to pass labour legislation which improves working
conditions, safety, welfare, security and retirement benefits of workers and their dependents,
seek redressal of grievances as and when needed.

Functions of a Trade Union:

(i) To secure fair wages to workers.

(ii) To safeguard security of tenure and improve conditions of service.
(iii) To enlarge opportunities for promotion and training.
(iv) To improve working and living conditions.
(v) To provide for educational, cultural and recreational facilities.
(vi) To co-operate in and facilitate technological advance by broadening the
understanding of workers on its underlying issues.
(vii) To promote identity of interests of workers with their industry.
(viii) To offer responsive co-operation in improving levels of production and
productivity, discipline and high standards of quality and
(ix) To promote individual and collective welfare.

Trade Union as an Organisation:

(a) Security of employment and protection against calamity of accident, death and secure
social security cover after retirement.
(b) Meeting companionship and affiliation need and improve ones influence with
management.
(c) To get a common platformto air ones views, aims ideas and feelings and obtain
recognition and status among fellow workers.
(d) Make use of the principle of unity for the purpose of securing good working
conditions, high economic compensations, better career prospects and welfare needs.
(e) Restrict management actions which are against the interest of workers.

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 TRADE UNION MOVEMENT IN INDIA
Trade union movement in our country has a century-long history. The first quarter of the
present century saw the birth of the trade union movement, but the seeds of the movement
were sown much earlier.1

In the twenties, soon after the World War I, working class in our country realised the
effectiveness of labour strike as a means of obtaining concessions, higher wages and better
working conditions. Many strikes were declared consequently and most of them were
successful. This success led to the formation of several unions.

The AITUC was set up in 1920 with the objectives of representing workers interests, to co-
ordinate the activities of all labour organisations in the country, and to spread the message
about the need for union movement. Hundreds of unions came into being in big and small
industries. Their number, as well as membership, increased considerably.

A landmark in the history of labour movement was the enactment of the Trade Unions Act
1926. The Act gave a legal status to the registered trade unions and conferred on them and
their members a measure of immunity from civil suits and criminal presentation. Registration
of union gave them respectability before employers and the general public.

Towards the end of 1920s, there was a split in the union movement, the split being caused by
the leaders ideological differences. The AITUC was captured by the communists. The
moderates formed a new organisation, called All India Trade Union Federation. Ideological
differences and splits had their effect on strikes too. Majority of the strikes failed.

Unlike 1920s, the 1930s were not favourable to the trade union movement. The presentation
of the communists involved in the Meerut conspiracy case and the failure of the Bombay
textile strike of 1929 brought a lull in trade union activities.

Economic depression of the period also added to the dull phase of union movement.
Retrenchments and strikes were common, the latter being mostly ineffective. There were
further splits in the movement, but just before the World War II some unity was achieved.

1 http://www.businessmanagementideas.com/trade-unions/trade-unions-objectives-functions-
formation-regulations-rights-and-liabilities/2489

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The unity was shattered during the World War II because of ideological differences and
mounting cost of living. Industrial unrest increased and the Govt, banned strikes and lockouts
invoking the Defence of India Rules. Luckily workers realized the need for an organized
movement to secure relief. This realisation led to an increase in the number of unions.

The aftermath of independence was not good for unions. The hopes of workers to secure
better facilities and wages from the national government were not realized. There was large
scale unrest and strikes and lock outs multiplied.

The disunity in the trade union ranks was aggravated by the starting of three central labour
organisations, namely the INTUC in 1947, the Hind Mazdoor Sabha (HMS) in 1948, and the
United Trade Union Congress (UTUC) in 1949.

As years went by, more unions and central organisations came into being the movement
became deeply entrenched as of today, there are 50,000 registered unions and most of them
are affiliated to one or the other central trade union.

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 FORMATION AND REGISTRATION OF TRADE

UNION IN INDIA
1. Appointment of Registrars

The appropriate government shall appoint a person to be the registrar of trade unions for each
state. The appropriate government may appoint as many additional and deputy registrars of
trade unions as it thinks fit for the purpose of exercising and discharging under the
superintendence and direction of the registrar.

Such powers and functions of the registrar under this Act as it may, by order, specify and
define the local limits within which any such additional or deputy registrar shall exercise and
discharge the powers and functions so specified.2

2. Mode of Registration

Any seven or more members of a trade union may, by subscribing their names to the rules of
the trade union and by otherwise complying with the provision of this Act with respect to
registration, apply for registration of the trade union under this Act.

Where an application has been made under subsection (i) for the registration of a trade union,
such application shall not be deemed to have become invalid merely by reason of the fact
that, at any time after the date of the application, but before the registration of the trade union,
some of the applicants, but not exceeding half of the total number of persons who made the
application, have ceased to be members of the trade union or have given notice in writing to
the registrar dissociating themselves from the application.

3. Application for Registration

(i)Every application for registration of a trade union shall be made to the registrar and shall
be accompanied by a copy of the rules of the trade union and a statement of the following
particulars, namely-

The names, occupations and addresses of the members making application.

2 http://www.legalindia.com/how-to-form-a-trade-union-in-india/

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 The name of the trade union and the address of its head office.
The titles, names, age, addresses and occupations of the office bearers of the trade
union.

(ii) Where a trade union has been in existence for more than one year before the making of an
application for its registration, these shall be delivered to the registrar, together with the
application, a general statement of the assets and liabilities of the trade union prepared in
such form and containing such particulars as may be prescribed.

4. Provisions to Be Contained In the Rules of a Trade Union:

A trade union shall not be entitled to registration under this Act, unless the executive thereof
is constituted in accordance with the provisions of this Act.3

5. Power to Call For Further Particulars and To Require Alterations of Names:

(i) The registrar may call for further information or the purpose of satisfying himself that any
application complies with the provisions of Section 5, or that the trade union is entitled to
registration under Section 6, and may refuse to register the trade union until such information
is supplied.

(ii) If the name under which a trade union is proposed to be registered is identical with that by
which any other existing trade union has been registered or, in the opinion of the registrar, so
nearly resembles such name as to be likely to deceive the public or the members of either
trade union, the registrar shall require the persons applying for registration to alter the name
of the trade union stated in the application, and shall refuse to register the union until such
alteration has been made.

6. Registration

The registrar, on being satisfied that the trade union has complied with all the requirements of
the Act in regard to registration shall register the trade union by entering in a register, to be
maintained in such form as may be prescribed, the particulars relating to the trade union
contained in the statement accompanying the application for registration.

7. Certificate of Registration

3 http://www.whatishumanresource.com/the-trade-union-act-1926

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The registrar, on registering a trade union under section and, shall issue a certificate of
registration in the prescribed form which shall be conclusive evidence that the trade union has
been duly registered under this Act.

8. Cancellation of Registration

A certificate of registration of a trade union may be withdrawn or cancelled by the registrar

on the application of the trade union to be verified in such manner as may be prescribed in if
the registrar is satisfied that the certificate has been obtained by fraud or mistake or that the
trade union has ceased to exist.

It has to provide not less than two months previous notice in writing specifying the ground
on which it is proposed to withdraw or cancel the certificate shall be given by the registrar to
the trade union before the certificate is withdrawn or cancelled otherwise than on the
application of the trade union.

9. Registered Office

All communications and notices to a registered trade union may be addressed to its registered
office. Notice of any change in the address of the head office shall be given within fourteen
days of such change to the registrar in writing, and the changed address shall be recorded in
the register referred to in Section-8 of the Companies Act.

10. Incorporation of Registered Trade Union

Every registered trade union shall be a body corporate by the name under which it is
registered and shall have perpetual succession and a common seal with power to acquire and
hold both movable and immovable property and to contract, and shall by the said name sue
and be sued.

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 RIGHTS AND LIABILITIES OF REGISTERED

TRADE UNIONS
1. Objects on Which General Funds May Be Spent:

The general funds of a registered trade union shall not be spent on any other objects than the
payment of salaries, allowances and expenses to the office bearers of the trade unions;
expenses for the administration of the trade union; the presentation or defiance of any legal
proceeding to which the trade union of any member thereof is a party; the conduct of trade
disputes and compensation of members for loss arising out of trade disputes; provision of
education, social or religious benefits for members; upkeep of a periodical published.

2. Constitution of a Separate Fund for Political Purposes:

A registered trade union may constitute a separate fund, from contributions separately levied
for or made to that fund, from which payments may be made for the promotion of the civic
and political interests of its members, in furtherance of any of the objects such as the payment
of any expenses incurred, either directly or indirectly; the holding of any meeting or the
distribution of any literature/documents in support of any such candidate; the registration of
electors of the selection of a candidate for any legislative body constituted under or for any
local authority; the registration of electors or the selection of a candidate for any legislative
body constituted under/or for any local authority; holding of political meetings of any kind.

3. Criminal Conspiracy in Trade Disputes:

No office bearer or member of a registered trade union shall be liable to punishment under
sub-section (2) of Section 120 B of the Indian Penal Code, 1860 in respect of any agreement
made between the members for the purpose of furthering any such object of the trade union
as is specified in section its unless the agreement is an agreement to commit an offence.

4. Immunity from Civil Suit in Certain Cases:

(i) No suit or other legal proceeding shall be maintainable in any civil court against any
registered trade union or any office bearer or member thereof in respect of any act done in
contemplation or furtherance of a trade dispute to which a member of the trade union is a

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party on the ground only that such act induces some other person to break a contract of
employment, or that is in interference with the trade, business or employment of some other
person or with the right of some other person to dispose of his capital or of his labour as he
wills.

A registered trade union shall not be liable in any suit or other legal proceeding in any civil
court in respect of any fortuitous act done in contemplation or furtherance of a trade dispute
by an agent of the trade union if it is proved that such person acted without the knowledge of,
or contrary to express instructions given by the executive of the trade unions.

5. Enforceability of Agreements:

Notwithstanding anything contained in any other law for the time being in force, an
agreement between the members of a registered trade union shall not be void or voidable
merely by reason of the fact that any to the subjects of the agreement are in restraint of the
trade.

6. Right to Inspect Books of Trade Unions:

The account books of a registered trade union and the list of members thereof shall be open to
inspection by an office bearer or member of the trade union at such times as may be provided
for in the rules of the trade union.

7. Right of Minors to Membership of Trade Unions:

Any person who has attained the age of 18 years may be a member of a registered trade union
subject to any rules of the trade union to the contrary, and may subject as aforesaid, enjoy all
the rights of a member and execute all instruments and give all acquittances necessary to be
executed or given under the rules.

8. Effects of Change of Name and of Amalgamation:

The change in the name of a registered trade union shall not affect any rights or obligations of
the trade union or render defective any legal proceeding by or against the trade union. An
amalgamation of 2 or more registered trade unions shall not prejudice any right of any of
such trade unions or any right of a creditor of any of them.

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 TRADE UNION CHALLENGES IN INDIA

India has the largest number of trade unions.4 But they have developed very slowly. In spite
of the slow growth, the unions brought about some economic, political and social betterment
of the workers. Economically, they have improved the lot of the workers. Politically, the
unionism has produced a mighty secular anti-imperialist, anticapitalist, equalitarian and
socialistic force of national economy. Socially they have emerged as a unique force of
national integration in spite of the hindrance offered by illiteracy, rural background of the
worker and their migratory character, by communalism, casteism and linguism. The chief
features of the present day unionism in India are that only about 28% of the workers are
unionized. The unions are getting smaller in size. Their finances are generally in bad shape.
Trade union leadership faces several dilemmas. The unions often cannot make a constructive
approach because of intensive inter-union rivalries and multiplicity of unions. Then, there is
the heterogeneity of membership with workers from different areas, classes, castes and
regions. Because of such peculiarities, it has been observed that unlike the trade unions in
Sweden, Germany, the U.K., the U.S.A. Indian unions are yet weak, unstable, amorphous,
fragmental and uncoordinated. The most important problems of the trade unions in India are
uneven Growth: industry-wise and Area-wise, small size of unions, financial weakness,
multiplicity of the unions and inter-union rivalry, leadership issue, politicaliation of the
unions, democracy and leadership, management Attitude, statutory support, illiteracy and
ignorance.5

1 Uneven Growth Of Unionism

Trade unionism has not influenced a variety of industries. Plantations, coals mines, food
industries, textiles, printing presses, chemicals, utility services, transport and communication
and commerce are the main organised industries, in which unionism has made progress. 6 The

4 Barber B (2003) The future of trade unions. City University Vice Chancellors Lecture.

5 http://www.hoffmanpr.com/press-release/ilo-highlights-global-challenge-to-trade-unions/

6 Bhopal M (2001) Malaysian Unions in Political Crisis: Assessing the Impact of the Asian
Contagion. Asia Pacific Business Review 8: 73-100.

18
degree of unionisation varies widely from industry to industry. For example, it has been 51%
in mining and 30 to 37% in transport, communication, manufacturing industries and
electricity and gas, industries with a high rate of unionism are Coal (61%); Tobacco
manufacture (75%); Cotton textile (56%); Iron and steel (63%); Banks (51%); Insurance
(33%); Railways (33%) and Plantation (28%). Another important feature of the unionism is
that it is mainly concentrated in a few States and in bigger industrial centres. The main reason
for the development of such industry-cum-centre unions has been the concentration of certain
industries in particular areas. For example textile workers in Bombay, Ahmedabad, Indore,
Kanpur; plantation labour in Assam, west Bengal, Tamil Nadu and Kerala; jute mill workers
in Bengal, engineering workers in Calcutta, Bombay etc; workers engaged in chemical and
pharmaceutical industries in Bombay and Vadodra. Trade union development in white-collar
workers and in lower management cadre is even more unsatisfactory. Hardly there is any
trade union activity in small scale enterprises, domestic servants and agricultural labour. Of
the total labour force of about 100 lakhs, only about half of the workers are trade union
members. The story of labour in the organised industry is the history of Indian labour
moment. There has been no movement amongst the vast mass of labour in the primary sector
and the small establishments. The lack of labour organisation in the rural sector is due to their
scattered and sparse habitations, their lack in in group feeling, and their neglect by labour
leaders. The proportion of union members to the total number of workers could be placed at
about 23 per cent in sectors other than agriculture. If workers in agriculture are included, the
percentage of organized labour will fall considerably.

11. Small Size of Unions

Though trade unions are of various sizes with thousands of members, yet, most of the unions
are still characterized by their small size and small membership. The average membership per
union in India is less than 800, as compared with the U.K (17,600) the USA (9,500). 7 The
small size of the unions is due to the following factors as the fact that any seven workers may
from a union under the Trade Union Act and get in registered has resulted in large number of
small unions, the structure of the trade unions organisation in the country is in most cases, the
factory or the unit of employment; so whenever employees in a particular factory or mine are
organised, a new unions is formed. Unionisation in India started with the big employees and

7 Cornfield D, McCammon H (2003) Labor Revitalization: Global Perspectives and New

Initiatives. JAI pres, London, UK.

19
gradually spread to smaller employees.8 This process is still continuing and has pulled down
the average membership. Though the number of unions and union membership are
increasing, average membership is declining. Rivalry among the leaders and the Central
Organisations has resulted in multiplicity of unions thereby reducing the average
membership. It is noteworthy that as the number of unions increases, the total membership
does not increase proportionately. If rival unions could be stopped from being evolved, the
average size of unions could definitely go up. Because of the small size of the unions, they
suffer from lack of adequate, funds and find it difficult to engage the services of experts to
aid and to advise members in time of need. Further, they cannot face the challenge of
employers for long because of their weak bargaining power. Again, the small degree of
unionisation further aggravates their helplessness in collective bargaining and makes them
thoroughly dependent either on the political parties or on such outside personalities who
happen to command political influence on the employers and the Government machinery.

12. Financial Weakness

Trade unions suffer from financial weakness as the average yearly income of the unions has
been rather low and inadequate.9 The average income has been low not because of the
poverty of the workers but because of certain factors namely, workers are apathetic towards
trade unions and do not want to contribute out of their hard earned money. The national
commission on labour observed that, union organisers generally do not claim anything higher
nor do the workers feel like contributing more because the services rendered by the unions do
not deserve a higher fee. The members instead of making regular payment to the union make
adhoc payment if a dispute arises which show a lack of commitment to the unions. Under
conditions of multiplicity of unions, a union interested in increasing its membership, usually
keeps their subscription rate unduly low and does not collect even that subscription regularly.
To improve the financial conditions of the unions, the National Commission on Labour
recommended that the minimum subscription should be raised to rupee one per month. It,
however did not favour the existing arrangement of collecting one per cent or even more by
way of membership fee on the ground that it would mean different amounts within each State

8 Heery E (2009) Trade Unions and Contingent Labour: Scale and Method. Cambridge
Journal of Regions Economy and Society 2: 429-442.

9 Freeman RB (2005) What Do Unions Do? The 2004 M-Brane Stringtwister Edition,
National Bureau Of Economic Research, Massachusetts, US.

20
for the same group of workers. Another method advocated is the introduction of the
Checkoff system, under which an employer undertakes on the basis of a collective
agreement, to deduct union dues from the workers pay and transfer the same to the union. 10
But, this system has not found favour with certain sections. It has been alleged that if the
system is adopted, the constant touch between the union and the rank-and file will be
lessened. Further, no deductions can be made on this account under the payment of Wage Act.
The National Commission on Labour has held An enabling provision should be adequate.
The right to demand checkoff facilities should vest with the unions, and if such a demand is
made by a recognised union, it should be incumbent on the management to accept. But this
recommendation seems to be difficult to implement. The best solution of improving the
financial; condition of the unions would be to remove trade union rivalry, by strictly adhering
to the principle of one union in one industry.11

13. Multiplicity of Trade Unions

Multiple trade unions are the biggest curse of Indian trade union movement. Existence of
many unions each trying to compete with each other on membership drive and securing
management support to recognise their union, not only weakens the trade union movement
but also cause inter-union rivalry and disunity among the workers. The following are the
major causes of multiple trade unions. Rapid industrialization has increased the pace of
capital formation in India.12 But skill formation has not matched the capital formation. This
is because we in India missed merchant craftsmanship stages of capitalism and instead a
predominately agrarian labour force was converted directly into an industrial labour
force. Accordingly, most of the trade unions were not based on trade specialization and
instead based on generalization. Most of the trade unions were linked to the political parties.
Since India have a plethora of political parties, it causes formation of number of trade unions
linking with each political parties. When such political parties spilt, the trade unions also
spilt. Political influence often necessitates projecting outside politicians as trade unions

10 Geert De Neve (2005) The Everyday Politics of Labour: Working Lives in Indias
Informal Economy. Social Science Press, New Delhi, India.

11 Gopal Ghosh (2005) Indian Trade Union Movement. The Peoples History Publication,US.

12 Kumar HL (2010) Law Relating to Dismissal, Discharge and Retrenchment. Universal

Law Publishing Co, Delhi, India

21
leaders. Since the political parties fortune changes rapidly, the membership of unions also
fluctuate. Union management relationship is a social relationship. Unfortunately, in India we
the same more as a legal matter.13 For example, as per Indian Trade Unions Act, any seven
workers can form a union. Many unions are formed on this basis. Also, there is no central law
which stipulates conditions for recognizing a trade union. Hence, each union is trying to
influence management to recognize a trade union. In order to influence them, they often
take help from outside leaders and political parties and organise union as dictated by
influential persons from outside. The ill-effects of multiple trade unions are also as
multiplicity divide the workers on party lines instead of uniting them together which is the
primary objective of trade unionism. Unscrupulous management exploits this to their
advantage. Unions organized on party line are more committed to the ideology of political
parties to which it is affiliated than the industrial unit and its objectives in which they work.
Unions rivalries often make it difficult to settle disputes because their approach to the
problem and method of settlement vary. The problem is more complicated when settlement
does not suit the liking of their political bosses outside. Multiple trade unions also make it
difficult for all of them to join together and make a single charter of demands or chalk out a
common strategy of action plan. This will make their bargaining power very weak. Multiple
trade unions weaken the financial status of each union. This causes severe handicap for each
of them to effectively project their programmes and influence the workers.

14. Intra-Union Rivalry

Another vexing problem is intra-union rivalry. Trade union rivalry is acute and pervades the
entire industrial scene in India. Rival unions sometimes go to the extent of even obstructing
the normal conduct of trade Union activities on different pleas. A union does oppose strike by
a rival on various grounds, the strike being unnecessary, uncalled for against the interests of
the workers and being anti-national. Conditions are created where anti-union employer gets a
chance to paint the trade union in the darkest colour and to play one against the other, causing
all-round disruptions. The rivals also indulge and wild accusation which shakes workers
faith in the trade unions itself. The Standing committee of the Indian Conference, discussed
the problem and recommended that, A provision should be made in the Trade Unions Act,
that when more than one per of persons claimed to be office-bearers of the same union. 14 If
the union is affiliated to any central Organisation, the latter should first try to settle the

13 Sabina (2008) Industrial disputes and labour laws. Alfa Publications, India

22
difference within its affiliates. Failing this, under the aegis of the Labour Court, an election
confined to the members of the union concerned should be held. The National Commission
on Labour recommended the following to reduce inter-union rivalries, i) building of internal
leadership within the unions in order to eliminate party politics and outsiders; (ii) Promotion
of collective bargaining through recognition of sole bargaining agents; (iii) improving the
system of union recognition; (iv) encouraging union security; and (v) empowering the Labour
Courts to settle inter-union disputes, if the concerned central organisation is unable to resolve
these.

15. Leadership Issue

Another disquieting feature of the trade unions is outside leadership, i.e., leadership of trade
unions by persons who are professional politicians and lawyers and have no history of
physical work in the industry.15 This is leadership by intellectuals rather than by workers.
It applies at the local as well as at the national level. There are several reasons for this
phenomenon, namely, the rank and the file are largely illiterate; as such they cannot
effectively communicate with the management; the union s lack of formal power tends to put
premium on the charmistic type of the leader, usually a politician, who can play the role of
their defender of the workers against his enemies; for ensuring a measure of equation of
power in collective bargaining, where the workers are generally uneducated and have a low
status; for avoiding victimisation of workers office bearers of the trade unions; and at times
for lack of financial resources to appoint whole time officebearers. The National Commission
on Labour gave a good deal of thought to the issue whether outside leadership should be
retained. It felt that, there should be one of non-employees holding positions in the executive
body of the unions as that would be a very drastic step. The commission referred to freedom
of association and protection of the right to organise, and the workers organisations to have
the right to elect their representatives in full freedom.

16. Politicalisation

In a democracy, political influence of trade unionism cannot be avoided. However in India,

the historical development of tradeunion movement was inseparably intermingled with
14 PK Jalan (2004) Industrial Sector Reforms in Globalization Era. Sarup & Sons, New
Delhi, India.

15 Budhwa PS, Bhatnagar J (2009) The Changing Face of People Management in India.
Routledge Taylor & Francis, New York, US.

23
political movement through liberation struggle. In the initial stages, it helped union to record
rapid growth and gain considerable influence with the government in power. In the long run,
it has become a curse for undoing the very objective of trade unionism the unity among the
working class. The disadvantages are dependence on outside leadership who are not
committed to the organisation, exploitation of trade unions and workers strength by political
parties to meet their political objectives, multiplicity of trade unions because of the existence
of multiple political parties., Any spilt in the parental political party automatically spilt the
corresponding trade unionism. Examples are the spilt in communist party of India into CPI
and CITU owing allegiance to CPM, inter-union and intra-union rivalry and disunity among
the employees which weaken their bargaining power, exploitation of the disunity among the
union by employers in their effort to play them, one against other.

17. Democracy and Leadership

One of the basic objectives of trade unionism is to promote industrial democracy. This
objective is achieved when trade union is an organization of the workers in practice, this
rarely happens and instead less participation, openness and transparency. Decision making is
centralized Elections are often postponed and positions are filled repeatedly by nominations,
rank and file are pampered with promises and seldom get near top decision-making process.
Positions get worse when unions are guided by outside leader and regulated by the policies or
political parties. Absence of democratic leadership reduces the effectiveness of trade unions
and prevents the development of Trade Union from among the workers within the
industries.16 The disadvantages of outside leadership are obsession with political ideology or
and personal interest, lack of intimate knowledges of working conditions and workers
problem, lack of stake in the survival of organisation and commitment, pre-occupation with
many unions; some studies have showed that a particular political leader was president of 20
odd unions in Bombay.

18. Management Attitude

Management, by and large, take an unhelpful attitude. Unionism is considered by them as an

anathema. Union leaders, according to managers are trouble makers. They are there to break
the harmony between the management and workers. They restrict the managers; power in
decision-making, question their discretion and wisdom and obstruct their right to manage.

16 The challenge of employment in India: An informal economy perspective (2009) National

Commission for Enterprises in the Unorganized Sector, India.

24
Given this mindset, very often, they find fault with union for all difficulties faced by
management; be it on low productivity, low quality, low profitability or lack of good will
from customers. No doubt, some union leaders are also responsible for the negative image of
their unions because of use of muscle power, money power and militant methods adopted by
them which is called irresponsible unionism. Managers also take advantage of multiple
trade unions and their inter-union rivalry by playing one against another. Another area is the
recognition of trade union to become a bargaining agent. Management makes use of the
loopholes of the existing labour legislation in with holding or delaying the recognition.
Management considers trade union a legal obligation. This does not bring faith and good will.

19. Statutory Support

Indian constitution considers formation of association as a fundamental right. Indian Trade

Union Act allows any seven workers to join together and form a Trade union. Both give rise
these file to formation of multiple trade unions which goes against the very concept of
unionism-the unity workers. No central legislation now exists which makes it compulsory for
management to recognize more than one unions or not to recognize anyone. This has further
weakened the trade union and their bargaining power. The Indian Trade Union Act further
allows 50 per cent of officer-bearers from outside the organization and 10 per cent of
leadership from outside. This provision resulted politicalisation, and remote control of union
activities from outside the organisations. Even the code of discipline only recommend
recognition of trade union as a voluntary action. Recognition of trade union causes rivalry
from others who are not recognized. This problem can be tackled by bringing out
comprehensive central legislation covering all aspects such as Recognition, Multiplicity,
Outside leadership, etc.

20. Illiteracy and Ignorance

Majority of Indian labour is illiterate, ignorant and poor. They are exploited by unscrupulous
trade union leaders, which result in the following problems. These workers are easily brain-
washed to become card holders of political parties and work for such parties at the expense of
working clause interest and unity. Workers are divided on caste religion, ethnic and creed
lines which goes against trade union objectives of unity and identity. Illiteracy and ignorance
are also exploited by outside leaders who prevent development of leaders from within the
organization. Workers are too ignorant to know their rights and often pampered with false
promises by union-leaders and politicians. This is the tendency of a worker moving from one

25
union to other with the hope that such a change will improve his economic gains. At times,
they may even hold membership of more than one union.

26
 ROLE OF TRADE UNION IN INDUSTRIAL

RELATIONS

Trade or labor unions have been around since the 1930s to resist through equal bargaining
power the domination of employers over employees and to represent workers interests in the
employment relationship. It is through union efforts that workers benefit from better pay and
working conditions, and that they are treated with dignity and respect at work. The
importance of trade unions cannot be overstated even though membership has been on a
steady decline.

1 Collective Bargaining

Labor unions developed to grant employees equal bargaining power with their employers,
who traditionally had the ability to exclusively set the terms and conditions of work and pay.
Unions represent workers within a given industry in negotiations with their employers. Since
the union comprises a group of workers, it has a greater voice than if employees were dealing
with employers individually. For example, unions are credited with abolishing sweatshops
and child labor in the United States because they pushed for these practices to end. The
National Labor Relations Act guarantees employees right to bargain collectively through
their chosen labor union representatives. Unions can organize strikes, boycotts, go-slows and
sit-ins to get employers to consider their proposals.17

Unions bring collective bargaining to a small business. Collective bargaining consists of a

negotiation process between the management or HR department of a small business and the
union representatives of the company. For example, the union will negotiate equal payment
for similar work for all employees based on the job position and length of time on the job.
This eliminates the HR department's ability to provide a bonus or raise to an employee who is
exemplary and whose work exceeds expectations. Additional terms the union negotiates

17 http://www.wageindicator.org/main/labour-laws/international-conventions/trade-union-
rights

27
under collective bargaining includes cost of living raises, vacation pay, sick leave, health
benefits and grievance procedures.

21. Employee Welfare

Unions have successfully fought for better terms and conditions for workers. They represent
workers interests and have secured a variety of benefits, such as higher wages for unionized
employees, work-life balance characterized by reasonable work schedules, job security and
protection from arbitrary action by employers. In a September 2012 essay on the CNN
website, Democratic strategist Donna Brazile asserted that is also due in part to union activity
that discrimination in the workplace was outlawed and that workers have access to health
care, safe working conditions and guaranteed Social Security. Unions not only have given
workers dignity in the workplace, but they also consistently facilitate enhanced welfare and
standards of living for American workers.

22. Unfair Practices

Labor unions check the unfair labor practices of employers. The NLRA declares that it is
unlawful for employers to dominate a union, discriminate against workers engaged in union
activity, victimize workers who file charges against them with the National Labor Relations
Board or interfere with employees engaged in concerted union activity. If the employer does
any of these prohibited acts, the union can take it up with the board on behalf of the
employees. For example, the union representing Boeing Co. engineers and technical workers
filed charges against the company for interfering with employees engaging in concerted
union activity. The board investigates charges and may take a variety of actions, including
issuance of cease-and-desist or reinstatement orders to remedy unfair treatment against
employees. Unions ensure that employers comply with the law and can lodge appeals in
federal court if employers do not respect board decisions.

23. Legislation

Unions also play a key role in developing labor laws and regulations for effective worker
protection. The unions initiate the push for regulation in areas that concern employees in the
workplace. They lobby for the creation of laws and regulations and disseminate information
to the employees about them. Measures such as the NLRA, the Social Security Act, the
28
Family Medical Leave Act and the Occupational Safety and Health Act exist as a result of
union efforts for better terms and conditions for workers. Unions monitor the status of
implementation of employee welfare laws and regulations to ensure they are properly
enforced.

ADVANTAGES OF LABOR UNIONS FOR AN

ORGANIZATION

Labor unions are organizations in which employees bond together to create a collective voice
for negotiations with employers. While some view labor unions as a negative, they actually
can have several positive effects on the labor market in general. They can help both
employers and employees, if they are utilized correctly.18

1 Simpler Negotiations

As an employer, one of the advantages of dealing with a labor union is that it simplifies the
negotiations process. When you deal with a labor union, you do not have to negotiate with
multiple employees. You simply talk to the head of the labor union and the head of the union
speaks for all of the workforce. By doing this, you can negotiate faster and more efficiently
without having to worry about meeting with many different employees.

24. Employee Satisfaction

Another advantage of dealing with labor unions is that it can improve employee satisfaction.
When employees deal with unions, they may be more satisfied because they have a voice to
speak to the employer. They get higher wages on average and better benefits packages. When
you meet the needs of the employees better, they will be more satisfied in their jobs and will
be willing to work harder for you. This could lead to higher productivity and better quality
production.

25. Less Turnover

18 http://smallbusiness.chron.com/advantages-labor-unions-organization-21119.html

29
Another advantage of labor unions for organizations is that they lead to less turnover. When
you have a workforce that is comprised of labor union members, they will not leave their jobs
as frequently. They have to pay dues to be a part of the union, and they typically do not want
to lose their position in the organization. When you have lower levels of turnover, it saves
your business money in the long run by not having to train as many new employees.

26. Easier to Make Changes

Businesses regularly have to undergo change if they want to stay at the forefront of their
industry. When a business has a labor union to work with, they can partner together to
facilitate change easier. When the employer knows that change is required, it can disseminate
this information to the leadership of the union and the union can then pass the information
along to the employees. When everyone is on the same page, it improves the chances of the
company getting through the change.

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 HR'S ROLE IN MAINTAINING EFFECTIVE

WORKING RELATIONSHIPS WITH UNIONS

Labor unions protect workers rights and negotiate for better employment terms and
conditions through collective bargaining. A healthy working relationship between
management and union officials is vital to prevent and resolve workplace disputes. The
human resources department supports, guides and trains managers to help them maintain
effective working relationships with unions.19

1 Labor Agreement

When a workforce becomes unionized, the company negotiates a labor agreement with local
union officials. The labor agreement governs the relationship between the company and the
union. It lists the items that are subject to collective bargaining, such as wages, benefits,
discipline and training. It also reserves certain items to the sole authority of management,
such as which products to produce and the location of production. HR helps managers
prepare for negotiations by gathering relevant data and helping plan the bargaining strategy.

27. Grievances

While the labor agreement is the foundation for the relationship, most of the day-to-day
interaction between the union and management involves the practicalities of implementation,
as no agreement can account for every eventuality. When a dispute arises, the union raises a
grievance on behalf of its member or group of members. HR supports supervisors to resolve
grievances in a positive and constructive manner by providing training on the content of the
labor agreement and the skills required to deal with grievances rationally and objectively.

28. Interest-Based Bargaining

Traditionally, the relationship between management and the union has been adversarial, with
both parties engaged in position-based bargaining. Increasingly, companies are implementing

19 http://smallbusiness.chron.com/hrs-role-maintaining-effective-working-relationships-
unions-20468.html

31
nonadversarial negotiations, such as interest-based bargaining. Interest-based bargaining
requires parties to invest time and effort to understand each other's interests and helps them
develop a more constructive relationship over time. HR can assist managers to move toward
interest-based bargaining by providing training and coaching. HR professionals can also
support managers by sourcing best-practice examples of interest-based bargaining from their
HR network.

29. Communication

Unions have a significant effect on management decision-making, challenge supervisory

authority and prevent a company from formulating HR policy unilaterally. Such restrictions
can create tension between management and the union. However, managers benefit from
meeting regularly with union officials to build their relationship and discuss forthcoming
changes in the workplace that will impact employees' terms and conditions. HR can facilitate
communication between management and union officials by organizing meetings, providing
guidance and sharing expertise.

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 CONCLUSION

In India, as against the earlier policy of suppressing trade unionism and its leaders, a modest
protection has been given under the Trader Unions Act, 1926. Trade Union means any
combination, whether temporary or permanent, formed primarily for the purpose of
regulating the relations between workmen and employers or between workmen and workmen
or between employers and employers, or for imposing restrictive conditions on the conduct of
any trade or business, and includes any federation of two or more Trade Unions (Sec 2{g}).
The rulebook of the trade union, a copy of which is to be submitted for registration along
with other details, shall disclose whole of the objects for which the trade union has been
established and whole of the purposes for which the general funds of the trade union shall be
applicable. The rules shall also determine membership criteria, subscription requirements,
method of election of office bearers and dissolution of the trade union (Sec 6).

The Registrars satisfaction about compliance with all the requirements of the Act leads to
registration (Sec 8) creating a corporate personality. In order to deal with the problem of
multiplicity of trade unions, it is provided by the Amendment Act 2001 that a registered trade
union of workmen shall at all times continue to have not less than ten percent or one hundred
of the workmen, whichever is less, employed in the industry with which it is connected (Sec
9A). Willful contravention of the provisions of the Act, or fraud or mistake in obtaining
registration, or stoppage of functioning may cost its registration itself (Sec 10). This is a
strong measure for purpose compliance.

For effective functioning of the trade unions, the office bearers or members of Trade Unions
are given immunity from criminal and civil liabilities (Sec 17 and 18) for activities purporting
to further trade union objectives. The appropriate government (either central or state) shall
appoint a person as Registrar of Trade Union for each state. He shall be assisted by
Additional and Deputy Registrars of Trade Unions appointed by the Government. These
officers are the implementing bodies for the statute. Willful contravention of the provisions of
the Act, or fraud or mistake in obtaining registration, or stoppage of functioning may cost its
registration (Sec 10).

33
34
 BIBLIOGRAPHY

BOOKS:-

Dr. S.N Misra , Labour & Industrial Laws , 28 th Edition , Central Law Publications ,
Allahabad , 2016
Dr. S.C. Srivastava, Industrial Relations and Labour Laws , 6th Edition , Vikas
Publishing House, Allahabad, 2012
V K Kharbanda , Commentaries on Trade Unions Act 1926 , 2nd Edition , 2013.

WEBSITES:-

http://lawstudentshelpline.com
www.legalserviceindia.com
www.indiakanoon.org
www.scribid.com
www.law.cornell.edu/wex/
https://en.wikipedia.org/wiki/
legal-dictionary.thefreedictionary.com

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