Evolution of Industrial Relations

The expression ‘industrial relations’ by itself means relationship that emerges out of day-to-day
working of labour and management. It includes the relation between an employee and
employer in the course of running an industry. It involves the impact or influences of various
forces. It’s a complex task to study the impact various forces, so researchers have taken three
significant factors, viz. trade union, labour lagislation, and industrial democracy and
considered the issues that emerge out of these which pose a problem to industrial relations.
These themes revolve around the three actors of IR system, viz. employees, employers, and the
government.
Industrial relations,at its core, is a discipline, that concerns itself with the study of the
relationship between employers and employees at an organization, industry or a nation level.

BACKGROUND:

 IR plays a crucial role in establishing and maintaining industrial democracy. In India a numbers
of factors ----- social economic and political--- have influenced industrial relations in India.
 The history of employer-employee relations can be traced back to the early eighteenth
century. The workers of the textile industry took the support of leaders of the independence
movement to revolt against the oppressive practices of British, whose sole aim was to totally
destroy the textile industry in the country and reduce it to a mere supplier of raw material to
the textile industry in Britain.
 In the pre independence days, workers were hired and fired, as the principal of demand and
supply governed industrial relations. The employer was in a commanding position and the
condition of employment wages were very poor
 Till the end of the first world war, the trade union movement had not emerged.
 There were hardly any laws to protect the interest of the workers except the Employers and
Workmen(Dispute) Act, 1980, which was used to settle wage dispute.
 After the First World War, the industrial relation concept assumed a new dimension in the sense that
workers now resorted to violence . There were numerous strikes and disturbances during 1928-29.
 As a result government enacted the Trade Disputes Act, 1929, to enhance the early settlement of
industrial disputes.

 After India attained independence, one of the significant steps taken in the field of industrial relations was
the enactment of the Industrial Disputes Act, 1947
 In December 1947, an industrial conference was held in India, where an appeal was made to labour and
management to maintain industrial harmony.

 Another development in the immediate post-Independent period was the setting up of the Indian Labour
Conference(ILC), a tripartite body to look into IR problem in India. It was constituted with the objective of
establishing co-operation between the government, the employers and the trade unions. It met(first
meeting in Aug 1942) once in a year to discuss problems relating to labour-management relations.

 An important characteristic feature of IR in the post-independence period was the change in the
Government’s attitude towards labour and their problems. Many labour laws were enacted to protect the
interest of industrial workers during 1947 to 1956.
 [ The value of production loss due to strikes and lockouts in 1980 was Rs 12.53 cr, in 1979 was Rs 125.63cr
and in 1978 it was 108.16 cr.
Industrial Relations (IR) is defined as the relationship between the employer and employees. The employer
represented by the management or association of employers and the employees are represented by
trade unions.

Actors in Industrial Relations

 Employees and Trade Unions
 Employers and Employers Associations
 Government

1. Employees and Trade Unions: Unions play a crucial role in organizing the employees and mobilising them
through a set of demands and also engaging with employers through collective bargaining. Employees join
trade unions to improve the working environment as well as for better terms and conditions in
employment. The employees also expresses their grievances in respect of working and employment
conditions through unions. Any seven or more employees are permitted to form a trade union in India, as
per the Trade Union Act,1926. In order to limit the number of trade unions in India, the government
amended the act in 2001. Accordingly, trade unions are registered only if 10% or 100 workers(whichever is
less) are members of a trade union, subject to a minimum of 7 workmen in an establishment or industry.
Some Problems of Trade Unionism in India:
 One of the major problem is the fragmentation of unions Several unions, associated with different political
parties and groups, have entered the national scene.
 The non-existence of legal provisions for the recognition of unions( except BIR Act and the Maharastra
Recognition of Trade Unions and Prevention of Unfair Labour Practices) makes for fragmentation of unions
and consequent inter-union rivalry.
 The multi-unionism to industrial harmony in India has posed a serious threat. In its effort to meet this
problem, the government has evolved the Code of Discipline which provides that a union can claim
recognition of its members comprise 25 per cent of the total workers in that industry. But the
controversy here relates as to how the membership of rival unions should be verified, whether it should
be using the method of membership verification or secret ballot.

 The only state which has made some headway in this direction is Maharastra. In 1971 it passed the
Maharastra Act for Prevention of Unfair Labour Practices and Compulsory Recognition of Trade Unions,
1971. The Bombay Industrial Relations Act, which has restricted applications, also empowers the
appropriate authority to recognize a representation union in a plant/industry. The Industrial Relations Bill
of 1978 also sought to provide for a sole bargaining agent in a plant.

2. Employers and Employers Association:

 Employers desire harmonious industrial relations so that the productivity and profit of their organization is
not affected.

 Employers desire the right to hire and fire employees, relocate the firm/factory in case of problem, and
also introduce modern technology to reduce their dependence on employees.
 Employer preferred unions so that they can hear ‘one voice’ rather than listening to ‘multiple voices’ in the
system. But after technological advancement and emergence of Human Resource Management, they
directly deal with employees and try to avoid unions as far as possible.
 The employers are concerned about attracting and retaining talent in the organization to improve the
productivity and profit of the firm.
 They also use FDI as a mechanism to influence governmental policies regarding labour.
 Use temporary workers, contract workers and out source their work.
GOVERNMENT:
 Government plays a mediating role whenever the employer and employee are not able to arrive at a
consensus regarding any employment related issue. The role of government also changes based on the
policies of the political party
 The government also plays a direct role in the industrial relations through legislation, rules and
agreements.
 In India, labour is in the concurrent list; hence central as well as state governments can enact legislations.
The government also changes its position based on environmental and economic factors.

 Prior to liberalisation, government as well as most of the political parties took pro-employees stand on
most of the critical issues. During stedrikes, the pro-employee stance can be clearly discern. After
liberalisation, the stance has changed from pro employee to a pro-employer one. The central government
and most of the state governments are competing to attract FDI. There is an impression that pro-employee
stance and rigid labour laws deter FDI flow to India.
Key Concepts in Industrial Relations(Dominant Aspects):

COLLECTIVE BARGAINING: Collective bargaining comprises negotiations pertaining to working and service
conditions. Collective bargaining may result in collective agreement.
 ILO defines collective agreement as “ all agreements in writing regarding working conditions and terms of
employment concluded between an employer, a group of employers or one or more employers’
organizations, on the one hand, and one or more representative workers’ organizations, or, in the absence
of such organizations, the representatives of the workers duly elected and authorised by them in
accordance with national laws and regulations.
 The collective agreements are binding in nature. The principle of free and voluntary negotiation and the
principle of good faith help both the parties to arrive at collective agreement.

STRIKE: A strike is a collective suspension of work, agreed upon by a number of workers with the purpose of
reaching a certain end. Strike is the most powerful weapon for trade unions to force the management to
agree to their demands.

LOCK-OUT: As per Industrial Disputes Act, 1947, lock-out has been defined as, “the temporary closing of a place
of employment, or the suspension of work, or the refusal by an employer to continue to employ any
number of persons employed by him”. Lock-out is the powerful weapon for the employer to force the
employees to return to work, in case of employees resorting to strike. Emoloyers resort to lock-out to put
pressure on the trade unions and employees to scale down their demands.
UNION DENSITY: Union Density is defined as, “a measure of the membership of trade unions, calculated as the
number of currently enrolled members as proportion of all those employees potentially eligible to be
members.
RECOGNITION OF TRADE UNION: Recognition of trade union is done by the employer whereas registration of
trade union is done by Registrar of trade union. Since the word recognition of was not provided in the Trade
Union Act, 1926, employer have good reason for not recognizing trade unions in their organizations. An
organization can have many registered trade unions, but the recognition of the union is decided by the
employer. For healthy industrial relations, the employer may recognize trade unions and negotiate with them.
 TRADE UNIONS

 Trade unions are an important institution in the realm of industrial relations. A trade union is an
organization of workers or employees that is formed mainly to negotiate with the employers on various
employment related issues.
 Trade unions are a major component of the modern industrial relations system. A trade union of workers is
an organization formed by workers to protect their interests, improve their working conditions, etc. All
trade unions have their objectives or goals to achieve, which are contained in their constitution and each
has its own strategy to reach those goals.

 Trade unions came into being for a variety of purposes. Individual workers found it more advantageous to
band together and seek to establish their terms and conditions of employment. They realize that if they
bargained as individuals, the employer would have a better leverage.
 Additionally, the influence of political parties interested in acquiring a foothold in the labour movement
also provided the impetus for the formation of labour unions.

First Assignment: Write a note on Historical Evolution of Trade Unions in India

Blue-Collar and White-Collar Workers: All shop floor workers ( part of the production system who operate
machines and related systems ) are termed blue-collar workers and all clerical or office staff, who do not
work on the shop floor are termed white-collar workers.
At present, Ministry of Labour has recognized twelve central trade unions
i. All India Trade Union Congress
ii. Indian National Trade Union Congress
iii. Hind Mazdoor Sabha
iv. Centre of Indian Trade Unions
v. All India Central Council of Trade Unions
vi. All India United Trade Union Centre
vii. Bharatiya Mazdoor Sangha
viii. New Trade Union Initiative
ix. Self Employed Women’s Association in India
x. Labour Progressive Federation
xi. United Trade Union Congress
xii. Trade Union Co-ordination Committee
 The Concept of Trade Unionism
The initial days of industrialization resulted in a kind of work organization where the employer, in their effort
to extract maximum from the resource at hand, including labour, developed an exploitative regime as far
as labour was concerned. An individual worker was powerless in the face of the employer and could do
little for amelioration of his/her condition of work. A collective might not be as powerless. Besides an
individual worker may be dispensable for an employer, a collective may not be. The genesis of modern
trade unionism lies here.
At the fundamental level, unionism binds the workers together into a common action with “strike” as their
ultimate weapon. This collectivism was aimed at resorting some kind of a balance in the employer-
employee relationship.
Trade unionism refers to that movement from the labour that has progressively sought to protect job and
real earning, secure better conditions of work life, and fight against exploitation and arbitrariness to
ensure fairness and equity in employment

In a nutshell, the concept of trade unionism emerges from the need for a constant organization or a permanent
association that is engaged in securing economic benefits for employees while protecting their interests

Impact of Trade Unions: Trade unionism owes its influence to Industrialization and capitalism. Trade
unionism from its inception has been assertive in fighting for the rights of workers and securing higher
wages and benefits. Trade unionism has also made a great impact on the social, political, and economic
life. Trade unions have also, sometimes, led the movement for the ameliorating the conditions of the
weaker sections of the society. They have worked towards improving especially the working conditions
for of the women and children, and abolishing child labour. In addition, they have constantly
spearheaded the movements for general economic betterment of the working class, humane working
hours, safety and other welfare measures pertaining to labour and dependence.
Principles of Trade Unionism:

There are few fundamental principles on which trade unionism hinges, The prominent
ones being:
1. Unity: Unity is strength

2. Equality: Workers must not be discriminated against on the basis of caste, creed or
sex. In regard to pay, each worker must get equal pay for equal work.

3. Security: The security of the employment of their members must be safeguarded.

REASONS FOR JOINING A TRADE UNION: The workers join a trade union for the following reasons
 To attain economic security
 To be able to improve bargaining power.
 For the ventilation of worker grievances
 For an information medium
 To protect unexpected economic needs
 To satisfy social needs
 For securing power.
Objectives of Trade Union:

1. Ensure security of workers

2. Obtain better economic returns
3. Improve working environment and welfare measures
4. Secure power to influence management
5. Secure power to influence government.
Machinery to Deal with Industrial Disputes: There are various ways to cope with industrial
conflicts
1. Statutory Measures:
Statutory measures relate to the various types of machinery set up by the government under the
Industrial Disputes Act for specific conflicts which the government refers to the respective
authorities.
2. Non-statutory Measures: Several non statutory measures like the code of discipline, worker’s
participation in management and collective bargaining, which are voluntary in nature, are
supported by the government, and they help in resolving the conflict. These non-statutory
measures encourage a resolution through negotiation between the two parties, and, thus, by
their very nature, speed up the process and ccut short the long procedure.

The Industrial Dispute Act, 1947

The diverse and conflicting interests of the workmen and employers, the growing labour
consciousness and ever expanding complex industrial spectra entail frequent friction of the
opposite interests resulting in strikes and lockouts, paralysing the industrial world. This
necessitates amicable settlements to put an end to the dispute already in existence or to
prevent an apprehended dispute. The Industrial Dispute Act,1947 was an outcome of this
need to create a preventive as well as settlement machinery for minimizing industrial unrest.
OBJECTIVES:
The Industrial Dispute Act, 1947 is formulated to make provisions for the investigation and the
settlement of industrial disputes and for certain other purposes. It is an Act that aims to
ensure specific justice both to the employers and workmen and advance the progress of
industry by bring about harmony and cordial relationships between the parties. Specifically,
the object of the Act is to
1. Promote measures for securing and preserving amity and good relations between employer
and employees to minimize the differences, and to get the dispute settled through
adjudicatory authorities.
2. Provide suitable machinery for the investigation and the settlement of industrial disputes
between employers and employees, between employers and workmen, or between
workmen and workmen with a right of representation by a registered trade union or by an
association of employers.
3. Prevent illegal strikes and lockouts
4. Provide relief to workmen in matter of lay-offs, retrenchment, wrongful dismissals and
victimization
5. Give the workmen the right of collective bargaining and promote conciliation
6. In short, ameliorate the conditions of workmen in an industry.
The Prohibition of Strike and Lockout:
The Act prohibits strikes and lockouts subject to the following terms
1. No person employed in a public utility service shall go on strike in breach of contract
 Without giving to the employer notice of strike, as hereinafter provided, within six weeks
before striking; or
 Within 14 days of giving such notice; or
 Before the expiry of the date of strike specified in any such notice as aforesaid; or
 During the pendency of any conciliation proceedings before a conciliation officer and seven
days after the conclusion of such proceedings
2. No employer carrying on any public utility service shall lockout any of his workmen:
 Without giving them notice of lockout as hereinafter provided, within six weeks before
locking out; or
 Within 14 days of giving such notice; or
 Before the expiry of the date of lockout specified in any such notice as aforesaid; or
 During the pendency of any conciliation proceeding before a conciliation officer and seven
days after the conclusion of such proceeding.
3. The notice of lockout or strike under this section shall not be necessary where there is already
in existence a strike or, as the case may be, lockout in the public-utility service, but the
employer shall send intimation of such lockout or strike on the day on which it is declared, to
such authority as may be specified by the appropriate government either generally or for a
particular area or for a particular class of public utility services.
4. The notice of strike referred to in Subsection(1) shall be given by such number of persons to
such person or persons and in such manner as may be prescribed.
5. The notice of lockout referred to in Subsection (2) shall be given in such a manner as may be
prescribed.
6. If on any day, an employer receives from any person employed by him any such notices as are
referred to in Subsection (1) or gives to any person employed by him any such notices as are
referred to in Subsection (2), he government orshall, within five days thereof, report to the
appropriate government or to such authority as that government may prescribe, the number
of such notices received or given on that day.
7.
Illegal Strikes and Lockouts:
1.A strike or lockout shall be illegal if:
i. It is commenced or declared in contravention of Section 22 or Section 23; or
ii. It is continued in contravention of an order made under Subsection (3) of Section
10 [or Subsection (4A) of Section 10A.]
2. Where a strike or lockout in pursuance of an industrial dispute has already
commenced and is in existence at the time of the reference of the dispute to a
Board( an arbitrator, a Labour Court, Tribunal or National Tribunal), the
continuance of such strike or lockout shall not be deemed to be illegal, provided
that such strike or lockout was not as its commencement in contravention of the
provision of this Act or the continuance thereof was not prohibited under
Subsection (3) of Section 10 [ or Subsection (4A) of Section 10A]
3. A lockout declared in consequence of an illegal strike or a strike declared in
consequence of an illegal lockout shall not be deemed to be illegal.
 Lay-off, Retrenchment and Closure
Lay-off and retrenchment are one of the most controversial proposition of the
Industrial Disputes Act. ID Act has tried to lay down the circumstances and
procedures for lay-off, retrenchment and closure of undertaking.

Lay-Off: Lay-offs have been defined under Clause 2(KKK) of the ID Act. It means the
failure, refusal or the inability of an employer to give employment to a workman
whose name is present on the master rolls of the industrial establishment and who
has not been retrenched. The “failure, refusal or inability” can be for arbitrary
reasons but must be specifically attributed to any of the following:
 Shortage of coal/power/raw materials
 Accumulation of stocks
 Breakdown of machinery
 Natural calamity
 Any other “connected” reason

Therefore a workman who has not been retrenched can be laid-off, provided the
above described conditions are met.
Retrenchment: Retrenchment has been defined in Section 2(00) of the Act.
Retrenchment means termination of service by an employer, of a workman, for
any reason whatsoever other than:
 As punishment inflicted by way of disciplinary action;
 Retirement on reaching the age of superannuation if such a stipulation exist in the
contract of employment;
 Voluntary retirement
 Non-renewal of contract; and
 Continued ill health.

In effect, this means that termination for any reason except the above shall construe
to mean “retrenchment”, in which case, it is necessary for the employer to follow
the procedure for retrenchment, as laid down in the Act. If proper procedure is not
followed, the termination will be deemed illegal.
Closure: Closure means the permanent closing down of a business. It has been
defined in Clause 2(CC) of the Act.
CHAPTER VB. Till 1976, the provisions for lay-off, retrenchment and closure were identical for all
industrial establishment. However through an amendment in 1976, Chapter VB was added.
Its provisions were different from the earlier provisions and covered industrial establishment
that were not of a seasonal nature and employed, on average, during the last 12-month
period, 300 or more workmen. This was further amended in 1982 to make these provisions
applicable to establishments with 100 or more workers.

The Provisions for Lay-off and Retrenchment in VB:

In the provisions outlined in Chapter VB, the employer prior to effecting lay-off, has to take
permission from the appropriate government
The Provision of Lay-Off

[1. No woekman whose name is borne on the muster rolls of an individual establishment shall be
laid off by his employer except with the permission of the appropriate government unless
such lay-off is due to shortage of power or to natural calamity and in the case mine, such lay-
off is due also to fire, flood, excess of inflammable gas or explosion.]
EXPLANATION: For the purpose of this section, a workmen shall not be deemed to be laid-off by
an employer if such employer offers any alternative employment ( which in the opinion of
the employer does not call for any specific skill or previous experience and can be done by
the workman) in the same establishment from which he has been laid-off or in any other
establishment belonging to the same employer, situated in the same town or village, or
situated within such distance from the establishment to which he belongs that the transfer
will not undue hardship to the workman having regard to the facts and circumstances of his
case, provided that the wage that would normally have been paid to the workman are
offered for the alternative appointment also
Conditions Precedent to Retrenchment of Workmen:

No workman employed in any industry who has been in continuous service for not less than one
year under an employer shall be retrenched by the employer until:

a) The workman has been given one month’s notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been paid in lieu of
such notice wages for the period of the notice.

b) The workman has been paid, at the time of retrenchment, compensation that shall be
equivalent to 15 days average pay ( for every completed year of continuous service) or any
part thereof in excess of 6 months.
c) Notice in the prescribed manner is served on the appropriate government( for such authority
as may be specified by the appropriate government by notification in the official gazette).
Closure of Undertaking:
Closure is when the business of an industrial establishment closes down. The Chapter VB
provisions for closure are as below.

 Sixty days’ notice to be given of intention to close down any undertaking

1. An employer who intends to close down an undertaking shall serve, at least 60 days before
the date on which the intended closure is to become effective, a notice in the prescribed
manner, on the appropriate government stating clearly the reasons for the intended closure
of the undertaking , provided that nothing in the section shall apply to an undertaking in
which (i) less than 50 workmen are employed, (ii) less 50 workmen were employed on an
average per working day in the preceding 12 months, or (iii) an undertaking set up for the
construction of building, bridges, roads, canals, dams or for other construction work or
project.

2. Notwithstanding anything contained in subsection (1), the appropriate government may, if it

is satisfied that owing to such exceptional circumstances as accident in the undertaking or
death of the employer or the like, it is necessary so to do, by order, direct that provisions of
Subsection (1) shall not apply in relation to such undertaking for such period as may be
specified in the order.
 Compensation to Workmen in Case of Closing Down of Undertaking:
Where an undertaking is closed down for any reason whatsoever, every workmen who has been
in continuous service for not less than one year in that undertaking immediately before such
closure shall, subject to the provisions of Subsection (2), be entitled to notice and
compensation in accordance with the provisions of Section 25F, as if the workmen had been
retrenched: provided that where the undertaking is closed down on account of unavoidable
circumstances beyond the control of the employer, the compensation to be paid to the
workmen under Clause (b) of Section 25F, shall not exceed his average pay for three months.

EXPLANATION: An undertaking that is closed down for reasons of (i) financial difficulties
(including financial loses); (ii) accumulation of indisposed stocks; (iii) the expiry of the period
of the lease or license granted to it , or (iv) In case where the undertaking is engaged in
mining operations, exhaustions of the minerals in the area in which operations are carried on
, shall not be deemed to be closed down on account of unavoidable circumstances beyond
the control of the employer within the meaning of the provision to the subsection.
Notwithstanding anything contained in subsection (1), where an undertaking engaged in
mining operations is closed down by reason merely of exhaustion of the minerals in the area
in which such operations are carried on, no workman referred to in the Subsection shall be
entitled to any notice or compensation in accordance with the provision of …………
 Unionisation: Law and Environment
Two factors are relevant to the process of unionisation in India they relate to
 Trade union law
 Political parties and their labour strategy

The Trade Union Act, 1926, states as follows: 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 the Act with respect of registration,
applying for the registration of the trade union under this Act.
The organization pattern of a trade union federation is usually three-tierd. Units exist
at the plant or shop, state and the national level.
NATIONAL LEVEL FEDERATION
Historically, four major federations have been in existence and have established a
national network of federated union.
 All India Trade Union Congress (AITUC)
 Indian National Trade Union Congress (INTUC)
 United Trade Union Congress(UTUC)
 Hind Mazdoor Sabha (HMS)
GROWTH OF TRADE UNIONS: With the change of political atmosphere in the country and the
spreading of ideas about democracy, socialism, the right to a living wage, leveling of
inequalities, building of a welfare state and similar thoughts, there is no doubt that a steadily
increasing number of workers, particularly in the large metropolitan centres, have begun to
realise that a trade union organizaion is very essential for the protection and advancement
of the working classes and their interests.

Recognition of a Union: The two issues related to

 The need to recognize a union
 The process to be employed for verification when a union stakes its claims, either a new
union situation or in multi-union situations.

This problem arises because at the moment there is no uniform legislation available in all the
states and union territories with regard to the recognition issue. It is only in states where the
Bombay Industrial Relations Act in force, e.g., Gujarat and Maharastra, that there are
elaborate provisions regarding recognition.
The Trade Unions Act, 1926:

The Trade Union Act, 1926, deals with the registration of trade unions both employers and
workers, cancellation of trade union registration, rights and liabilities of registered trade
unions, constitution of a separate fund for political purposes. It also deals with penalties and
procedure in case of failure to submit returns and supply of false information regarding trade
union.

SCOPE and COVERAGE: The Act extends to the whole of India and applies to all kinds of unions of
workers and association of employers, which aim at regularizing labour-management
relations. A trade union is a combination, whether temporary or permanent, formed for
regulating the relations not only between workmen and employers, but also between
workmen and workmen or between employers and employers.

OBJECTIVES: The main objectives of the Act are to:

i. Provide for the registration of the trade union
ii. To accord registered trade unions a legal and corporate status, immunity to office bearers
and members from civil and criminal liability in respect of legitimate trade-union activities
Provisions: The act therefore, stipulates the following:

 The Trade Unions Act, 1926 was enacted mainly in deference to the ILO
convention, the recognition of the rights of workers, to organize and also to
strengthen the bargaining power of the workers.

 The Act aim to provide for the registration of trade unions and, in certain respects,
to define the law relating to registered trade unions. The objective of the Act is to:
 Lay down conditions governing the registration of TUs.
 Define obligations of a registered TU.
 Prescribe rights and liabilities of a registered TU.

Definition: Trade Union: It means a combination, whether temporary or permanent,

formed primarily for---- the purpose of regulating the relations between workmen
or employers for imposing restrictive conditions on the conduct of any trade or
business, and includes any federation of two or more unions.
Registration: Any trade union formed with at least seven members may apply for
registration to the registrar with the following documents:

i. A copy of the rules of the trade union

ii.Names, occupation and addresses of members making the application
iii.
Name of the trade union and the address of its office
iv.Designation, names, age, addresses and occupation of the office
v. Bearer of the trade union
vi.In case already in operation--- submit statement of accounts/assets and liability
statement.
On Registration. A trade union, after registration, acquires the following
characteristics:
 It becomes a body incorporate by the name under which it is registered, and it
becomes a legal entity distinct from its members of which it is composed.
 It has perpetual succession and a common seal
 It has the power to acquire and hold both movable and immovable property.
 It has the power to contract
 It can, by the name under which it is registered, sue and be sued
RULES: The rules of trade union require constitution of its executive with the following

 The name of the trade union

 Objectives for which it is established
 The membership list in a form that can be made available for inspection
 The purpose for which funds shall be applicable
 Members to be persons actually working in the unit/industry
 Honorary/temporary office bearers in the executive
 Conditions under which members entitled to any benefit/fines to be imposed
 The manner in which rules shall be amended, varied
 The manner in which office bearers shall be appointed
 Safe custody of funds
 The manner in which the trade union may be dissolved
The Amalgamation of Trade Unions: Any two or more registered trade unions may
become amalgamated together as one trade union, with or without dissolution for
division of funds of such trade unions, or either or any of them, provided that
a) The votes of at least half of the members of each or every such trade union is
entitled to vote are recorded; and b) at least 60% of the votes recorded are in
favour of the proposal

DISSOLUTION: When a registered trade union is dissolved, the notice of the

dissolution signed by seven members and by the secretary of the trade union is
required to be submitted within 14 days of the dissolution to the Registrar for
verification as to whether the dissolution has been effected as per rules of the
union. In case the rules do not provide for distribution of funds consequent to the
dissolution, the Registrar shall divide the funds among the members in such
manner as prescribed. The members can alternatively form another society under
the Societies Registration Act, 1869, for the purpose of recovering the said
properties.
The Trade Union ( Amendment ) Act, 2001

Some provisions of the Trade union Act, 1926 were amended in 2001. Some of the salient
features of the Trade Union (Amendment) Act, 2001 are:
1. No trade union of workmen shall be registered unless at least 10% or 100, whichever is less,
engaged or employed in the establishment or industry with which it is connected, are the
members of such a trade union on the date of making of application for registration.

2. A registered trade union of workmen shall at all times continue to have not less than 10% or
100 of the workmen , whichever is less, subject to a minimum of 7 persons employed in the
establishment or industry with which it is connected, as its members.
3. A provision for filling an appeal before the Industrial Tribunal/Labour Court in case of non
registration/restoration of registration have been provided.
4.
5.
6.

ANCILLARY FUNCTIONS OF TRADE UNION

1. Communication 2. Welfare Activities 3. Education 4. Research
The Factories Act, 1948;
The first Factories Act was enacted in 1881 and amended in 1891. There were major changes in
the Act in 1934 on the basis of recommendation of The Royal Commission on Labour. The
Factories Act 1948 was the outcome of the investigation and recommendation of the Labour
Investigation Committee appointed by Government of India in February, 1944 to investigate
conditions of employment in respect of various industries. The Act came into force 0n 1 April
1949. In 1987, certain provisions with regard to safety and occupational health were
incorporated through an amendment.

OBJECTIVES:
The beginning of modern legislation lies in factory legislation. The rapid industrialization and
urbanization without any planning resulted in unsanitary, unhygienic, unsafe, and crowded
work and living places. Both quality of work life and quality of life itself were affected by the
capitalist quest for making quick bucks, unmindful of its social consequences. The objectives
of this Act was to protect human beings from being subjected to unduly long hours of
physical strain or manual labour. The main objectives of this Act are:
 To protect health, safety, and welfare of the workmen
 Regulate hours of work, weekly offs and annual leave
 Regulate the employment of women and young persons.
COVERAGE:
This Act is a Central Legislation and extends to the whole of India, including Jammu and Kashmir
The provisions of this Act are applicable to all Factories, including the factories that belong to the
central government or any state government.
The provision of this Act cover persons who are included within the meaning of the ‘term’ worker
as contained in the Act.

WHO IS A WORKER?
The Factories Act, 1948 has defined a worker in section 2(1). A worker means
 A person employed
 Directly or by or through any agency
 With or without the knowledge of the principal employer
 He may be employed with or without remuneration

A worker must be employed in

 The manufacturing process, or
 In cleaning some parts of the machinery or premises used for the manufacturing process, or
In some other kind of work incidental to or connected with the manufacturing process.
Factories Act: A schematic representation of the contents
Chapter 3
Health
CHAPTER 1
Objectives, Extent, Definition,
Approval, Licensing, Notice by
Safety
Occupier Chapter 4 Safety

Chapter 2 Chapter 4A
Inspecting Staff Hazardous Process

The Factories Act, Chapter 5

Chapter 9
Welfare
Special Provisions 1948

Chapter 10 Chapter 6
Penalties and Procedure Working Hours

Chapter 11
Chapter 7
Supplimental
Employment of
Young Persons

Chapter 8
Annual Leave with
Wages
MAIN PROVISIONS:
The Factories Act primarily aims at preserving the health, safety and welfare of workers working in a factory.
The Act also provides for regulating the working hours, weekly offs, leave with wages and employment of
young persons and women. For the workers, being the weaker section of the society, the State has made
elaborate provisions and institutional framework to ensure that exploitation of labour by employer does
not take place. The significant provisions of the Act are

HEALTH AND HYGIENE: Section 11 to 20 of the Factories Act, 1948 detail out the health provision that need to
be followed in “factories”. In particular, provisions for health and hygiene comprise the following

Section 11: Cleanliness

Section 12: Disposal of waste and Effluents
Section 13: Ventilation and Temperature
Section 14: Dust and Fume
Section 15: Artificial Humidification
Section 16: Over-crowding
Section 17: Lighting
Section 18: Drinking water
Section 19: Latrines and Urinals
Section 20: Spittoons
SAFETY PROVISIONS: Elaborate provisions for the safety of workmen have been made in Chapter
4 of the Act. Subsequently, in 1987, Chapter 4A was added, which had further provisions
related to hazardous processes. These provisions, contained in Section 21 to 41, are
obligatory and further supplemented and elaborated by rules framed by each of the state
governments.

SECTION 21: Fencing of Machinery

SECTION 22: Work on or Near Machinery in Motion

SECTION 23: Employment of Young Persons on Dangerous Machines

SECTION 24: Striking Gear and Devices for Cutting off Power

SECTION 25: Self-acting Machine

SECTION 26: Casing of New Machinery
SECTION 27: Prohibition of Employment of Women and Children near Cotton Openers
SECTION 28: Hoist and Lifts
SECTION 29: Lifting Machines
HAZARDOUS PROCESSES: Chapter 4A has been added to the Factories Act to make provisions for
factories employing hazardous processes. Hazardous process has been defined in Section
2(cb) of the Act. In essence, it implies such processes that may be carried out in an industry
specified in Schedule 1 of the Act and the process may cause one of the following two (or
both)
1. Cause material impairment to the health of the persons engaged in or connected with it
2. Result in pollution of the general environment.

Section 41 A to 41 H have been added to Chapter 4A dealing with provisions for hazardous
processes.
WELFARE PROVISIONS: The welfare measures are contained in Chapter V of the Act. Welfare
facilities within the factory premises are supposed to provide mental peace to the workers so
that they can devote their attention and energy to work at hand and not on looking for such
facilities.
SECTION 42: Washing Facilities
SECTION 43: Facilities for Storing and Drying Clothing
SECTION 44: Facilities for Sitting
SECTION 45: First Aid Appliances
SECTION 46: Canteens
SECTION 47: Shelters, Rest Rooms, and Lunch Rooms
SECTION 48: Creches
SECTION 49: Welfare Officers
SECTION 50: This section empowers the state government to make rules regarding exemption of
factories from few of the provisions subject to compliance with alternative provisions.

WORKING HOURS, WEEKLY OFFS, AND SPREAD-OVERS