Trade Unions in India
“Our trade-union movement today is fragmented. Everyone talks of the value of unity, the imperative need of unity today, but in practice, hardly anyone seems to be willing to give up separate identities.”
National Commission on Labour
After reading this chapter, you will be able to:
Trace the evolution of the trade-union movement in India
Understand the structure and political affiliations of the major trade unions
Understand the problems of Indian trade unions
Know the provisions of the Trade Unions Act, 1926
A Show of Strength
The Dwarkapur Steel Plant, established in the year 1956 with technical collaboration from the UK, employed around 20,000 workers and 1,200 managers. Set up at a time when the foundation of the country was being laid through the creation of infrastructure, the plant managed to attain its rated capacity of 1 million tonne per annum by the early 1960s. Most workers in the plant were members of the union that was affiliated to the ruling party—the Indian National Congress. The government at the centre as well as in the State were from the same party. In the late 1960s, and early 1970s, changes in the political landscape saw the rise of the left parties in the State. The rising influence of these left parties encouraged the unions affiliated to these parties to make their presence felt in the Dwarkapur Steel Plant. To show that it was a force to reckon with, the newly created union encouraged protests including work stoppages, gheraos and demonstrations, wherever it had pockets of influence. The management, however, continued dealing with the Congress-affiliated trade union, as it was the “recognized” union and, as far as records went, the union with a “majority”. The left-affiliated union, in a bid to demonstrate its hold over the workers in the plant, challenged the management to verify the union membership of all the workers to ascertain which union had a majority. The management was in a fix, since sensing a threat to its status, the Congress-affiliated union was opposing the move for verification, threatening industrial action if the management even formally held discussions with the other union that was not recognized in the first place. In the mean time, a change in the ruling party at the State level increasingly pressurized the management to undertake the verification process. Both the unions, to establish their strength, started competing with each other completely vitiating the industrial relations atmosphere in the plant. Dwarkapur Steel Plant was a central PSU, with the Ministry of Steel, Government of India being the administrative ministry. On the other hand, the appropriate government under various labour laws was the state government. This further complicated the issues.
The opening case highlights one phase of the development of the trade-union movement in India. Although today, the influence of trade unions seems to have waned to a large extent, it may be because they are in the process of evaluating a coherent response to the forces unleashed by liberalization, privatization and globalization. To reach this stage, trade unions have travelled a long distance—both chronologically and conceptually. This chapter traces the genesis of the trade-union movement in India, and examines the issues and challenges that face them in present times.
The trade-union movement in India is over a century old and the trade unions in this country are generally regarded as too fragmented. Since at least the middle of the twentieth century, trade unions have split on ideological, political, craft, caste and even on personality bases. These splits have often resulted in bitter rivalry, and in a few cases, many unions at a workplace have competed for the allegiance of the same set of workers.
6.1 Phases in the Growth of Trade Unions in India
The growth of trade unions in India has passed through a few distinctive phases, paralleling the political and economic developments in the country.
6.1.1 The Pre-independence Phase
India being an agricultural country, trade unionism was largely restricted to industrial areas. The earliest known trade unions in India were the Bombay Millhand's Association formed in 1890, the Amalgamated Society of Railway Servants of India and Burma formed in 1897, the Printers' Union formed in Calcutta (now Kolkata) in 1905, the Bombay Postal Union which was formed in 1907, the Kamgar Hitwardhak Sabha, Bombay formed in 1910. The trade-union movement began in India after the end of the First World War. After a decade following the end of the First World War, the pressing need for the coordination of activities of the individual unions was recognized. Thus, the All India Trade Union Congress was formed in 1920 on a national basis; the Central Labour Board, Bombay and the Bengal Trades Union Federation were formed in 1922. The All India Railwaymen's Federation was formed in the same year, and this was followed by the creation of both provincial and central federations of the unions of post-and-telegraph employees. The origin of the passing of a Trade Unions Act in India was the historic Buckingham Mill case of 1940 in which the Madras High Court granted an interim injunction against the Strike Committee of the Madras Labour Union forbidding them to induce certain workers to break their contracts of employment by refusing to return to work. The trade-union leaders found that they were liable to prosecution and imprisonment for bona fide union activities and it was felt that some legislation for the protection of the trade union was necessary. In March 1921, Shri N. M. Joshi, then General Secretary, All India Trade Union Congress, successfully moved a resolution in the Central Legislative Assembly, recommending that the government should introduce legislation for the registration and protection of trade unions. The opposition from the employers to the adoption of such a measure was, however, so great that it was not until 1926 that the Indian Trade Unions Act was passed. The Indian Trade Unions Bill, 1925 was introduced in the Central Legislative Assembly to provide for the registration of trade unions, and in certain respects, to define the law relating to registered trade unions in provinces of India.
Some interesting facts about trade unions in India:
The trade-union movement in India is over a century old.
Indian trade unions are very fragmented.
Early splits in Indian trade unions tended to be on ideological grounds.
Recent fragmentations have centred on personalities and, occasionally, on regional and caste considerations.
Trade-union activities are restricted to industrial areas.
The AITUC was formed in 1920 on a national basis.
The Trade Union Act was passed in 1926.
A trade union in India is the primary instrument for promoting the trade-union movement and championing the cause of the working class in India. The Indian government passed the Trade Unions Act in 1926, which legalized the registered trade unions in India. The Act also gives protection to these trade unions against certain civil and criminal cases. There are at present many trade unions in India, which regulate the aspirations of the working classes. The All India Trade Union Congress (AITUC) is the oldest trade union in India, and till 1945, it remained the central trade-union organization in India. The trade unions in India could be grouped under two main categories, i.e., the politically affiliated unions and the independent ones. The affiliated unions (those having links with one or the other political parties) have federated themselves industry-wise as also geographically. There are almost 70,000 registered trade unions in India and the BMS is the most representative national union.
The evolution of trade unionism, post-Independence, is described below, in terms of the “four phases of unionism” corresponding to the structural changes in the economy that impacted the labour market and industrial relations scenario.
6.1.2 The First Post-independence Phase
The first decade (1950–mid-1960s) corresponds to an era of State planning and import substitution, when public-sector employment and public-sector unionism rose phenomenally. Unions and bargaining structures were highly centralized; the two main federations were the nationalist Indian National Trade Union Congress (INTUC) and the communist All India Trade Union Congress (AITUC). State interventionz in the determination of wages and working conditions was the norm, and “state-dominated pluralism” prevailed. There was a spurt in union membership and also an increase in labour fragmentation with new political parties/break-away groups emerging in the fore front of national politics. The Hind Mazdoor Sabha (HMS), launched in 1948, emerged stronger with its focus on the nationalization of key industries, securing effective recognition to bargain collectively, workers' participation for the regulation of industries and advocating the cooperative movement.
The first post-independence phase of the growth of trade unions was characterized by:
An era of State planning and import substitution
The rise in public-sector employment and public-sector unionism
Centralized union structures and bargaining
INTUC and AITUC main federations
State intervention in wage determination and working conditions
A spurt in union membership and labour fragmentation
6.1.3 The Second Post-independence Phase (Mid-1960s–1980)
The two-decade period (1960s–1980) was a period of economic stagnation and political turmoil. Many more unions emerged in various parts of India, based on local political support. Indian politics also became more heterogeneous with dissident groups emerging. Employment slowed down, there were massive inter-union rivalries, and industrial conflict increased. Centralized bargaining institutions now started feeling the pressure of dissent from below, and both the Hind Mazdoor Sabha (HMS) and the Centre of Indian Trade Unions (CITU) made significant progress in the labour movement. The crisis culminated in the May 1974 railway strike that was followed by the 1975–1977 Emergency Regime of Mrs Gandhi. An “involuted” pluralism dominated Indian labour relations during this second phase.
6.1.4 The Third Post-independence Phase (1980–Pre-liberalization Era)
The third phase (1980–1991) corresponds to a period of segmented and uneven economic development. Decentralized bargaining and independent trade unionism enter the stage in a significant way. Two major strikes (the 1980–1981 Bangalore public-sector strike and the 1982 Mumbai textile workers' strike) marked this phase, and inter-state and inter-regional variations in the nature of labour–management regimes became much wider. In the more profitable economic sectors, the unions gained, but in the unorganized and declining sector, workers lost out and the unions were left with few strategies.
The 1960s to the 1980s represented the second post-Independence growth phase of trade unions, characterised by:
A period of economic stagnation and political turmoil
The emergence of many more unions
Heterogeneity of politics
Employment slow down
An increase in industrial conflicts
Pressure on centralized bargaining
The railway strike of 1974 and severe curbs during Emergency
The pre-liberalization era from 1980 to 1991 represented the third major phase in the growth of trade unions:
Period of segmented and uneven economic growth
Decentralized bargaining and independent trade unionism
Bangalore PSU strike and Mumbai textile workers' strike
Inter-state and interregional variations in labour–management relations
The liberalization of the economy in 1991 posed new challenges for the growth of trade unions further:
Post-economic reform period
Stabilization and structural adjustments
Demands for labour-market flexibility
Recruitment freeze in public sector
Right sizing of manpower through VRS
Reducing the role of unions
6.1.5 The Fourth Post-independence Phase (Post-liberalization Era)
Finally, the fourth phase of unionism represents the post-economic reform period. The stabilization and structural-adjustment programmes led to demands for increased labour-market flexibility, especially employment flexibility. This has led to a recruitment freeze in many public-sector sites, and the unions in these sectors now have to cope with competition at the local level. In non-viable public enterprises, unions are coming to terms with “voluntary” retirement schemes. In the early years of economic reform, there were sincere attempts by all parties to engage in tripartite consultations, but there now seem to be several barriers to this form of engagement.
6.2 The Structure of Trade Unions in India
In India, in general, the structure of trade unions consists of three levels: the plant/shop or local level, the state and the centre. The ideology at the central level percolates to the state and plant/unit level. Every national federation of labour in India has state branches, state committees or state councils, from where its organization works down to the local level. There are two types of organizations to which the trade unions in India are affiliated:
- National federations
- The federation of unions
National federations have all trade unions, irrespective of the industry, as their affiliated members. Such federations are the apex of trade-union structure and coordinate activities of all trade unions to give trade-union policies a national character. All central unions discussed in Section 6.1.2 are national federations based on different political ideologies and have different positions on labour-related issues. The characteristic features of these national federations are:
- Trade-union leadership provided by politicians
- Political leanings determine whether to follow policy of cooperation/militancy/continuous strife/litigation based on the party's affiliation to the ruling party
- Empowered to decide jurisdiction of local and state councils
- Allow unit/state-level bargaining with employers
- Nominate delegates to represent in the ILO/International Confederation of Free Trade Unions' conferences
The Federation of Unions is a combination of various unions for the purpose of gaining strength and solidarity. Such federations may be local, regional, state, national or even international. Examples of local federations of unions include Bharatiya Kamgar Sena; Labour Progressive Federation, Chennai; The National Front of Indian Trade Unions; and the Coordinating Committee of Free Trade Unions. Most of these unions are affiliated to the central unions.
The National Commission on Labour in India (1969) points out, “The growth of industry-cum-centre has been facilitated by the provisions in the industrial relations legislation in certain states permitting recognition of industry-wise unions in a given area. The setting up of institutions like wage boards and tripartite industrial committees have provided greater scope for formal and informal consultations in the formulation and implementation of policy at the all-India level.”1 Stating that the unions in India are not distinctive by craft or category and in view of the advantages enjoyed by industry unions, the NCL has recommended that:
- The unions operating in a unit/industry should be encouraged to amalgamate into an industrial union.
- Where an industrial union covering all categories of workers in an enterprise has been recognized as the sole bargaining agent, it would be desirable for such a union to set up committees for important craft/occupations so that the problems peculiar to them receive adequate attention.
6.3 Union Security
Union security is gained through membership that is sought by providing benefits only to those who remain their members. The union derives its meaning and strength from the number of members it has. The unions, therefore, look for measures that enhance security, i.e., maintaining a healthy membership in comparison to others. These measures may include:
- Recognition as the sole bargaining agent, whereby the union is accepted as a bargaining agent for all employees in the unit, irrespective of whether they are members or not
- Maintenance of membership
- Preferential Union Shop: wherein additional recognition by agreement is accorded by management to give the first chance to union members in recruitment
- Union Shop: employs non-union workers as well, but sets a time limit within which new employees must join the union
- Closed Shop: employs only people who are already union members, and in this case, the employer must recruit directly from the union
- Open Shop: does not discriminate based on union membership in employing or keeping workers. Where a union is active, the open shop allows those workers to be employed who do not contribute to a union or the collective bargaining process
- Agency Shop: requires non-union workers to pay a fee to the union for its services in negotiating their contract
- Check-off, where an employer deducts union dues directly from pay and hands over the same to the union as a lump sum.
The National Commission on Labour (1969) in India, while discussing the advantages and disadvantages of union security measures, made the following recommendations:
- A closed shop is neither practicable nor desirable. A union shop may be feasible, although some compulsion is in-built in the system also.
- Neither should be introduced by the State. The union security measure should be allowed to evolve as a natural process of trade-union growth.
- An enabling provision to permit check-off on demand by a recognized union would be adequate.
In fact, most countries are unfavourably inclined towards closed shops or union shops.
6.4 Political Affiliations of Trade Unions
At present, there are nine central unions, all affiliated to a major political party. The major and important ones are discussed below (see Table 6.1):
- AITUC (All India Trade Union Congress) was established in 1920 as an outcome of the resolution passed by the organized workers of Bombay, and its first President was Lala Lajpat Rai. The AITUC endeavours to achieve its objectives through legitimate, peaceful and democratic methods such as legislation, education, propaganda, demonstrations, and only as a last resort, opts for strikes or other methods of protest. The AITUC is affiliated with the World Federation of Trade Unions (WFTU).
- INTUC (Indian National Trade Union Congress) was established in 1947 as an outcome of the resolution by Central Board of the Hindustan Mazdoor Sevak Sangh, a labour organization working under the direction of the National-Congress-minded labour leaders on the Gandhian philosophy of Sarvodaya. S. C. Banerjee was the first President of INTUC. The INTUC stands for the gradual transformation of the existing social order and it attempts to instil a sense of responsibility in the workers. INTUC is associated with the ILO since 1949 and is one of the founding members of the International Confederation of Free Trade Union Congress (ICFTU).
- UTUC (United Trade Congress) was formed in 1949 with the aim of establishing a “pure” trade union, free from the control of political parties. The leadership was dominated by various left-wing political groups.
- HMS (Hind Mazdoor Sabha) came into being in 1948 and espouses the socialist philosophy, having linkages with socialist parties. However, there has been a division within the socialist ranks with the emergence of the Hind Mazdoor Panchayat, another federation with socialist leanings.
- BMS (Bharatiya Mazdoor Sabha) was the outcome of a decision taken by the Jana Sangh in its convention in 1954 and is viewed as a productivity-oriented, non-political trade union based on a triple ideology—(i) nationalize labour (ii) labourize the industry and (iii) industrialize the nation.
- CITU was established in 1971 as a result of the split in the AITUC, which was a sequel to the split in the CPI, a new centre, owing to its allegiance to the CPI (M).
Table 6.1 The structure and stated objectives of the major trade unions in India.
Box 6.1 describes the structure and the stated objectives of the major trade-union organizations in India.
The ideologies of the different TUs can be described briefly as under:
- AITUC: Opposed to adjudication, but also agrees that everything should not be left to the two parties to sort out without State intervention
- UTUC: Favours conciliation and adjudication but resents the government's discretion in the matter of reference of disputes to adjudication
- HMS: Favours collective bargaining and is strongly opposed to compulsory adjudication. It is, however, open to State intervention in case conciliation fails and also favours the right to strike as a weapon for bargaining
- INTUC: Condemns strike and has played the conventional role of raising the issues of labour welfare and working conditions
- CITU: Objectives have a socialistic flavour with a demand for public ownership of industry
6.5 The Problems of Trade Unions in India
A lot has been written and discussed in various forums about the problems of trade unions in India, but very little has been done in this regard. India has the largest number of trade unions, yet their growth and effectiveness have not been very significant. The reasons and problems that have been detrimental are enumerated below and then discussed briefly to prepare ground for understanding the trade union's role in the current context of employee relations management.
6.5.1 The Politicization and Proliferation of Unions
Even though the stimulus to form trade unions was the economic hardship of the workers, the influence of various historical and institutional factors and the social, economic and political developments in the country made the trade unions assume a political character. The political affiliations of the national federations and the local unions taking protective cover under these federations resulted in a lot of political interference in the union activities. Most of their activities could be better explained in political terms, rather than on worker-interest concerns. As unions are closely aligned to political parties, political leaders continue to dominate the unions even now. The use of political methods and using labour groups to create vote banks has made the trade-union movement in India more political than labour-inspired or labour-driven. This has resulted in trade unions being grossly misused by politicians to serve their own narrow, political aspirations.
BOX 6.1 RECOMMENDATIONS OF THE SECOND NATIONAL COMMISSION ON LABOUR
We strongly believe in the role that bilateral interaction, dialogue and negotiations can play in promoting harmonious industrial relations. In a sense, bilateralism is the recognition of the stake that workers and the management have in the viability and success of the undertaking. Our Trade Union movement today is fragmented. Everyone talks of the value of unity, the imperative need of unity today, but in practice, hardly anyone seems to be willing to give up separate identities. One of the ways to strengthen the incentives for consolidation can lie in the field of registration and recognition, where the criteria for eligibility can be upgraded or at least proportionately upgraded.
Negotiating agent should be selected for recognition on the basis of the check-off system, with 66 per cent entitling the union to be accepted as the single negotiating agent, and if no union has 66 per cent support, then unions that have the support of more than 25 per cent should be given proportionate representation on the college.
The question of the method that should be used to identify the bargaining agent has been the subject of discussion and debate for many decades now.
The Commission carefully considered the advantages and disadvantages of the relevant options. In dealing with this issue, we had to keep in view our belief that collective negotiations require a strong trade-union movement, which, in its turn, demands an increasing degree of unionization. Any formula which militates against increasing unionization should, therefore, ab initio be avoided.
Secret ballot even on a restricted basis is logistically and financially a difficult process in industries like railways, banks, post offices, coalmines and other undertakings operating in a number of states.
Check-off system has the advantage of ascertaining the relative strengths of trade unions based on continuing loyalty reflected by the regular payment of union subscription. The argument advanced against the check-off system is that it exposes the loyalty of the worker, and this may make him vulnerable to victimization by the management or persecution by members of other unions.
Check-off system in an establishment employing 300 or more workers must be made compulsory for members of all registered trade unions.
Though the check-off system will be preferred in the case of establishments employing less than 300 persons too, the mode of identifying the negotiating agent in these establishments may be determined by the LRCs. Any union in such smaller enterprises may approach the LRCs for conducting a secret ballot. We are recommending a slightly different dispensation for units employing less than 300 as we feel that it is in such units that the possibility of victimization has to be provided against.
We would also recommend that recognition, once granted, should be valid for a period of four years, to be co-terminus with the period of settlement. No claim by any other trade union/federation/centre for recognition should be entertained till at least four years have elapsed from the date of earlier recognition. The individual workers' authorization for check-off should also be co-terminus with the tenure of recognition of the negotiating agent or college.
The multiplicity of trade unions is also an outcome of dissident groups and break-away political parties emerging in the Indian polity. A split in political ideology results in a split in the trade union professing the same ideology. With proliferation of a large number of unions, the multiplicity character at the plant level provides little or no bargaining power to a union. Further, with so many unions operating at the unit level, their size is considerably reduced. Besides, there are ambiguities of dual membership, wherein names are repeated in the member lists of two or more unions. The divide-and-rule syndrome has only reduced the solidarity of the workers and given more bargaining power to the management.
6.5.2 Outside Leadership
The Indian trade-union movement, from the very inception, was closely associated with the Freedom struggle and, thus, led by national leaders. Post-Independence, every political party patronized a particular union and provided the much-desired leadership. It needs to be appreciated that the worker community at the time of Independence was illiterate and migratory in nature, having come from agricultural regions, and taking breaks, during the harvesting season, to go back to their original roots. The social status between the management and the workers, and their educational and communication levels being different, this intermediary external leadership was beneficial to both workers and management. Further, the resource-starved unions got some financial support from the national federations in times of need.
The major problems faced by trade unions in India are:
Outside or political leadership
Multiplicity of unions and inter-union rivalry
Small size of the unions
Poor financial position
Low level of knowledge of labour legislation
Fear of victimization
6.5.3 Inter-union Rivalry
The multiplicity of unions emerging from political affiliations and led by external political leaders brought to fore the politics of many and the dynamics associated with it. Unions became competitive, and the survival of the fittest led to inter-union conflicts and mutual accusations being traded freely. This became advantageous for the management, which followed the policy of “divide and rule”. The predominance of inter-union rivalry has entered the very roots of trade unionism in India, and is one of the most significant factors that has pushed them to the periphery in the current global economic environment.
6.5.4 Intra-union Rivalry
Indian trade unionism has also demonstrated the intra-union rivalry coming to the forefront and hampering production and industrial relations. The National Commission on Labour remarked that while healthy rivalry and opposition are necessary within the democratic structure of any trade union, it can have pernicious effects when motivated by personal considerations. The NCL recommended that intra-union rivalries should best be left to the central workers' organizations concerned to settle disputes, and that labour courts should step in at the request of either group or on a motion by the appropriate government in cases where a central organization was unable to resolve the dispute.
6.5.5 Small Size
The small size of trade unions is an outcome of the Indian Trade Unions Act of 1926, which allows a large number of small unions to be registered. With multiple unions operating, the size gets reduced and with inter-union rivalry taking centre stage, new employees shy away from becoming members. It also needs to be noted that women employees, who now account for a large section of the workforce, refrain from joining any union, and this has also impacted the size and growth of unions in India.
6.5.6 Financial Insecurity
The membership fee, which is the major source of revenue for the Indian trade unions, is low, given the low per capita income of the workers. More often than not “ad hoc” payments are made rather than regular payments. They do not get any financial support from any agency, as opposed to the situation in America, where the National Federation of Central America makes regular contributions. The insufficiency of funds affects their working, and their organization is dependent on honorary workers whose time availability to focus exclusively on workers' interests is limited.
6.5.7 The Changing Demography of Workforce
Apart from the low membership coverage and fragmentation of the trade unions, there is evidence of a decline in membership, growing alienation between trade unions and membership, particularly due to changing characteristics of the new workforce and the waning influence of national federations over the enterprise unions. The new pattern of unionization points to a shift from organizing workers in a region or industry to the emergence of independent unions at the enterprise level, whose obsession is with enterprise-level concerns with no forum to link them with national federations that could secure for them a voice at national policy-making levels. The shift in employment from the organized to the unorganized sector discussed in the earlier chapters adds to the fragmentation of the unions. To sum up, the Indian trade-union movement is closely affiliated to political parties, and has narrow support base on account of small-sized multiple unions operating at the unit level. The centralized decision-making, ad hoc management, obsolete strategies, external and over-aged leadership that is more personalized and power-oriented makes it less labour-oriented and more politically motivated. The confrontationist attitude, non-existent second-tier leadership, and negligible women representation dilute its credibility and, hence, do not provide motivation for the new workforce to become members of a union.
6.6 The Recognition of Unions
One of the critical problems in industrial relations facing trade unions, government and employers for a long time is to evolve a satisfactory and acceptable way to settle the competitive claims of rival unions for being declared the sole bargaining agent. This is essential for collective bargaining to be successful. There is no uniform law covering the entire country stipulating the employer to recognize a union, nor any spelt-out procedure for the recognition of a union; managements either refrain from doing so or recognize a union of their choice. Recognition is the process whereby the management accepts a particular trade union as having a representative character and, hence, willing to conduct discussions with them pertaining to workers' interests. A union, once recognized, continues to enjoy the powers associated with it, irrespective of their current membership or credibility among the workers. As workers are unsure about which union holds a key to management lobbying, they become members of more than one union. The Bombay Industrial Relations Act, 1946; The Madhya Pradesh Industrial Relations Act, 1960; and the Industrial Disputes Act (Rajasthan Amendment), 1958 provide for the registration of unions as the representative union, subject to their fulfilling certain conditions.
There are two issues with regard to recognition—one is recognition in an un-unionized situation and in a multi-union situation, and second is the verification process. The verification process based on membership creates ambiguity as the same names are found in the membership list of rival unions. Secret ballot is a solution that can be taken up by the State machinery on the request of the management. There is no legislation in this regard and adhocism prevails. In Gujarat and Maharashtra, unions are classified as representative, qualified and primary. Recognition requires 15 per cent of employee strength, qualified union should have membership of over 5 per cent of industry employment and primary union 15 per cent or more employees enrolled at the plant level. The relevant provisions regarding union recognition in the Mumbai IR Act are as under:
- Where there is more than one union, a union claiming recognition should be functioning for at least one year after registration. Where there is only one union, this condition would not apply.
- The membership of the union should have over at least 15 per cent of the workers in the establishment concerned. Membership would be counted only for those who paid subscriptions for at least three months during the six months immediately preceding the reckoning.
- For a union operating in an industry in a local area, the prescribed membership was fixed at 25 per cent.
- A union recognition would be binding for a period of two years.
- Where there are several unions, the one with the largest membership should be recognized. Only the unions observing the Code of Discipline would be recognized, provided other conditions are fulfilled.
6.7 Rights of Recognized Unions
Most of the cases of inter-union rivalry/disputes relate to the issue of recognition of a second or a third union. In many similar establishments, the managements refuse to recognize any union at all. See Box 6.2. This is especially true of attempts to unionize the informal sector of industry.
Suggesting a remedy to this problem, the first National Commission of Labour observed that “this situation can only be set right by a proper demarcation of the rights and functions of the industry/area of recognized unions and plant-wise unions, and by ensuring that recognition at the industry/area level is conferred subject to certain well-defined conditions. We consider that industry-wise recognition is desirable, wherever possible. A union recognized as the representative union under any procedure should be statutorily given, besides the right of sole representation of the workers in any collective bargaining, certain exclusive rights and facilities to enable it to effectively discharge its functions.”2 These rights, in the Commission's opinion, would include:
- The right to raise issues with the management
- The right to collect membership fees within the premises of the organization
- The ability to demand check-off facility
- The ability to put up a notice board on the premises for union announcements
- The ability to hold discussions with employees at a suitable place within the premises
- The right to discuss members' grievances with the employer
- The ability to inspect beforehand a place of employment or work of its members
- The nomination of its representatives on committees formed by the management for industrial relations purposes as well as in statutory bipartite committees.
These rights largely repeated the Right of Recognized Unions incorporated in the Code of Discipline at the 20th session of the ILC in 1962. For minority or non-recognized unions (shelved by the ILC), the Commission suggested that they be allowed only the right to represent the cases of dismissal and discharge of their members before the labour court (NCL, 1969, Para 23.61). Most of these rights were available under the Bombay Industrial Relations Act, 1946, some under the Madhya Pradesh Act, 1960, and only the collective bargaining right under the Industrial Disputes Rajasthan (Amendment) Act, 1958. But the first two also had provisions of unfair labour practices.
BOX 6.2 FOR CLASS DISCUSSION
Should we have a uniform law requiring the management to “recognize” a union? Is it desirable? Can you discuss the practicalities of having or not having such a law?
6.8 Unfair Labour Practices with Regard to Trade Unions
The main concept of unfairness in labour practices relate to management interference in the relations between a union and its members or between two unions, or the freedom of employees to choose a union. The unfair labour practices of the unions are rarely discussed in negative terms and are considered methods of protest. In the USA, unfair labour practices are a long list of don'ts for the unions. For instance, the primary unfair labour practices to be avoided are the refusal of a recognized union to bargain in good faith, coercive activities, union instigation or active support for an illegal strike, physical prevention of willing employees from joining work during a strike, intimidation of employees or managerial staff during a strike, go-slow or squatting on work premises after working hours, forced confinement of managerial staff and demonstrations at the residence of employers.
The Bombay IR Act provides that “management cannot dismiss, discharge or reduce any employee of such union or punish him in any order manner merely because he is an officer or member of the registered union or a union which has applied for recognition under the Act” (Section 101). This provision is necessary to protect union activists from being victimized by managers for their union activities. Without this protection, the right to association becomes hollow.
The Industrial Disputes Act, 1947, includes amendments made in 1982 to Chapter V, containing provision against unfair labour practices. The Fifth Schedule of the Act details the specific practices considered illegal. Primarily, the management's victimization of trade unions by such activities as the denial of promotion or punitive transfers, management intervention in trade-union affairs, union coercion of workers to join a union, or threats for not joining, or the use of violence have all been included as unfair practices. Box 6.1 lists a few important recommendations of the Second National Commission on Labour pertaining to the issue of recognition.3
6.9 Trade Unionism in India Today
Unions today do not show any distinctive pattern. Unionization is different in different industries and also their impact varies from state to state. The key industries had industry-level unions dominated by external leadership with unit- or plant-level issues dealt with by the unit leadership. Collective bargaining was at the industry level in core sectors of the economy like steel and coal. Plant-level bargaining existed in BHEL, HMT, etc. The private-sector industries, as a practice, discouraged the formation of unions, and wherever they existed, collective bargaining was at the plant level. Union density is directly proportional to the size of the industry in India. In small units, unions are practically non-existent.
The multi-union rivalry and the competition among the different trade unions have effectively diluted the power base of the unions. Though unionization is in recession the world over, and India is no exception, but the reassertion of capitalism under the New Economic Policy has been the major reason for the decline in the unionized workforce. In addition, worker mobility, and the changing demography and aspiration level of the new workforce dispel the pluralistic principle of unionization.
By and large, unionization in different industries and sectors has followed different patterns. The traditional industries exhibited a pattern of industry-level unions, whose leadership was largely external, with plant-level industrial relations taken care of by plant-level leadership. Collective bargaining in industries like jute, tea, coal and banking take place at the industry level. Many public-sector industries, particularly in the core areas like steel and coal, also follow this pattern. However, there are also several public-sector undertakings where unions were formed at the plant level, but combined thereafter for bargaining purposes. Examples of this type may be observed in Bharat Heavy Electricals, Hindustan Machine Tools, and so on.
The private sector, other than traditional industries, has exhibited a different pattern again. Generally, enterprises with multinational origins, had plant-level unions, which were discouraged from forming federations with other unions, either in the region or in the other plants of the same company. Bargaining takes place at the plant level with separate agreements for different plants or units. This practice, while making the unions quite powerful in their respective domains, prevents large-scale concerted action. In the government transport sector, like airlines or railways, powerful craft unions operate.
Compared to this, there is hardly any unionization at all in the medium- or small-scale sector. If present at all, they are usually small, divided and weak, and unable to stand up to management, either in bargaining or in other spheres. Union density in India, being directly proportional to the size of the organization, is thus becoming almost zero in small units. The problems of organizing this sector are related to the uncertainty of jobs and personnel. Unionists or workers trying to organize unions may be dismissed promptly, and since there is no job security, they are treated with suspicion by workers. It is only when major crises confront such workers that they turn to unionism or welcome regular organizers. Even if an organization starts, regular unions find it difficult to keep track of workers in these units, since they are laid off, or the unit is closed, or shifted to some other location. Union density is, therefore, related to the lack of organizing freedom in India.
Trade unions today are facing more and more competition among themselves. At the same time, they are also facing a much more determined management response. They are, thus, fighting on both fronts. But this is a common feature in many countries of the world and not confined to India alone.
Unionism is in recession today. The decades of the 1980s and the1990s have been bad years for trade unionism all over the world. Union membership has been declining in most developed countries, with the USA and the UK leading, and even Japan not far behind. Unions need to understand the three sets of forces working against them. But trade unions, even today, consider themselves as the sole representatives of the working class in India. The Indian Trade Unions Act of 1926 has undergone a number of minor amendments, but the overall framework of the Act has remained unaltered. According to the Act, any group of seven persons could form a union. There are, however, discussions to bring in amendment to raise the number to 100 or 10 per cent of the employees as minimum required for the registration of a trade union.
The Indian Trade Union Movement (ITUM) held its centenary celebrations in 1992. The ITUM membership has remained stagnant, and its activities have been more or less confined to the organized sector, more so to the public-sector enterprises—from where over 70 per cent of its membership is drawn. Since the focus of ITUM was the workers in the organized sector, particularly, those employed in the government-owned establishments, the concerns of the unorganized workforce sector has remained out of its focus. The trade unions, too, are now trying to penetrate the unorganized sector. This has been evident in tobacco, construction, fisheries, forestry and film industries. It needs to be examined whether the enrolment for union membership has led to alleviating the concerns of the workers in these industries, as the techniques used in organized employment may not easily work in the unorganized sector, since the government controls are weaker in this sector. The five central trade-union organizations accorded recognition of being national centres of trade unions are the BMS, with maximum verified membership, followed by INTUC, CITU, HMS and AITUC. In addition, there are a large number of non-affiliated/independent unions functional particularly in the unorganized sector and private/joint-venture companies. Then there are other forms of workers' organizations, such as Morcha, labour cooperatives, NGOs, etc. performing the role of promoting workers' welfare.
Trade Unionism in India today
Unionization according to industry/region/state
70,000 registered TUs, many not registered
2 per cent of the workforce unionized
PSUs: Industry-level collective bargaining in coal/steel; enterprise level elsewhere
Private Sector—Plant-level collective bargaining
Union density according to the size of industry
Craft unions in the government transport sector
Low unionization in SMEs
Twin battle against inter-union competition and assertive management
Like global trend, unionization in India under recession
During over a century of its existence, the trade unions in India have grown in size and strength, despite the fact that their membership account for no more than 2 per cent of the Indian workforce. As of now, the trade-union movement in India comprises over 70,000 registered unions and an unaccountable number of non-registered organizations engaged on the issue of promoting and protecting workers' interests. The politically affiliated unions have consolidated themselves by establishing a well-developed federal structure. They have established their federations at the state and the district levels as also industry-wise. The unions that are not politically affiliated, on the other hand, are fragmented, despite being very professional, financially sound and effective. Their involvement in policy-making bodies is almost negligible.
In spite of these weaknesses, the trade unions occupy a significant position in India, more so in matters relating to labour policies. Politically, almost every political party patronizes the trade unions as they have a strong influence in garnering labour votes, in the key industries such as cement, iron and steel, coal, heavy electrical, transportation, textile, dock, banking, etc. Thus, in India, the working class in the organized sector exercises political and economic power far in excess of what their number warrant.
A concluding assessment of Indian trade unions could be made in the context of legal rights that they have. This legal framework depends on the following factors:
- The immunity of trade unions and the degree of such immunity
- The rights and obligations of unions towards employers, the community and their members
- The access trade unions have to information
- Settlement machinery
- Consultation with management
- Relations of unions with their members and the rights of rank and file
- Procedures regarding funds, financing, use of funds, elections and duties of office-bearers
- Status vis-à-vis management or claims against management or against other unions (this is particularly important in a multi-union situation)
- Limitations on industrial action such as restrictions on strikes or lockouts
The main laws that allow or restrict the unions are the Trade Unions Act, 1926 and the Industrial Disputes (ID) Act, 1947. The provisions under The Trade Unions Act are discussed in the following paragraphs. Under the ID Act, trade unions have considerable degree of freedom to strikes in small organizations (employee strength below 100). For larger organizations, unions have to follow certain sets of procedures by giving the notice before a strike. There are also restrictions on strikes or direct industrial action during and for some time after conciliation or arbitration proceedings.
There are no provisions in either of the two acts, which lay down guidelines for relations with their own members. Except for the need to call annual general meetings, which is common for any type of organization in all types of situations, there is very little that union members can do against their own leadership. The procedures for removing a leader are so much a matter of political and group dominance, that members have little power to do anything. This may be one of the reasons why there is so much dissidence within unions, leading ultimately to splits and fragmentation. Political affiliation helps to fan dissidence. There is no provision on strike ballot, a basic tool in many countries, which gives rank and file members some control over the most decisive tool in the hands of the unions. This implies that union leaders can take a decision on strike without really consulting many of its members.
6.10 The Trade Unions Act, 1926
The Trade Unions Act, 1926 provides for the registration of trade unions with a view to render lawful organization of labour to enable collective bargaining. It also confers on a registered trade union certain protection and privileges.
6.10.1 Scope and Coverage
The Act extends to the whole of India and applies to all kinds of unions of workers and associations of employers, which aim at regularizing labour–management relations. A trade union is a combination, whether temporary or permanent, formed for regulating the relations not only between workmen and employers, but also between workmen and workmen or between employers and employers.
The main objectives of the Act are to:
- Provide for the registration of trade unions and
- To accord registered trade unions a legal and corporate status, immunity to office bearers and members from civil and criminal liability in respect of legitimate trade-union activities. This protection is provided for under Section 120 B, sub-section 2 of The Indian Penal Code.
The Act, therefore, stipulates the following:
- The Trade Unions Act, 1926 was enacted mainly in deference to the ILO convention, the recognition of the right of workers to organize and also to strengthen the bargaining power of the workers.
- The Act aims to provide for the registration of trade unions and, in certain respects, to define the law relating to registered trade unions. The objective of the Act is to:
- Lay down conditions governing the registration of TUs
- Define obligations of a registered TU
- Prescribe rights and liabilities of a registered trade union
DEFINITION. Trade Union: It means a combination, whether temporary or permanent, formed primarily for—the purpose of regulating the relations between workmen or employers for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more unions.
REGISTRATION. Any trade union formed with at least seven members may apply for registration to the Registrar with the following documents:
- A copy of the rules of the trade union
- Names, occupation and addresses of members making the application
- Name of the trade union and address of its office
- Designation, names, age, addresses and occupation of the office
- Bearers of the trade union
- In case already in operation—submit statement of accounts/assets and liability statement
RULES. The rules of trade union require constitution of its executive with the following:
- The name of the trade union
- Objectives for which it is established
- The membership list in a form that can be made available for inspection
- The purpose for which funds shall be applicable
- Members to be persons actually working in the unit/industry
- Honorary/temporary office bearers in the executive
- Payment of subscription to be less than 25 paise
- Conditions under which members entitled to any benefit/fines to be imposed
- The manner in which rules shall be amended, varied or rescinded
- The manner in which office bearers shall be appointed
- Safe custody of funds
- The manner in which the trade union may be dissolved
The Registrar, if satisfied with the requirements, shall register the trade union by entering the information in a register, to be maintained in a prescribed form. In case all terms of the Act are complied with, it is obligatory upon the Registrar to register the union, and he has no discretion in this matter.
Registration may be cancelled if the Registrar, at any point during verifications, is certain that the registration was obtained by fraud or mistake, or it ceased to exist, or has contravened any provisions in the Act.
ON REGISTRATION. A trade union, after registration, acquires the following characteristics:
- It becomes a body incorporate by the name under which it is registered, and it becomes a legal entity distinct from its members of which it is composed.
- It has perpetual succession and a common seal.
- It has the power to acquire and hold both movable and immovable property.
- It has the power to contract.
- It can, by the name under which it is registered, sue and be sued. Under the present law, registration is not compulsory. Unregistered trade unions are not illegal either.
But the benefits conferred by the law on registered unions will not be available to unregistered trade unions. An unregistered union has neither corporate existence nor legal entity.
RIGHTS AND LIABILITIES OF REGISTERED TRADE UNIONS. Section 15 of the Act provides for certain obligations and liabilities of registered unions and also stipulates the purpose for which funds can be utilized.
THE AMALGAMATION OF TRADE UNIONS. Any two or more registered trade unions may become amalgamated together as one trade union, with or without dissolution for division of funds of such trade unions, or either or any of them, provided that (a) the votes of at least half of the members of each or every such trade union is entitled to vote are recorded; and (b) at least 60 per cent of the votes recorded are in favour of the proposal.
DISSOLUTION. When a registered trade union is dissolved, the notice of the dissolution signed by seven members and by the secretary of the trade union is required to be submitted within 14 days of the dissolution to the Registrar for verification as to whether the dissolution has been effected as per rules of the union. In case the rules do not provide for distribution of funds consequent to the dissolution, the Registrar shall divide the funds among the members in such manner as prescribed. The members can alternatively form another society under the Societies Registration Act, 1869, for the purpose of recovering the said properties.
6.11 Managerial Trade Unionism
In India, we have unions in the executive cadre as well, such as civil services, doctors, electricity board, bank officers, merchant navy officers, etc. These associations among white-collared workers are more pronounced in the public sector. In the private sector, officers' associations (not unions) exist in Grasim, Tata Electric, ITC, Glaxo, etc. The white-collar unionism in India today has brought into its fold even professionals like college and university teachers, engineers and resident doctors. The characteristic difference between the worker unions and these associations are that they are loosely knit, focus on few issues and have a narrower perspective. Most of them are registered under the Societies Registration Act rather than the Trade Unions Act, even though their activities and functions are more on the lines of a union. The reasons for their unionization are the same as that of trade unions but are more protective than regulatory. The emergence of these unions has invariably been attributed to the erosion of their social status and the treatment from the employer on their issues and concerns; the management reaction to these associations has not been considered very positive either.
- The Indian trade-union movement is over a century old but is still coping with problems of small membership and financial insecurities.
- The political affiliations have resulted in external leadership, and politicization created break-away factions and multiplicity of unions.
- The inter-union rivalries and dynamics associated with it have made trade unionism in India ineffective, and post–New Economic Policy, they have been pushed to the periphery.
- The provisions of the Trade Unions Act, though comprehensive in terms of registration and deregistration, make the formation of unions even with mere seven members possible, thereby creating a large number of trade unions in the country.
- The Act is, however, silent on statutory recognition of trade unions, which is the essential foundation on which collective bargaining can be made successful.
- As in the rest of the world, in India too, there has been a decline in the growth of trade unionism as a consequence of the process of globalization and liberalization.
- agency shop
- closed shop
- open shop
- preferential union shop
- sole bargaining agent
- trade unions
- union shop
- Define the following terms:
- Describe briefly how trade unions are registered and certificates of registration issued.
- What are the rights of a registered trade union?
- What are the characteristics of trade unions?
- Why do you think the recognition of trade unions in every establishment should be done? What are the disadvantages for the employer?
- What is a trade union and how is it generally formed?
- When can the registration of a trade union be cancelled or withdrawn?
- Is the amalgamation of two or more trade unions possible? How can this be done?
- Define the scope and objectives of The Trade Unions Act, 1926.
- Differentiate between
- Craft and industrial unions
- Preferential union shops and closed shops
- Registered and recognized unions
QUESTIONS FOR CRITICAL THINKING
- Discuss some of the problems of trade unions in India and the recommendations of the National Commission of Labour in this regard.
- What are the functions of trade unions? Examine whether the trade unions in India have been able to fulfil these functions.
- Taking into consideration the existing problem of trade unionism in India, suggest measures for strengthening trade unionism and give reasons for the same.
- In the current day competitive environment, has the role of trade unions changed? Explain and describe its impact on the industrial relations climate.
- Discuss some of the problems of trade unions in India and suggest steps that can be taken to improve the same in the current-day context of multinationals and a growing unorganized workforce. Are the National Commission of Labour recommendations still applicable?
- Discuss the changing role of trade unions and the resultant impact of union–management relations consequent to globalization and technological breakthroughs in industry.
- Does India's booming information-technology and information-technology-enabled-services (IT/ITES) industry, which employs almost one million professionals, require a trade union to fight for its rights?
- Though India has the largest number of trade unions, their contribution to industrial work life has not been phenomenal.
Given below is an extract of a news item relating to Bajaj4 Auto Ltd. Analyse the legal issues emanating out of this and the alternatives available to the management to cope with this problem.
The stalemate between workers, unions and the management of the two-wheeler manufacturer Bajaj Auto Ltd took an unexpected turn with the Pune industrial court declaring the automaker's biggest workers' group, Vishwa Kalyan Sanghatana or VKS as the “recognized” union at the firm's Akurdi mother plant since it had support of the majority of the workers.
The court simultaneously revoked the recognized union status accorded to another worker group Bharatiya Kamgar Sena or BKS, backed by the Shiv Sena party, partly on whose support company chairman Rahul Bajaj got elected to the Rajya Sabha last year.
The Bajaj Auto management has been negotiating workers' issues such as wages only with BKS in the last two years. VKS insists that it will hold talks with the firm's management only after it allows workers into the premises of the Akurdi factory that has been shut down since 1 September. Some 1,400 workers have been striking work since then demanding that Bajaj Auto bring back production of two-wheelers shifted out to units at Aurangabad and Uttarakhand. VKS, which is fighting the BKS union recognition since November 2005, says it has the support of more than 1,600 of the 2,700 workers at Akurdi, while BKS has a following of just a few hundred.
The IT industry and Trade Unions
Read the following news item5 and then discuss the questions below:
The Leftist trade unions insist that it is high time the massive industry, which contributes more than 4.5 per cent to the country's national economic output, had a trade union to protect their jobs.
The Indian ITES-BPO (business process outsourcing) industry aggregated revenues to the tune of $5.2 billion in 2004–05.
The proposal to forge a union for IT workers has now come from the Centre for Indian Trade Unions (CITU)—the trade-union wing of the Communist Party of India (Marxist)—the largest Left party in the country.
So why do white-collar IT professionals need a trade union?
“A union for IT workers is the urgent need of the hour. I would call the IT professionals ‘the labourers of the information age’. They toil long hours; they work at night; and some of them still get meagre salaries. So a labour union for them would help fight for their rights,” according to the CITU president. To begin with, CITU, in collaboration with other Left-unions—like the All India Trade Union Congress—wants the Union government to enact a law separately to deal with the labour issues of the IT industry.
“Yes, there is an urgent need for a labour law exclusively for the IT industry. It is the one sector that is booming across India, and we need to frame a legislation for IT workers. We are going to take up the issue with the Manmohan Singh government soon,” said the Community Party of India national secretary.
How are the Left trade unions going ahead to form the unions for IT workers?
“It is not going to be easy. Already, we have begun the process to hold consultations with many senior IT employees in places like Kolkata, Bangalore, Chennai and Trivandrum (Thiruvananthapuram). We do hope to establish a proper union soon,” a Union Leader of CITU pointed out.
Left leaders say there is also already tremendous backing from the Union of Network International, a global alliance of 900 trade unions, to forge an IT industry workers' union in India.
“IT industry professionals in India are ‘cyber coolies’. We are trying to organize them and convince them on the need to form a union to fight for their rights and job protection,” said Narayan Ram Hegde, who works for the Union of Network International in India.
But Hegde says the task is not going to be easy because young IT professionals always have a negative image of trade unions in India.
A number of organizations for IT professionals now exist at the state level in Hyderabad (in Andhra Pradesh) and Bangalore (in Karnataka).
Left leaders say the idea now is to broad base this forum into a politically empowered union that can demand and stand up for the rights and protection of IT workers.
Here is what some of the employers from the industry have to say about unionization of the workforce:
Kiran Karnik, President, National Association of Software and Services Companies (Nasscom):
“Employees in IT and ITES sector do not need any external intervention as they are looked after very well. It is not a good move and I don't think it would succeed. The employees who think of themselves as the CEOs of the future may not support it.”
R. Vidyasagar, Director (HR), Philips Software India:
“There is no need for a third-party intervention and it did not augur well for the industry. I feel that unionism will not take off as employees will not like to be led by somebody else. We need to maintain our pre-eminence in the IT and ITES sector as countries such as China are fast catching up.”
Raman Roy, ex-CEO, Wipro BPO: “I have no problems with a union in the BPO industry, as long as it guarantees that no employee will leave the organization before one year. The union should work with the BPO industry to control the menace of attrition.”
Prosenjit Ganguly, Head (HR), HTMT, a BPO firm: “The move to unionize workers is a retrograde step and would spell disaster for the industry. After having reached this level, any attempt to unionize the workers would set us back.”
- What do you think are the reasons of non-unionization in the emerging sectors like IT/ITES?
- Look at the reasons from the business as well as the socio-psychological perspective. Why do you think trade unions have failed to make inroads?
- Make out a comprehensive case from the management side as to why it is not a good idea for allowing unionization in this sector.
- What kind of workplace regulatory mechanism do you foresee in the coming years in this sector? On what do you base your analysis?
Ramaswamy, E. A. “Managerial Trade Unionism”, EPE, Vol. 21, 1985.
Reports of the National Commission on Labour (1969 and 2002), Government of India.
Sharma, B. R. Managerial Unionism: Issues in Perspective (New Delhi: Shriram Center for Industrial Relations, 1993).