LABOUR LAW

P.S.D.A.

TRADE UNION AND TRADE DIPUTE

W.R.T. INDUSTRIAL DISPUTE

NAME: RAHUL NAIR

CLASS: 4-D
ENR. NO.: 16010303816
SUBMITTED TO: Ms. CHINTU JAIN
INTRODUCTION

Trade unions in India have come a long way since the first organized trade union - the
Madras Labour Union, one of the earliest unions, was formed in 1918. India now has
more than 84,642 registered trade unions along with an unaccounted number of
unregistered trade unions scattered across a large spectrum of industries in India. The
potential for growth in trade union represented workers is huge given the fact that India
is likely to have a working population of more than 64% by the year 2021.

Trade dispute means any dispute or difference between employers and employers or
between employers and workmen or between workmen and workmen, which is
connected with the employment or non-employment or the terms of employment or with
the conditions of labour of any person.

HISTORY OF TRADE UNION IN INDIA

At the beginning of the last century, a few groups were formed amongst workers in India
so as to improve their bargaining power with respect to their service conditions and
wages. These were akin to trade unions of the present day India. The earliest known of
such unions were the Printers’ Union formed in Calcutta in 1905 and the Bombay Postal
Union formed in 1907.

The trade union movement in India began after the end of First World War due to the
need for coordination of activities of individual unions. The movement, over a period of
time, systematically spread to almost all industrial centres and became an integral part of
the industrial process in India. Various trade unions were formed during such period,
such as the Madras Labour Union in 1918, the All India Trade Union Congress
(“AITUC”) in 1920, the Bengal Trade Union Federation in 1922 and the All India
Railwaymen’s Federation in 1922.

In March 1921, Shri N.M. Joshi, the then General Secretary of the AITUC,
recommended through a resolution that the Government should introduce legislation for
the registration and protection of trade unions in India. Eventually, the Trade Unions Act,
1926 (“TU Act”) was enacted for the purpose of ensuring governance and protection of
trade unions.

Today, the Bharatiya Mazdoor Sangh (“BMS”), the Indian National Trade Union
Congress (“INTUC”) and the AITUC are considered to be the largest trade unions in
India. Also, the country’s manufacturing sector in particular, is heavily unionized. Many
Indian trade unions have an affiliation with a political party. In addition to the
interference of political leaders, such affiliation has also led to multi-unionism which has
created various complexities for the employers especially during the collective
bargaining process.
INDIA’S CENTRAL TRADE UNION ORGANIZATIONS

There are twelve Central Trade Union Organizations (“CTUO”) recognized by the
Ministry of Labour and their respective affiliations :

1. Bharatiya Mazdoor Sangh (BMS) - Bharatiya Janata Party

2. Indian National Trade Union Congress (INTUC) - Indian National Congress

3. All India Trade Union Congress (AITUC) - Communist Party of India

4. Hind Mazdoor Sabha - None. Independent Socialist Organization

5. Centre of Indian Trade Unions (CITU) - Communist Party of India (Marxist)

6. United Trade Union Congress (Lenin Sarani) (UTUC (LS)) - SUCIPP

7. United Trade Union Congress (UTUC) - Revolutionary Socialist Political Party

8. Trade Unions Co-Ordination Centre (TUCC) - All India Forward Bloc Political Party

9. Self- Employed Women’s Association (SEWA) - None. Independent.

10. Labour Progressive Front (LPF) - Dravida Munnetra Kazhagam Political Party

11. All India Central Council of Trade Unions (ICCTU) - Communist Party of India (M)

12. Indian National Trinamool Trade Union Congress (INTTUC) – AITCPP

LAWS GOVERNING TRADE UNION IN INDIA

In India, the right to form and join a trade union, and engage in collective bargaining is
provided for under national and state-specific legislations. Time and again, the courts
have upheld the right of workers to form or join a trade union in India.

1. THE CONSTITUTION OF INDIA

Article 19(1)(c) of the Constitution of India, 1950 (“Constitution”) which envisages

fundamental right to freedom of speech and expression also guarantees the country’s
citizens the right “to form associations or unions” including trade unions.

The SC has held that the right guaranteed in Article 19(1) (c) also includes the right to
join an association or union. This right carries with it the right of the State to impose
reasonable restrictions.

Furthermore, it has been established that the right to form associations or unions does
not in any manner encompass the guarantee that a trade union so formed shall be enabled
to engage in collective bargaining or achieve the purpose for which it was formed.
The right to recognition of the trade union by the employer was not brought within the
purview of the right under Article 19(1)(c) and thus, such recognition denied by the
employer will not be considered as a violation of Article 19(1)(c)38.

The various freedoms that are recognized under the fundamental right, Article 19(1)(c),
are:

i. The right of the members of the union to meet

ii. The right of the members to move from place to place

iii. The right to discuss their problems and propagate their views

iv. The right of the members to hold property.

2. TRADE UNIONS ACT, 1926

The Trade Unions Act, 1926 (“TU Act”) provides for formation and registration of trade
unions and in certain respects to define the law relating to registered Trade Unions. The
TU Act defines a trade union as “any combinations, 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 condition on the conduct of any trade or business, and includes
any federation or two or more trade unions.” All workmen have the right to form a union
or refuse to be a member of any union.

However, not all workers’ organizations are considered trade unions. For example, the
Madras High Court has held that an association of sub-magistrates of the judiciary,
tahsildars, etc., is not a trade union because the members are engaged in sovereign and
regal functions of the government.

3. INDUSTRIAL DISPUTE ACT, 1947

The IDA also deals with trade unions in the manner that it regulates the rights of
employers and employees in the investigation and settlement of industrial disputes. It
provides for collective bargaining by negotiation and mediation and, failing that,
voluntary arbitration or compulsory adjudication with the active participation of trade
unions. As per the IDA55, a settlement arrived at through collective bargaining is
binding. Two types of settlements are recognized:

i. Those reached in the course of conciliation proceedings before the authority - such
settlements bind members of the signatory union as well as non-members and all present
and future employees of the management.

ii. Those reached outside the course of conciliation proceedings, but signed
independently by the parties to the settlement - such settlements bind only those
members who are a signatory or a party thereto.
Furthermore, the Industrial Employment (Standing Orders) Act, 1946 (“IESOA”) also
contains certain provisions pertaining to trade unions. The IESOA regulates and codifies
the conditions of service for an industrial establishment employing at least 100
workmen. As per the IESOA, an employer to which the IESOA applies is required to
draft and adopt standing orders defining its employees’ conditions of employment. As
per the IESOA a registered trade union (or worker, if no registered union exists) must
review and may object to the draft standing orders before it is certified by an officer.

CAUSES OF INDUSTRIAL DISPUTES

1. Wages and Allowances:

Since the cost of living has generally showed an increasing trend, the workers have been
fighting for higher wages to meet the rising cost of living and to increase their standard of
living. 34.1% of the industrial disputes in 1973 were due to demand for higher wages and
allowances. This percentage was 36.1% in 1974. During 1985, 22.5% of the disputes were
due to wages and allowances. Wages and allowances accounted for 25.7% of disputes in
1986, 26.6% in 1992, 25.0% in 1996 and 20.2% in 2000.

2. Personnel and Retrenchment:

Personnel and retrenchment causes have also been important. During 1973, 24.3% of the
industrial disputes were because of dismissals, retrenchment, etc. as compared to 29.3% in
1961. In 1979, personnel and retrenchment topped the list of causes of industrial disputes
with 29.9%. The number of disputes because of personnel and retrenchment was 32.0% in
1971, 23.1% in 1985 and 19.8% in 1996. In 2000, about 12.1% of the disputes occurred due
to dismissals, layoffs, retrenchments, etc.

3. Bonus:

Bonus has been an important factor in the industrial disputes, 10.3% of the industrial disputes
in 1973 were because of bonus as compared to 6.9% in 1961. 13.8% and 15.2% of the
disputes were due to bonus during 1976 and 1977 respectively. It is worth noting that during
1982 only 4.7% of the disputes were due to bonus as compared to 7.3% in 1985. This
percentage was 4.2 in 1992, 3.6 in 1996 and 8.5 in 2000.

4. Indiscipline and Violence:

The number of disputes because of indiscipline and violence among the workers has been
significant. During 1987, 15.7% of the disputes were because of indiscipline and violence as
compared to only 5.7% in 1973. During 1985, 16.1% of industrial disputes were caused by
indiscipline and violence and during 1996, about 21.6% of the industrial disputes arose due to
indiscipline and violence in industrial undertaking. This shows that indiscipline and violence
have continued to be a serious problem in industry during the past two decades.

5. Leave and Hours of Work:

Leave and hours of work have not been so important causes of industrial disputes. During
1973, 1.5% of the causes were because of leave and hours of work. Their percentage share in
the industrial disputes was 2.2% in 1977, 1.8% in 1985, 2.2% in 1996 and 0.9% in 2000.

6. Miscellaneous Causes:

Miscellaneous causes include modernisation of plant and introduction of computers and

automatic machinery recognition of union political factors, etc. These factors have caused a
significant number of industrial disputes in the country, 24.1% of the industrial disputes in
1973 were due to miscellaneous causes. They accounted for 19.5% of the industrial disputes
in 1977, 29.2% in 1985, 27.8% in 1996 and 33.2% in 2000.

Miscellaneous causes of industrial disputes are as follows:

(a) Workers’ resistance to rationalisation, introduction of new machinery and change of place
of factory.

(b) Non-recognition of trade union.

(c) Rumours spread out by undesirable elements.

(d) Working conditions and working methods.

(e) Lack of proper communication.

(f) Behaviour of supervisors.

(g) Trade union rivalry etc.

Thus, industrial disputes do not arise only when workers are dissatisfied on economic
grounds, they also arise over issues which are of non-economic nature. Instances may be
quoted when strikes where successfully organised to protest against the management’s
decision to change the location of the plant from one state to another. Similarly, even causes
like behaviour of supervisor and trade union rivalries may give rise to industrial disputes.
The whole concept of industrial relations revolves around the principle of friction dynamics
which is the key to the establishment of harmonious relations between labour and
management. We cannot think of any society completely obliviant of some sort of friction
between labour and management.

MEASURES TO IMPROVE INDUSTRIAL RELATIONS

The following measures should be taken to achieve good industrial relations:

1. Progressive Management:

There should be progressive outlook of the management of each industrial enterprise. It

should be conscious of its obligations and responsibilities to the owners of the business, the
employees, the consumers and the nation. The management must recognise the rights of
workers to organise unions to protect their economic and social interests.

The management should follow a proactive approach, i.e., it should anticipate problems and
take timely steps to minimise these problems. Challenges must be anticipated before they
arise otherwise reactive actions will compound them and cause more discontent among the
workers.

2. Strong and Stable Union:

A strong and stable union in each industrial enterprise is essential for good industrial
relations. The employers can easily ignore a weak union on the plea that it hardly represents
the workers. The agreement with such a union will hardly be honoured by a large section of
workforce. Therefore, there must be a strong and stable union in every enterprise to represent
the majority of workers and negotiate with the management about the terms and conditions of
service.

3.Atmosphere of Mutual Trust:

Both management and labour should help in the development of an atmosphere of mutual
cooperation, confidence, and respect. Management should adopt a progressive outlook, and
should recognise the right of workers.

Similarly, labour unions should persuade their members to work for the common objectives
of the organisation. Both the management and the unions should have faith in collective
bargaining and other peaceful methods of settling industrial disputes.
4. Mutual Accommodation:

The right of collective bargaining of the trade unions must be recognised by the employers.
Collective bargaining is the cornerstone of industrial relations. In any organisation, there
must be a great emphasis on mutual accommodation rather than conflict or uncompromising
attitude. Conflicting attitude does not lead to amicable labour relations; it may foster union
militancy as the union reacts by engaging in pressure tactics. The approach must be of mutual
“give and take” rather the “take or leave”.

5. Sincere Implementation of Agreements:

The management should sincerely implement the settlements reached with the trade unions.
The agreement between the management and the unions should be enforced both in letter and
spirit.

6. Workers’ Participation in Management:

The participation of workers in the management of the industrial unit should be encouraged
by making effective use of works committees, joint consultation and other methods. This will
improve communication between managers and workers, increase productivity and lead to
greater effectiveness.

7. Sound Personnel Policies:

Personnel policies should be formulated in consultation with the workers and their
representatives if they are to be implemented effectively. The policies should be clearly stated
so that there is no confusion in the mind of anybody. The implementation of the policies
should be uniform throughout the organisation to ensure fair treatment to each worker.

8. Government’s Role:

The Government should play an active role for promoting industrial peace. It should make
law for the compulsory recognition of a representative union in each industrial unit. It should
intervene to settle disputes if the management and the workers are unable to settle their
disputes. This will restore industrial peace.
LANDMARK CASES

There are various cases that have played a major role in interpreting and shaping the law
on trade unions in India. A few of these cases have been mentioned below:

i. The case of All India Bank Employees’ Association v. N.I.Tribunal laid down the rights
of the members of the trade unions that are encompassed within the fundamental right to
freedom of expression and speech, i.e. Article 19(1)(c): ɵ The right of the members of
the union to meet ɵ The right of the members to move from place to place ɵ The right to
discuss their problems and propagate their views ɵ The right of the members to hold
property However, the case held that Article 19(1)(c) does not account for a right
pertaining to the achievement of the all the objectives for which the trade union was
formed. Say for example, if one of the objectives for formation of trade union was to
push the employer for raising the wages, the trade union cannot, as a matter of right, ask
the employer to fulfil the objective of increasing wages of the workers. The case also
stated that strikes by trade unions may be controlled or restricted by appropriate
industrial legislation.

ii. Another case which is of much importance is the case of B. Srinivasa Reddy v.
Karnataka Urban Water Supply & Drainage Board Employees’ Association60 wherein it
has been held that an unregistered trade union or a trade union whose registration has
been cancelled has no rights either under the TU Act or the IDA. This case highlights the
importance with respect to registration of trade unions.

iii. In the case of B.R Singh v. Union of India the court has recognized “strike” as a
mode of redress for resolving the grievances of workers.

iv. In MRF United Workers Union rep. by its General Secretary v. Respondent:
Government of Tamil Nadu rep. by its Secretary, Labour and Employment Department
and Ors., the court has highlighted the validity of procedure for recognition of a trade
union. When the State government accepts a particular procedure for recognition, it shall
direct the Labour Commissioner to call upon two unions to submit their membership
details as per the Code of Discipline. Subsequently, the Labour Commissioner shall
decide as to which Union is a true representative union of workmen and give it a genuine
recognition. Further, the court cannot permit management to claim that the Union which
shows larger membership after recognition will not be recognized by management.

v. In Balmer Lawrie Workers’ Union, Bombay and Anr. v. Balmer Lawrie & Co. Ltd. and
Ors., the underlying assumption made by the Supreme Court was that a recognised union
represents all the workmen in the industrial undertaking or in the industry. This case was
also referred to in the MRF United Workers case.

vi. In Kalindi and Others v. Tata Locomotive and Engineering Co. Ltd the Supreme
Court held that there is no right to representation as such unless the company, by its
standing orders, recognizes such right. The decision was reiterated in Bharat Petroleum
Corporation Ltd. v. Maharashtra General Kamgar Union & Ors.

vii. In Food Corporation of India Staff Union vs. Food Corporation of India and Others,
the Supreme Court laid down norms and procedure to be followed for assessing the
representative character of trade unions by the ‘Secret Ballot’ system.

RECENT TRADE UNION ACTIVITIES IN INDIA

In recent times, trade unions have been engaging in aggressive collective bargaining
tactics by staging strikes. The Indian Automotive Industry has seen considerable number
of strikes backed by trade unions that have caused major slump in the earnings of the
various companies. For instance, Honda Motorcycle and Scooter India lost a total of Rs.
1.2 billion as three thousand workers and supporters went on strike against the company.
Even Maruti Suzuki faced a fall in their production capacity and huge losses in 2012 due
to trade union backed violence at one of their plants that consequently led to shutting
down of the plant temporarily. The company was only able to reach 10% of their original
production capacity after reopening of the plant.

There has also been a great amount of unrest due to the labor reforms that have been
introduced by the government in various industries such as the Coal and Insurance. This
is mainly due to the ordinances that have been issued by the Indian government
pertaining to de-nationalization and privatization of these sectors in various ways. For
instance, the government passed the Coal Ordinance (Special Provisions) Bill, 2014,
which focuses on reallocating the various coal blocks through e-auction process. This
caused various trade unions of Coal India Ltd. and Singareni Collieries Company Ltd. to
initiate a five day strike that is said to have a future impact on the power sector despite
these various companies having stepped up their supplies of coal to the various sectors
so as to limit disruption of work. Furthermore, it appears that the trade unions in the
Insurance sector are preparing for strikes on similar lines due to the reforms pertaining to
the hike in FDI and disinvestment in the Insurance sector.

Trade unions also seem to be seeping into the Information Technology sector / services
sector and are predicted to gain a strong foothold in the sector. Traditionally, the services
sector has remained untouched by any trade union activity. Tata Consultancy Services
Ltd., recently, met with great opposition from various central trade unions such as CITU
and INTUC with respect to their move to terminate the employment of a number of their
employees.

The proposed recent amendments to the various labor laws by the central government
and the state governments, more specifically, the government of the state of Rajasthan,
are said to impact workers immensely. The proposed amendments mainly pertain to
(i) allowing industrial establishments employing up to 300 workmen (which threshold is
100 workmen currently) to terminate workmen without availing the prior permission of
the government.

(ii) raising the threshold of number of workmen as contract labour for the purpose of
applicability of the Contract Labour (Regulation and Abolition) Act, 1970 from 20 to 50.

(iii) Raising the threshold of number of employees for the purposes of applicability of
the Factories Act, 1948 from 10 to 20 (in factories where work is being carried out with
the aid of power) and from 20 to 40 (in factories where work is being carried out without
the aid of power).

(iv) raising the minimum membership from 10% to 30% with respect to registration as a
trade union under the Trade Unions Act, 1926 (v) introducing a limitation period of 3
years with respect to raising industrial disputes.

The abovementioned proposed reforms are said to encourage strikes by the various trade
unions since workers may be adversely affected by these reforms. In fact, various trade
unions have already engaged in opposition and nationwide protests against these
reforms. It is yet to be seen whether these reforms will continue to be implemented or
will succumb to the demands of the trade unions.

CONCLUSION

Historically, in India, the function of the trade unions was limited largely to collective
bargaining for economic considerations. However, trade unions now play a major role in
employee welfare activities, cultural programs and banking and medical facilities and by
creating awareness through training and educating the members of the trade union. On
the other hand, the dominant managerial objectives in collective bargaining in recent
years owing to heightened competition have been to reduce labour costs, increase
production or productivity, flexibility in work organization (multi-skilling /multi-
functioning, changes in worker grades etc.), increase in work time, reduction in regular
staff strength via VRS, stress on quality and so on.

Despite certain recent developments which may be largely considered as one-off

incidents, most trade unions have managed to foster an environment so as to enable a
healthy discussion between the workers and employers with respect to any demands the
workers may have. Furthermore, trade unions in India have, over the period of time,
ensured to provide a forum to facilitate better industrial relations, industrial growth and
improve productivity.