Mod 3

 Role and relevance of trade unions: Past, present, and future,

 Trade union relations with employee, management, and state,
 Globalization, liberalization, and changes in market and business models

Trade unions
According to Trade Union act 1926"Trade Union" means any combination, whether temporary or
permanent, formed primarily for the purpose of regulating the relations between workmen and employers
or between workmen and workmen, or between employers and employers, or for imposing restrictive
conditions on the conduct of any trade or business
Their primary function is to protect the interests of workers against discrimination and unfair labor
practices.

A trade union is an organized association of workers in an industry, industry group, or profession whose
primary purpose is to protect and promote the rights and interests of workers. This can be done, for
example, through collective bargaining on terms and conditions of employment. Trade union and its
purpose

FUNCTIONS OF TRADE UNIONS

 Militant or Protective or Intra-mutual functions: These functions include defending the workers’
interests, i.e., hike in wages, providing more benefits, job security, etc., through the means of collective
bargaining and direct action such as strikes, gheraos, etc.
 Fraternal or extramural functions: These functions include ensuring the financial and non- financial
assistance available to workers during the periods of strikes and lock-outs, extension of medical facilities
during slackness and casualties, provision of education, recreation, recreational and housing facilities,
provision of social and religious benefits, etc.
 Political functions: These functions include affiliating the union to a political party, assisting the political
party in enrolling members, amassing donations, seeking the help of political parties during the periods of
strikes and lock-outs.
 Social functions: These functions include getting involved in social service activities, discharging social
responsibilities through various sections of the society like educating the customers etc.

OBJECTIVES OF TRADE UNIONS

Unions concentrate their attention to achieve the following objectives: -
 Wages and Salaries: The subject which shows the major attention of the trade unions is wages and
salaries. Of course, this item may be related to policy matters. However, differences may arise in the
process of their implementation. In the case of unorganised sector, the trade union plays a instrumental
role in bargaining the pay scales.
 Working conditions: Trade unions with a view to protect the health of the workers demand the
management to provide all the basic amenities such as lighting and ventilation, sanitation, rest rooms,
safety equipment while discharging hazardous duties, drinking water, refreshment, minimum working
hours, leave and rest, holidays with pay, job satisfaction, social security benefits and other welfare
measures.
 Discipline: Trade unions not only conduct negotiations in respect of the items with which their working
conditions may be improved but also safeguard the workers from the controls of management whenever
workers become the victims of management’s unilateral acts and disciplinary policies. This victimisation
results in to various forms such as penal transfers, suspensions, dismissals, etc. In such a situation, the
worker who is separated is left in a helpless condition may approach the trade union. Ultimately, the
problem may be brought to the notice of the management by the trade union, and it describes about the
injustice meted out to an individual worker and fights the management for justice. Thus, the aggrieved
worker may be protected by the trade union.
 Personnel policies: Trade unions may fight against inappropriate implementation of personnel policies in
respect of recruitment, selection, promotions, transfers, training, etc.
 Welfare: As stated earlier, trade unions are destined for the welfare of workers. Trade union works as a
guide, consultant and cooperates in overcoming the personal problems of the workers. It may bring to the
knowledge of the management through collective bargaining meetings the difficulties of workers in respect
to sanitation, hospitals, quarters, schools and colleges for their children’s cultural and social problems.
 Employee-employer relations: Harmonious relations between the employees and employer are essential
prerequisite for industrial peace. A trade union always strives for achieving this objective. However, the
rigid bureaucratic attitude and unilateral thinking of the management may lead to conflicts in the
organisation which, ultimately, disrupt the relations between the workers and the management. Trade
union, in the capacity of representative of all the workers, may carry out continuous negotiations with the
management with a view to promote industrial peace.
 Negotiating machinery: Negotiations include the proposals made by one party and the counterproposals
of the other. This process streches until the parties reach an agreement. Thus,
negotiations are based on the principle of ‘give and take’ principle. Trade union, being a party for
negotiations, protects the interests of workers through collective bargaining. Thus, the trade union works
as the negotiating machinery.
 Safeguarding organisational health and the interest of the industry: Organisational health can be
ascertained by methods evolved for grievance redressal and techniques adopted to reduce the rate of
absenteeism and labour turnover and to improve the employee relations. Trade unions through their
effective working may achieve employee satisfaction. Thus, trade unions help in reducing the rate of
absenteeism, labour turnover and developing systematic grievance settlement procedures leading to
harmonious industrial relations. Trade unions can thus, contribute to the developments in level of
production, productivity and discipline thereby cultivating good quality of work-life.

Reasons for Joining trade Unions :

The important forces that make the employees join a union are as follows:
1. Greater Bargaining Power : The individual employee possesses very little bargaining power as
compared to that of his employer. If he is not satisfied with the wage and other conditions of employment,
he can leave the job. It is not practicable to continually resign from one job after another when he is
dissatisfied. This imposes a great financial and emotional burden upon the worker. The better course for
him is to join a union that can take concerted action against the employer. The threat or actuality of a
strike by a union is a powerful tool that often causes the employer to accept the demands of the workers
for better conditions of employment.
2. Minimize Discrimination : The decisions regarding pay, work, transfer, promotion, etc. are highly
subjective in nature. The personal relationships existing between the supervisor and each of his
subordinates may influence the management. Thus, there are chances of favouritisms and discriminations.
A trade union can compel the management to formulate personnel policies that press for equality of
treatment to the workers. All the labour decisions of the management are under close scrutiny of the
labour union. This has the effect of minimizing favouritism and discrimination.
3. Sense of Security : The employees may join the unions because of their belief that it is an effective way
to secure adequate protection from various types of hazards and income insecurity such as accident,
injury, illness, unemployment, etc. The trade union secure retirement benefits of the workers and compel
the management to invest in welfare services for the benefit of the workers.
4. Sense of Participation : The employees can participate in management of matters affecting their
interests only if they join trade unions. They can influence the decisions that are taken as a result of
collective bargaining between the union and the management.

Growth of Trade Unions in India

The beginning of the Labour movement in the modest sense started after the outbreak of World War I in
the country. Economic, political and social conditions of the day influenced the growth of trade union
movement in India.

Establishment of International Labour Organisation in 1919 helped the formation of trade unions in the
country. Madras Labour Union was formed on systematic lines in 1919. A number of trade unions were
established between 1919 and 1923. Category wise unions, like Spinners’ Union and Weavers’ Union, came
into existence in Ahmedabad under the inspiration of Mahatma Gandhi.

These unions were later federated into an industrial union known as Ahmedabad Textile Labour
Association. This union has been formed on systematic lines and has been functioning on sound lines based
on the Gandhian Philosophy of mutual trust, collaboration and non-violence. The most important year in
the history of Indian Trade Union movement is 1920 when the All India Trade Union Congress (AITUC) was
formed consequent upon the necessity of electing delegates for the International Labour Organisation
(ILO). This is the first all India trade union in the country. The formation of AlTUC led to the establishment
of All India Railwaymen’s Federation (AIRF) IN 1922. Many Company Railway Unions
were affiliated to it.

Present Position
There are over 9,000 trade unions in the country, including unregistered unions and more than 70
federations and confederations registered under the Trade Unions Act, 1926. The degree of unionism is
fairly high in organised industrial sector. It is negligible in the agricultural and unorganised sectors.
Though the number of unions has greatly increased in the last four decades,

There is a high degree of unionisation in coal, cotton, textiles, iron and steel, railways, cement, banking,
insurance, ports and docks and tobacco sector. White-collar unions have also increased significantly
covering officers, senior executives, managers, civil servants, self-employed professions like doctors,
lawyers, traders, etc. for safeguarding their interest.

There are as many as 10 central trade union organisations in the country (as against one or two in UK,
Japan, USA).

At present there are twelve Central Trade Union Organizations in India:

 All India Trade Union Congress (AITUC)
 Bharatiya Mazdoor Sangh (BMS)
 Centre of Indian Trade Unions (CITU)
 Hind Mazdoor Kisan Panchayat (HMKP)
 Hind Mazdoor Sabha (HMS)
 Indian Federation of Free Trade Unions (IFFTU)
 Indian National Trade Union Congress (INTUC)
 National Front of Indian Trade Unions (NFITU)
 National Labor Organization (NLO)
 Trade Unions Co-ordination Centre (TUCC)
 United Trade Union Congress (UTUC) and
 United Trade Union Congress - Lenin Sarani (UTUC - LS)

Recent Trends
There has been a steady decline in both union membership and influence of trade unions in India. There
are several reasons for such a decline:
1. There are some employers who are keeping their businesses union-free. Some are active in their
opposition and lookout for legal strategies to combat unions. Also there are employers who put
workers on their management team by establishing profit-sharing plans to reward employees.
 2. The new additions to the labour force particularly women and white-collar employees have less
loyalty to trade unions.
3. Industrial and manufacturing jobs, long the bastion of union membership, have declined in recent
years. Indian workers are now more highly educated than ever before and have tended to move
towards white collar jobs not traditionally associated with union membership.

Regardless of origins, characteristics, and patterns of national trade union movements, trade unions
worldwide face virtually the same problems:
 decline in membership
 decline in state support or state neutrality
 deregulation, decentralisation, denationalisation, and consequent reduction in the job, income, and
social security, creating anxiety among workers about the effectiveness and utility of union(s).
 repudiation of their rights by employers, consumers, and other actors/ institutions in civil society
 changing aspirations and needs of new-generation workforce
 direct communication, direct participation, growth of atypical, non-standard patterns of
employment, and individualisation of employment contracts diminishing the role of unions
 reduced capacity to mobilise workers for conflict
 imperative need to cooperate with managements

Future Role
Historically, unions have played an important and positive role. Unions are very much necessary in many
work places. Union leaders may try to enhance their power by continually challenging the credibility or
trustworthiness of management. Unions today serve several purposes of continuing importance. Even if
unions do not have a strong direct impact upon the real income of their members, their presence helps to
gain general acceptance for the rates of pay and working conditions that prevail.

Unions have made what is perhaps their greatest contribution in securing fairer treatment for their
members at the workplace. As the most potent organised body, they have represented the political
interests of workers, and to a lesser extent of the poor and disadvantaged. Unions have in fact performed
their positive role for millions who would otherwise have remained unrepresented.

What the unions have to do for their effective functioning? They have to carry out both long range and
short range planning. In order to know what to plan for, a union must first make clear the purposes of the
organisation. The union leaders must inform themselves about emerging problems and opportunities that
may affect the ability of the organisation to pursue its aims over a period of years. In the light of this
information, more precise objectives can be fixed over the period in question and strategies can be devised
by which to reach these goals.
Although, the aims of unions may vary in detail, almost every labour leader would affirm that his
organisation seeks to increase the economic welfare and job security of the members, to increase the
membership and thereby extend the benefits of unionism to new groups of employees, and to render
constructive service to the community.
Under changed economic scenario, the role of trade unions needs a drastic change. Trade unions have to
realise that their objective is to not only protect interest of workmen but also of the organisational
interest. They have to develop a positive and participative work culture.

Globalization, liberalization, and changes in market and business models

The economic reforms process initiated by Rajiv Gandhi gained momentum in 1991 and finally culminated
into Liberalization, Privatization, Globalization (LPG) model of development. The LPG model was already
established in several countries world over so India could not encapsulate itself from the process for long.
Once India adopted this model of development the concomitant effects and pressures ensued. Before the
introduction of 1991 economic reforms trade unions played a prominent role in Indian industry.
Post-reforms, both in public and private sector, trade unions experienced weakening of their position. To
meet the pressures generated by liberalization, privatization and globalization the capitalist class
introduced various measures for cost reduction and profit maximization which rendered trade unions
weak, fragmented and helpless. unions. Increased customer awareness dramatically changed public
perception towards trade unions, particularly when the unions opposed pro-customer changes.
Globalization, market forces and severe competitiveness in terms of price, quality, and customer focus
further reduced the role of unions.

The government also redefined its labour market and industrial relation policies that resulted in decline in
employment, worsening of workers’ condition and powerlessness of unions in public sector. Trade unions
have, by and large, opposed the neo-liberal policies following economic reforms. Nation-wide strikes,
bandhs and rallies were organized in different parts of the country. The protests of trade unions did not go
well with the aspirations of the government, the industry and the growing middle class to have a new,
vibrant and developed India. These protests have been seen as unnecessary and unreasonable. Trade
unions have to understand that they cannot wish away globalization. Opposing globalization or using
traditional reactive means of protests will not help the working class. Trade unions have to improve their
image from reactive agents, power mongers, antagonists of modernization and development and
proponents of traditionalism to partners in the growth of the company.

However, the weak and powerless unions have been proving to be a bane rather than a boon. The
capitalist class needs effective, strong and responsible unions that can ensure productivity, advancement
of technology and workers’ accountability.

Workers also need strong unions to save their interest. But trade unions will be able to regain their status
only if they reorient themselves to the changed demands of the market economy. They have to become
partners in the growth of the company; adapt their structure to meet the demands of competition, ensure
re-education and retraining of the workers as per needs of the knowledge-based economy and sell the
concept of quality, productivity and accountability to vast mass of workers.

To gain a strong foothold amongst workers, and public at large, they have to become, effective service
providers, focus more on non-bargaining activities, include vast mass of male and female workers in the
unorganized sectors, create awareness among workers about the importance of associating with trade
unions and become apolitical. Beyond all these initiatives is the need for professionalizing of trade union
movement. The leaders have to be trained in management, strategic planning, leader- ship development,
networking, information technology, gender issues, labour laws etc. Such capacity building will empower
the trade unions to meet the challenges posed by the LPG model of development and help them revive
their earlier prominence.

Trade Unions Act -1926

The Trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful
organisation of labour to enable collective bargaining. It also confers on a registered trade union certain
protection and privileges.

The Act extends to the whole of India and applies to all kinds of unions of workers and associations of
employers, which aim at regulating labour management relations

Following the rapid growth of unions around the time of the First World War, the Russian Revolution and
the setting up of the ILO - industrial conflict began to increase and over 1,000 strikes were recorded
between 1920 and 1924. The waves of strikes boiled over with the arrest of prominent leaders and trade-
unionists in the infamous 'Cawnpore Conspiracy case' in 1924 with the union leaders being arrested and
accused of attempting a Communist revolution to try and overthrow the ruling British government.
Subsequently, the Trade Union Act (1926) was passed which created the rules for the regulation and closer
monitoring of Trade Unions. In the first year of the law's operation, 28 unions registered and submitted
returns with a total membership.

The Indian Trade Unions Act, 1926, was enacted with a view “to provide for the registration of Trade
Unions and in certain respects to define the law relating to registered Trade Unions.”

Features of the Act:

The important features of the Trade Unions Act are listed below:

1. It provides for the registration of trade unions with the Registrar of the Trade Unions. It empowers the
Registrar to call for further particulars and to require alteration of names and to issue or cancel the
certificate of registration.

2. It provides that every registered trade union shall be a body corporate and shall have perpetual
succession and a common seal.

3. It lays down the right and liabilities of registered trade unions, 2)objects on which general funds of trade
unions may be spent. (iii) constitution of a separate fund for political purposes, etc.

4. It provides to the registered trade unions or any of its office-bearers or members, immunity from civil
suits in certain cases.

5. It provides that certain Acts shall not apply to registered trade unions. These Acts are as follows:

i. The Societies Registration Act, 1860

ii. The Cooperative Societies Act, 1912

iii. The Companies Act, 1956.

RECOGNITION of trade unions

Recognition means the expressed recognition of a registered trade union by an employer or by an

employers association for the purposes of collective bargaining.

Recognition is different from registration. Recognition is provided to that union which comprises of more
than 50 percent of the employees in that establishment as its members.

It is the employer and only the employer, who awards recognition to one or more unions, or refuses such
recognition.

TYPES OF RECOGNITION: Recognition is of two types:

 VOLUNTARY TRADE UNION RECOGNITION: When an employer voluntarily recognizes a trade union
without using any legal procedures.
 STATUTORY TRADE UNION RECOGNITION: If an employer and trade union do not come to a voluntary
recognition agreement, a trade union can make an application for statutory recognition. This only
applies where the employer, together with any associated employers, employs 21 or more workers.
METHODS OF RECOGNITION

Membership Verification: An official of the labor department of the state or central government visits the
establishment, obtains the manpower list from the management and asks each employee individually
whether or not they wish to become members of a union and if so, which union. Based on the responses, it
is identified which union gets the majority support of employees. This becomes the criteria for selecting
the sole bargaining agent in an establishment.

Check-off: Employees are asked to state in writing whether or not they belong to a union and if they do, to
which union. Also, they should undertake in writing that they are willing to have union membership
deducted from their salary. The check-off system helps management to know and make an assessment of
the relative strength of unions for the purpose of recognition

Secret Ballot: A more democratic method, election by secret ballot, enables employees to exercise their
option secretly, without fear or favor. The entire process takes place in the overall supervision of the Chief
Labor Commissioner.

There are two types of secret ballots:

• Panel: In panel type, the union formed can be a mix of electing members from different parties. For
example, a union may be formed with president from one union, secretary from other union and treasurer
from a third union.

• Banner: In banner type, employees vote for a single union i.e. all positions are held by electing members
of same union.

Code of Discipline: The criteria is set for recognition of trade unions. In professionally managed
organizations the management signs an agreement with the recognized unionwhich stipulates do’s and
don’ts for management and union but all these are not binding on the management and the trade union.

CRITERIA FOR RECOGNITION UNDER CODE OF DISCIPLINE

 The Unions should have at least one year standing.

 They should have at least 15% of the membership of the establishment to claim recognition; and
25% of the work force to claim recognition on industrial basis.
 When there are multiple unions in an establishment, the union with largest membership will be
given recognition.
 The local unions if they have more than 50% of the membership of the locality, can be recognized
to represent their grievances.
 The recognition granted will be valid for 2 years. The unions which do not follow code of discipline
will not be granted recognition.
Strikes and Lock outs

Strikes: A strike is a very powerful weapon used by trade unions and other labor associations to get their
demands accepted. It generally involves quitting of work by a group of workers for the purpose of bringing
the pressure on their employer so that their demands get accepted. When workers collectively cease to
work in a particular industry, they are said to be on strike.

TYPES OF STRIKE

1) Economic Strike: Under this type of strike, labors stop their work to enforce their economic demands
such as wages and bonus. In these kinds of strikes, workers ask for increase in wages, allowances like
traveling allowance, house rent allowance, dearness allowance, bonus and other facilities such as increase
in privilege leave and casual leave.

2) Sympathetic Strike: When workers of one unit or industry go on strike in sympathy with workers of
another unit or industry who are already on strike, it is called a sympathetic strike. The members of other
unions involve themselves in a strike to support or express their sympathy with the members of unions
who are on strike in other undertakings. The workers of sugar industry may go on strike in sympathy with
their fellow workers of the textile industry who may already be on strike.

3) General Strike: It means a strike by members of all or most of the unions in a region or an industry. It
may be a strike of all the workers in a particular region of industry to force demands common to all the
workers. These strikes are usually intended to create political pressure on the ruling government, rather
than on any one employer. It may also be an extension of the sympathetic strike to express generalized
protest by the workers.

4) Sit down Strike: In this case, workers do not absent themselves from their place of work when they are
on strike. They keep control over production facilities. But do not work. Such a strike is also known as 'pen
down' or 'tool down' strike. Workers show up to their place of employment, but they refuse to work. They
also refuse to leave, which makes it very difficult for employer to defy the union and take the workers'
places. In June 1998, all the Municipal Corporation employees in Punjab observed a pen down strike to
protest against the non-acceptance of their demands by the state government.

7) Wild cat strikes: These strikes are conducted by workers or employees without the authority and
consent of unions. In 2004, a significant number of advocated went on wildcat strike at the City Civil Court
premises in Bangalore. They were protesting against some remarks allegedly made against them by an
Assistant Commissioner.

Lockouts: A lockout is a work stoppage in which an employer prevents employees from working. It is
declared by employers to put pressure on their workers. This is different from a strike, in which employees
refuse to work. Thus, a lockout is employers’ weapon while a strike is raised on part of employees.

PICKETING : When workers are dissuaded from work by stationing certain men at the factory gates, such a
step is known as picketing. Pickets are workers who are on strike that stand at the entrance to their
workplace. It is basically a method of drawing public attention towards the fact that there is a dispute
between the management and employees.

The purpose of picketing is: to stop or persuade workers not to go to work

• to tell the public about the strike

• to persuade workers to take their union's side

GHERAO: Gherao in Hindi means to surround. It denotes a collective action initiated by a group of workers
under which members of the management are prohibited from leaving the industrial establishment
premises by workers who block the exit gates by forming human barricades. The workers may gherao the
members of the management by blocking their exits and forcing them to stay inside their cabins. The main
object of gherao is to inflict physical and mental harassment to the person being gheraoed and hence this
weapon disturbs the industrial peace to a great extent.

1
OSN Academy, Lucknow
CHAPTER 1
THE TRADE UNIONS
ACT, 1926
Before the passing of the
Indian Trade Union Act, 1926,
the Indian workers were
denied the fundamental right
of freedom of association.
This handicapped the trade
union movement in India. Not
only were the officers of the
trade unions liable for civil
action for infringing
contractual rights and
obligations, but were also
exposed to
criminal proceedings for taking
concerted action. The right to
strike and lock-out were
ultimately recognized in India
indirectly under the provision
of the Indian Trade Disputes
Act, 1929 and later under the
Industrial Disputes Act, 1947.
The Indian Trade Unions Act,
1926, was enacted with a
view “to provide for the
registration of Trade Unions
and in
certain respects to define the
law relating to registered Trade
Unions.”
Features of the Act:
The important features of the
Trade Unions Act are listed
below:
1. It provides for the
registration of trade unions
with the Registrar of the
Trade
Unions. It empowers the
Registrar to call for further
particulars andto require
alteration of names and to
issue or cancel the certificate
of registration.
2. It provides that every
registered trade union shall be
a
body corporate
and shall
have
perpetual succession
and a
common seal
.
3.
It lays down
(i)
the right and liabilities of
registered trade unions,
(ii) objects on which general
funds of trade unions may be
spent.
(iii) constitution of a separate
fund for political purposes,
etc.
4. It provides to the
registered trade unions or any
of its office-bearers or
members,
immunity from civil suits in
certain cases.
5. It provides that certain
Acts shall not apply to
registered trade unions.
These
Acts are as follows: