EXCEL BOOKS

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Chapter

2
5
TRADE UNIONS
AND
EMPLOYERS
ASSOCIATIONS

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ANNOTATED OUTLINE

INTRODUCTION
A trade union is a formal association of workers, acting collectively,
who seek to protect and promote their mutual interests through
collective action

Features

It is an association of employees or employers or of independent workers

It is a relatively permanent formation of workers

It is formed to secure certain economic benefits to members

It emphasizes joint, coordinated action and collective bargaining

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Objectives of trade unions

Securing economic benefits to members
Improving the working conditions
Protecting members from unilateral acts and disciplinary actions of
management
Fighting against inappropriate personnel policies
Promoting the welfare of members
Improving employer-employee relations
Carrying out negotiations with management in a fair manner
Safeguarding organisational health and the interests of the industry

Functions of trade unions

Intra-mural functions
Extra-mural functions
Political functions
Social functions

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Structure Of Trade Unions

Craft union: It is a union whose members done type of work,

often using specialised skills and training.

Industrial union: It is a union that includes many persons

working in the same industry or company regardless of jobs
held.
General union: This type of union consists of workers
employed in different industries and crafts within a particular
city or region.
Federation: It is a group of autonomous, national and
international unions

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Growth Of Trade Union Movement And

Membership

Early period: Social workers, philanthropists, religious leaders led the

movement, mostly, on humanitarian grounds. After the Factories Act,
1881 was passed, important unions sprouted up slowly.

Modest beginning: The outbreak of World War! and the subsequent

economic, political and social conditions influenced the growth of trade
union movement. The establishment of ILO in 1919 helped formation of
several unions between 1919 and 1923.

All India Trade Union Congress: The AITUC was formed in 1920
followed by the establishment of All India Railwaymen's Federation in
1922. Unions began to adopt militant postures to achieve their demands.
Splits and mergers were quite common. The influence of political parties
was quite significant.
Current status: It has been a long and arduous road for the trade
union movement in India, a past boasting of prominent national leaders at
centre stage, to militant presence till 1990s and a painful process of
fighting for survival till 2000 and an uncertain future in the midst of
tumultuous economic, social, political and technological changes.
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The Legal Framework

The Trade Union Act, 1926 legalises the formation of trade unions by
any seven persons employed in a unit quite easily. A registered union
has certain advantages to its credit. Due to inter union and intra union
rivalry, it is not easy to carry out negotiations with a recognised union in
India. The Act, of course, has not cleared the fog either.

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Union recognition: criteria and rights

The Bombay Industrial Relations Act, 1946, classified the registered unions as:
i.

Representative union having a membership of not less than 25% of the total
employees as members in an industry;

ii.

Qualified union having at least 5% of membership in an industry; and

iii. Primary union having a membership of at least 15% of employees in an

undertaking.
The rights of a Representative union under the Act are:
a. First preference to appear or act in any proceedings under the Act as the
representative of employees;
b.

Right to submit a dispute for arbitration;

c.

To make a special application to the Labour Court to hold an inquiry; and

d.

Office-bearers of the union cannot be dismissed or discharged.

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Employer decides everything?

Collective bargaining can succeed only when the employer recognises a trade
union as the sole bargaining agent (in a multi-union situation) and agrees to
negotiate with it on various issues affecting the lives of workers. A union may be
strong, having a large majority of workers standing by its side, but unless it is
recognised by the employer it will not be able to deliver the goods. If the employer
refuses to recognise such a fact, for any reason whatsoever, it may not be able to
obtain any concessions for its members. Denial of recognition to a union enjoying
majority may lead both parties to a tug-of-war situation, seriously impacting
industrial activities. Since there is no Central Law for compulsory recognition of
unions, the employers are free to recognise any union of their own choice. In a
multi-union situation the employer is compelled to verify the claims of contending
unions in a careful way, following the procedure recommended by the 16th Tripartite
Labour Conference, 1958. The employer, by and large, is also free to grant
recognition to any union, purely guided by his whims or political strength of the
union.

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The Legal Framework

Code of Discipline, 1958

When multiple unions exit, the union claiming recognition should

be functioning for at least one year after recognition

The membership of the union should cover at least 15% of

workers in the establishment
To be recognised as a representative union for an industry in a
local area, the union should have membership of at least 25 per
cent of workers in that area
In case of multiple unions in an establishment or industry, the
one with the largest membership should be recognised.

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The Legal Framework

Verification of trade union membership
The majority character of a union is not easy to decide because of
claims and counter claims from warring factions. Proper
membership records, often, are not available. There is the problem
of common names appearing in the registers of more than one
union. Union leaders often divide workers along caste, community,
religion, linguistic and regional lines. The check off system
(whereby members pay their respective fee directly into the
account of the union concerned) is offered as a viable alternative
to solve the knotty issue.

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Problems Of Trade Unions

The factors responsible for the ever-growing list of problems faced
by trade unions in India may be recounted thus:
Trade union leadership: Outside leaders have hijacked the
trade union movement right from the beginning. Absence of
strong leaders from the ranks of workers, inability to represent
the woes of workers in a forceful manner, the presence of
towering political personalities willing to serve the cause of
workers, the illiteracy of workers, by and large, contributed to
this peculiar phenomenon.

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Evil effects of outside leadership

Slow growth of unions

Weakening of the overall goals for which unions existed

Coming in the way of nurturing strong leaders from the ranks of workers

Inability to understand the problems of workers

Inhibiting the development of one union in one industry

Personal agendas of leaders gaining priority over workers' overall interests

Multiple unions: This came in the way of a healthy and

democratic growth of labour movement in the country. The small
size, naturally, affected the bargaining powers of the union
severely.

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The Legal Framework

Union rivalry: The inter-union and intra-union rivalry helped the
cause of the employer more than that of workers. The warring
factions, consequently, had very little time to put up a joint,
coordinated fight before employers even under extremely trying
conditions.
Financial woes: The membership fee is pathetically low. There
were very few opportunities to raise funds otherwise. To keep
workers in good humour, often, unions had to organised
functions and programmes, out of merciful grants offered by
employers. This had a telling effect on their bargaining powers.
Other problems: Illiteracy, low membership, heterogeneous
nature of labour, lack of interest on the part of a large majority of
workers, absence of paid office bearers etc were some of the
other problems faced by trade unions.
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Current Trends In Trade Unionism

Of late, trade unions have been pushed to the wall due to factors
such as: global competition, restructuring exercises carried out by
companies from time to time just to survive, rising costs of
manufacturing, lack of support from the general public and the
government; privatisation, failure to deliver results in case of a
prolonged battle etc.

Reasons for the Paradigm shift

Militancy does not

Political base shrinking

aq

Public sympathy disappearing

Jobs vanishing at an alarming rate

Membership figures sinking

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Measures to strengthen trade union

movement
In order to strengthen the trade union movement in the country,
there is an urgent need to improve trade union finances, develop
leaders from the ranks of workers, recognise a bargaining agent on
the basis of strong membership figures, promote one union one
industry policy, strict criteria for recognising a representative union ,
strong political support for labour-related issues etc.

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Employers Associations
Employers associations are formed, primarily, to promote and protect
the interests of employers in trade and industry.

Objectives
Employers Associations are formed to promote and protect interests of employers in
trade and industry. They are formal groups of employers set up to defend, represent
or advise affiliated employers. They perform several important functions:

Primary
a. Promote and protect the interests of employers engaged in industry, trade and
commerce in India.
b. Study, analyse and disseminate information relating to labour policy, labourmanagement relations, collective bargaining, etc.
c.

Offer advice concerning various aspects of labour policy.

d. Liaise with Union Government and initiate steps that are representative and
legislative in nature.
Cont

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Employers Associations
Secondary
e.

Train and develop staff and members.

f.

Obtain data on wages and conditions of work in industries attached to them.

g. Come out with surveys, research-based reports on issues of importance to

both labour and management.
h.

Take up projects for social and family welfare.

i.

Deal with safety and health at work place and working environment.

j.

Initiate steps to improve public image and improve public relations.

k.

Educate the public regarding the character, scope, importance and needs of
trade, industry and commerce represented by members.

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Employers Associations
Status in India
All India Organisation Of Employers
The Employers Federation Of India
International Organisation Of Employers

Trade Unions And Employers Associations