Class notes- Industrial relations

Lecture 5- Trade Unionism in India

With the changed social, political and educational environment in terms of awareness of
right, trade unions are considered a major component of industrial relations system. Workers union
plays an crucial role to protect the interest of its members.

Trade unions are those organisations of employees/workers who work for the maintenance
and enhancement of their economic status by insisting on a rise in money wages and improvement
in working conditions and benefits. Besides this economic objective, there are other dimensions of
trade unions which have grained importance in the context of the changing sociopolitical
environment. The workers is not only a factor of production but an individual whose total life
situation is a matter of concern for the trade unions. Gandhiji viewed trade unions as moral
institutions aiming at making the workers better individuals and responsible citizens. Trade unions
are considered to be institutions experimenting with industrial democracy which would strengthen
democracy.

First Workers' Union in India

The first factories Act, 1881, was passed on the basis of the recommendations of the
Bombay Factory Commission, 1985. Due to the limitations of the Act, the workers in the Bombay
Textile Industry under the leadership of N. Lokhande demanded reduced hours of work, weekly rest
days, mid-day recess and compensation for injuries. The Bombay Mill owners' Association conceded
the demand for weekly holidays. Consequently, Lokhande established the first Workers' Union in
India in 1890 in the name of Bombay Mill-hands Association. A labour journal called "Dinabandu"
was also published.

First properly registered trade-union

The beginning of the Labour movement in the modern sense started after the outbreak of
World War I in the country. Economic, political and social conditions of the day influenced the
growth of trade union movement in India. Establishment of International Labour Organisation in
1919 helped the formation of trade unions in the country. The following years saw the rise and
growth of several other labour associations and unions in India like the Madras Labour Union which
was the first properly registered trade-union founded by B.P. Wadia in the year 1918, A number of
trade unions were established between 1919 and 1923. In the year 1920 the country saw the growth
of the Ahmedabad Textile Labourer’s Association in Gujarat which turned into a union under the
guidance of Mahatma Gandhi and is considered to be one of the strongest unions in the country of
that time because of the unique method of arbitration and conciliation it had devised to settle the
grievances of the workers with the employers.

First trade union federation at National level

The most important year in the history of Indian Trade Union movement is 1920 when the
All India Trade Union Congress (AITUC) was formed consequent upon the necessity of electing
delegates for the International Labour Organisation (ILO). This is the first All India trade union in the
country. The first meeting of the AITUC was held in October, 1920 at Bombay (now Mumbai) under
the presidentship of Lala Lajpat Rai. The formation of AITUC led to the establishment of All India
Railwaymen's Federation (AIRF) in 1922. Many Company Railway Unions was affiliated to it. Signs of
militant tendency and revolutionary ideas were apparent during this period

Meaning
As per Sec. 2 (h) Trade Unions Act, 1926-

“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.”

“A Trade Union is an organisation of workers, acting collectively, who seek to protect and promote
their mutual interests through collective bargaining”.

Characteristics of a Trade Unions

Trade unions are voluntary organizations of workers or employers formed to promote and
protect their interests through collective action. The Trade Unions Act, 1926 defines a trade union as
a combination, whether temporary or permanent, formed -

1. Association of employees
A trade union is essentially an association of employees belonging to a particular class of
employment, profession, trade or industry. For example, there are unions for teachers, doctors, film,
artistes, weavers, mine workers and so on. Trade Unions are primarily for the purpose of regulating
the relation between-

a) Workmen and employers or

b) Between workmen and workmen, or
c) Between employers and employers

2. Voluntary Association
An employee joins the trade union out of his free will. A person cannot be compelled to join a
union.

3. Permanent Body
A trade union is usually a permanent body. Members may come and go but the trade union remains.

4. Common Interest
The members of a trade union have certain matters of common interest-job security, better pay
and working conditions and so on, which bring them together.

5. Collective Action
Even when an individual employee has any grievance over certain management decisions, the
matter is sorted out by the intervention of the trade union Employees are able to initiate collective
action to solve any problem concerning any particular employee or all the employees.

6. Rapport with the Management

The trade union seeks to improve relations between the employees and employers. The
officials of the trade union hold talk with the members of the management concerning the problems
of the employees in order to find an amicable solution. It is thus possible for the employees to have
better rapport with the management.

Objectives of Trade Union

Unions concentrate their attention to achieve the following objectives:

1. Better Wages and Salaries

The subject which drew the major attention of the trade unions are wages and salaries. This
item may be related to policy matters. However, differences may arise in the process of their
implementation. In the case of unorganised structure, the trade union plays a crucial role in
bargaining the pay scales.

2. Improving Working Conditions

Trade unions with a view to safeguard the health of workers demand the management to
provide all the basic facilities such as lighting and ventilation, sanitation, rest rooms, safety
equipment while discharging hazardous duties, drinking water, refreshment, minimum working
hours, leave and rest, holidays with pay, job satisfaction, social security benefits and other welfare
measures.

3. Ensure favourable term of employment

Trade unions may fight against improper implementation of personnel policies in respect of
recruitment, selection, promotions, transfers, training, etc. This involves continued employment of
workers, prevent retrenchment, lay off or lock-outs. Restrict application of “fire” or dismissal or
discharge and voluntary retirement scheme (VRS).

4. Protection against victimisation of worker

Trade unions not only conduct negotiations in respect of the items with which their working
conditions may be improved but also protect the workers from the clutches of management
whenever workers become the victims of management's unilateral acts and disciplinary policies. This
victimisation may take the form of penal transfers, suspensions, dismissals etc. In such a situation
the separated worker who is left in a helpless condition may approach the trade union. Ultimately,
the problem may be brought to the notice of management by the trade union, which explains about
the injustice meted out to an individual worker and fights the management for justice. Thus, the
victimised worker may be protected by the trade union.

Trade union which is puppet in the hand of employers also called a company or "yellow" union.
It is a worker organization which is dominated or influenced by an employer, and is therefore not an
independent trade union which may work for the victimisation of worker.

5. Welfare of employees
Trade union works as a guide, consulting authority and cooperates in overcoming the personal
problems of workers. It may bring to the notice of management, through collective bargaining
meetings the difficulties of workers in respect of sanitation, hospitals, quarters, schools and colleges
for their children's cultural and social problems.
 6. Harmonious Employee-Employer Relations
Harmonious relations between the employees and employer are of prime importance for
industrial peace. A trade union always strives for achieving this objective. However, the bureaucratic
attitude and unilateral thinking of management may lead to conflicts in the organisation which,
ultimately, disrupt the relations between the workers and the management. Trade union, being the
representative of all the workers, may carry out continuous negotiations with the management with
a view to promoting industrial peace.

7. Provide negotiating machinery

Trade union provide strength to negotiate with management and influence their polices.
Negotiations include the proposals made by one party and the counterproposals of the other. This
process continues until the parties reach an agreement. Thus, negotiations are based on the give
and take' principle. Trade union, being a party for negotiations, protects the interests of workers
through collective bargaining. Thus, the trade union works as the negotiating machinery.

8. Safeguarding Organisational Health and the Interest of the Industry

Organisational health can be diagnosed by methods evolved for grievance redressal and techniques
adopted to reduce the rate of absenteeism and labour turnover and to improve the employee
relations. Trade union by their effective working may achieve employee satisfaction. Therefore,
trade unions help in reducing the rate of absenteeism, labour turnover and developing systematic
grievance settlement procedures leading to harmonious industrial relations. Trade unions can thus
contribute to the improvements in level of production, productivity and discipline thereby improving
quality of work-life.

Function of Trade Unions

In modern period, the various functions are performed by trade unions as pointed out below:

1. Militant or protective or intra-mutual functions

These functions include protecting the workers' interests, i.e., hike in wages, providing more
benefits, job security, etc. through collective bargaining and direct action such as strikes, gheraos,

etc.

Trade Unions perform the this role in different spheres.

a) Sectional Bargainer - Interests of the workers at plant, industry, national level multiplicity of
unions, Crafts Unions, white Collar Union, etc.
b) Class Bargainer - Unions representing the interest of the class as a whole - like union related
lower class example agricultural unions and upper class like Unions of professionals.

2. Fraternal or extra-mutual functions

These functions include providing financial and non-financial assistance to workers during the
periods of strikes and lock-outs, extension of medical facilities during slackness and casualties,
provision of education, recreation, recreational and housing facilities, provision of social and
religious benefits, etc.
 3. Political functions
These functions include affiliating the union to a political party, helping the political party in
enrolling members, collecting donations, seeking the help of political parties during the periods of
strikes and lock-outs.

4. Social functions
These functions include carrying out social service activities, discharging social
responsibilities through various sections of the society like

a) Educating the rank and file workers so that the traditional agitational role be gradually
transformed into one of understanding and co-operation.
b) Well-being and progress of the society constantly before them by way of refraining from
unnecessary strikes work stoppage, go-slow intimidation;
c) Protect the interests of the consumer which is usually lost sight of in bipartite
agreements reached between the parties.
d) Success of the schemes for planned economic development of the country, maximizing
production and distribution in an equitable manner.
e) Organise the unorganized sections of the working class in the rural and urban areas and
help these groups in organising themselves.

In every country the role of the trade unions has to change depending on the stage of
economic and social development. It also depends on the strength of the unions, both organisational
and financial, and also to a great extent on the institutional set-up of the society in which they
operate.

Structure of Trade Unions

The structure of unions refers to the basis on which unions are organised (i.e., whether they
are organised on craft or industrial or general union basis) and to the pattern whereby the plant
unions are linked to regional level or national level federations or unions.

Trade unions can be classified into three categories:

1. Craft union
A craft union is an organisation of wage earners engaged in a single occupation (therefore also
called Occupational union). It may cover all workers engaged in a particular craft irrespective of the
industries in which they are employed. Thus, electricians though working in different industries, may
form a union of electricians. There may be separate unions for fitters, turners, carpenters, etc. The
International Wood Carvers' Association and the Indian Pilots' Guild may be cited as examples of
craft unions.

2. Industrial unions
An industrial union is organised on the basis of an industry rather than a craft. If the work
forces of a cotton textile factory decide to from a union consisting of workers of different crafts, the
union will be called an industrial union. It is also called Vertical Union, the workers from lowest
‘shop-floor’ grade up to management are recruited.
 3. General unions
A General union is one whose membership covers workers employed in different industries and
crafts. General unions are not popular in India.

In India, trade unions have largely been organised by industry rather than craft. Although
industrial unions have grown continuously craft unions have also emerged here and there. The exist
among non-manual workers like administrative staff professionals, technicians, etc.

The reasons responsible for the growth of industrial unions. The predominance of industrial
unions can be attributed party to conditions not favouring the growth of craft and general unions
and partly to the environmental support to industrial unions.

Five functional type of unionism by Robert F. Hoxie

Robert F. Hoxie explained the origin of trade unionism in terms of group psychology. According to
him to understand the nature of trade unionism one has to take into account not only
environmental conditions but also temperamental characteristics of the worker are concerned.
Thus, differences in group psychology cause different types of unions to appear.

Hoxie’s greatest contribution to the theory of unionism was to classify labour organizations
according to their functional operations.

The main types of trade unions according to Hoxie were five:

1. Business Unions:
These are also known as ‘Bread and Butter union’. These are trade conscious rather than class
conscious. They accept the existing economic system and aim at bringing about improvement in the
wages and working conditions of their members. Collective bargaining is the usual method followed
by these unions with heavy reliance on strike as a weapon.

2. Revolutionary Unions
Revolutionary unions are opposed to the capitalistic industry and replace it by the socialistic
systems through radical means such as strikes, boycott and gheraos.

Revolutionary unions may be of any of the following forms:

a) Anarchist Unions: These unions endeavour to destroy the existing economic system and
usually use violent means.
b) Predatory Unions: Initiated by Professor Hoxie, such unions believe in plundering benefits
and ruthless pursuit of the matter in hand by adopting any means irrespective of ethical,
legal or moral considerations.

3. Predatory unions
Unions of this kind do not subscribe to any ideology. Such unions are characterized by their
ruthless pursuit of immediate ends. Their methods include collective bargaining, secret
bribery and violence.
It may be of two types as follows:
a) Guerrilla unions – These unions can go to any extent, including resorting to terrorism and
other violent means, to accomplish their objectives. It is the boss who rules the roost.
 b) Hold-up unions – The unscrupulous bosses of workers’ organisations and unscrupulous
employers conspire together to exploit the customers by selling their prod-ucts at very high
rates; the major chunk of the money so earned goes to the pockets of these unscrupulous
elements, leaving very little, if at all, for the workers.

4. Friendly or Uplift Unions

These unions mainly aim at improving the intellectual, moral and social life of their members. These
unions are not craft conscious. They rather focus on the interest of workers. They are idealistic in
nature. Since they are law-abiding, they believe in the institution of collective bargaining and also
setting up of cooperative enterprises, mutual insurance, profit-sharing and the like.

5. Dependent Unions
A depend union is parasitic in nature relying upon the support of the employers or other
labour groups. Unions of this type appear in two forms:

Company Union – This type of union totally depends on the employer for its support and does not
really represent the interest of the workers in so far as it is not opposed to the interest of the
management.

Union label Union – These types of union depends upon the union label being imprinted on the
products made by the union members.

Hoxie predicted that with the rise of union power, collective bargaining would develop into a
form of industrial democracy and bring an end to the profit system

Other types of Trade Unions

Labour Unions
In these unions, membership is open to all workers irrespective of their occupation, skill or industry,
the philosophy being that all workers have common status and a common need for mutual help.
Labour unions refer to both craft and industrial unions.

Blue-Collar Workers’ Unions

Blue-collar workers’ unions constitute of employees usually performing operative jobs. They usually
operate machines in the production and allied departments. Blue-collar workers constitute the bulk
of membership of trade unions in the organised sector.

White-Collar Workers’ Unions

Such unions usually comprise office staff or who work off the shop floor and perform desk jobs or
provide service over the counter or any such other job. White-collar category includes executives,
managers, professionals, administrators, supervi-sors, clerks and the like.

We come across such unions in banks, service sector, insurance companies, BPOs, software
organisations, Central and state government offices, and so on. Their members being educated and
matured are aware of the capacity to pay off their organisa-tions and, therefore, are more
reasonable while they prepare their charter of demands.
Classification based on agreement
Another basis on which labour agreements are sometimes distinguished is on basis of the
type of agreement involved, based on the degree to which membership in the union is a condition of
employment. These are:

1. Closed Shop: Where management and union agree that the union would have sole
responsibility and authority for the recruitment of workers, it is called a Closed Shop
agreement. The worker joins the union to become an employee of the shop.
2. Union Shop: Where there is an agreement that all new recruits must join the union within a
fixed period after employment it is called a union shop. In the USA where some states are
declared to be ‘right-to-work’.
3. Preferential Shop: When a Union member is given preference in filling a vacancy, such an
agreement is called Preferential Shop.
4. Maintenance Shop: In this type of arrangement no compulsory membership in the union
before or after recruitment exists. However, if the employee chooses to become a member
after recruitment, his membership remains compulsory right throughout his tenure of
employment with that particular employer. This is called a maintenance of membership
shop or maintenance shop.
5. Agency Shop: In terms of the agreement between management and the union a non union
member has to pay the union a sum equivalent to a member’s subscription in order to
continue employment with the employer. This is called an agency shop.
6. Open Shop: Membership in a union is in no way compulsory or obligatory either before or
after recruitment. In such organisations, sometimes there is no union at all. This is least
desirable form for unions. This is referred to as an open shop.

The above classifications are more usual in the west than on the Indian sub-continent.

Weaknesses of trade unions in India-

i. Uneven Growth
Trade unions are concentrated in large scale industry sector and in big industrial centers. There is
very little trade union activity in small sector, agricultural labour and domestic sector. Trade
unionism has touched only a portion of the working class in India.

2. Small Size
Most of the unions have low membership though the number of unions and union membership are
increasing, average membership is inadequate.

3. Weak Financial Position

The average yearly income of unions is very low and inadequate. The subscription rates are low and
many members do not pay the subscription in time. Due to their financial weakness, most of the
unions are not in a position to undertake welfare programmes for workers.
4. Political Leadership
Trade unions are under the leadership and control of political parties and outsiders. Politicians
exploit unions and workers for their personal and political gains. Thus, the political leadership is very
harmful to the trade union movement in India.

5. Multiplicity of Unions
There exist several unions in the same establishment or industry. The existence of rival unions with
conflicting ideology is greatly responsible for unhealthy growth of trade union movement. In some
cases employers encourage split in unions to undermine their bargaining power.

6. Problem of Recognition
Employers are under no obligation to give recognition to any union.

7. Absence of Paid Office-Bearers

Most of the unions do not have Hill-time paid office-bearers. Union activists working on honorary
basis devote only limited time and energy to union activities. Union officers lack adequate
knowledge and skill due to lack of proper training, weak financial position and political leadership
are the main reasons for this state of affairs.

8. Apathy of Members
Majority of workers do not take keen interest in union activities. The attendance at the general
meetings of unions is very poor.

9. Opposition from Employers

Trade unions in India have to face opposition from employers. Many employers try to intimidate or
victimise labour leaders, start rival union and bribe union officials.

10. Inter-Union Rivalry

Multiple unions create rivalry. Unions try to play down each other in order to gain greater influence
among workers. Employers take advantage of infighting. Inter-union rivalry weakens the power of
collective bargaining and reduces the effectiveness of workers in securing their legitimate rights.
Employer’s Associations:

The intention in covering employers' organisations under the Trade Unions Act, 1926 was to place
both workers' and employers' organisations on par in matters of rights and responsibilities.

Brief History of Employer’s Associations

The origin and growth of Employers' Associations in India can broadly be classified into three
distinct phases. Each phase reveals their structural and functional characteristics, and also varying
changes in them in accordance with the contemporary economic, social and political developments.

Three Phases:

1. The period prior to 1930

The pre-1930 period was characterised mainly by the formation of certain associations such as the
Bombay Millowners' Association, the Bengal Millowners' Association, and the Ahmedabad
Millowners' Association.

2. The period between 1931 and 1946

The period 1931-1946 witnessed the growth of chambers of commerce and industrial
associations for dealing with a variety of problems connected with industry. The All-India
Organisation of Industrial Employers (AIOIE) and the Employers' Federation of India (EFI) came into
existence in 1933. The All-India Manufacturers' Organisation (AIMO) was formed in 1941. The setting
up of these organisations was is response to the need felt for representation of employers in
international conferences and legislative bodies.

3. The post-Independence period

The post-Independence period further saw the growth of employers' organisations to meet the
requirements of individual employers for advice on labour and related matters. The All India
Organisation of Employers is a unitary type of organisation, setup in 1953; members hail from
manufacturing, banking, insurance, commercial establishments; and has no sub-organisation on an
industrial or geographical basis.

Standing Conference of Public Enterprises (SCOPE) came into existence on April 10, 1973 and was
formally given recognition as an apex body of Central Public Sector Enterprises in November 1976 by
a decision of the Union Cabinet.

Different EOs in India

Present Employers’ Association in India

All India Organisation of Employers (AlOE)
The All India Organisation of Employers is a unitary type of organisation, setup in 1953; members
hail from manufacturing, banking, insurance, commercial establishments; and has no sub-
organisation on an industrial or geographical basis. The President is elected every year.

Employers’ Federation of India (EFI)

The Employers’ Federation of India has a federal structure formed in 1933, it has governing body
executive committee and the secretariat. The governing body formulates policies, the executive
committee implements policies and the secretariat with its own permanent staff is responsible for
carrying out the decisions of the governing body. It had only four presidents in over 50 years. EFI was
registered as a trade union in 1963 under the Indian Trade Unions Act of 1926.

International Organisation of Employers (IOE)

International Organisation of Employers, represents the interests of employers in all social and
labour matters at the international level. Founded in 1920 with headquarters in Geneva, it has a
membership of Employers’ Associations from over 100 countries. The Central Council of Indian
Employers is a matter of IDE.

Standing Conference of Public Enterprises (SCOPE)

The objectives of the Standing Conference of Public Enterprises cover a wider ambit. SCOPE looks
upon its tasks as both internal and external to the public sector. Internally, it would endeavour to
assist the public sector in such ways as would help improve its total performance. Externally, it
would help improve its total boundary role in conveying such information and assist the public
sector in such ways as would help improve its total performance and advice to the community and
the Government as would generally help the public sector in its role.

Council of Indian Employers (CIE)

The main object in setting up the Council of Indian Employers was to ensure closer co-operation and
coordination between the two bodies which together represent particularly the interests of large-
scale industry in India. In the year 1973, the SCOPE joined the CIE.

Structure of Employers’ organisations

Employers' organistions in India have a three-tier structure, viz., local associations, regional
industrial associations and All-India federations. Of the three, the local associations which operate
mainly through the chambers of commerce cover all industries in an area.

The industrial associations are the general pattern of organistion of employers in India. They are
formed at the area or regional level as also at the all-India level, and are generally affiliated to the
apex central industrial organisations. Individual employers are also admitted to the apex
organisation.

The main reason for the industry-wise development of associations is the common problem
confronting each industry and trade. The setting up of wage boards on an industry-wise basis,
industrial committees at the Central and State levels, and development of collective bargaining at
the industry level in certain regions, have helped their growth.Existence of more than one industrial
association in a particular industry is a problem which at times hindered the progress of collective
bargaining on an industry-wise basis.

At the national level, there are federations, namely, AIOE, EFI and AIMO which have been
given representation on different tripartite labour consultative bodies.
Function of Employers’ Organisations
The main role and functions of an employers' organisation is to protect and promote the interest of
its members. Its activities are designed and directed on a broader plane; labour problems are only a
part of their overall responsibilities.

Their main functions in the field of labour are given below:

1. Communication
The employers' associations keep their members informed of all new labour legislations (even at
the formative stage), regarding all changes in labour policy, important court decisions on labour
matters, obligations accepted at the national level, proceedings of important tripartite deliberations,
etc.

2. Advisory Function
They advise their affiliates on complex legal provisions, procedures etc., when such advice is
sought. Some of the employers' organisations have built up an expert advisory service on labour
matters for their members.

3. Educational Efforts
They organise seminars, conferences and training programmes at different levels to discuss
important issues in the labour-management relations. Important studies on collective argeements,
role of the private sector in national development, etc. have been carried out by the Employers'
Federation of India.

4. Representational Functions
They are represented on various committees, wage boards, etc, set up by the government from
time to time and place before these bodies the point of view of employers. They have also set up
special committees of their own to study particular problem.

5. Undertaking of Social Responsibilities

They also discharge certain social responsibilities towards the country and society by
participating in national plans for economic development, eliciting responsive cooperation from the
unions, improving levels of production and productivity, pursuing policies that are conducive to the
development of industry and the economy, adopting neighbourhood villages, social development
schemes, etc.

Objective of Employers’ Association

a) To promote and protect the legitimate interests of employers engaged in industry, trade
and commerce.
b) To take steps to promote, support or oppose legislative and other measures affecting or
likely to affect industries.
c) To maintain harmonious relations between management and labour.
d) To initiate and support all well-considered schemes that would increase productivity and
at the same time give labour a fair share of increased return.
e) To collect and disseminate information affecting employers and to advise members on
employer-employee relations and other ancillary problems.
f) To give subscriptions, donations, grants or remuneration to desiring individuals and
organisations for worthy causes and in furtherance of the objects of AIOE.
g) To make rules and regulations and bye-laws for the conduct of the affairs of AIOE and
add to, amend, vary or rescind them from time to time.
h) And generally to do all that may be necessary in the interest of the realisation of the
above aims and object of AIOE directly or indirectly.