Unit 6

Trade Unions
Introduction: Under the Trade Unions Act, 1926, the expression trade
union includes both employers and workers in organizations. According to the Indian Trade Unions Act, 1926, a “Trade Union means any combination whether temporary or permanent formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business and includes any federation of two or more trade unions”. The term trade union however is commonly used to refer to the organization of workers formed to protect their rights and enhance their welfare. Definition: According to V.V. Giri, “Trade unions are voluntary associations of workers formed together to promote and protect their interests by collective action.”

Trade Union movement in India
Trade union activities in India started with the formation of the Bombay Mill Hands Association (BMHA) in 1890. In subsequent years a number of unions were formed at places like Calcutta and Madras. All these unions aimed at promoting welfare activities for workers, spreading literacy among them etc. The leadership to these unions was provided mostly by social reformers and politicians. During the First World War and immediately afterwards, certain events like the Russian Revolution, setting up of the International Labour Organisation, Swaraj Movement etc. facilitated the trade union movement, which led to the formation of All India Trade Union Congress (AITUC). The formation of AITUC prompted the formation of a number of trade unions industry-wise and region-wise. In 1926, Trade Unions Act was passed to provide legal status to union activities and registration of unions under the act. During the late 1920’s, ideological differences among top union leaders

started and many leaders left AITUC and formed the National Trade Union Federation (NTUF). After Independence there was rapid growth in trade unions due to support from both the government and society at large. The Congress party formed the Indian National Trade Union Congress (INTUC) in 1947. The Praja Socialist Party formed Hind Mazdoor Sabha in 1948. Meanwhile, Communist Party of India took over the control of AITUC. With the proliferation of the political parties, the trade unions also proliferated. Presently the more active central trade unions are:  National Trade Union Federation (NTUF)  Indian National Trade Union Congress (INTUC) (Congress)  All India Trade Union Congress (AITUC) (Communist Party of India, CPI)  Centre of Indian Trade Unions (CITU) (CPI-M)  Bharatiya Mazdoor Sangh (BMS) (BJP)

Factors which contributed to the growth of Trade Unions in India
According to Giri, the following factors helped the growth of Trade Unions in India: 1. World War I: Though the labour movement began in India about a

century ago, it was only from the end of the First World War (19141918) that it gathered momentum. Giri pointed out that both economic and political conditions alike had contributed to the new awakening. Prices had shot up during the War and there had been no corresponding increase in the wages though the employers had amassed huge profits. These conditions led to the formation of a large number of Trade Unions throughout the country.
2. Influence of political leaders: The early stage of the development

of trade union movement in India owes a lot to the contributions of some political leaders, social reformers and philanthropists. The mass movement started by Lokmanya Tilak, Annie Besant and later by Mahatma Gandhi, caused ripples in the trade union movement.

Gandhiji was also greatly responsible for giving a re-orientation to the labour movement by establishing the Ahmedabad Textile Labour Association.
3. The ILO: The establishment of International Labour Organisation of

which India was a founder member prompted the formation of trade unions in India. In choosing its nominees to the International Labour Conference held annually, the government had to consult the association of workers and employees to represent their interests. This led to the establishment of the All India Trade Union Congress (AITUC) as the central body of workers, representing the various trade unions affiliated to it.
4. The Russian Revolution: The success of the Russian Revolution gave

an impetus to the labour movement because of the feeling it generated that the solidarity of the working class could achieve great things.
5. The Trade Unions Act: The Indian Trade Unions Act, passed in 1926,

is a landmark in the history of trade movement in India because this Act gave trade unions a legal status and immunity to its officers and members against civil and criminal liability for concerned actions.

Characteristics of Trade Unions:
1. Association: A trade union is an association or combination of

2. Voluntary: Membership of a trade union is voluntary. Generally there

is no legal or other pressure to join a trade union. An employee has a choice whether he wants to join or not to join a trade union.
3. Temporary / Permanent: A trade union is a continuing, permanent

or a temporary, casual association. It has to be a long-term body as otherwise it cannot achieve its objectives.
4. Collective action: Trade unions always act through united action of

members to promote and protect their economic and other interests.

5. Community of similar interests: Members of a trade union have

common interests and problems which motivate them to unite. A union seeks to regulate relations between employers and workers.

Objectives of Trade Unions:
According to the Trade Unions Act, “A trade union must work to protect and promote the interests of the workers and conditions of their employment.” The main objectives of a trade union are:

1) To secure for the workers fair wages in the light of the cost of living and the prevailing standards of living. 2) To improve working conditions by securing shorter working hours, better leave facilities, adequate social security, better housing and education and other welfare measures. 3) To ensure security of employment by resisting retrenchment. 4) To assure workers a share in the increased profitability of industry through payment of adequate bonus. 5) To secure for the workers a say in the management and industrial democracy, thereby bringing about a new social order.

Functions of Trade Unions:
1. Militant or intra-mural functions: These functions include

protecting the workers’ interest through collective bargaining and direct action. Trade unions safeguard workers against all sorts of exploitation by the employers and political parties. Trade unions provide protection from unfair practices and atrocities of the management. They also attempt to secure for the workers fair wages,

proper working conditions and welfare facilities so as to secure a desirable standard of living.
2. Fraternal or extra-mural functions: These functions include

providing financial and non-financial assistance to the workers during periods of lock-out and strikes. These functions include medical facilities during sickness. These functions also include provision of education, recreation and housing facilities etc.
3. Social functions: These functions include carrying out social service

activities, discharging social responsibilities. They can play a vital role in tackling social evils like corruption, nepotism, casteism, regionalism, black marketing etc and in promoting national integration.
4. Political functions: These functions include affiliating a union to a

political party, helping the political party in enrolling members, seeking the help of political parties during strikes and lock-outs.
5. Ancillary functions: These functions include a) Communication: Trade unions communicate their activities,

programmes, decisions and achievements to their members through publications of newsletters and magazines.
b) Education: Many trade unions make arrangements for the

education of workers and their family members.
c) Human resource development: Many trade unions take initiative

and provide for further vocational training, workshops, seminars etc. to further advance the careers of their members and to increase their chances to end up in a higher paying job.

Role of Trade Unions / Why do workers organise into unions:
1. Steady employment: Workers form into a trade union to secure for

themselves, a security of service. Unions take political action to get legislative protection against dismissal. They also resist any attempts by the employer to retrench workers.

2. Economic benefits: An individual worker will never be in a position to

secure good pay and proper working conditions from the employer. He joins a union because unions have great bargaining power to get these economic benefits for the workers.
3. Check on arbitrary action: If the workers are not invited, an

employer may adopt arbitrary policies and procedures to exploit them. Workers form unions to ensure formulation of rational and uniform personnel policies and their unbiased implementation on the part of the management.
4. Economic security: Unions protect their members from various

economic hazards like illness, accidental injury and unemployment. Unions contact employers to pay compensation and retirement benefits. Unions also have funds to provide financial support to distressed members.
5. Self-expression: Workers join unions to communicate with the

management. Union serves as a platform through which a worker makes his voice heard by the employer.
6. Sense of belongingness: An ordinary worker has little sense of

belongingness in modern industry. By joining a union he can associate with fellow-workers and gain social respect. He can also discuss his problems with leaders of the trade union. Trade unions generate a spirit of self-reliance and self-respect among workers.
7. Industrial relations: There is a need for an adequate machinery to

maintain proper relations between management and labour. A trade union provides this machinery through collective action. Therefore workers join a union.
8. Recognition & participation: Workers can gain recognition as equal

partners with the employer by joining unions. They can even participate in the management of the industry. They can influence decisions that affect their interests through collective bargaining.

Structure of different types of trade unions

The structure of trade unions in India varies from organisation to organisation. They are broadly as follows.

Craft unions: A craft union is the simplest form of a trade union. A
craft union is an organisation of workers employed in a particular craft, trade or specialization. Due to their identical training and skills, members of a craft union tend to develop similar outlook and unity among them is easier. In India, craft unions are found largely among white collar workers and professionals such as government employees, bank employees, doctors, lawyers and teachers etc.

Advantages: a) Craft unions give most stable relationships. b) They provide needed training through apprenticeship. c) They secure high wages and better benefits to their members. d) They have strong bargaining power as they comprise of skilled employees.

Disadvantages: a) Craft unions have become irrelevant in the modern days due to increasing generality of service conditions of all classes of employees. b) These unions keep majority of the workers outside the union leadership.


Industrial unions: An industrial union is organised specifically to
each industry. These unions are vertical in nature because they consist of all types of workers in an industry. Ahmedabad Textile Labour Association, the Rashtriya Mill Mazdoor Sangh are examples of industrial unions in India. These unions consist of both skilled and unskilled workers.


General unions: General unions consist of workers employed in
different industries and crafts within a particular city or region. The Jamshedpur Labour Union is one such example of a general union.


Federations: Federations are national-level bodies to which plant
level unions, crafts unions, industrial unions and general unions are affiliated. Federations are apex organisations of workers and they’re also called Central Trade Unions. The main federations in India are: 1. Indian National Trade Union Congress (INTUC) 2. All India Trade Union Congress (AITUC) 3. Centre of Indian Trade Unions (CITU)
4. All India Bank Employees Association (AIBEA)

5. National Federation of Postal Employees (NFPE)

Trends in trade union movements:
After the liberalization process in the economic system which started in the 1990’s, there have been many changes in the trade unionism too. The changes are chronicled as under:

Stage 1: There is a decreasing attraction among employees from
industrial sector towards unionism. This is evident from the decreasing number in members of trade unions.

Stage 2: There is an increasing de-politicization of trade unions. This is
happening in two ways- Firstly, many trade unions are not affiliated any longer to central trade unions and secondly, many central trade unions are passing on their control to non-politicians.

Stage 3: Unions are becoming increasingly matured, responsive and
realistic in their thinking and actions. Gone are the days of cat-call strikes, bandhs, gheraoes and violence. Union leaders have become more mature in their approach.

Stage 4: Trade union circles now discuss more about productivity, total
quality management, quality of work life and how to face competition, etc. rather than making plans to go for strikes or other pressure tactics.

Stage 5: The futility of multiple unions is being realised by the
government and the workers. The government proposes to amend the Trade Unions Act, 1926, to prescribe a minimum strength for the formation of a union as 100 or 10% of the total staff, whichever is less.

Stage 6: Trade unions have accepted many new employee management
processes like VRS, Golden Handshake and the like which used to be the cause for discontent few years ago. These changes are taking place on a continuous basis, which are positive indications for conducive industrial relations. It may be observed that the union movement is now more widespread, has taken deep roots and is better organised. Today there are more than 50,000 registered trade unions.

Limitations / Problems / Shortcomings of Trade Unions in India
1. Uneven growth: Trade unions are densely concentrated in large scale

in industrial sectors and big cities but there is very little activity in small sector, agricultural and domestic sector. Many workers still regard their employer as their BOSS and do not join trade unions.
2. Small Size: Most of the trade unions in India are so small in size, with

few members. 80% of the unions are of less than 50 members. This is not a healthy development because small unions fail in pressurizing the government or employees in meeting workers’ demands.
3. Weak financial position: The average yearly income of trade unions

is very low and inadequate. The subscription fees are very low and many members do not pay the subscription fees in time. Workers are apathetic towards the unions and most of them are poor. Due to their weak financial position, most of the unions are not in a position to undertake welfare programmes for workers.

4. Political leadership: Leadership of trade unions is not rooted in the

working class. Trade unions are under the leadership and control of political parties and outsiders. Politicians exploit unions and workers for their personal and political gains. Strikes are organised and prolonged for political considerations. Thus, political leadership is very harmful to the trade union movement in India.
5. Multiplicity of unions: Workers’ associations in our country are

highly fragmented. There are more than one union in most of the industries in India because of various political parties’ dominance over workers. Thus, multiplicity of unions weakens the collective bargaining power of the union. So smaller trade unions should be amalgamated into one big trade union which can organise the labour activities well.
6. Narrow outlook of unions: Trade unions have a very narrow range

of service. They rarely look after the social needs of workers. They do not co-operate with employers in the accomplishment of goals. They are always in a striking position; many trade unions in India continue to be virtually strike associations expanding rapidly when conflict arises.
7. Apathy of members: Majority of workers do not take keen interest in

union activities. Trade unionism can make little progress until members appreciate their need for supporting the movement for a common cause and take part in the affairs of the unions.
8. Inter-union rivalry: Multiple unions create unnecessary, unwanted

rivalry. Unions try to down play each other in order to gain greater influence among workers. Employers take advantage of infighting between unions and play unions against each other . Inter-union rivalry weakens the power of collective bargaining and reduces the effectiveness of workers in securing their legitimate rights.
9. Illiteracy: Illiteracy and lack of education among the workers hinders

the growth of trade unions because workers are often unable to appreciate and contribute to the positive role of trade unionism. The ignorance and indifference of workers may result in lack of proper control of the leadership and misconduct.
10. Opposition from employers: Trade unions in India have to face

opposition from employers. They adopt all means to disrupt the activities and unity of workers. They also victimize the labour leaders, start rival unions and bribe the trade union officials.

11. Lack of integrity: Lack of integrity and dedication on the part of

trade union leaders is a major drawback of trade unionism in India. Leaders deceiving the workers in the negotiations, with the employer misusing their position and funds to use the union for their vested interests is not uncommon. These lead to the disillusionment among workers, so that they may even back out of the union.
12. Low income: The low income of workers is a negative factor in the

growth of trade unions. Because of their low income workers may feel it difficult to subscribe to the unions. As a result they may hesitate to join the unions.

Measures for strengthening Trade Unions:
1. Strong base: In order to develop a strong trade union movement, it is

essential to widen the unionism to unorganised sector and small towns. Workers in household, small-scale and domestic sector should also form trade unions.
2. One union in every industry: The principle of “one union in one

industry” should be adopted to avoid multiple unions and inter-union rivalry. The National Labour Commission observed and recommended that labour courts should be employed to settle inter-union disputes.
3. Financial stability: Sound financial position is an essential ingredient

in the effective functioning of trade unions. To improve the financial condition of the trade unions, the minimum membership fee should be raised as the wages of workers increased significantly. The financial position of the trade unions can be improved through  Increase in rate of subscription  Collection of donations
4. Internal leadership: Leaders of unions should be developed from

within the rank and file of the workers. This will help to eliminate political parties and outsiders. There need not be a ban on nonmembers holding executive position in a union, but then limit of outsiders in the executives of the union should not exceed 25%. Arrangements are made for education and training of workers.

Penalties should be imposed for victimizing union leaders and employees.
5. Recognition of unions: It should be made obligatory for employers

to recognise the unions in all undertakings employing 100 or more workers. The recognised unions should be statutorily given certain exclusive rights and facilities.
6. Paid officials: Full-time paid officials should be appointed to manage

the affairs of trade unions. These officials should be competent and sincere. They should be able to evaluate workers’ aspirations and be strong enough to negotiate with employers on equal terms. They should be paid well.
7. Need for comprehensive legislation: The Trade Unions Act passed

in 1926 made comprehensive legislation not only for registration and recognition of trade unions but also for protection and promotion of workers’ interests.

End of unit -6

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