23
CHAPTER II
CONCEPTUAL ANALYSIS OF THE
DEFINITION OF TRADE UNION
2.1. Introduction
Generally the trade unions are understood as voluntary associations of
workmen, which are formed with the prime object of defending the interest of the
workmen and to strive to better the living conditions especially the economic
conditions. The need for the associations was felt by the workers due to the fact
that a workman as an individual is very weak at bargaining against the mighty
economic power of the employer. However under the legal frame work trade
unions do include the associations of employers. As the primary object of these
associations is to protect, preserve and advance the interest of their members.
Towards this end object these associations adopt various methods inter-alia,
collective bargaining, conciliation, adjudication strikes/lockouts etc. Such
associations gain the right to represent the members in the bargaining process.
These associations may be registered or unregistered. Certain privileges and
obligations are provided by registration. The collective bargaining or conciliation
process may end with an agreement or a settlement. The validity of
24
agreements/settlements depends upon the nature of the associations and the
representative character. In day to day life we come across various types of
associations’ viz. Employer’s Credit Co-operative Societies, Workmen’s’
Housing Co-operative Societies, etc., but all these associations though formed by
the workers or employers would not be coming within the frame work of trade
union. A trade union has a right to raise an industrial dispute and have it referred
for adjudication on failure of collective bargaining process or conciliation
process. An industrial dispute is necessarily a community dispute where the
majority of the workmen are interested in, save the dismissal, discharge,
retrenchment or otherwise termination of an individual workman under Section
2 A of Industrial Disputes Act, 1947.
Industrial peace and harmony not only are sine-quo-non for the industrial
development and economy of a country but also for the welfare of the workmen.
Trade union plays a vital role in maintenance of industrial peace and harmony.
Thus the term “Trade Union” attains significance. It is imperative to understand
the necessity of a trade union. The workers combine to form associations/trade
unions to achieve inter-alia the following main objectives.
25
(a) To preserve and promote social security i.e. protection against
economic hazards like illness, old age, disability employment
accidents deaths etc;
(b) To air out their views, feelings and to communicate their
protest/frustrations. For this purpose trade union serves as a
medium/channel;
(c) To restrain the employer from taking irrational, discriminatory
action; which may be prejudicial to the labour. Sri V.V. Giri has
aptly described that ‘a trade union is nothing but preservation
through the power of combination’.
2. 2. Meaning and Definition of ‘Trade Union’
According to C.K. Johri “trade unions are generally understood as
voluntary organizations of workers formed for the purpose of defending and
advancing the latter’s collective interest either mutually or in relation to outside
parties’ such as employers, Government and other trade unions.” 4
4 Johri C.K. “Unionism in a Developing Economy", (New Delhi: Asia Publishing House, 1967,
at 25.
26
According to Sydney and Beatrice Webb “a trade union is a continuous
association of wage earners for the purpose of maintaining the conditions of their
lives.”5
According to S.D Punekar “a trade union is a monopolistic combination of
wage earners who as individual producers are complementary to one another but
who stand to employers in a relation of dependence for the sale of their labour
and production and that the general purpose of association is in view of that
dependence to strengthen their power to bargain with the employers or
bargaining collectively.”6
Sri V.V.Giri defined trade union as “voluntary organizations of workers
formed to promote and protect their interest by collective action.”
The Oxford Dictionary has defined a trade union as “ an association of
workers in any trade or allied trades for the protection and furtherance of their
interests in regard to wages, hours and conditions of labour and for the provision
5 See Dale Yoder, “Personnel Management and Industrial Relations” (1972) at 159-160.
6 Punekar S.D “Trade Unionism in India” (Bombay: 1st Ed. Himalaya Publishing House,
1948) at 23.
27
from their common funds, pecuniary assistance to the members during strikes,
sickness, unemployment and old age etc.,”
The British Trade Unions Act, 1871 has defined a ‘trade union’ as any
combination, whether temporary or permanent, for regulating the relations
between the workmen and masters, or between workmen and workmen, or
between masters and masters, or for imposing restrictive conditions on the
conduct of any trade or business.
2.2.1. Statutory Definition of ‘Trade Union’ in Indian Context
The term ‘trade union’ has been defined under Section 2(h) in the Trade
Unions Act, 1926. Accordingly ‘trade union’ means any combination, whether
temporary or permanent, formed primarily for purpose of regulating the relations
between workmen and employers or between workmen and workmen or between
employers and employers or for imposing restrictive conditions on the conduct of
any trade or business and include any federation of two or more trade unions.
Provided that this Act does not affect:
(i)
Any agreement between partners as to their own business.
28
(ii)
Any agreement between an employer and those employed by
him as to
(iii)
such employment or
Any agreement in consideration of the sale of goodwill of a
business or of instruction in any profession, trade or
handicraft”
This definition is similar to that of the definition of trade union as defined
under the Trade Unions Act, 1871 in England. The paramount purpose of the
combination is to regulate the relations between the employer and workmen and
to impose the restrictive conditions on the conduct of trade or business of some
other person. This definition is having a specific relevance to the immunities
provided under sections 17, 18 and 19 of the Trade Unions Act, 1926. The Act
also defines the term ‘registered Trade Union’ under section 2(e). The purpose is
a trade union can exist without registration as required under the provisions of the
Act
2.3. The Concept of ‘Combination’
Combination is a coherent group formed by two or more persons with the
object to promote the interests of its members. In other words a combination is an
29
association of persons with common intent or object of preserving and promoting
common interest. A combination is democracy in action.
The concept of combination was developed when the people realized the
power of concerted action. In Labour Jurisprudence combination played very
important role and contributed to the development of Labour Laws. It is viewed
synonym to its inherent power of concerted action i.e. strike or the economic
action. Thus in eighteenth century the English workers attempted to achieve
improvements in employment conditions through combination by direct
economic action. The economic action was the concerted refusal to work or
concerted withdrawal of labour to force the reluctant employer to accept and
grant the concessions demanded by the combination. The concept of combination
consisted merely of concerted exercise of individual freedom of contract acting
together by all the members of the combination with a common object. Holmes.
•y
J in his dissenting note in Vegelahn v Guntner observed that one of the eternal
conflicts out of which life is made up is that between the effort of every man to
get the most he can for his services and that of society, disguised under the name
of capital, to get his services for the least possible return, combination on the one
7 (1896) 44 N.E. 1077
30
side is patent and powerful, combination on the other is the necessary and
desirable counterpart, if the battle is to be carried on in a fair and equal way.
The concerted action of the combination many a time caused harm to
others. The courts evolved general principles and applied on the activities of the
combinations. The origin of these general principles can be traced to the Trilogy
of the House of Lords. The Trilogy consisted of three cases out of which one is
concerning to the combination of businessmen and the other two of workmen.
Mogul Steamship Company v McGregor Gow and Company8 was the first
case decided in 1892 among the Trilogy. To dislodge Mogul Steamship
Company which was a new shipping company, all others formed a combination
called Mc.Gregor Gow and Company. The combination offered concessions to
the shippers who sent cargo exclusively in its ships and refused to accept cargo
from any one who patronised the new company i.e. Mogul Steamship Company.
As a result shippers were forced to use only the ships of the combination
companies as the new shipping company served only few ports and the
combination served all the ports. Thus the new company went bankrupt. The
House of Lords held that there was a conflict between two equally protected
8
(1892) A.C. 25
31
rights i.e. plaintiffs right to protection in the legitimate exercise of trade and
secondly the right of the defendants to carry on business as they see fit as long as
they observe the law. The combination of the defendants in this case “have done
nothing more against the plaintiffs than to pursue to the bitter end of competition
waged in the interest of their trade.” The decision of the house of the Lords in
this case had established the immunity of a combination causing serious harm
through the exertion of economic pressure in the guise of secondary boycott with
the ultimate motive for self advancement.
The principle that “any combination intent to promote the interest of its
members was free to do so by using (ruthless) economic coercion against others
as long as it did not engage in conduct contrary to any established category of tort
or crime” was recognized.
Allen vs. Flood 9 was the second case among the Trilogy. In this case a
Ship Repair Company employed 40 boiler makers. All the boiler makers were
members of a trade union called Boiler Makers Union. The Company employed
two shipwrights Flood and Taylor who were members of different trade union.
Allen, the representative of the Boiler Makers Union served a notice on the
9 (1898) A.C. 1
32
company to discharge Flood and Taylor who are members of the other union or
else face the strike. The Company did not want a strike and hence fired the
shipwrights Flood and Taylor as the two shipwrights were not employed under
contract but employed at will. The House of Lords held that union men acted in
the interest of their class and as long as they do not resort to unlawful acts they
are entitled to further their interests in the manner which seems to them best and
most likely to be effectual.
Thus in the Trilogy the trade unions also got encouraged by the most
pleasing decision of the House of Lords in Allen vs. Flood10. The trade unions felt
that they are on par with business class in the use of economic pressure to
promote their interests. They perceived that they could wield their collective
privilege to work or not to work at their pleasure. Then the last of the Trilogy
case came as a disillusioning chapter to the combination of the workmen.
Quinn v. Leathern
was the third of the Trilogy.
Leathern was a
wholesale slaughterer. The meat workers union asked Leathern to hire help only
from among members of the union. The existing workers of Leathern who are not
members of the union should quit their jobs first; join union as members, wait for
10 id
11 (1901) A.C. 495
33
their turn as Leathern should employ only those who are members of the union
by seniority. Leathern refused to comply. The union resorted to secondary
boycott. Munce was running a large retail market. He was purchasing his meat
from Leathern. All the workers of Munce were members of the union. Hence the
union represented by Quinn served a notice on Munce to cease dealings with
Leathern or face a strike. Munce to avoid strike stopped purchasing meat from
Leathern. Thus Leathern suffered loss of business and brought action against
Quinn and the members of the union. The House of Lords held that the
substantial factor was the struggle between the union and Leathern’s old
employees for the opportunity to work. There is considerable evidence that the
union was not serving any useful purpose by their conduct but merely inflicting
aimless and unjustifiable harm on Leathern.
It would be very appropriate to consider the observation made by
10
Brampton in Quinn v Leathern ; “whether assuming the existence of a
conspiracy to do a wrongful and harmful act towards another and to carry it out
by a number of overt acts, no one of which taken simply and alone would if done
by one individual acting alone and apart from any conspiracy, constitute a cause
of action such acts would become unlawful or actionable if done by conspirators
12
Id
34
acting jointly or severally in pursuance of their conspiracy and if by those acts
substantial damage was caused to the person against whom the conspiracy was
directed.... Much consideration of the matter has led me to be convinced that a
number of actions and things not in themselves actionable or unlawful if done
separately without conspiracy may, with conspiracy become dangerous and
alarming just as a grain of gun powder is harmless but a pound may be highly
destructive or the administration of one grain of a particular drug may be most
beneficial as a medicine but administered frequently and in larger quantities with
a view to harm may be fatal as a poison. A conspiracy is a powerful and
dangerous engine which in this case has I think been employed by the defendants
for the perpetration of organized and ruinous oppression”. These observations in
Quinn vs. Leathern13 brought in the concept of Civil Conspiracy in the Trade
Union activities.
The legal principles derived from the Trilogy were formulated by Lord Cave
in Sorrel vs. Smith14 as follows.-
13 Supra
14 (1925) A.C. 700
35
1.
A combination of two or more persons willfully to injure a
man in his trade is unlawful and if it results in damage to him
is actionable.
2.
If the real purpose of the combination is not to injure another
but to forward or defend the trade of those who enter into it,
then no wrong is committed and no action will lie although
damage to another ensues.
The combination can be of workers or the traders or employers. There is
no necessity that there should be identity of interest between the parties
combining. Regarding the identity of combiners interest Lord Maugham has
observed in Grafter's case
that it is sufficient if all the various combining
parties have their own legitimate trade or business interest to gain, even though
these interests may be of different kinds. If indeed some of these parties were
actuated merely by hate or vindictive spite or by no just excuse at all, I should
doubt very much whether the defense would succeed. I think however that
reasonable self interest in trade or business is a “just cause or excuse” for those
combining, even though each of them has his own axe to grind.
15
(1942) A.C. 435
36
Thus the object of the employers or traders was to eliminate competition
whereas the object of the union of workers was to achieve cent percent trade
unionism. The joint aim of a combination is a desire for prosperity.
It is pertinent to note in the labour cases of the Trilogy that in both the
cases the trade union has acted with the basic object to consolidate the unionism.
The acts of the trade unions were sans the immediate benefit to the working class
as a whole except gamering the benefits to only its members. In the process
damage has been caused not only to the employer but also to some section of the
workers, i.e. Flood and Taylor lost there jobs. The total unionization of the
workforce was the fundamental object of both the unions in Allen vs. Flood16 as
well as Quinn vs. Leathern . Thus the concept of combination had suffered a set
back with the decision of the House of Lords in Quinn vs. Leathern . This has
also led the labour unions to realize that there was a need for legislative
protection from the concept of civil conspiracy faced by the labour combinations.
16 Supra
17 Supra
18 Supra
37
2.4. Judicial Approach to the Concept of ‘Trade Unionism’ in the
Indian Context
The expression “Combination” has been used in the Trade Unions Act,
1926.
Unlike the word “Association” the word “Combination” has a wider
application/import. The Act does not specify whether the “Combination”: shall
be of workers or employers only. The “Combination” may even be of workers
AND the employers. Such “Combinations” of workers and employers has been
classified as quasi trade unions. But still such “Combinations” would be perfectly
trade unions under the Act provided the object of forming “Combination” is
statutory object i.e., regulating the relations between workmen and workmen or
between workmen and employers or between employers and employers or for
imposing restrictive conditions
on trade or business.
There can be
“Combinations” who can claim to be trade unions which are for workmen but not
of workmen.
The Madras High Court in Tamil Nadu NGO s Union vs. Registrar of Trade
Unions19 held that a trade union which included among its members SubMagistrates of Judiciary, Tahasildars, Officers of Treasuries and Sub-Treasuries,
Officers of Civil Court establishment and Home Department of Government
19
AIR 1962 Mad. 234.
38
could not be considered as a trade union. For these persons were civil servants
engaged in the task of sovereign and regal aspects of the Government which were
its inalienable functions.
According to the Trade Unions Act, 1926 temporary, casual, badli workmen
also enjoy the statutory right to form ‘combination’ with the statutory objects as
primary object. Such combination falls with in the purview of the Trade Unions
Act, 1926. Nothing restricts the contract labour to form ‘combination’ as a trade
union.
The objects of a trade union are dynamic in nature. They vary from time to
time, industry to industry, place to place and country to country. A trade union
may include in its rule book the sociological, religious, spiritual, ethical, and
economic or welfare objects.
It is the primary object of the ‘combination’ which determines the nature
of the combination whether it attains the character of a trade union or not under
the Act. As long as the primary object of the ‘combination’ is statutory, it is a
trade union whether or not such a ‘combination’ included secondary objects.
Conversely if the primary objects is welfare or other than statutory object and
39
even though the statutory objects included as secondary and such ‘combination’
cannot be called as a trade union under the Act.
2. 5. The Foundations of the Trade Unions Act, 1926 vis-a-vis the
Trade Disputes Act, 1906 of England
The pressure put on the workers by the haggling of the market caused them
to organize into unions to protect their economic interests. The conditions of
employment were determined by the chain of bargains linking together with the
manual worker, the capitalist employer, the wholesale trader, the shop-keeper and
the customer.
The pressure began with the customer, the final consumer and constantly
increased with each link in the chain until it finally gave the employer no choice
but to produce as efficiently as he could forcing him to hold wages and other
labour costs as low as possible. Each class of producers engaged in concerted
activity (Trade Associations) to over come this pressure. In case of workers it led
to Union activity.
20 Sidney & Beatrice Webb “Indian Democracy’''- (London) Longmans, Green& Co. Ltd 1897
at 16.
40
2.5.1.
The Evolution of Trade Unionism in England
Albeit the workers formed Associations as early as 14
century, the
modem trade unionism can be traced only in 18th century with the formation of
craft associations. The emergence of craft associations in the 18 century can be
attributed to the decay of the medieval system of wage fixing. During this period
the wage fixing was entmsted statutorily to the Justices of the peace. In 1562
Statute of Artificers (more commonly known as Statute of Apprentices) was
passed during Queen Elizabeth’s reign. The Act provided that rates of wages to
be fixed by Justices at their general sessions. The Statute also introduced a
system of compulsory apprenticeship, prohibiting employment of un-apprenticed
workmen. However the statute did not deliver the results as desired for the
reasons that there was no central control, no enforcement machinery, the justices
were reluctant to exercise and interfere in altering the existing wages. In 1811
certain Kent Millers attempted to enforce the statute of Artificer and a writ of
mandamus was issued ordering the Justices of Kent to hear and determine the
application for an assessment of wages.21
21 See R. vs. Justices ofKent (1811) 14East 395.
41
This led the workers to form combinations. The object of these
combinations was to present petitions to the legislature calling for the
enforcement of the wage fixing or apprenticeship legislation. Though the
combinations were prohibited, these worker’s combinations were not treated as
being criminal conspiracies because the object of these combinations was to
enforce the existing Law and not to defeat. Besides this preservation and
improving the workers wage levels and conditions of employment were their
objects. They also made provision by floating a common fund to provide relief
during hard times like sickness, unemployment and old age.
However, industrial revolution brought in the up heaves and industrial
unrest caused due to the in ability of individual workmen to bargain effectively
with their employers. Despite the existence of combination Laws prohibiting
combinations trade unions were established. Act of 1800 made all combinations
of workmen to regulate the conditions of their work illegal. The Act of 1800 also
made illegal all contracts and agreements between employers and workers for
reducing wages or altering hours of work or increasing the quality or work. A
select committee on Artisans and Machinery in 1824 recommended
that
employers and workmen should be free to make such agreements as they thought
fit, that the restrictions imposed upon this freedom by statute should be removed
42
and also that the Law making combinations for such purposes criminal
conspiracies should be altered. Accordingly Combination Laws Repeal Act, 1824
was enacted which repealed all the Combination Laws including Act of 1800.
Further the Act of 1824 was replaced by Combination Law Repeal Act
Amendment Act, 1825 which penalized the acts of violence, threats and
intimidation.
For the protection of the funds the workers trade unions were registered
under the Friendly Societies Act, 1855. There were cases of embezzlement of
trade union funds. However, the Courts were reluctant to extend the protection on
the ground that the union was in unlawful restraint of trade. Besides the
vulnerability of its funds the trade unions also faced the draw back that they are
only voluntary associations with no corporate personality or a separate legal
entity. Thus trade union could not hold any property. The property of the trade
union was held to be joint property of all members. This deficiency led to the
passage of the Trade Unions Funds Protection Act, 1869. As a result of these
developments Royal Commission on trade unions was appointed in 1867. The
Commission gave its report in 1869 recommending legal recognition of trade
unions and also conferring upon them certain rights and powers. The result was
enactment of Trade Unions Act, 1871. The Act legalized trade unions and thrown
43
an option for voluntary registration which conferred special legal status, powers
and imposing certain obligations. One of the most recognizable provisions of the
Act was that it made it clear that the members of a trade union shall not be liable
for criminal conspiracy because its purposes are in unlawful restraint of trade.
Then came the Trilogy of the famous House of Lords decisions. It was the
last case i.e. Quinn vs. Leathern22 that brought to light the deficiencies and the
vulnerability of the trade union under civil conspiracy. The House of Lords in
Quinn vs. Leathern
held that although no unlawful act had been committed by
any of the defendants individually, the combination to injure was an unlawful
conspiracy entitling the plaintiff to recover damages and also held that 1875 Act
afforded no protection which referred to only criminal conspiracy. As a
consequence of
Quinn vs. Leathern’s24 decision the Trade Disputes Act, 1906
was passed. The risk of civil conspiracy was removed for the acts done in
contemplation or furtherance of a trade dispute, if the act is not unlawful,
combination will not make it so.
22 Supra n 8
23 Id
24 Id
44
The Act, 1906 also confers immunity from tortuous liability for inducing a
breach of contract of employment in contemplation or furtherance of a trade
dispute.
2. 5. 2. Evolution of Trade Unionism in India
The workers used to unite to form combinations to redress their
grievances. Severe drought forced the agricultural workers to come out of
villages in search of work. .Industrialization had offered work to these workers.
There was phenomenal exodus of agricultural workers from villages to industrial
towns. This unparallel movement of agricultural workers led to surpassing of the
workers supply to workers demand. Thus the theory of demand and supply
played in determining to wage levels. Workers were exploited by the
Industrialists. They were paid starvation wages. The First World War added salt
to the injury as that has lead to increase in cost of living considerably. United
India was ruled by foreigners. For independence political agitations against the
foreign rule was gaining momentum. Economic discontent was conspicuous
among the masses. Political agitators were in search of issues. The discontented
industrial workers were in search of support. Thus the political upsurge found its
way in the discontent of industrial workers. Action committees were formed
45
consisting of representatives of workers who lead the workers to strike at work.
Many of the strikes were successful and the demands of the workers were
fulfilled. These successes in term lead to jacking up the morale of the workers
associations. The Associations gained the confidence of the workers.
Incidentally labour consciousness was on upraising through out the world. The
trade union movement got impetus in India. During the same period International
Labour Organization was established which further influenced the growth of
trade union movement in India.
However, in India for the first time in 1890 the Mill Workers lead by
N.M. Lokhanday formed an Association christened as “Bombay Milhands
Association”. “The purpose was to provide a clearing house for the grievances of
Mill workers and to help in drawing public attention to the cause of labour. This
was the first Union in India which earned for its founder the title of being the
‘FIRST TRADE UNIONIST of the country. He also published DINABHANDU, a
working class newspaper, to place before the authorities and the employers, the
legitimate grievances of workers. In subsequent years a number of unions were
formed, such as The Amalgamated Society of Railway Servants of India and
Burma (for European and Anglo-Indian Railway Employees) to cater to their
economic needs, through mutual insurance schemes. The Printers’ Union of
46
Calcutta, 1905; the Bombay Postal Union, as also at Calcutta and Madras, 1907;
the Kamgar Hitwardhah Sabha, 1909; the Social Services League, 1910”. All
India Trade Union Congress (AITUC) was established in 1920 as a result of a
resolution passed by the organised workers of Bombay and the delegates which
met in a conference on 31st October, 1920. The Indian National Trade Union
Congress came into existence on 4th May 1948, as a result of the resolution
passed on 17 November 1947, by the Central Board of the Hindustan Mazdoor
Sevak Sangh, which was a labour organization.
The pro labour leaders influenced by Gandhian Philosophy and Sarvodaya
worked under the direction of National Congress. The AITUC was under the
strong hold of the Communist, the Congress leaders thought of forming a Central
Trade Union Organization.26
Later the history in 1920 took a different turn when the Madras High Court
has granted an injunction restraining the union officials of Madras Textile Labour
Union to induce certain workers to break their contracts of employment by
refusing to return to work. Thus the leaders of trade union were exposed for
25
Dr. C.B. Memoria, Dr. Sathish Memoria and S.V. Gankar, “Dynamics of Industrial
Relations” (Mumbai: 14th Ed. Himalaya Publishing House, 2000) at page 96.
26 Id
47
prosecution and imprisonment under Indian Penal Code for criminal conspiracy
besides for damages under torts even for bona-fide trade union activities. This led
the workers to feel the necessity of legislative protection of the trade union
activities. A resolution was moved in the central legislative assembly in AITUC
seeking enactment of law for the protection of trade unions. Against the
opposition of the employers finally the Indian Trade Unions Act, 1926 was
passed which came into force from First June 1927.
During pre-independence days the trade union movement was not
satisfactory due to various reasons. One of the main reasons was that of passing
of Government of India Act, 1932. The post independence led to development of
democratic spirit among the citizens including the working class. Thus in the post
independence days trade union activities were developed tremendously. Every
category of workers formed unions of their own.
2. 6. Kinds of Trade Unions under the Trade Unions Act, 1926
As per Section 2 (h) of the Trade Unions Act, 1926 a trade union is any
combination, whether temporary or permanent formed primarily for the purpose
of regulating relations between workmen and employers or between workmen
48
and workmen or between employers and employers or for imposing restrictive
conditions on the conduct of any trade or business and includes any federation of
two or more trade unions.
There is no restriction as to who can form the combination to be called as
trade union as long as the objective of such a combination is one of the two
objects mentioned in the Act. The Trade Union Act 1926 impliedly defines two
kinds of trade unions namely, (i) trade union and (ii) registered Trade Union.
The Trade Unions Act, 1926 vividly illustrates that the legal status of
registered trade unions and their structural complexity. There is no provision
under the Trade Unions Act, 1926 for compulsory registration of trade union.
However, certain privileges and liabilities as discussed below are bestowed to
only on registered trade union under the Act.
2. 7. Incorporation of a Trade Union
Every registered trade union shall be a body corporate by the name under
which it is registered and shall have perpetual succession and a common seal
49
with power to acquire and hold both movable and immovable property and to
contract, and shall by the said name sue and be sued.27
Registered trade union has been given more privileges under the Trade
Unions Act, 1926 for the effective functioning of the trade union with the object
to accelerate and maintain industrial peace and harmony. Regarding the outsiders
as office bearers or members of the executive of the registered trade union, the
Act distinguishes the unorganized sector from organized sector. Thus the Act
makes provision for more participation of the outsiders in case of unorganized
sector for the reason that illiteracy is rampant besides the job vulnerability of the
unorganized sector workers28.
The unregistered trade unions are not entitled for any privilege under the
Trade Unions Act, 1926. An unregistered trade union is not however precluded
from raising an industrial dispute, or participating in collective bargaining
process, conciliation, arbitration or adjudication. It is also not prevented from
declaring strikes duly following the conditions / procedures detailed under
Section 22 & 23 of the Industrial Disputes Act, 1947. But an unregistered trade
27 See section 9 and 13 of the Trade Unions Act, 1926
28 Section 22 of the Act provides that ‘no office-bearer or member of a registered Trade Union shall be liable to
punishment under sub-section (2) of section 120-B of the Indian Penal Code, 1860 in respect of any agreement
made between the members for the purpose of furthering any such object of the Trade Union as is specified in
section 15, unless the agreement is an agreement to commit an offence.
50
union is not entitled for the immunities under the Trade Unions Act, 1926. These
immunities under the Trade Unions Act, 1926 take a trade union out of the fear
of victimization and make a trade union strong. It boosts up the moral of the
executive of a registered trade union. However there are trade unions which are
unregistered yet they are strong and effective in imposing and restricting the
employers from unilateral and arbitrary decisions / policies. But such
unregistered trade unions derive the strength from the committed membership of
the workmen, the literacy, the position of the workmen in the industry such as
technical etc, and also the political affiliations it has. Such trade unions are
mostly class conscious trade unions, i.e. they are formed on category basis e.g.
Railway loco Running Staff Associations, State Transport Drivers Associations,
Tool and Die Makers Associations, Plumbers Associations, Carpenters
Associations etc.
On the other hand the Associations formed mainly of Administrative /
Ministerial staff does not enjoy the same strength. The trade unions of casual
labour, temporary labour, contract labour etc, of the unorganized sector
necessarily register and seek for strength from outside the industry such as
political support etc.
51
2. 8. The Privileges of a Registered Trade Union
The Act under sections 17,18 and 19 provides various types of immunities
for registered trade unions. A registered trade union enjoys the immunity from
criminal conspiracy in respect of certain acts done in furtherance of trade objects
as defined under section 15. The immunity conferred under Section 1729 is not an
unfettered or unqualified but a limited one i.e. the immunity is available to any
office bearer or member only in respect of any agreement made between the
members for the purpose of furthering any such object of trade union as is
specified in Section 15. However, if the agreement is an agreement to commit an
offence this immunity is not available.
A registered trade union also enjoys the immunity from civil suit, under
Section 18 of the Trade Unions Act, 1926 in certain cases i.e. in respect of any
act in contemplation or furtherance of a trade dispute to which a member of a
trade union is a party on the ground only that such an act induces some other
person to break a contract of employment, or that it is an interference with the
trade, business or employment of some other person or with the right of some
other person to dispose of his capital or of his labour as he wills.
29
Section 17 of the Act provides that a registered
52
Further a trade union shall not be liable in any suit or other legal
proceedings in any civil court in respect to tortuous act done in contemplation or
furtherance of a trade dispute by an agent of the Trade Union if it is proved that
such person acted without the knowledge of or contrary to express instructions
given by the executive of the trade union.30 Further section 19 of the Act
provides that an agreement between members of a registered trade union shall not
be void or voidable merely by reason of the fact that any of the objects of the
agreement are in restraint of trade.
2. 9.
Kinds of Trade Unions as Referred in Common Parlance
Ever since the dawn of industrialization there has emerged a wide variety of
unions across the Globe. The unions are classified based on (i) the purpose for
which unions are formed and (ii) the composition of their membership. However,
unions are not rigid and rarely exist in their pure form. A brief discussion of
different types of unions is given below.
30 See section 18(2), of the Trade Unions Act, 1926.
2. 9.1. The Reformist Unions
These unions aim at the preservation of the capitalist society and the
maintenance of the usual employer-employee relationship, elimination of
competitive system of production. They neither seek comprehensive change nor
wish to destroy the existing social, economic or political structure of the state.
They desire only to modify these in accordance with what their members
consider to be current modes in society. For example, they may wish to increase
labour’s share in the increased production or they may aim at improving working
conditions by enforcing safety measures. They may try to generate increased
purchasing power by providing for worker’ various cooperative ventures,
insurance associations and educational programmes. They generally seek to
dignify labour by forcing upon the public and its leaders recognition of the
importance of labour in modem society. All these objectives, they believe, can be
attained without any extensive change in the present economic, social and
political institutions.
54
In USA, the unions affiliated with A.F.L (American Federation of Labour)
the C.I.O (Congress for Industrial Organization) are predominantly of this type.31
In India I.N.T.U.C (Indian National Trade Union Congress) is of this class.
UPLIFT unions are also called as friendly unions which aspire to elevate the
moral, intellectual and social life of the workers and advocates idealistic plans for
social regeneration.
2.9. 2.
Revolutionary Unions
These unions aim at destroying the present structure completely and
replacing it with new and different institutions according to the ideals that are
regarded as preferable. In USA the most common example of this type of union
is the Industrial Workers of the World (I.W.W). C.I.T.U (Centre of Indian Trade
Union) in India belongs to this class of unions. C.I.T.U believes that the
exploitation of the working class can be ended only by socialising all means of
production, distribution and exchange and establishing a socialist state, that is, it
stands for the complete emancipation of the society from all exploitation.
31
Dr. C.B. Memoria, Dr. Sathish Memoria and S.V. Gankar, “Dynamics of Industrial
Relations” (Mumbai: 14th Ed. Himalaya Publishing House, 2000) at 78.
55
2. 9.3.
Craft Unions
They referred to a particular organization of workers employed in a
particular craft
or trade
or in
a
single
or two
or three related
trades/crafts/occupations, Such organizations link together those workers who
have similar skills, craft training and specialization Historically speaking, it were
the craft unions that lent stability to the trade union movement because of their
relative stability in employment and higher earnings. The craft unions are mostly
found amongst non-manual employees and professional workers. The
Ahmedabad Weavers’ Union, The Kanpur Suti Mill Mazdoor Sabha, The
International Wood Carvers Association, The Indian Railway Loco Running
Staff Association and The All India Station Masters Association are the
outstanding examples of such unions.
Their members are generally craft
conscious rather than class conscious. They derive their strength from the
strategic position of their workers. Such unions are horizontal in character, for
they enroll workers engaged in one or a single group of processes. 32
32 Id
56
2.9.4.
General Unions
These unions are usually formed by the workmen representing all
categories/ elasses/group/trades/crafts of workmen. They have large membership
base. Normally their negotiations take care of the effect of one privilege to one
category and its effect on other category, since the trade union is representing all
categories of workmen. Such types of trade unions are believed to be more
responsible, mature in their dealings with the employer and during the course of
collective bargaining process/ negotiations and conciliations proceedings.
2. 10. The Trade Unions Amendment Act, 2001 - A New Legal
Regime
The Amendment Act of 2001 introduced certain far reaching reforms to the
existing provisions in the Act in the areas more prominently relating to the (i)
registration of trade union, (ii) minimum subscription and (iii) composition of
Executive Committee as to the proportion of out-siders. These amendments were
long awaited as per the recommendations of the National Commission on Labour
constituted in the years 1966 and 1999 and the high power Committees
constituted from time to time by Government of India.
57
Section 4 of the new amended version provides that no trade union of
workmen shall be registered unless at least ten percent or one hundred whichever
is less of workmen engaged or employed in the establishment or industry with
which it is connected, are on the date of filing the application for registration, the
members of such trade union and in no case a trade union shall be registered
without a minimum strength of seven members. Section 6 of the amended regime
introduces two types of subscription rates in respect of organized and
unorganized sector workers unions.
Further the amended version of section 22 provides that all office bearers
of a Registered Trade Union, except not more than one third of the total number
of office bearers or five whichever is less shall be persons actually engaged or
employed in the establishment or industry with which the Trade Union is
connected. The employees who have retired or have been retrenched not be
construed as outsiders for the purpose of holding an office in a trade union. In
case of unorganized sector, however, the present provision of section 22 of the
Act continues to be applicable.
58
2.10.1. The Probable Adverse Impact
According to the definition under the Trade Unions Act, 1926 a trade
union is any combination (of workmen or employers). It is limpidly clear there is
no number restriction as to the structure of the combination. When the said
combination (of workmen) seeks to register, the amended Section 4 and the new
Section 9A inserted by the Amendment Act, 2001 puts a restriction that the
combination should have at least of ten percent or one hundred of the workmen
whichever is less but not less than seven members engaged or employed in the
establishment or industry. Hence a registered trade union (of workmen ) under
the Act is any combination of at least ten percent or one hundred of the workmen
whichever is less engaged or employed in the establishment or industry but not
less than seven such persons.
The Statement of objects and reasons clearly shows that one of the aims of
the amendment is at reducing the multiplicity of the trade unions. With this
ultimate object Section 4 was amended and section 9A was inserted in the Trade
Unions Act, 1926 making it obligatory upon a union of workmen to have at least
ten percent or one hundred workmen employed or engaged in the establishment
or industry but not less than seven such persons as its members. The object of the
59
Amendment 2001 is highly laudable i.e. reducing the multiplicity of the trade
unions.
The Indian trade union movement is retarded because of the weakness it
suffers from the multiplicity of the trade unions. The multiple unions are mainly
the result of political outsider wanting to establish unions of their own with a
view to increasing their political influence, albeit in urban areas.33
The numbers of trade unions on Indian labour scene have increased many
folds since 1932. This increase dose not necessarily reflects that trade union
movement in India has strengthened. If the average membership of a trade union
is taken during this period, it shows that average membership of a trade union has
not increased proportionate to the increase in employment opportunities but
decreased to the base year 1932. Thus it is evident that trade union movement has
weakened by this mania of multiplicity of trade unions. Though the Amendment
Act, 2001 was aimed to reduce the multiplicity by prescribing the minimum
membership of a trade union, it is not effective one for the following reasons:
33
Amiya Rao, How relevant are our Trade Unions?, Economic and political weekly. Vol.
XVIII No.47- November 19,1983. at 1960
60
(i)
Hypothetically in an industry where two thousand workmen
are employed or engaged theoretically it is possible to have at
least twenty registered trade unions which is an anathema for
the industrial relations.
(ii)
Secondly, the requirement of ten percent or hundred or at least
seven persons employed or engaged is applicable only for
registration of trade unions. Registration is only optional in
the Trade Unions Act, 1926. Hence where the trade union of
workmen which do not comply with this minimum
requirement may opt not to register and still it remains to be a
trade union on the scene (which is not conducive to industrial
peace and harmony). There is also no bar on number of such
trade unions.
(iii)
Thirdly, to curtail the multiplicity of trade unions the
Amendment Act, 2001 also brought in provisions viz. that a
registered trade union shall at all times continue to have a
minimum number of persons engaged or employed as its
members and the registrar has been given power under
61
Section 10 (c) to withdraw or cancel the certificate of
registration if he has satisfied that a registered trade union of
workmen ceases to have the requisite numbers. This provision
also does not check the growth of unregistered trade unions.
(iv)
Fourthly, though the Amendment Act, 2001 with committed
emphasis has brought in provision regarding minimum
membership, but failed to delete sub section (2) of section 4
of Trade Unions Act, 1926 which is as under.
Further section 4 (2) of the Act (amended version) provides as follows:
“Where an application has been made under subsection (1) for the
registration of a trade union, such application shall not be deemed to have
become invalid merely by reason of the fact that, at any time after the date of the
application, but before the registration of the trade union, some of the applicants,
but not exceeding half of the total number ofpersons who made the application
have ceased to be members of the trade union or have given notice in writing to
the Registrar disassociating themselves from the application. ”
62
Keeping the above provision in the statute would have far reaching effect,
finally defeats the very object of the Amendment Act, 2001. According to
Section 4(1) and the proviso, the trade union should have the requisite number at
the time of the application for registration. If before the grant of certificate of
registration half of the total number of persons who made the application
disassociate themselves with the trade union or give notice to the Registrar even
though the required number has fallen (but not below half of the requisite
number), the Registrar has no option but to register and grant certificate of
registration.
The new insertion of Section 9A and clause C of Section 10 through the
amendment Act would be ineffective in the light of Section 4 (2). In as much as
under Section 4 (2) a trade union has a right to demand registration if it had
complied with regard to the requisite number of persons employed or engaged
only at the time of making the application. After submission of the application
but before the registration, even if the requisite number falls but not below fifty
percent of the requisite number the trade union has right to be registered under
the Trade Unions Act, 1926. In effect it means the requisite number has to be
maintained by a trade union of workmen only at the time of submission of the
application for registration. As such the provisions brought in by insertion of
63
Section 9A and 10(C) are ineffective for the reason that when the Registrar has
no power to refuse to register a trade union of workmen which has complied with
the requisite number only at the time of making the application but at the time of
granting, the number dwindle to not less than half of the requisite number, the
Registrar would not be in a position to withdraw or cancel the certificate of
registration if a trade union of workmen maintain more than half of the requisite
number of persons as its members i.e. minimum number is five percent or fifty
but not less than four. In such situations the principle object of the Amendment
Act, 2001 may suffer.
The multiplicity of trade unions of workers leads to the loss of
representative character of the trade unions unless they form a federation which
is envisaged under the definition of the ‘Trade Union’. Under section 2(a) of the
Trade Unions Act, 1926 a ‘trade union’ includes any federation of two or more
trade unions.
The multiplicity of trade unions of workmen also leads to inter union
rivalries, which ultimately cuts at the very root of unionism, weakens the power
of collective bargaining and reduces the effectiveness of workers and their
chances of securing their legitimate rights.
64
The thrust of Section 22 (amended version) was for promoting internal
democracy, rank and file leadership of facilitating their orderly growth and
regulation. It is a fact that trade union movement in our country has been built up
by committed leaders who were not employed or engaged in the industry
concerned but committed for the welfare of the working class. In India the trade
union movement was closely associated with the freedom struggle. Sri
M.K.Gandhi was also instrumental in the growth of trade union movement prior
to Independence. (Eminent National leaders like S.C.Bose, J.L.Nehru acted as
Presidents of AITUC).
Outsiders are necessary to certain extent due to the present illiteracy of the
workers but it is considered to decrease the ratio with the advent of literacy
among the workers as there is always likelihood of the workers being exploited
by irresponsible labour leaders for political gains.34
There are many determinant factors which led to the growth and stay of
outsiders in trade unions .The chief among them are:
34 Report of the Plantation Enquiry Commission, New Delhi: Government of India, Ministry of
Labour, 1956-page 139.
65
(i)
Illiteracy: Illiteracy among the working class was rampant but now
with the raise in national literacy rate, it has narrowed in the
organized sector also. However in unorganized sector still it is at
high level. Illiteracy leads the workers to the lack of professional
and diplomatic tactics while bargaining across the table with the
employees, it thus generates feeling of helplessness, insecurity and
hopelessness and finally ends up with ineffective bargaining.
(ii)
Lack of resourcefulness is another cause for the workers to seek
outside leadership.
(iii)
Lack of finances is yet another reason for the workers to look at
outside leadership.
(iv)
Fear of victimization is one of the most important factors that lead
to outside leadership.
Among the unorganized sector workers all the above major determinants
are still dominating. Based on these ground realities the Amendment Act, 2001
was brought with the following changes .Viz. Section 22 of Trade Unions Act,
1926 has been substituted and amended as under:
66
(1) Not less than one half of the total number of the office bearers of every
registered trade union in an unorganized sector shall be persons
actually engaged and employed in an industry with which the trade
union is connected.
Provided that the appropriate Government may by special or general order,
declare that the provisions of this section shall not apply to any trade union or
class of trade unions specified in the order.
Explanation: For the purposes of this section “unorganized sector” means any
sector which the appropriate Government may by notification in the official
Gazette Specify.
(2) Save as other wise provided in Sub Section (i) all office bearers of a
registered trade union except not more than one third of the total
number of the office bearers or five which ever is less shall be persons
actually engaged in the establishment or industry with which the Trade
Union is concerned.
Explanation: For the purpose of this Sub Section, an employee who has
been retrenched shall not be construed as outsider for the purpose of
holding an office in a trade union.
•L- 7 6.7S
7-
P7
67
(3) No member of council of Ministers or a person holding an office of
profit (not being an engagement or employment in an establishment or
industry with which the trade union is connected.) in the Union or
State shall be a member of the executive or other office bearer of a
registered trade union.
Another important provision brought in by the Amendment Act, 2001 is
that of insertion clause (hh) to Section 6 of Trade Unions Act, 1926 which reads
as “the duration of period of being not more than three years, for which the
members of the executive and other office bearers of the trade union shall be
elected”.
The intention and aim of the legislature is laudable in curtailing the
menace of professional leaders lending leadership to the trade unions. The main
thrust of the amendment should have been for the permanent solution rather than
adhoc in as much as only regulation of outsiders would not develop internal
democracy of a trade union. A trade union to be more effective should have three
qualities i.e. it should be internally strong, internally democratic and internally
responsible. These characteristics would be developed among the trade unions
only when legal provisions are made in the legislation regarding recognition of
the trade unions as a bargaining agent. The recognition brings in the much
68
required confidence among the rank and file which further leads to stabilization
of trade union finances and develop internal leadership.
The Amendment Act also does not bar an outsider holding executive office
of more than one trade union simultaneously. Thus the Trade Unions
Amendment Act, 2001 does not check the growth of self centered, irresponsible
professionals who are unconnected and unconcerned with the problem of the
workers but interested only in their personal gains. Hence, the Amendment
should be to check the growth of such outside leaders and at the same time
should create an ambiance for the growth of internal leaders strengthening trade
union democracy. In this angle the Trade Unions Act, 1926 needs a thorough
reform.
On the whole the primary purpose of a trade union is to regulate the
relations between the workmen and the employer or to impose any restrictive
conditions on the conduct trade or business of some other person. A trade union
in the process necessarily has to conduct the disputes of variegating nature to
further the common interests of the workers. In this context it is very much
relevant to understand the scope and content of the term an ‘industrial dispute’ in
order to have more clarity on the issue.