Paper: 01, Human Resource Management

Module: 30, Trade Unions

Prof. S P Bansal
Principal Investigator Vice Chancellor
Maharaja Agrasen University, Baddi

Prof YoginderVerma
Co-Principal Investigator Pro–Vice Chancellor
Central University of Himachal Pradesh. Kangra. H.P.

Prof. Rajeev Jain

Paper Coordinator Faculty of Commerce & Management,
Kota University, Kota

Prof. Rajeev Jain

Content Writer Faculty of Commerce & Management,
Kota University, Kota
 Items Description of Module
Subject Name Management
Paper Name Human Resource Management
Module Title Trade Unions
Module Id Module no.-30
Pre- Requisites Basic knowledge of Industrial Relations & Industrial Disputes
Objectives To study the basic concepts, objectives and functions of trade unions
Keywords Trade Unions, Negotiations, Reformist Unions, Revolutionary Unions

QUADRANT-I

Module 30: Trade Unions

1 Learning Outcome
2 Introduction to Trade Unions
3 Main Objectives of Formation of Trade Unions and Their Role
4 Functions of Trade Unions
5 Types of Trade Unions
6 Trade Unions and its Importance to Workers and Management
7 Rights and Liabilities of Trade Union
8 Multiplicity and Effectiveness of Trade Union
9 Summary

1. Learning Outcome:

After completing this module, you would be able to:

 Understand the meaning and purpose of Trade Unions

 Know the main objectives of formation of Trade Unions
 Put a light on the role of Trade Unions
 Come across the functions of Trade Unions
 Understand the different types of Trade Union
 Know the importance to workers and management
 Know about the duties and responsibilities of Trade Union;
 Learn about the effectiveness of Trade Union in present scenario.

2. Introduction to Trade Unions

Source:
https://media.licdn.com/mpr/mpr/AAEAAQAAAAAAAAV6AAAAJGZkZjlmY2YxLWMzYjgtNDc
1Zi1hNWUxLWYxNjJjYTM0ZWZiMA.jpg
As per Trade Union Act 1926 – “Any combination formed primarily for the purpose of regulating
the relations between workmen and employers or workmen and workmen or employers and
employers or for imposing restrictive conditions on the conduct of any trade or business and includes
any federation of two or more trade unions.”
We can also say that a trade union is an organization of workers that have banded together to achieve
common goals such as better working conditions. The trade union, through its leadership, bargains
with the employer on behalf of union members (rank and file members) and negotiates labor contracts
(collective bargaining) with employers. This may include the negotiation of wages, work rules,
complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace
safety and policies. The agreements negotiated by the union leaders are binding on the rank and file
members and the employer and in some cases on other non-member workers.
Under the Trade Unions Act, 1926, the expression trade union includes both employers and workers
in organizations. The term trade union however is commonly used to refer to the organization of
workers formed to protect their rights and enhance their welfare.

V.V. Giri, Says that “Trade unions are voluntary associations of workers formed together to promote
and protect their interests by collective action.”

3. Main Objectives of Formation of Trade Unions and Their Role

The primary function of Trade Unions is to protect the interests of workers against discrimination and
unfair labor practices. Trade unions are formed to achieve the following objectives:

Source: Designed by Author

1. To Negotiate: Negotiation is where union representatives, discuss with management, the
issues which affect people working in an organization. There may be a difference of opinion
between management and union members. Trade unions negotiate with the employers to find
out a solution to these differences. Pay, working hours, holidays and changes to working
practices are the sorts of issues that are negotiated. In many workplaces there is a formal
agreement between the union and the company which states that the union has the right to
negotiate with the employer. In these organizations, unions are said to be recognized for
collective bargaining purposes.
2. To Represent the Problem : Trade unions represent individual workers when they have a
problem at work. If an employee feels he is being unfairly treated, he can ask the union
representative to help sort out the difficulty with the manager or employer. Unions also offer
their members legal representation. Normally this is to help people get financial compensation
for work-related injuries or to assist people who have to take their employer to court.
3. To Raise Voice against Decisions (which Effects Workers) : The economic security of
employees is determined not only by the level of wages and duration of their employment, but
also by the management’s personal policies which include selection of employees for layoffs,
retrenchment, promotion and transfer. These policies directly affect workers. The evaluation
criteria for such decisions may not be fair. So, the intervention of unions in such decision
making is a way through which workers can have their say in the decision making to
safeguard their interests.
4. To Provide Services to Members : During the last few years, trade unions have increased
the range of services they offer their members. These include:
a. Education and Training : Most unions run training courses for their members on
employment rights, health and safety and other issues. Some unions also help members
who have left school with little education by offering courses on basic skills and courses
leading to professional qualifications.
b. Legal Assistance : As well as offering legal advice on employment issues, some unions
give help with personal matters, like housing, wills and debt.
c. Financial Discounts : People can get discounts on mortgages, insurance and loans from
unions.
d. Welfare Benefits : One of the earliest functions of trade unions was to look after
members who hit hard times. Some of the older unions offer financial help to their
members when they are sick or unemployed.

There is a considerable debate on the purposes and role of trade unions. The predominant
view, however, is that the concerns of trade unions extend beyond ‘bread and butter’ issues.
Trade unions through industrial action (such as protests and strikes) and political action
(influencing Government policy) establish minimum economic and legal conditions and
restrain abuse of labour wherever the labour is organised. Trade unions are also seen as moral
institutions, which will uplift the weak and downtrodden and render them the place, the
dignity and justice they deserve.

Trade unions are unique organisations whose role is variously interpreted and understood by
different interest groups in the society. Traditionally trade unions role has been to protect jobs
and real earnings, secure better conditions of work and life and fight against exploitation and
arbitrariness to ensure fairness and equity in employment contexts. In the wake of a long
 history of union movement and accumulated benefits under collective agreements, a plethora
of legislations and industrial jurisprudence, growing literacy and awareness among the
employees and the spread of a variety of social institutions including consumer and public
interest groups the protective role must have undergone, a qualitative change. It can be said
that the protective role of trade unions remains in form, but varies in substance.

4. Functions of Trade Union

TU is any association (temporary /permanent) for the purpose of regulating the relationship
between employers-workers, employer-employer, worker-worker for imposing restrictive
conditions on trade practices. It also includes federation of unions referred as association of
professional persons. In countries like England, trade union is referred as association of
professional person. In India it is considered as cursi - union /semi- union. In America, TU is
considered as the association of all persons in a trade. Functions of Trade Unions can be broadly
classified as follows:

Source: Designed by Author

A. Militant Functions (Protective)

One set of activities performed by trade unions leads to the betterment of the position of their
members in relation to their employment. The aim of such activities is to ensure adequate
wages secure better conditions of work and employment get better treatment from employers,
etc. When the unions fail to accomplish these aims by the method of collective bargaining and
negotiations, they adopt an approach and put up a fight with the management in the form of
go-slow tactics, strike, boycott, gherao, etc. Hence, these functions of the trade unions are
known as militant or fighting functions. Thus, the militant functions of trade unions can be
summed up as:
 To achieve higher wages and better working conditions
 To raise the status of workers as a part of industry
 To protect labors against victimization and injustice

B. Fraternal Functions (Positive)

Another set of activities performed by trade unions aims at rendering help to its members in
times of need, and improving their efficiency. Trade unions try to foster a spirit of
 cooperation and promote friendly industrial relations and diffuse education and culture among
their members. They take up welfare measures for improving the morale of workers and
generate self confidence among them. They also arrange for legal assistance to its members, if
necessary. Besides, these, they undertake many welfare measures for their members, e.g.,
school for the education of children, library, reading-rooms, in-door and out-door games, and
other recreational facilities. Some trade unions even undertake publication of some magazine
or journal. These activities, which may be called fraternal functions, depend on the
availability of funds, which the unions raise by subscription from members and donations
from outsiders, and also on their competent and enlightened leadership. Thus, the fraternal
functions of trade unions can be summed up as:
 To take up welfare measures for improving the morale of workers
 To generate self confidence among workers
 To encourage sincerity and discipline among workers
 To provide opportunities for promotion and growth
 To protect women workers against discrimination.
C. Intramural/ extramural Function
Intramural refers to welfare schemes & activities within the framework of factory
premises (safety, secure working environment, minimum wages, minimum working
hours, and leave with wages) Extramural refers to the welfare schemes outside the
factory premises (medical assistance, health care, education etc.)

5. Types of Trade Union

Source: Designed by Author

According to Purpose:
Under this head, normally following two types of unions have been kept:
(i) Reformist Unions: These unions are those which aim at the preservation of the capitalist
society and maintenance of the usual employer-employee relationship, elimination of
competitive system of production. The reformist unions have been subdivided by hoxie
according to the objectives: into business unions and uplift unionism.
 (ii) Revolutionary Unions: These unions aim at destroying the present structure completely
and replacing it with new and different institution according to the ideas that are regarded
as preferable. The revolutionary unionism is also of two types namely, anarchist and
political. Dr horie also enumerates a third type of unionism namely predatory unions and
gorilla union.
According to Membership Structure:
Under this head, normally four types of unions are classified:
(i) Craft Union: Workers, those are working in same as similar type of work/trade/business.
They have similar skills, specialization. Members are mostly non manual workers. Members
are craft conscious than class conscious .They take the membership on the basis of similar
type of work. They strengthen their union by integration of their members.
(ii) Staff Union: Organization, those are basing upon a sense of common status, same type of
need. They try to seek their membership from non manual sectors of the economy like
clerical, supervisors, operators, technicians, craftsmen etc. Unique feature of staff union was
women workers were also members of staff union. Staff union gained popularity by taking
women workers as their members.
(iii)Industrial Union: Irrespective of crafts, skill, grade, position, gender etc. The workers
working in one industry were members of industrial union. This union is more class conscious
than trade conscious.
(iv) General union: It covers all types of industries. Labor class people from any type of industry
can be members of general union. It is more open than the industrial unions. Their numerical
strength is high.
6. Trade Union and its Importance to Workers and Management

Source: https://us.123rf.com/450wm/radiantskies/radiantskies1210/radiantskies121000730/16049340-
abstract-word-cloud-for-trade-union-with-related-tags-and-terms.jpg?ver=6
The existence of a strong and recognized trade union is a pre-requisite to industrial peace. Decisions
taken through the process of collective bargaining and negotiations between employer and unions are
more influential. Trade unions play an important role and are helpful in effective communication
between the workers and the management. They provide the advice and support to ensure that the
differences of opinion do not turn into major conflicts. The central function of a trade union is to
represent people at work. But they also have a wider role in protecting their interests. They also play
an important educational role, organizing courses for their members on a wide range of matters.
Seeking a healthy and safe working environment is also prominent feature of union activity.
Some important social responsibilities of trade unions include:
 Promoting and maintaining national integration by reducing the number of industrial disputes
 Incorporating a sense of corporate social responsibility in workers achieving industrial peace.
Trade unions help in accelerated pace of economic development in many ways as follows:
 By helping in the recruitment and selection of workers.
 By inculcating discipline among the workforce
 By enabling settlement of industrial disputes in a rational manner

By helping social adjustments. Workers have to adjust themselves to the new working conditions, the
new rules and policies. Workers coming from different backgrounds may become disorganized,
unsatisfied and frustrated. Unions help them in such adjustment.
At present there are twelve Central Trade Union Organizations in India:

Source: http://sheffieldtuc.co.uk/wp-
content/uploads/2014/07/Trades_Union_Councils_logo_RGB.jpg
1. All India Trade Union Congress (AITUC)
2. Bharatiya Mazdoor Sangh (BMS)
3. Centre of Indian Trade Unions (CITU)
4. Hind Mazdoor Kisan Panchayat (HMKP)
5. Hind Mazdoor Sabha (HMS)
6. Indian Federation of Free Trade Unions (IFFTU)
 7. Indian National Trade Union Congress (INTUC)
8. National Front of Indian Trade Unions (NFITU)
9. National Labor Organization (NLO)

10.Trade Unions Co-ordination Centre (TUCC)

11.United Trade Union Congress (UTUC) and United Trade Union Congress - Lenin Sarani
(UTUC - LS)
7. Rights and Liabilities of Trade Union

Source: Designed by Author

A. Disabilities of Unregistered Union
A trade union shall not enjoy any of the rights, immunities or privileges of a registered trade union
unless it is registered.
B. Immunity from Civil Suit in Certain Cases
No suit or other legal proceeding shall be maintainable in any civil court against any registered trade
union or any officer or member thereof in respect of any act done in contemplation or in furtherance
of a trade dispute to which a member of the trade union is a party on the ground only that such act
induces some other person to break a contract of employment, or that it is an interference with the
trade, business or employment of some other person or with the right of some other person to dispose
of his capital or of his labour as he will.
C. Liability in Court:
(1) A suit against a registered trade union or against any members or officers thereof on behalf of
themselves and all other members of the trade union in respect of any tortuous act alleged to
have been committed by or on behalf of the trade union shall not be entertained by any court.
(2) Nothing in this section shall affect the liability of a trade union or any trustee or officers
thereof to be sued in any court touching or concerning the specific property or rights of a
trade union or in respect of any tortuous act arising substantially out of the use of any specific
property of a trade union except in respect of an act committed by or on behalf of the trade
union in contemplation or furtherance of a trade dispute.
D. Liability in Contract
Every registered trade union shall be liable on any contract entered into by it or by an agent acting on
its behalf: Provided that a trade union shall not be so liable on any contract which is void or
unenforceable at law.
E. Objects in Restraint of Trade Not Unlawful in Case of Registered Trade Union
The objects of a registered trade union shall not, by reason only that they are in restraint of trade be
deemed to be unlawful so as to render any member of such trade union liable to criminal prosecution
for conspiracy or otherwise or to render void or voidable any agreement or trust.
F. Proceedings By and Against Trade Unions:
1. A registered trade union may sue and be sued and be prosecuted under its registered name.
2. An unregistered trade union may be sued and prosecuted under the name by which it has been
operating or is generally known.
3. A trade union whose registration has been cancelled or withdrawn may be sued and
prosecuted under the name by which it was registered.
4. Execution for any money recovered from a trade union in civil proceedings may issue against
any property belonging to or held in trust for the trade union other than the benevolent fund of
a registered trade union.
5. Any fine ordered to be paid by a trade union may be recovered by distress and sale of any
movable property belonging to or held in trust for the trade union in accordance with any
written law relating to criminal procedure.
6. In any civil or criminal proceedings in which a registered trade union is a party such trade
union may appear in such proceedings by anyone of its officers or by an advocate and
solicitor.
G. Strikes and Lock-outs:

Source: http://images.clipartpanda.com/strike-clipart-k13307103.jpg
(i) No trade union of workmen shall call for a strike, and no member thereof shall go on strike, and
no trade union of employers shall declare a lock-out –
a) in the case of a trade union of workmen, without first obtaining the consent by secret ballot of
at least two-thirds of its total number of members who are entitled to vote and in respect of
whom the strike is to be called; and in the case of a trade union of employers, without first
obtaining by secret ballot the consent of at least two-thirds of its total number of members
who are entitled to vote;
 b) before the expiry of seven days after submitting to the Director General the results of such
secret ballot in accordance with section 40 (5);
c) if the secret ballot for the proposed strike or lock-out has become invalid or of no effect by
virtue of section 40 (2), (3), (6) or (9);
d) in contravention of, or without complying with, the rules of the trade union;
e) in respect of any matter covered by a direction or decision of the Minister given or made in
any appeal to him under this Act; or
f) in contravention of, or without complying with, any other provision of this Act or any
provision of any other written law.
(ii) Any trade union which, and every member of its executive who, commences, promotes, organises
or finances any strike or lock-out which is in contravention of subsection (1) shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding two
(iii) Any member of a trade union of workmen who commences, participates in, or otherwise acts in
furtherance of, any strike which is in contravention of subsection (1) shall forthwith cease to be a
member of the trade union, and thereafter such member shall not be eligible to become a member of
any trade union except with the prior approval of the Director General in writing; and the trade union
of which he has so ceased to be a member shall forthwith –
a) remove the name of such member from its membership register;
b) inform the Director General and the member concerned of such removal; and
c) exhibit conspicuously in its registered office in a place where it may be easily read a list of
members whose names are so removed.
(iv) The Director General may, where he is satisfied that subsection (1) has been contravened by any
person and the trade union concerned has failed to carry out the provisions of subsection (3), or where
there is undue delay in so doing, after such investigation as he deems necessary, order the trade union
to remove forthwith the names of the members concerned from its membership register.
(v) The satisfaction of the Director General under subsection (4) that subsection (1) has been
contravened by any person may be arrived at regardless as to whether or not there is any prosecution
of any person for contravention of the said subsection (1).
(vi) Any registered trade union which, and every member of its executive who, fails to comply with
subsection (3) or with an order of the Director General under subsection (4) shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding one thousand ringgit, and a further
fine of one hundred ringgit for every day during which such offence continues.
(vii) In every proceeding for an offence under this section the onus of proving that the requirements
specified in subsection (1) have been complied with shall be on the trade union, the member of its
executive or the member of the trade union, as the case may be.
8. Multiplicity and Effectiveness of Trade Union

Source: http://aslanroars.org/wp-content/uploads/2014/08/Unity2.jpg
Multiple unionism leads to multiple enrolment in unions and no subscribing members, causing delay
or failure to get recognition. This restrains a union’s bargaining power during a period of prolonged
strife while the unions are squabbling among themselves for dominance, the workers are deprived of
their wages and the plant suffers a loss of production. Multiple unionism qualitatively weakens the
movement resulting in the formation of small- sized unions without effective organization.
However it must be noted that in spite of foregoing there are many organizations where multiple
unions exist and the management does effectively negotiate, and conclude agreements. In many
plants, workers are unionized –on a craft basis –their special skills or training bonding them together.
Multi-unionism is more a problem where general unions exist, for whom all categories can be
organized in one general union.
9. Summary

Source: https://www.newswire.com/blog/wp-content/uploads/2015/02/Expert-Strategies-for-Writing-
Your-Press-Release-Summary.jpg
The trade unions are organized by workers to solve their problems created by modern industry. They
are voluntary associations of workers formed to promote and protect their interests by collective
action. They play different roles; for example, they act as agents of the government and help in
maintaining social discipline and administering its policies.
To achieve their objectives, trade unions may employ Variety of means – depending on the attitude of
the unions regarding the economic system in which they operate; the degree of group and class
consciousness among workers, the nature of political organization; and the nature and type of trade
union leadership.
Trade unionism in India suffers from a variety of problems, such as politicizations of the unions,
multiplicity of unions, inter and intra-union rivalry, small size and low membership, financial
weakness, and lack of financial weakness, and lack of welfare facilities for the members, weak
bargaining power, reliance on litigation and strikes, and dependence on outside leadership. This
vicious circles has adversely affected their status and bargaining power, and must be broken at as
many points as possible.
The factors that make a trade union strong and healthy and unflinching adherence to the union’s
constitution and rules, regular payment of dues, fully representative character of the union, co-
operation with sister unions and a sound leadership. A methodological organization with an
enlightened labor force is essential.