CLOISTERED PROBLEMS OF TRADE UNIONS AND ROLE OF COLLECTIVE BARGAINING IN INDIA
Authors: Samyak Dalal,
3rd Year Law Student,
School of Law,
Trade union plays significant role in shaping the worker’s life in India. But in developing countries like India, unions are losing its membership in recent decades. This downward trend is prevalent in certain group of workers like female workers, young workers and those who are working in private sector particularly in a smaller organisation. The initial part of the paper would emphasise about the history and the problems concerning with trade unions in India also how the workers being weaker segment can get their rights only through collective representation i.e. collective bargaining. Collective bargaining is the backbone for harmonious industrial relations. Right to collective bargaining is available only to recognized trade union. The paper would elucidate upon different stages, levels of collective bargaining. Recognition of trade union means accepting or conferring right to negotiate on behalf of workers. The main crux of the paper would be to analyse the different laws governing the Trade union in India, i.e., Trade Disputes Act, 1926, Industrial Disputes Act, 1947, Constitution of India, 1950. The paper would also focus upon the incidents and the important cases on the matter. The National Commission on Labour recommended compulsory recognition of representative union, and worked out a comprehensive legislation draft covering all aspects of industrial relation, but it remained in papers. In views of the above to bestow workers fundamental right and ensure industrial peace, there should be a legislation of recognition of trade union. The latter part of the paper would provide solutions to the problem dealing with trade unions and constitute the role of collective bargaining.
KEYWORDS: Trade Union, Collective Bargaining, Constitution, Employee, Recognition
The research which the paper would adopt is Doctrinal Method and would also use primary and secondary sources for the use of the paper.
SCOPE/RELEVANCE OF THE STUDY
The paper would bind itself to the jurisdiction of India and specially the state of Karnataka and would address the problem and provide the solution for the same.
I. Constitution of India, 1950
II. Trade Unions Act, 1926
III. Industrial Disputes Act, 1947
Recognition and registration of a trade union are both different aspects and they differ in nature. Registration of a trade union is mandatory under “The Trade Union Act, 1926”, but recognition of trade union is not mandatory, it is process of conferring right to the trade union by the management to represent the member employees as a sole bargaining agent during various negotiations either in to settlements on behalf of its members with the management and to raise the members voice and opinion while formulating management policies and procedures relating to their working conditions.
Freedom of association (formation of trade union) is a fundamental right conferred under article 19 (1) (c) of Constitution of India, 1950 and it is statutory obligation on the part of trade union to get it registered with registrar of trade unions. In the case of All India Bank Employees’ Association v. N.I. Tribunal, Supreme Court laid down the rights of the members of the trade unions that are encompassed within the fundamental right to freedom of expression and speech, i.e. Article 19(1)(c). But, on the other hand, there is no obligation on the part of management to recognize the trade union whether it is registered or not. Though the trade union is in Union as well as Concurrent list as a subject to the constitution, but there is no central rule yet present in India regarding recognition of trade union. However, states like Kerala, Andhra Pradesh, Madhya Pradesh, Maharashtra, Odisha and Gujarat have made it statutory to recognize the trade union. ILO during its 32nd convention at Geneva, vide its Convention Number 98 made it mandatory for all its member countries to recognize the trade union but India is one of the country who yet to ratify such convention.
The parliament also made an amendment in “Trade Union (Amendment) Act, 1947 introducing recognition of trade union but it was neither notified nor brought in to force. At present, the only provision for recognition is contained Section 36 of Industrial Dispute Act, 1946, where the said provision concerns only with representation in industrial disputes by the trade unions and it does not as such provide for recognition of any trade union, which can be considered as one of the backlog in the field of preserving and protecting the interest of all the workers.
2. HISTORY AND PROBLEMS CONCERNING TRADE UNIONS
The trade union movement in India can be distinctively studied through three phases. The first phase (1875- 1918) was mainly characterized by a humanitarian spirit that was employed by the friendly societies in dealing with the labour. The second phase (1919- 1947) was quite remarkable as it saw the beginning of real modern trade unionism in India with organized and continuous labour movement.
The first trade union was formed in Bombay when textile mills were established in 1851. Trade unions also emerged in Calcutta in 1854 with the establishment of jute mills there. The first factory Commission was set up in 1879 to study the problems of workers. In 1891, the first factory act- The Indian factory Act was passed but it remained ineffective. The Second Factory Commission was formed in 1884 to which a memorandum signed by Narayan Meghji Lokhande (1sttrade union leader) along with 5300 workers was submitted and arranged a mass demanding Sunday as a weekly off and was considered as the first victory of the trade union.
The International Labour Organization (ILO) was formed soon after the first World War in 1919. The formation of ILO was instrumental in inspiring the leaders of India towards the formation of the first national-level trade union in India in 1920.
Trade Unions in India have grown since then. As per data obtained from the Labour Bureau, the total number of registered trade unions across the country numbered to 11556 in 2013 and the average membership per union was 1283. Amidst the well-known fact that the degree of unionism is not very high in India, the concentration of union membership is high in critical sectors like banking, insurance, railways, postal services, ports, telecoms and power.
As the birth of trade union took place just because there existed a lot of problems, but even after this the exploitation of trade unions still existed. These problems are (a) small size of trade unions, (b) domination of political parties, (c) inadequacy of finances, (d) multiplicity of unions and (e) lack of enlightened labour force.
a) SMALL SIZE OF TRADE UNIONS
Nearly three-fourths of the trade unions prevailing in India have a membership of less than 500. Smallness in size of the union implies, weakness the bargaining power and due to this problem majority of the problems cannot be solved.
b) DOMINATION OF POLITICAL PARTIES
Political parties prevailing in today’s era dominate the trade unions at a great extent in India. To achieve their narrow and selfish political motives, the real character of trade unions cannot be adhered to. Rivalry in the politics strikes the true spirit of trade unionism and, unfortunately, the workers in the organization suffer and become victims.
c) INADEQUACY OF FINANCE
Another weakness of the trade unions in India is the inadequacy of finances. Funds are limited because of low membership fee, many are defaulters; so, when needs arise, unions cannot fight for want of funds. A continuous fight against management to bargain something needs funds since the workers may have to go on strike during which period they will have to be maintained out of the funds of the trade unions.
d) MULTIPLICITY OF UNIONS
Of late, trade unionism in India is also characterised by multiplicity of unions based on craft, creed and religion. This is well indicated by the socio-political realities after the mandalisation of polity and heightened sectarian consciousness after the demolition of the disputed structure of Ayodhya.
e) LACK OF ENLIGHTENED LABOUR FORCE
The lack of an enlightened labour force capable of manning and conducting the movement efficiently, purposefully and effectively has been a major problem in the development of trade unions in the country. Lack of education, division by race religion, language and caste, migratory nature, lack of self-consciousness, and non-permanent class of workers have been attributed as the causes for the lack of enlightened labour force in India.
Apart from all the above mentioned problems faced by the trade unions, there are many others which are not even traceable. If all the trade unions are recognized, there will be least possibility that they will be exploited and many problems faced by the trade unions in India can be solved automatically.
Collective bargaining as a process also faces a lot of problems. A few important issues around which collective bargaining enters in this developing country are as follows:
(a) RECOGNITION OF TRADE UNION
Recognition of the union has been an important issue in the absence of any compulsory recognition by law. In the under-developed countries in Asia, however, on account of the tradition concept of management functions and the immaturity of the industrialist class there is much resistance from the employers to recognise the status of the unions. Central government of India has made a lot of efforts for passing such bill but got lapsed.
(b) LOW BARGAINING RATE
Bargaining upon wage problems to fight inflation or rising cost of living and to resist wage cuts during depression has resulted in several amicable agreements. But, no statistics are available for such amicable settlements. It has been customary to view collective bargaining in a pattern of conflict; the competitively small number of strikes and lock-outs attract more attention than the many cases of peaceful settlement of differences.
(c) SECURITY OF UNIONS
The union security has also been an issue for collective bargaining, but it could not acquire much importance in the country, although stray instances are found. The Tata Workers union bargained with M/s Tata Iron and Steel Co. Ltd., Jamshedpur, on certain issues, one of which was union security and in the resulting agreement some of the union security clauses were also included.
3. ROLE OF COLLECTIVE BARGAINING IN PROTECTING INTEREST OF THE WORKERS.
The expression ‘collective bargaining’ was coined by Sydney. This was widely accepted and used in the USA for settling industrial disputes. Thus, the USA is considered as the motherland of collective bargaining. Collective bargaining as a method of settling industrial disputes is comparatively of recent origin in India.
Basically, collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers’ compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.
If there exists any dispute between employees and their employers, trade union comes into the picture and plays a major role in solving any kind of dispute between both the parties. A trade union acts as an representative of the employees/ workers of the organization and try to mediate between both the parties and solve their problem by the way of collective bargaining.
Besides solving the dispute, the trade union also fights for the interest of the workers. For example, if there is any employer who pays less amount of salary/wages to their employees/workers, the trade union, even in this case.
Collective Bargaining is of great importance to almost all the stake holders in the economy. The collective bargaining advances the mutual understanding between the two parties i.e., employees and employers.
The role of collective bargaining may be evaluated from the following point of view. The paper seeks to give point of view from all the stakeholders involved in this process.
(1) From Management Point of View:
The main object of the organisation is to get the work done by the employees at work at minimum cost and thus earn a high rate of profits. Maximum utilization of workers is a must for the effective management. For this purpose co-operation is required from the side of the employees and collective bargaining is a device to get and promote co-operation.Collective bargaining is the best remedial measure for maintaining the cordial relations.
(2) From Labour and Trade Union Point of View:
Labour has poor bargaining power. Individually a worker has no existence because labour is perishable and therefore, the employers succeed in exploiting the labourers. The collective bargaining imposes certain restrictions upon the employer. Collective bargaining can be made only through the trade unions. Trade unions are the bargaining agents for the workers. The main function of the trade unions is to protect the economic and non- economic interests of workers through constructive programmes and collective bargaining is one of the devices to attain that object
ive through negotiations with the employers, Trade unions may negotiate with the employer for better employment opportunities and job security through collective bargaining.
ive through negotiations with the employers, Trade unions may negotiate with the employer for better employment opportunities and job security through collective bargaining.
(3) From Government Point of View:
Government is also concerned with the process of collective bargaining. Government passes and implements several labour legislations and desires it to be implemented in their true sense. If any person violates the rules and laws, it enforces them by force.
Collective bargaining prevents the Government from using the force because an amicable agreement can be reached between employer and employees for implementing the legislative provisions.
4. DIFFERENT LAWS GOVERNING TRADE UNION IN INDIA.
In India, the right to form and join a trade union, and engage in collective bargaining is provided for under national and state-specific legislations. Time and again, the courts have upheld the right of workers to form or join a trade union in India.
There are 3 laws governing trade union in India. These are as follows: (a) Constitution of India,1950 (b) Trade Unions Act, 1926 and (c) Industrial Disputes Act, 1947.
I. CONSTITUTION OF INDIA, 1950.
Article 19(1)(c) of the Constitution of India, 1950 (“Constitution”) which envisages fundamental right to freedom of speech and expression also guarantees the country’s citizens the right “to form associations or unions” including trade unions. The SC has held that the right guaranteed in Article 19(1) (c) also includes the right to join an association or union.This right carries with it the right of the State to impose reasonable restrictions.
Furthermore, it has been established that the right to form associations or unions does not in any manner encompass the guarantee that a trade union so formed shall be enabled to engage in collective bargaining or achieve the purpose for which it was formed. The right to recognition of the trade union by the employer was not brought within the purview of the right under Article 19(1)(c) and thus, such recognition denied by the employer will not be considered as a violation of Article 19(1)(c).
The various freedoms that are recognized under the fundamental right, Article 19(1)(c), are:
i. The right of the members of the union to meet,
ii. The right of the members to move from place to place,
iii. The right to discuss their problems and propagate their views, and
iv. The right of the members to hold property.
II. TRADE UNIONS ACT, 1926
The TU Act, 1926 provides for formation and registration of trade unions and in certain respects to define the law relating to registered trade unions. The TU Act defines a trade union as “any combinations, 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 condition on the conduct of any trade or business and includes any federation or two or more trade unions.”
All workmen have the right to form a union or refuse to be a member of any union.However, not all workers’ organizations are considered trade unions. For example, the Madras High Court has held that an association of sub-magistrates of the judiciary, tahsildars, etc., is not a trade unio
n because the members are engaged in sovereign and regal functions of the government.
n because the members are engaged in sovereign and regal functions of the government.
III. INDUSTRIAL DISPUTES ACT, 1947
The IDA also deals with trade unions in the manner that it regulates the rights of employers and employees in the investigation and settlement of industrial disputes. It provides for collective bargaining by negotiation and mediation and, failing that, voluntary arbitration or compulsory adjudication with the active participation of trade unions. As per the IDA, a settlement arrived at through collective bargaining is binding. Two types of settlements are recognized:
i. Those reached in the course of conciliation proceedings before the authority – such settlements bind members of the signatory union as well as non-members and all present and future employees of the management.
ii. Those reached outside the course of conciliation proceedings, but signed independently by the parties to the settlement – such settlements bind only those members who are a signatory or a party thereto.
Furthermore, the Industrial Employment (Standing Orders) Act, 1946 “IESOA” also contains certain provisions pertaining to trade unions. The IESOA regulates and codifies the conditions of service for an industrial establishment employing at least 100 workmen. As per the IESOA, an employer to which the IESOA applies is required to draft and adopt standing orders defining its employees’ conditions of employment. As per the IESOA, a registered trade union (or worker, if no registered union exists) must review and may object to the draft standing orders before it is certified by an office.
5. LANDMARK CASE LAWS REGARDING RECOGNITION OF TRADE UNIONS AND COLLECTIVE BARGAINING IN INDIA.
In the case of B. Srinivasa Reddy v. Karnataka Urban Water Supply & Drainage Board Employees’ Association,wherein it has been held that an unregistered trade union or a trade union whose registration has been cancelled has no rights either under the TU Act or the IDA. This case highlights the importance with respect to registration of trade unions.
In the case of B.R Singh v. Union of India,the court has recognized “strike” as a mode of redress for resolving the grievances of workers.
In MRF United Workers Union (rep.by its General Secretary) v. Government of Tamil Nadu (rep. by its Secretary, Labour and Employment Department) and Ors., the court has highlighted the validity of procedure for recognition of a trade union. When the State government accepts a particular procedure for recognition, it shall direct the Labour Commissioner to call upon two unions to submit their membership details as per the Code of Discipline. Subsequently, the Labour Commissioner shall decide as to which Union is a true representative union of workmen and give it a genuine recognition. Further, the court cannot permit management to claim that the Union which shows larger membership after recognition will not be recognized by management.
In Balmer Lawrie Workers’ Union, Bombay and Anr. v. Balmer Lawrie & Co. Ltd. and Ors. the underlying assumption made by the SC was that a recognized union represents all the workmen in the industrial undertaking or in the industry. This case was also referred to in the MRF United Workers case.
In Kalindi and Ors. v. Tata Locomotive and Engineering Co. Ltd, the SC held that there is no right to representation as such unless the company, by its standing orders, recognizes such right. The decision was reiterated in Bharat Petroleum Corporation Ltd. v. Maharashtra General. Kamgar Union & Ors.
In Food Corporation of India Staff Union vs. Food Corporation of India and Others, the SC laid down norms and procedure to be followed for assessing the representative character of trade unions by the ‘secret ballot’ system.
6. NEED FOR LEGISLATION OF RECOGNITION OF TRADE UNIONS.
Recognition of trade union is one of the important aspect for smooth functioning of trade union in solving the disputes between the management and the company. A union must be recognised before it may effectively represent any employees. Once a union is recognised it serves as the bargaining agent for the workers in a particular bargaining unit. An employee may not circumvent the union, because recognition entails willingness ‘to negotiate with a view to striking a bargain and this involves a positive mental decision. As mentioned earlier, registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can form a trade union and apply to the Registrar for it registration.
The application for registration should be in the prescribed form and accompanied by the prescribed fee, a copy of the rules of the union signed by at least 7 members, and a statement containing
(a) the names, addresses and occupations of the members making the application,
(b) the name of the trade union and the addresses of its head office, and
(c) the titles, names, ages, addresses and occupations of its office bearers.
If the union has been in existence for more than a year, then a statement of its assets and liabilities in the prescribed form should be submitted along with the application. The registrar may call for further information for satisfying himself that the application is complete and is in accordance with the provisions.
If talking about the legal status of a registered trade union, a registered trade union is a body corporate with perpetual succession and a common seal. It can acquire, hold sell or transfer any movable or immovable property and can be a party to contracts. It can even sue and be sued in its own name. further, no civil suit or other legal proceeding can be initiated against a registered trade union in respect of any act done in furtherance of a trade dispute under certain conditions. Also, in furtherance to that, no agreement between the members of a registered trade union shall be void or voidable merely on the ground that any of its objects is in restraint of trade.
Further, registration does not mean recognition and both are totally different in nature. Registration and recognition of Union by an employer are independent issues. Registration of Trade Union with Registrar has nothing to do with its recognition in a particular factory/company. Recognition of Trade Union is generally a matter of agreement between employer and trade union. In States like Maharashtra and Madhya Pradesh, there are specific legal provisions for recognition of a trade union.
There is a dire need for recognition of trade unions. It has become very important for the trade unions to be registered. The need for recognition of trade unions by employers was felt by the working class to ensure that appropriate modes of collective bargaining took place and that the agreements, which were collectively reached, were mutually observed. It was considered that recognition of trade unions was a step towards securing reasonable levels of pay and working conditions. This in turn will be achieved if workers stood united in representing their demands through a trade union, which is adequately recognized.
It was the late 1990’s that it was realised that trade unions have become massive bureaucratic bodies with interests and agendas of those who comprise its membership. However, there is a growing debate as to the extent to which they represent and pursue the interests of their members. It is often argued that this is slight and coincidental.
There are elements in the discussion, such as the argument about whether it is acceptable to require a level of support from among the whole of a workforce, in order to be recognized – an idea with history and resonance, which need to be debated thoroughly. Trade union recognition works as much in the interests of the employer as it does in the interest of the worker. The recognition of a trade union has several repercussions in defending people on disciplinary charges, accompanying members in meetings with managers and negotiating local conditions of service.
After the passing of the Trade Unions Act, 1926, it may be observed that from criminal and illegal associations trade unions have now become legalized and recognised institutions, from institutions which were only very small bodies they have now become gigantic associations, from institutions that were primarily interested in the advancement of the cause of their own membership they have now become institutions which are interested in the social, cultural and political development of the country. This was a remarkable process.
Recognition of trade union is the very important aspect of collective bargaining. It has been a debatable topic time and again. But inspite of the government encouraging trade unions in the present era, there exists no enforced legislation on this subject till date. There are however voluntary code of discipline and legislations in some states, but not a central legislation.
Definition of Collective bargaining as the ‘performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment’. Absence of any central legislation, management in several states have refused to recognise a trade union mainly on five grounds:
(1) lack of inside members of the office bearers in a union
(2) these disapproved by management, particularly politicians and ex-employees;
(3) less number of members in a union
(4) presence of many rival unions in existence
(5) the trade union was not registered under the Trade Unions Act, 1926.
7. CONCLUSION AND SUGGESTION
The paper seeks to provide the conclusion and the suggestion regarding the current problems faced by the trade unions in India. If a trade union is recognized, all the stakeholders involved in this process will be in a great advantage. Recognition of a trade union hampers the growth of the trade unions and protecting the interest of the workers in an organization. Having a single body for negotiating terms and conditions for workers is simpler than dealing with workers individually. By recognition, it will encourage the trust and commitment of the workers in a trade union. This will also increase the industrial relations between the management and the employees of a trade union.
The author concludes, that there is a dire need of the enactment of the legislation for recognition of a trade union. The central government must try to put efforts for enactment of such a legislation which makes compulsory the registration as well as recognition of the trade union.
The Trade Unions (Amendment) Bill, 2019 was introduced in Lok Sabha by the Minister of Labour and Employment, Santosh Kumar Gangwar, on January 8, 2019. The Bill amends the Trade Unions Act, 1926, which provides for the compulsory registration and regulation of trade unions at the central and state level. Such trade unions or the federation of trade unions will be recognised as Central Trade Unions or State Trade Unions. The same bill was lapsed and there exists no such provisions for the same.
The author seeks and suggests to make compulsory the recognition of trade union by the way of passing an amendment in The Trade Unions Act, 1926. The main motive and idea behind passing such an amendment would result in the protection of the trade unions and also interest of the worker all over India and every state would have to abide by the same. The role and function of the legislature is beneficial for all the stakeholders involved in this process. The reinstatement of the bill is the most important solution that the paper seeks to provide and embark.
The author also seeks to provide that the Indian Constitution provides for freedom of association (formation of trade union) under Article 19 (1) (c) and it is statutory obligation on the part of trade union to get it registered with registrar of trade unions. Hindering such trade unions from being recognized will lead to infringement of their fundamental rights. Thus, it becomes a mandate for the government to provide for the provision of recognition of trade union. Even the Apex Court has laid down in various landmark cases that the rights of the members of the trade unions that are encompassed within the fundamental right to freedom of expression and speech, i.e. Article 19(1)(c).
The author seeks to provide that, recognition of trade is the backbone of the process of collective bargaining. Furthermore, collective bargaining is the backbone for harmonious industrial relations and Right to collective bargaining is available only to recognized trade union. Such a right confers on a trade union to bargain with the management company, which is an important aspect for solving disputes between the parties. Thus it makes very important for the legislators to enact such a legislation which mandates the recognition and all the problems between the management and workers in an easy and efficient manner.
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