TRADE UNION

TRANSPORT MANAGEMENT TECHNOLOGY | HUMAN RESOURCE MANAGEMENT

| May 6, 2019
Table of Contents
HISTORY OF TRADE UNION IN THE WORLD ...................................................................... 2
HISTORY OF TRADE UNIONISM IN NIGERIA ....................................................................... 3
WHAT IS A TRADE UNION? ..................................................................................................... 6
FRAMES OF REFERENCE TO TRADE UNION ......................................................................... 6
THEORIES ON TRADE UNION ................................................................................................. 7
OBJECTIVES OF TRADE UNIONS ........................................................................................... 10
FUNCTIONS OF TRADE UNIONS ........................................................................................... 10
BENEFITS OF TRADE UNION ................................................................................................... 11
FORMATION AND REGISTRATION OF TRADE UNIONS ..................................................... 11
SHORTCOMINGS OF TRADE UNIONS .................................................................................. 13
CONCEPT OF COLLECTIVE BARGAINING ............................................................................ 15
FAILURE TO REACH AN AGREEMENT .................................................................................. 18

PAGE 1
HISTORY OF TRADE UNION IN THE WORLD

The origins of trade unions can be traced back to 18th century Britain, where the rapid expansion of
industrial society then taking place drew women, children, rural workers and immigrants into the
work force in large numbers and in new roles. They encountered a large hostility in their early
existence from employers and government groups; at the time, unions and unionists were regularly
prosecuted under various restraint of trade and conspiracy statutes. This pool of unskilled and
semi-skilled labour spontaneously organized in fits and starts throughout its beginnings, and would
later be an important arena for the development of trade unions.

By the 1810s, the first labour organizations to bring together workers of divergent occupations were
formed. Possibly the first such union was the General Union of Traders, also known as the
Philanthropic Society, founded in 1818 in Manchester. The latter name was to hide the
organization's real purpose in a time when trade unions were still illegal.

The first attempts at setting up a national general union were made in the 1820s and 30s. The
National Association for the Protection of Labour was established in 1830 by John Doherty, after an
apparently unsuccessful attempt to create a similar national presence with the National Union of
Cotton-spinners.

Trade unions were finally legalized in 1872, after a Royal Commission on Trade Unions in 1867
agreed that the establishment of the organizations was to the advantage of both employers and
employees.

This period also saw the growth of trade unions in other industrializing countries, especially the
United States, Germany and France.

In the United States, the first effective nationwide labour organization was the Knights of Labor, in
1869 under the leadership of Uriah Smith Stephen. This group attracted employees and local unions
from all crafts and occupational areas. They had two objectives which were to organize one large
union for all employees regardless of trade and to replace the American political and economic
system of capitalism with socialism.

In 1886, a group of craft unions left the Knights of Labour and formed the American Federation of
Labour (AFL) under the leadership of Samuel Gompers. Initially, membership was restricted to
skilled tradespeople such as machinists, bricklayers and carpenters. There was a period of slow
growth from 1886 to 1935 when the Congress of Industrial Organization (CIO) was formed by John
L. Lewis. This union offered its membership to both skilled and unskilled workers within an
industry, such as assembly line workers, machinists and assemblers. Soon, the AFL began to offer
membership to unskilled workers as well. Competition for new union members led to bitter
conflicts between the AFL and CIO until they finally merged in 1955, forming the AFL-CIO.

In Germany the Free Association of German Trade Unions was formed in 1897 after the conservative
Anti-Socialist Laws of Chancellor Otto Von Bismarck were repealed. Although trade unions in
Germany have a history dating back to the German revolution in 1848. The most important labour
organization is the German Confederation of Trade Unions which represented more than 6 million

PAGE 2
people from several other smaller trade unions from various economic sector as at 31st December
2011.

In France, labour organization was illegal until 1884. The Bourse du Travail was founded in 1887 and
merged with the Fédération nationale des syndicats (National Federation of Trade Unions) in 1895
to form the General Confederation of Labour (France).

HISTORY OF TRADE UNIONISM IN NIGERIA

Historically, there has been organization of workers in Nigeria before the advent of modern
trade unionism; these organizations could be referred to as trade unions because they were
organized to regulate trade practices, to offer mutual aid and to fix prices –wages- for their
services; such organizations included organizations of hunters, blacksmiths, carvers and
weavers. These organizations consisted of tradesmen and their children or other blood
relatives -usually sons-, there were no employment contracts as known today as the
children learned the trades and took over from their fathers. The functions of these
organizations some of which still existed today in the villages, included: settling of
disputes, regulation of relationship between tradesmen, fixing of prices and organizing the
payment of tribute to the Oba – the King.
Organized trade unions officially started on Monday 19 August 1912 in Nigeria when
workers in the then civil service organized themselves into trade unions as was done in
Sierra Leone. One Mr. Henry Libert – a Sierra Leonean- summoned a meeting of about
thirty-three indigenous workers, and by the fifth meeting on 15 November 1912 after advice
was received from Sierra Leone, the aim of the union was decided and this was to promote
the welfare and interests of the indigenous workers of the Nigerian Civil Service. It was
known then as the Civil Service British Workers Union but later changed to the Nigerian
Civil Service Union shortly before independence. It remained an exclusive union of Africans
of 1st class workers until the outbreak of the First World War in 1914.This brought about an
astronomical rise in cost of living and the union had to seek the support of other workers
outside the 1st class to agitate for 30% increase in basic salaries as the war bonus which was
granted by the colonial administrators. The union later discussed other grievances which
included: discrimination in salary scale in favour of Europeans against African workers
performing same jobs, and abolition of the ‘frequent imposition of fines as a measure of
discipline.
In 1931, the Railway Workers Union and the Nigeria Union of Teachers were formed; before
this time railway workers were under the Nigerian Civil Service Union. The 1930 economic
crisis aided the coming out of the then Mechanic Union out of the Nigerian Civil Service
Union; although the former claimed to embrace all employees of the railway; the clerical
workers chose to remain with the later. The reason for this break away of the railway

PAGE 3
workers to form the workers union was because they believed that the civil service union
was too soft spoken on fundamental issues and more so, the civil service union was not
responsive to the economic dictates of the period. More so because the new unions were
made up of skilled workers or artisans in various trade, they were placed on a strategic
position and so a strike by them could paralyze the economy. With the passing of the
Nigerian Trade Union Ordinance in 1938, the numbers of registered trade unions as well as
memberships increased; for example, in 1940 only 14 unions were registered with 4,629
members but by 1944 this had increased to 91 registered unions with over thirty thousand
members.
As an offspring of this association of skilled workers, the NUT was formed. The reason for
the formation was that the teachers were dissatisfied over conditions of employment. Thus
this grievance led to the formation of the union. The interest of the unions was to promote
national development and as a professional workers organization, the NUT was formed
partly to carry out the regulatory functions of the teaching profession and to be a watch
dog of the government educational policy. This development is equally true of the Nigerian
Medical Association which in addition to promoting the economic well-being of the
members also help to promote a healthy nation. The conglomeration of these unions
helped in maintaining stability in the nation’s economy. The militancy of the union
workers as regards government unfavourable policies created a catastrophic phase of
labour unrest and this led to a successful general strike in 1945. To ensure a sustained
harmonization of the various unions, a central union was formed and this was called Trade
Union Congress of Nigeria (TUCN). The congress demanded increase employment through
intensified industrialization, nationalization of all public utilities and the establishment of
labour party.
Before the attainment of independence in 1960, most senior staffs were Europeans and
there were very few Nigerians in this category they were therefore unable to form trade
unions. Their European counterparts had formed a union known as the Association of
European Civil Servants as far back as 1919. Associations of Nigerian Senior Staff came to
limelight in the civil service in 1960 and in the private sectors in 1971. The development of
management unions came as soon as the Europeans left and the Nigerian managers started
agitating for salaries and conditions of service as enjoyed by their former European
counterpart.
With the promulgation of the Nigerian Trade Union Act of 1938, employers of labour
were accorded same rights and privileges of organization and registration as the
organizations of employees, although Nigerian and expatriate employers organize
separately. In the 1950s when the various Regional Governments were offering increase
in wages partially to alleviate workers’ suffering and more importantly to get votes,
employers in the private sector were hard hit as their workers were asking for similar

PAGE 4
increases in salaries as their counterparts in the civil service. This led to the coming
together of all employers; both Nigerians and expatriates, it was therefore no surprise at
the inauguration when twenty - eight members companies were represented which
included: UAC and Shell-BP.
The Nigeria Employers’ Consultative Association (NECA) was only formed in 1957 and
registered under the Company and Allied Matters Act 1990 as there was no urgent need for
it as mentioned earlier and coupled with the fact that the British colonial masters did not
really encourage manufacturing as this might compete with the home manufacturing
concerns. The mission of NECA is to contribute to the process of creation of national
wealth through enterprise competitiveness, promotion of enabling environment, through
industrial harmony. The primary function of NECA is to protect employers’ interest and to
enthrone the private sector as a dependable and a reliable engine of socio and economic
development
NECA is the voice of Nigerian employers in the following national labour organizations:
National Labour Advisory Council, National Pension Commission, Nigeria Social Insurance
Trust Fund, Industrial Training Fund, National Planning Commission, National Health
Insurance Scheme, National Productivity Council, National Directorate of Employment,
Trust fund Pensions Plc and Industrial Arbitration Panel. NECA is also the voice of
Nigerian employers in the following international organizations: International Labour
Organization (ILO) International Organization of Employers (IOE), Pan African Employer
Confederation (PEC) and Federation of West African Employers (FOPAO).
By 1975, under the military regime of General Murtala Muhamed one thousand trade
unions were registered. That same year, his government established a Commission of
Enquiry to look into the past activities of the unions. Administrators were appointed to
manage the unions as the unions were polarized and ideologically divided therefore
creating labour problems for the country. The unions were restructured into 42 along
industrial lines and a Labour center was created. The Nigerian Labour Congress (NLC) was
created in 1978 and the 42 industrial unions became affiliates. This was given a legal
backing through the Trade Union Decree. In 1989, the trade union was restructured again
with 29 industrial unions affiliated to NLC through the Trade Union (Amendment) Decree
22 of 1978. Attempts were made to dissolve organs of the Nigerian Labour Congress twice
by the military regime. In 1988 under General Ibrahim Babangida and in 1994 under
General San Abacha. Following democratic reforms in Nigeria, some of the anti-union
regulations were abolished in January 1999. In the same month, Comrade Adams
Oshiomole was elected president of the Nigerian Labour Congress.
We must note that these trade unions are structured in such a way that it gives protection
to its members in cases of breach of contractual agreement between them and the

PAGE 5
authorities concerned while not forgetting its enduring task of fostering national
development.

WHAT IS A TRADE UNION?

According to Fajana, Trade unions laws in the UK and Nigeria defines trade union as: … any
combination whether temporary or permanent, the principal objectives of which its
constitution are … the regulation of the relation between workmen and workmen or
between masters and masters or the imposing of restrictive conditions on the conduct of
any trade or business and also the provision of benefits to members. From the definition,
employers’ associations are also to be regarded as trade unions.
According to G.D.H. Cole, trade union is the association of wage workers for the protection
and improvement of the standard of life.
According to Webbs trade union may be defined as “a continuous association of wage
earners for the purpose of maintaining or improving of their working lives”.
The trade unions historically passed through various stages from criminality to reluctant
federation, acceptance, and encouragement and finally to a full recognition reflected in the
view that union involvement in industrial relations should be actively promoted by
legislative means.

FRAMES OF REFERENCE TO TRADE UNION

Different views are held about the role of trade unions. These views are

 Unitary Approach: Essentially the unitary view sees the industrial enterprise as
one, where management and workers strive to achieve common objective in spite of
the fiction or conflict between management and workers. This is usually attributed
to factors such as poor communications, inefficient management or disruptive or
politically motivated workers. The supporters of this approach further say that
unionism may be justified for manual workers to improve their economic conditions
and standard of living in case they are denied their legitimate demands
 Pluralist view: The pluralist view differs from unitary view in holding that conflict
in industry is inevitable, as the interests of the employees inevitably differ from
those of the employers and that trade unions have an important role to play in
representing those interests by regulating both market and managerial relations.
This approach does not deny the common long term objective of employers and
workers for the survival of business which unitary approach advocates, but it

PAGE 6
 emphasizes inevitable and inherent conflict between employers and workers. The
employers are more concerned about their profit and investment, whereas workers
are concerned about their wages and standard of living. These different kinds of
interests lead to traditional conflict between employers and workers.
 Radical approach: This frame of reference rejects both the above analyses. It denies
that there is reality in a system of checks and balances reconciling the conflicting
interests of employers and workers. Rather it asserts that fundamentally capitalism
is the system of exploitation of the property less classes by the propertied. According
to this view a balance of power between employer and worker is an illusion which
helps legitimize a system of gross inequality and privilege. No arrangement or
system can alter the fundamental imbalance of control. The process of collective
bargaining provides a mechanism for resolving marginal disputes only but it cannot
eradicate the roots of imbalance of capital and labour. The imbalance between
capital and labour will be removed only by replacing capitalism with socialism.

THEORIES ON TRADE UNION

There are certain trade union theories that have been propagated by philosophers, civil
servants and academics some of which would be treated in this section.

 Marxist Theory: Marxist Theory is known as “Political Revolutionary Theory” of

labour movement. The theory goes around the concept of class struggle. According
to Marx “Large scale industries concentrate in one place a crowd of people unknown
to one another. Competition divides their interests. But the maintenance of wages,
this common interest which they have against their boss unites them in a common
thought of resistance combination”.
Marx theory of the trade union movement is the theory of class struggle. According
to him the conflict between bourgeoisie who are the owners of the money and
proletariat who are known to be free labourers is inventible and finally out of class
struggle classless society emerges without the help of the outside intellectuals. The
ambition of Marx is that working class by achieving political power would abolish
classes in the society.
Marx aimed at political power rather than achieving temporary economic gains. “In
his Poverty of Philosophy, Marx has emphasized that the Trade Unions are the
school of socialism. The trade unions should be merged with the political party.
Both should maintain their separate structural identities but must have functional
unity in the struggle against bourgeoisie”.
 Lenin’s Theory: Lenin says “The economic struggle is a collective struggle of the
workers against the employers for better terms in the sale of their labour power, for

PAGE 7
 better conditions of life and labour. This is inevitably a trade union struggle because
the conditions of labour differ greatly from trade to trade…… to lend a political
character to economic struggle means consequently to strive for the realization of
these same trade union demands by way of legislative and administrative measure”.
Lenin differs from Marx and says that the working class by their very nature of their
needs will get trade union consciousness but in order to have political consciousness
some outside help is needed. He directs that the intellectuals must “lead the struggle
of working class not only for better terms for the sale of labour power but also for
the abolition of the social system which compels the property less class to sell itself
to the rich”.
Lenin is of the opinion that the workers aim shall not be economical struggle or the
abolition of the very wage slavery. But its scope shall be extended to political power
in order to have a favourable legislation.
 Sidney and Beatrice Webb: According to Webb theory of industrial democracy,
trade unionism is an extension of democracy from political sphere to industrial
sphere. Their work on trade union is, The History of Trade Unionism (1894). The
goals of trade unions are not merely increase of wages and reduction of working
hours but reconstruction of society by elimination of capitalist society. He rejects
the concept of profit making but encourages the system of profit sharing. According
to Webbs as in the Marxist theory the trade unions have two goals - short run and
the long run. The short run is in the day-to-day struggle for maintaining wages and
the reduction of working hours and the long run aim of trade unions is the abolition
of the very capitalist system. The trade unions have to organize functionally and for
long run aim they have to organize politically. Whereas Webbs as a socialist explains
equal sharing of the national product. In order to achieve this object he advocates
the “genuine democratic control of industry”. He further explains trade union
emerges not from any institution but from every opportunity for bringing together
of wage earners of the same occupation.
The fundamentals of trade unionism that we find in the Marxism are to be found in
the theory of Sidney and Beatrice Webbs, but the difference lies in application.
Webbs believes in parliamentary method whereas Marx believes in struggle and
revolution.
 G.D.H. Cole: This theory can be known as ‘union control of industry’ theory. Cole’s
theory of the trade union movement is the same theory as that of class struggle as
discussed above. It was in 1913 in his book “The World of Labour” that he gave a
systematic shape to his theory.
He argues that unionism is class struggle and the ultimate is the control of industry
by labour and not revolution as predicted by Marx. Cole’s approach is a syndicalist
approach which advocates workers shall not aim at merely wages but also get the
control of industry in partnership with state. Cole wants that the trade union has to

PAGE 8
 play economic role coupled with political activity which is control of industry.
According to him the main role of trade unions is how to run the industry rather
than how to maintain state.
 Professor John R. Commons and Selig Perlman: Professor Commons believes
that the labour movement is always a reaction and a protest against capitalism. “He
wants to say that as a major part of the labour movement trade unionism comes into
being simultaneously with the birth of capitalism”. Commons argues that the class
struggle theory of European and other countries does not work in American
environment. The factors like free land, expanding frontier etc. of the American
environment provides “Job conscious” rather than “class conscious. They rejected
the idea of class consciousness as an explanation for the origin of the trade union
movement but substituted it with what he called job consciousness.
Professor Commons’ theory is known as the environmental theory of trade
unionism. He finds some of the peculiarities of the American environment such as
absence of feudal restrictions, free land, class fluidity, and democratic political
institutions prevents American workers from becoming class conscious. Thus
whereas class consciousness served as the unifying principle of the labour
movement of Europe, job consciousness according to the Commons Wisconsin
School took its place in the labour movement in America.
 Hoxie’s functional classification of unionism: His social psychology theory of
the labour movement first came out in 1920 in his work. “Trade unions in the United
States”. He classified unionism on the basis of its functions and psychological factor.
His classifications were “business unionism” for protecting the interest of various
craftsmen, “uplift unionism” for the purpose of contributing better life such as
association of sales engineers etc. “Revolutionary unionism” which is eager to
replace existing social order and “predatory unionism” which rests on the support of
others. He believed that the trade unionism grew out of social psychological
environment of the workers.
 Frank Tannenbaum Theory: Frank Tannenbaum technological/Rebellion theory
of trade unionism came to light in his philosophy of labour 1921. According to him
“The original organizer of the trade union movement is the shop, the factory, the
mine and the industry. The agitator or the labour leader merely announces the
already existing fact. He believes that the trade union movement is the result of the
machine. He emphasizes that mode of production where machines are used either
in factory, mine or the industry, is responsible for the birth of trade unions.
“Institutionally the trade union movement is an unconscious effort to harness the
drift of our time and reorganize it around the cohesive identity that men working
together always achieve”.

PAGE 9
OBJECTIVES OF TRADE UNIONS
Following are the objectives of trade unions:

 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. They also guarantee individual
security against threats and contingencies that might result from market fluctuations,
technological change or management decisions.
 Obtain Better Economic Returns:
This involves wages hike at periodic intervals, bonus at higher rate, other admissible allowances,
subsidized canteen and transport facilities. Thus, raising the standard of living and welfare of all
who work for a living, whether union members or not.
 Secure Power To Influence Management:
This involves workers’ participation in management, decision making, role of union in policy
decisions affecting workers, and staff members and also to guard against the use of arbitrary
and capricious policies and practices in the workplace.
 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 TRADE UNIONS

Trade unions perform the following functions on behalf of their members.

 Negotiate agreements with employers on pay and conditions.

 Discuss major changes to the workplace such as large scale redundancy.
 Discuss members' concerns with employers.
 Accompany members in disciplinary and grievance meetings.
 Provide members with legal and financial advice.
 Provide education facilities and certain consumer benefits such as discounted insurance.
 They facilitate the flow of communication between workers and the management, by providing
the guidance and support to both of them.
 They also accelerate the pace of economic development for instance; they act as a recruiting and
selecting agent for the unemployed workers, managing conflicts in the organization, inculcating
corporate social responsibilities to the members among others.

PAGE 10
BENEFITS OF TRADE UNION
Workers join trade union because of a number of reasons as given below:

 A worker feels very weak when he is alone. Union provides him an opportunity to achieve
his objectives with the support of his fellow colleagues.
 Union protects the economic interest of the workers and ensures a reasonable wage rates
and wage plans for them.
 Union helps the workers in getting certain amenities for them in addition to higher wages.
 Union also provides in certain cases cash assistance at the time of sickness or some other
emergencies.
 Union organize negotiation between workers and management and are instruments for
settlement of disputes.
 Trade union is also beneficial to employer as it organizes the workers under one banner and
encourages them follow to peaceful means for getting their demands accepted.
 Trade union imparts self-confidence to the workers and they feel that they are an important
part of the organization.
 It provides for promotion and training and also helps the workers to go to higher positions.
 It ensures stable employment for the workers and opposes the motive of management to
replace the workers by automatic machines.
 Workers get an opportunity to take part in the management and oppose any decision which
adversely effects them.
 Workers individual rights and liberties are better protected by trade unions. It protects
women employees against sexual harassment.
 Trade unions protect workers against physical and mental torture and exploitation of
superiors at workplace.
 Unions provide legal support to workers when they face police action and legal tangles.

FORMATION AND REGISTRATION OF TRADE UNIONS

The following steps are involved in the registration of trade union:

Appointment of Registrars

(a) 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.

(b) Mode of Registration:

PAGE 11
 (i) 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.

(ii) Where an application has been made under sub-section (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.

(c) 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—

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

2. The name of the trade union and the address of its head office.

3. 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.

(d) 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.

(e) 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.

(f) Registration:

PAGE 12
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.

(g) Certificate of Registration:

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.

(h) 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.

(i) 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.

(j) 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.

SHORTCOMINGS OF TRADE UNIONS

Trade union movement in our country suffers from the following weaknesses:

1. Uneven Growth:

Trade unions are concentrated in large scale industry sector and in big industrial centers. There is
very little trade union activity in small sector, agricultural labour and domestic sector.

PAGE 13
2. Small Size:

Most of the unions have low membership though the number of unions and union membership are
increasing, average membership is inadequate.

3. Weak Financial Position:

The average yearly income of unions is very low and inadequate. The subscription rates are low and
many members do not pay the subscription in time. Due to their financial weakness, most of the
unions are not in a position to undertake welfare programmes for workers.

4. Political Leadership:

Trade unions are under the leadership and control of political parties and outsiders. Politicians
exploit unions and workers for their personal and political gains.

5. Multiplicity of Unions:

There exist several unions in the same establishment or industry. The existence of rival unions with
conflicting ideology is greatly responsible for unhealthy growth of trade union movement. In some
cases employers encourage split in unions to undermine their bargaining power.

6. Problem of Recognition:

Employers are under no obligation to give recognition to any union.

7. Absence of Paid Office-Bearers:

Most of the unions do not have full-time paid office-bearers. Union activists working on honorary
basis devote only limited time and energy to union activities. Union officers lack adequate
knowledge and skill due to lack of proper training, weak financial position and political leadership
are the main reasons for this state of affairs.

8. Apathy of Members:

Majority of workers do not take keen interest in union activities. The attendance at the general
meetings of unions is very poor.

9. Opposition from Employers:

Trade unions over time have had to face opposition from employers. Many employers try to
intimidate or victimize labour leaders, start rival union and bribe union officials.

10. Inter-Union Rivalry:

Multiple unions create rivalry. Unions try to play down each other in order to gain greater influence
among workers. Employers take advantage of infighting. Inter-union rivalry weakens the power of
collective bargaining and reduces the effectiveness of workers in securing their legitimate rights.

PAGE 14
CONCEPT OF COLLECTIVE BARGAINING
The term "collective bargaining" was first used in 1891 by Beatrice Webb, a founder of the
field of industrial relations in Britain. Collective bargaining is a process of negotiation
between employers and a group of employees aimed at agreements to regulate working
salaries, working conditions, benefits, and other aspects of workers' compensation and
rights for workers. The interests of the employees are commonly presented by
representatives of a trade union to which the employees belong. The representatives of
both the employers and employees meet to work out a contract amongst themselves.
There are three basic types of collective bargaining:
Distributive bargaining
This occurs when labour and management are in conflict on an issue whose outcome is a
win-lose situation.
Integrative bargaining
This occurs when two sides face a common problem, for instance, high absenteeism among
employees. Both parties can attack the problem and arrive at a win—win outcome.
Concession bargaining
This exists when something of importance is given back to the management. Concessions
can consist of wage cuts, wage freezes of previously negotiated increases, benefits,
reductions, changes in work rules that result in increased flexibility for management and
similar actions.

PROCESS OF COLLECTIVE BARGAINING

The actual process of negotiating a collective bargaining agreement involves a number of
steps:

 Pre-negotiation
 Selecting negotiators
 Developing a bargaining strategy
 Using the best tactics
 Reaching a formal contractual agreement
 Ratifying the contract

PAGE 15
Pre-negotiation
In collective bargaining, both sides attempt to receive concessions that will help them
achieve their objectives. As soon as a contract is signed by the union and management,
both parties start to prepare for the next collective bargaining session.
Selecting negotiators
Members of the bargaining team on both sides are called negotiators and usually represent
areas of interest in the particular contract or have expertise in specific negotiated areas.
Each party is led by a chief negotiator. On the management end, the team of negotiators
usually consist of an HR specialist, a lawyer, a manager with knowledge of the entire
business organization while the union end consist of a business agent, shop steward, local
union president.
Developing a bargaining strategy
Labour agreements must be used for a long time, it is important to develop a winning
strategy and tactics. The strategy are plans and policies to be pursued at the bargaining
table. Tactics are the specific actions to be taken in the bargaining session. Bargaining
issues can be divided into 3 categories: mandatory, permissive, and prohibited.
Using the best tactics
Tactics are calculated actions used by both parties to secure a favourable agreement. Some
of the most used tactics include:
a. Conflict-based: In this case, both party are uncompromising. It happens when one
party mirrors the other party’s actions.
b. Armed truce: In this case, the parties see each other as adversaries as such, the
guidelines of the law must be followed to the latter to reach an agreement.
c. Power bargaining: In this case, both party accept one another with the knowledge
that a balance in power exists.
d. Accommodation: in this case, both parties adjust to each other. Positive
compromises, flexibility and tolerance are used rather than emotion and raw power.
e. Cooperation: In this cases, both parties accept each other as full partners
Reaching a formal contractual agreement
The union-management contract designates the formal terms of agreement. The average
contract is designed to last for 3 years. The contract spells out the authority and
responsibilities of both the union and management. Certain topics are included in virtually
all contract

PAGE 16
a. Recognition: This section identifies the union that is recognized as the bargaining
representative and to describe the bargaining unit.
b. Management rights: This section spells out the rights of management.
c. Union security: The objective of union security provision is to ensure that the union
continues to exist and to perform its function.
i. Closed shop: This is an arrangement whereby union membership is a
prerequisite for employment
ii. Union shop: This is an arrangement that requires all employees to become
members of a union after a specified period of employment or after a union
shop has been negotiated.
iii. Agency shop: This arrangement does not require employees to join the
union, however, the agreement requires, as a condition of employment, that
each non-union member of the bargaining unit pay the union the equivalent
of membership dues. This means that no employee is a free-rider.
iv. Exclusive bargaining shop: The Company is legally bound to deal with the
union that has achieved recognition, but employees are not obligated to join
or maintain membership.
v. Open shop: In this case, employment has equal term for union members and
non-members alike
vi. Dues check-off: The Company agrees to withhold union dues from member’s
checks and to forward them directly to the unions.
d. Compensation and benefit: This section typically constitute a large chuck of most
labour agreements. All items affecting compensation and benefits are included.
i. Wage rate schedule: The base rates to be paid each year of the contract for
each job are included in this section. An escalator clause can be obtained to
protect the purchasing power of employees.
ii. Overtime and premium pay: Provisions covering hours of work, overtime pay,
and premium pay such as shift differentials, are included in this section.
iii. Jury pay: The procedures covering jury pay is stated in this section whether
full salary or the difference between jury pay and the compensation that
would have been earned.
iv. Layoff or severance pay: The amount in various jobs will be paid if they are
laid off is outlined in this section.
v. Holiday: The holiday to be recognized and the amount employee are to be
paid if they have to work on such holidays are stated in this section
vi. Vacation: This section spells out the amount of vacation an employee might
take, based on seniority.
e. Grievance procedure: It contains the means by which employees can voice
dissatisfaction with specific management actions. Procedures for disciplinary actions
and termination of appointment are contained in this section.

PAGE 17
Contract ratification
After resolving their differences and agreeing on contract language with management, the
union negotiators must submit the tentative agreement to the members for ratification.
Ratification usually requires a simple majority vote. Although not all members may be
totally satisfied with the final agreement, a vote of ratification means that they can at least
live with it.

FAILURE TO REACH AN AGREEMENT

In an even where management and unions fails to reach a consensus on a mandatory
bargaining issue, or when the members of the union refuse to ratify a tentative agreement,
a bargaining impasse has occurred. Impasses can occur for a number of reasons:

 The settlement range of the negotiating parties do not overlap

 One or both sides may have failed to communicate enough information to reach a
settlement.
 The union membership may feel that its leadership did not bargain in good faith.
The consequences of an impasse include work stoppages by either the unions (strikes,
picketing and boycotting) or management (lockout) and seeking the help of neutral third
party to reach agreement. Another possible consequence is permanent replacement.
Strikes
A strike is an effort by employees to withhold work so that the employer will make greater
concessions at the bargaining table. The strike, or a potential strike, is a major bargaining
weapon used by the union. But before a union strikes, it needs to consider the legality of
striking, members’ willingness to endure hardship for a long strike, and the employer’s
chances of operating the organization without union members.
There are different types of strikes, including the following:
Economic strike: This strike is based on demands for higher wages or better fringe benefits
by the unions than the employer wants to provide.
Jurisdictional strike: This strike exists when two unions argue over who has the right to
perform a job. Although this type of strike is illegal in the Taft-Hartley Act.
Wildcat strike: This is an unapproved strike that occurs suddenly because one union
subgroup has not been satisfied by a grievance decision or by some managerial action. The
union leaders do not sanction the strike.

PAGE 18
Sit-down strike: The employees remain in the plant but are on strike.
Picketing
When a union mounts a strike, it usually resort to picketing by placing members at the
entrance of the organization’s premises to advertise the dispute and discourage people
from entering or leaving the premises. Peaceful persuasion through the formation of a
picket line is legal, but not violent. Picketing may also take place, without a strike, to
publicize a union’s viewpoints about an employer.
Boycotting
This is another type of union pressure where union members refuse to buy a company’s
products or services. In a primary boycott, the union members do not patronize the
boycotted firm which is legal. A secondary boycott occurs when a supplier of a boycotted
firm is threatened with a union strike unless it stops business with the boycotted company.
This type of boycotting is generally illegal.
A special type of boycott is the hot cargo agreement. Under this agreement, the employer
permits union members to avoid working with materials that come from employers who
have been struck by a union. It is illegal except in the construction and clothing industries.
Lockouts
Management’s responses to labour pressures may be to continue operation with a skeleton
crew of managerial personnel, to shut down the plant, or to lock the employees out. The
lockout is an effort to force the union to stop harassing the employer or to accept the
conditions set by management.
Lockouts are also used to prevent union work slowdowns, damage to property, or violence
related to a labour dispute.
Permanent Replacement
It has been a tactic used by companies facing loss of production during a protracted strike
to replace missing workers. When a settlement is reached, however, replacements are
terminated and union members return to their jobs. The law permits worker to engage in
collective bargaining and strike, it does not forbid companies from hiring replacement
workers, nor is there a prohibition against making these replacement permanent.
Third Party Intervention
In the case of an impasse, three major types of third party interventions are possible:
mediation, fact finding, and interest arbitration. Both parties have to agree to use any of
these alternatives.

PAGE 19
Mediation and Fact finding
Mediation is a process in which a neutral third party helps union and management reach
agreements. It is an inexpensive alternative to strikes when an impasse is reached during
negotiations.
Mediation is actually a continuum of possible techniques that can be used to persuade the
parties to resume negotiations. Conciliation, the first step in this continuum, attempts to
persuade disrupting parties to meet and discuss their problems. Its purpose is to get the
parties meeting and talking again.
In fact finding, a neutral third party studies the issues in a dispute and recommends a
reasonable settlement. Both mediation and fact finding assist the union and management
in reaching their own agreement.

Interest Arbitration
Interest arbitration is the final technique for resolving an impasse. In arbitration, a neutral
third party imposes a settlement on the disputing parties. As defined by the Supreme
Court, interest arbitration occurs when no agreement exist or change is sought and when
the parties have an interest in the outcome because the contract will specify future rights.
Interest arbitration is often used to solve impasses in the public sector.

PAGE 20