A

PROJECT WORK OF LABOUR LAW -II

FOR FULFILMENT OF

EVEN SEMESTER INTERNAL EVALUATION

ON

“DEVELOPMENT OF TRADE UNION IN INDIA ”

UNDER THE SUPERVISION OF

SUBMITTED BY
MR. GIRIJESH KUMAR SINGH
ASHWINA NAMTA
ICFAI LAW SCHOOL 18FLICDDN02034
The ICFAI UNIVERSITY, DEHRADUN BA LLB – 3RD YEAR -A

Submitted

To

The ICFAI University, Rajawala Road,

Selaqui,

Dehradun, 248011
 ACKNOWLEGEMENT

I would like to express my special thanks of gratitude to my Professor, MR.

GIRIJESH KUMAR SINGH, who gave me the golden opportunity to do this

wonderful project on the topic “DEVELOPMENT OF TRADE UNION IN

INDIA”which also helped me in doing a lot of Research and I came to know about
so many new things I am really thankful to her.

Secondly I would also like to thank my parents and friends who helped me a lot in
finalizing this assignment within the limited time frame.
 TABLE OF CONTENTS

1. Introduction
2. Objectives and need of trade union
3. Functions of trade unions in India
4. Development
 TRADE UNIONISM IN INDIA
 POST WORLD WAR I PERIOD
 THE BUCKINGHAM MILL CASE
 PERIOD POST 1947
 TRADE UNIONISM IN INDIA FROM 1950 TO 1970
 TRADE UNIONISM IN INDIA FROM 1970 TO 1990
 TRADE UNIONISM IN INDIA FROM 1990 TO 1999
 TRADE UNIONISM IN THE 21ST CENTURY

5. Major labour unions and their political affiliation

6. Structure of trade union
7. Problems faced by the labour movement post independence
8. Essential conditions for success of trade unions
9. Conclusion
10. Bibliography
 DEVELOPMENT OF TRADE UNION IN INDIA

 INTRODUCTION

What are trade unions or labour unions?

In a globalised world, it is equally important to protect the interests of workers along with that of
industrialists.At a time when the Government of India is trying to bring many labour reforms, it
is important to know the history of labour unions, popularly known as trade unions.

A trade union can be defined as an organised association of workers in a trade or profession,

formed to further their rights and interests. In India, Trade Unions in India are registered under
the Trade Union Act (1926).

Trade unions are interested in the economic and social welfare of the workers. Labour unions
1
may also have political interests in the larger society.

The labour movement was the principal force that transformed misery and despair into hope and
progress. Out of its bold struggles, economic and social reform gave birth to unemployment
insurance, old-age pensions, government relief for the destitute and, above all, new wage levels
that meant not mere survival but a tolerable life. The captains of industry did not lead this
transformation; they resisted it until they were overcome. When in the thirties the wave of union
organization crested over the nation, it carried to secure shores not only itself but the whole
2
society.

Trade unions are a major component of the system of modern industrial relations in any nation,
each having their own set of objectives or goals to achieve according to their constitution and
each having its own strategy to reach those goals. Union of workers plays an important role in
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industrial system. Annually statics on Trade Unions are collected by Ministry of Labour,
Government of Indias Labour Bureau.

3
Uttar Pradeshiya Shramik Maha Sangh v. State of U.P., (1960)

Right to form Trade Union in a fundamental right under Article 19 (1) (c) of the Indian
Constitution.

After the First World War there was a need for the coordination among individual unions which
leads towards the trade union movement in India.Gradually this movement becomes an essential
part of industrial progress in India. Apart from economic, social and political are dimensions of
Trade Unions in India.

The Webbs defined a trade union as a continuous association of wage-earners for the purpose of
maintaining of improving the conditions of their working lives.4

Historically, union representation and collective bargaining have been the keys to the growth of a
stable working population in developed economies, and have made it possible for workers to
gain a more equitable share of the wealth that they create; they are also able to improve working
conditions and help workers gain job security.

 OBJECTIVES AND NEED OF TRADE UNION

1. Wages and salaries-Wages and salaries and the most important subjects of Trade
Unions. In the organized industry, wages and benefits are determined through processes
such as collective bargaining, wage boards, conciliation, and adjudication. Working of all
these processes deserves systematic inquiry. Union power and objective facts hopefully
influence the wage scene through these forums.

3
Uttar Pradeshiya Shramik Maha Sangh v. State of U.P., (1960)
4
2. Working conditions-Another major objective of the Trade Unions is to insure the safety
of workers. While working every worker must be provided with basic facilities like.
Drinking water, minimum working hours, paid holidays, social security, safety
equipments, lights and others.
3. Personnel policies-Any personal policy of the employer with respect to promotion,
transfer and training may be challenge by Trade Unions if arbitrary.
4. Discipline-Trade Unions also protect the workers from arbitrary discipline action taken
by management against any worker. No worker should be victimized by management in
the form of arbitrary transfer or suspension.
5. Welfare-The main objective of the Trade Union is to work for the welfare of the
workers. This includes welfare of the family members or children of the worker.
6. Employee and Employer Relations-for an industrial peace there must be harmony
between employer and employee. But due to superior power of the management
sometimes conflict arises in this situation Trade Union represent the whole group of
workers and continue negotiations with management.
7. Negotiating Machinery-Trade Unions may also put proposals before management, as
this policy is based on the principle of Give and Take . Trade Unions protect the interest
of workers through collective bargaining.
8. Safeguarding Organisational Health and the Interest of the Industry-Trade Unions
also help in achieving employee satisfaction. Trade unions also help in better industrial
relation by creating procedure to resolve the industrial dispute.
9. Alone workers feel weak. Trade Union provides him a platform to join others to achieve
social objectives.

 FUNCTIONS OF TRADE UNIONS IN INDIA

1. Collective Bargaining- Honble Supreme Court of India has defined Collective bargaining
asthe technique by which dispute as to conditions of employment is resolved amicably by
agreement rather than coercion in this process negotiations and discussions take place
between employer and employee in respect to working conditions.Refusing to bargain
 collectively is an illegal trade practice. Collective bargaining helps to resolve the issues
of workers. Collective Bargaining is the foundation of the movement and it is in the
interest of labour that statutory recognition has been accorded to Trade Union and their
capacity to represent workmen. {Poona Mazdoor Sabhav.G.K. Dhutia, AIR 1956} 5

2. Trade Unions protect the worker from wages hike, provides job security through peaceful
measures.
3. Trade Unions also help in providing financial and non-financial aid to the workers during
lock out or strike or in medical need.

4. It has also to be borne in mind while making an agreement that the interest of the workers
who are not the members of Trade Union are also protected and the workers who are not
members of the Trade Union are also protected and the workers are not discriminated.
{Mst. Deoli Bakaram v.The State Industrial Ciurt, Nagpur,AIR 1959}6

 DEVELOPMENT

TRADE UNIONISM IN INDIA

The British started colonizing the Indian sub-continent in the 1600s and started to set up factories
and mills in India just like the Industrial Revolution in Britain. The main reason why the British
found it apt to start industrialization in India was that India had an abundance of cheap and poor
labour along with natural resources and land for setting up the industries.

The cotton mill was established in 1851 in Bombay and first jute mill was established in 1855 in
Bengal.

5
Poona Mazdoor Sabhav.G.K. Dhutia, AIR 1956
6
Mst. Deoli Bakaramv.The State Industrial Ciurt, Nagpur,AIR 1959
Just like in Britain, the conditions of labour in India was worse. The exploitative and pitiable
working terms such as working hours, wages and expelling policies made the labours join hands
and unite and protest. One of the first unrest among labourers can be dated back to the year 1877
when due to sudden reduction in wages the labourers of Empress Mill, Nagpur organized a
strike.

Since such unionism was a new phenomenon there existed no law to legalize and regulate these
new labour unions. With growing discontent and unrest among the labour class and constant tiff
with the employer class, few steps were taken to inquire and resolve the situation.

Factories Commission, 1875 – Factories Commission, 1875 was the first commission
set up which properly inquired into the conditions of the factories and came to the
conclusion that some kind of legal limit was necessary and the Factories Act, 1881 was
passed.

Factories Commission, 1885 – The Second Commission was set up in 1885 and on the
basis of the inquiry and second Factories Act in 1891 was passed.

Royal Commission on Labor, 1892 – The Commission led to imposing of limitations on

working hours in factories.

Factories Commissions and Factories legislations caused no improvement in the working

conditions of the labour class in India. In 1885 all workers of India had also signed a
memorandum with their employers to provide them with basic minimum working
conditions. However, the situation did not improve.

The initial approach by labourers was humanistic in nature under the background of the
setting up of Indian National Congress and non-violence movement initiated by Mahatma
Gandhi.
 POST WORLD WAR I PERIOD 

When World War I broke out there was the sudden diversion of all resources to cater to war
needs and the employers were dependent on the labourers. It then the labourers realized that the
employers need them as much as they need their employers. This gave them a “bargaining
position”. 

Trade unions started to get formed in India but the process was slow due to the leadership of
socialist reformers. Yet many Trade unions started to get formulated. The first major trade union
formed was the Madras Labour Union in 1918 under the presidentship of Mr B.P. Wadia. This
was followed by the formation of the All India Trade Union Congress in 1920.

With the formation of Trade Unions, the labourers started to organize strikes and protests to
7
assert their demands such as lowering of working hours, minimum basic wages, 

THE BUCKINGHAM MILL CASE

The formation of Trade Unions and the organization of strikes and protests by the labourers were
not welcomed by the employers. To put an end to the activities of the newly formed trade unions
and further to bar formation of Trade Unions the employers sought legal recourse. 

One of the most important cases filed was against Mr B.P. Wadia who was the President of the
Madras Labour Union that he conspired with workers and went on strike and was restraining
trade. The Employers prayed for an injunction to stay the protests and activities done by the
Trade Union.

Contentions raised by the Employers:

1. The strike is illegal because it amounts to a restraint of trade under Section 27 of the
Indian Contract Act. 
2. The strike constituted criminal conspiracy under section 120A of the Indian Penal
Code 1860. 
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 3. The strike also constituted civil conspiracy under civil law. 

The Hon’ble Madras High Court granted the injunction to stay the strike on three grounds:

1. There was a valid cause of action in favour of employers. 

2. There was a breach of law by the labourers. 
3. There were losses suffered by the employers due to the actions of the trade union. 

It is to be noted here that until this time there was no legislation which gave legal force/backing
to trade unions. The Order of the Madras High Court was further blown to the truth that there
was no law that legalized trade unionism in India. 

The growing need to have pro-labour legislation led to the passing of the Indian Trade Union Act
1926. The word “India” was later dropped and the legislation named Trade Union Act, 1926
came into force.

The Preamble of the “An Act to provide for the registration of Trade Unions and in certain
respects to define the law relating to registered Trade Unions”.

Post World War I the cost of living increased and there was growing agitation against colonial
rule. With the passing of the Trade Union Act emergence of “military trade unionism” was
witnessed with a lot of strikes and protests by the Trade Unions. India also joined the
International Labour Organization as a founding member. 

PERIOD POST 1947

One major lacuna with the 1926 Act was that though it provided for voluntary registration of
Trade Unions it did not provide for compulsory recognition of the Trade Unions by the
employers and because it was not compulsory for the employers to recognize the Trade Unions,
obviously did not recognize them. This again put a halt to the development of Trade unions. 
For example, whenever the members of Trade Unions or their lawyers went to negotiate with the
employers, the employers simply refused to talk to them on the ground that they do not recognize
such Trade union, though it is registered!

The Act was amended in 1947 which provided for compulsory recognition by the employers of
the representative Unions. However, the amended act has not been brought to force yet.

TRADE UNIONISM IN INDIA FROM 1950 TO 1970

Independence of India was beneficial to Trade Unions in India in a huge way as the forefathers
adopted the principles of equality for all, justice and freedom including the freedom of
expression. The Constitution of India also recognized Freedom of Association as a Fundamental
Right.

Planning was also adopted by India by the way of Five- year plans. The focus of the first two
five-year plans was on industry and agriculture which led to setting up of large public sector
industries. With the setting up of industries, the need for labour grew and trade unionism became
active.

However, the trade unions saw their own troubles. Due to a lack in organization and proper
leadership there was inter-union tensions and conflicts which was coupled with political
interventions. The State took a paternalistic approach whereby it stated dictating the unions.
Hence, during this period strikes and protests were low as compared to the coming years. 

TRADE UNIONISM IN INDIA FROM 1970 TO 1990

From the mid of 1960, the economic situation of India had started to deteriorate mainly because
of famines and wars witnessed by India in its preceding years. The rate of inflation rose and
prices of food and grains soared. Industries were also affected by the structural changes in the
economy. There were more protests, strikes and lockouts organized by the trade unions during
this period.
Nationwide Emergency imposed during PM Indira Gandhi’s regime from 1975 to 1977
suspended all the Fundamental Rights including the right to form associations and right to strike. 

Post-Emergency the government had attempted to bring into force an industrial relations bill
which aimed at banning strikes and lockouts in essential industries and services. However, the
bill was met with strong opposition from different participants, specifically the trade unions. As a
result, the bill was not passed.

The trade unions had achieved a domineering stance by this time. They had aced in their
bargaining powers and had become more organized and were able to meet their requirements by
negotiations and strikes.

TRADE UNIONISM IN INDIA FROM 1990 TO 1999

In 1991 the Government decided to open the economy by introducing the “New Economic
Policy” (NEP). With pressures of liberalization, privatization and globalization cracks and splits
were also seen in Trade Unions in India because the Government’s labour-friendly approach
changed to be more investor-friendly.

Due to globalization, there was massive cutting in the workforce and trade unions were trying
hard to save labourers jobs. With the advent of liberalization in 1991, the industrial relations
policy began to change. Now, the policy was tilted towards employers. Employers opted for
workforce reduction, introduced policies of voluntary retirement schemes and flexibility in the
workplace also increased.

The age-old policy of protectionism proved inadequate for the Indian industry to remain
competitive as the lack of flexibility posed a serious threat to manufacturers because they had to
compete in the international market. Thus, globalization brought major changes in industrial
relations policy in India. The main characteristics of trade unionism after globalization became
the small size of membership, lack of adequate finance, non-fulfilment of welfare schemes,
control of political parties and other outside interference in the activities of trade unions.
 TRADE UNIONISM IN THE 21ST CENTURY 

With difficulties faced by NEP, the trade unions had to face a barrage of problems but the silver
lining is the growth in the number of trade unions, better organization and functioning. As per
data of Labour Bureau, there are around 11,556 registered labour unions in India with average
membership at 1283 members per union. 

In 2001 the Act was amended. Major additions and amendments to the act are the following,

 Amendment to Section 4.: The proviso to Section 4, added after the 2001 amendment,
now prescribes minimum number workers who should be part of the Trade Union at
the time of making the application for registration. The proviso reads as, 

“Provided that no Trade Union of workmen shall be registered unless at least ten per cent of one
hundred of the workmen, whichever is less, engaged or employed in the establishment or
industry with which it is connected are the members of such Trade Union on the date of making
of an application for registration:

Provided further that no Trade Union of workmen shall be registered unless it has on the date of
making application not less than seven persons as its members, who are workmen engaged or
employed in the establishment or industry with which it is connected.”

 Insertion of Section 9A: Minimum membership requirement was established by

inserting Section 9A to the Act. The new Section 9A reads as,

A. The minimum requirement about membership of a Trade Union.-A registered Trade Union of
workmen shall at all times continue to have not less than ten per cent or one hundred of the
workmen, whichever is less, subject to a minimum of seven, engaged or employed in an
establishment or industry with which it is connected, as its members.
  MAJOR LABOUR UNIONS AND THEIR POLITICAL
AFFILIATION

1. All India Trade Union Congress – Communist Party of India.

2. Indian National Trade Union Congress – Indian National Congress.
3. Bhartiya Mazdoor Sangh – Bharatiya Janata Party.
4. Centre for Indian Trade Unions – CPI(M).
5. Hind Mazdoor Sabha – Samajwadi Party.
6. Self Employed Women’s Association – Unaffiliated.8

 STRUCTURE OF TRADE UNION

There were three kinds of unions on the basis of structure it consists of-

1. Industrial union
2. Craft union
3. General union

Crafts union consists and comprises of earning of wage from the single occupation, it includes
all the workmen working for single craft even of different industries ,An Industrial union is
formed by virtue of actions of industry not because of similar crafts or works, General union
consists the workmen of various crafts and industries. In India formation of trade union takes
place mainly because of industrial decisions reason of which can be reduced importance of
craftsmen after industrialization and availability of large unskilled labour.

 PROBLEMS FACED BY THE LABOUR MOVEMENT

POST INDEPENDENCE

 Uneven growth: They are concentrated in the metropolises, largely catering to organised

sector. Rural Agricultural labour and small scale labour are grossly underrepresented.

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 Low membership: Trade union membership is growing, but the vast majority of India’s
labour is not part of any trade unions. This reduces their collective bargaining power.
 Weak financial position: Membership fees are set too low (25 paise) by the Trade Union
Act, 1926. They are particularly disadvantaged against corporate lobbying groups that are
flush with cash.
 Political leadership: Careerist politicians and vested political agenda mean that worker
interests are sidelined. Since the leadership may not be from the labour force, they are held
captive to party politics. This lead to further exploitation.
 The multiplicity of unions: Bargaining power is diluted and it is easy for employers to
divert the attention of the labour.
 Inter-union rivalry: There are conflicts of interest and party politics between the unions.
 The problem of recognition: Employers are under no obligation to give them
recognition. This means that docile unions get recognition and genuine ones may be
sidelined.
 Diverse nature of labour: Most unions don’t have properly differentiated organisational
structure to cater to different classes of labour. Eg: Differences between agricultural, formal
and informal labour.
 Lack of public support: Especially post 1991, trade unionism is looked down as an
impediment to growth and development. This has led to a general ebbing of the movement
across the country.

 ESSENTIAL CONDITIONS FOR SUCCESS OF TRADE

UNIONS
1. The first essential of a trade union is the existence of a progressive labor force in order to
man the movement. An educated and capable labor force keeps the leaders devoted and
makes their will strong for leading their fellow workers. Lack of proper and adequate
level of education general as well as technical or vocational, proper commitment to the
job, diverse composition of the labor force divided by difference of language, custom,
caste and creed and widespread poverty owing to low level of wages render the working
 class incapable of manning the trade union movement effectively and purposefully.

2. Another essential factor of a successful and sound trade union is a sound leadership and
methodological organization. In order to gain success in its objects, a trade union should
have its foundation laid on solid grounds.

3. A clear enunciation of the objectives is a third fundamental feature for survival and sound
functioning of trade union. Trade unions with complexity in objects are looked down
upon with suspicion.

4. Another point which must be adhered to is that trade unions must make sure to have a
coherent and well-conceived policy regarding their structure. Haphazard growth of trade
unions may give rise to problems in jurisdiction, sphere of activity, etc. A trade union
should be regarded as a business organization as it also requires careful planning.

5. Sound internal organization is also a matter of vital importance This, in turn, requires that
besides sound business administration, the financial resources of the union should also be
adequate. Thus, the factors that make a trade union strong and healthy are unflinching
adherence to the unions constitution and rules, regular payment of dues, fully
representative character and cooperation with other unions
 CONCLUSION

A vibrant and responsible trade union environment is the requisite for inclusive growth to any
economy. It checks growing inequality and falling living conditions of the working class.

Recent years has seen an erosion of powers of most labour unions. Though labour reforms are
the need of the hour, every reform should strike a perfect balance between labour welfare and
investment-led development.

There are other sufferings which prevails with the working of trade union like lack of financial
resources and leadership which prohibits the proper allocation of resources and involvement in
policy making despite of such limitations the need of more efficient labour union is required so
as to protect the interest of sweat labours, In case of any arbitrary action from the employers
which hires them.

Trade Unionism in India has come a long way. Initially from having no legal backing to
illegalizing “strikes” by the unions to granting them registration procedure and compulsory
recognition and now having full-fledged legislations and special courts, trade unions in India
have attained remarkable status/standing in the labour movement. However, there are still few
impediments that the trade unions face such as lack of financial resources and governmental
support. Hence, there is still scope for the development of Trade Unionism in India.
 BIBLIOGRAPHY

 http://www.legalserviceindia.com/legal/article-193-role-of-trade-unions-in-india.html
 https://www.clearias.com/trade-unions-history-labour-unions-in-india/
 Labour and Industrial laws , S.N MISHRA