Unit - 2 Evolution of Industrial Relations

[BCom Sem - 4 Theory and Practice of Industrial Relations]

Evolution of the Industrial System

The problem of industrial or labour management did not arise when business
organisation were small. These developed only when elaborate organisational
structures come into b during the late nineteenth century, when gigantic
industrial empires of financial tycoons came existence, followed by the
technology of mass production in the early twentieth century. Lat management
became an important subject of study only when large aggregations of people
ca to work together under one roof in an organisation. We shall briefly review
the history background of the relations between employer and employees. In
order to understand the issue and problems associated with industrial relations,
it is desirable to study its various evolution phases.

The various stages through the system progressed are discussed here

(1) Agrarian Economy Stage

It developed during the Middle Ages and brought about a change in the views
on proper in tribal society, property was common and collective asset of the
group, but now it was identify as a personal asset of the landlord. Thus, there
arose a class of propertied individuals along with a class of property less
workers. Under this system, the employees were treated as slaves.and the
property of their master who purchased them for a few chips or conquered
them in some w against their opponents. The employee employer relationship
was that of the master-servant slave type. The slaves were required to do all
types of manual and other specialised work for the master and in return were
paid no wages but food of the coarsest type, old clothes and a small place to live.
They had to live under the absolute authority of their master till death
over-power him. The levels or strata of supervision were few. The Government
did not wield any power on employment relationship. The political
organisations that developed from alliances and quests supported the authority
of the owners. Some masters achieved dominant positions, ile others became
subordinates.
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(2) Handicrafts Stage

Handicrafts system developed because of the growth of towns and cities,

increase in trade commerce and a decline in the power of the feudal lords. This
system introduced an important innovation in the careers of workers, namely,
one in which they could actually move om the rank of workers/employees to
those of employers The workers/craftsmen owned factors production, worked
with their own tools and with the help of the members of their family and eh
worked in their own homes/workshops, and performed the hand tasks. They
sold their products directly to the customers, there being no middleman.
Separate craftsmen existed for pirate works. Some type of specialization of work
was found such as shoe-making, black smithy. entry, pottery industry, cloth
weaving, etc.

Sometimes the master craftsman also undertook to teach his craft to some
young men. e artisans began their careers as apprentices and were bound to
work for the master craftsman for specified time during which they could learn
the craft. They got no wages except gong and boarding facilities from the
master craftsman. These artisans could, when apprentice s were over, settle as
independent journeymen. The master craftsman and the apprentices worked
side by side; and only one or two levels of supervision were involved. Master
craftsmen ed highest status because they combined both the skill and the
ownership. Journeymen enjoyed relatively high status because of their skill and
related mobility and freedom. Apprentices occupied low status, though they
were superior to that of the slave or serf.

The cottage workers of the master craftsman developed a new institution.

These regulated economic and employment conditions of the members,
regulated the Dalit of materials and workmanship, set prices and determined
wages. Many of these guilds also dived various fraternal benefits like death,
disability and unemployment benefits to their members. They were akin to
modern crafts union.

(3) Cottage or Putting - Out Stage

With the development of economic system, and that of the steam and power,
some dividuals became employees in the new industrial units, which were
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brought about as a result both technological changes and the expansion of
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markets and trade. Other master-craftsmen avelling traders (or trading
capitalist) undertook to buy raw materials and supply these as well instances to
the craftsmen or who worked in their homes/workshops. They also hired the
tsmen to process the raw materials; and collected and sold the finished goods.
This system known as the "cottage or putting-out system, Under this
arrangement, the craftsmen worked the members of their family, in their own
home, and were paid on a piece work basis for the k. They delivered their
products to the financiers who supplied them with necessary finance.

(4) Factory or the Industrial Capitalism Stage

With the passage of time and gaining of experience, the trader capitalist
realized that venomies in production can be achieved from newly perfected
machines, so instead of "farming production to numerous small cottage workers,
he himself installed machinery, provided power-tools and equipment and
offered employment in newly built workshops or factories. 'n cottage workers
became factory hands. In these factories, a large number of people worked
under the same roof. This made it possible to supervise them more closely.

With the invention and manufacturing of power, driven machinery in the late
eighteenth a early nineteenth century, the process developed further. In course
of time, the factory system came to stand on a sound footing and human Labour
was replaced by machines. This gave to a system which is known the world over
as the Industrial Revolution. Under this system, woman and child labour were
employed often for long hours because machine production simplistic
operations and reduced skill requirements. The living and working conditions
became deplorable and housing accommodation inadequate. With increased
production, developed technology an science, decision-making became a more
specialised task and the relation between the worker and the employers
became more and more impersonal. By means of the factory system, workers
were brought together under one roof, and strict discipline was maintained
during the process of production by the employers. Since the work did not own
the means of production they were economically dependent on the employer k
their livelihood. The quality and quantity of the product was guaranteed. The
employer owned once wage all the physical means of production. He also
owned goods which were produced. The law supply and demand determined
the price of labour and decided the level of wages were paid, the responsibility
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of the employer was over. He did not bother himself about the workers'
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conduct or health after working hours or about how they and their families
struggle when no work was available The human element in the productive
process disappeared as the employer had no personal ties with the workers.
The maximization of profit was the sole facto which dominated the factory
system. As industry expanded, so did the number of workers, which motives
differed basically from each other. The employer produced goods with the sole
aimed selling them at profit, while worker was involved in the productive
process solely to satisfy his economic needs for food, shelter and clothing.

Occupations in Ancient India

In ancient times the principal occupation was agriculture, and trading was the
next important. The manual services formed the third rung of occupation. The
states were in active existence even in the Vedic times. A majority of the states
were ruled by the kings. A considerable number of the republics and oligarchies
were also in existence and lasted for many centuries.

India was greatly advanced in the field of industry and occupation in ancient
times, evidenced from the ancient literature. Dyeing of leather, weaving of
woollen cloth, making d containers to hold liquids (such as milk and curds),
making chariots for war, boats and ships for carrying on trade with foreign
countries, and making of plough and carts for the farmer, were textile main
crafts.

Following categories of persons engaged in agriculture and allied occupations

have bee mentioned: Kinasa/Krisivala-ploughman: Gopa and Gopala-herdsmen;
Avipala and Ajapea -goat herd; Pashupal- herdsman; Dhanjakrit one employed
in husking Upalopraksis women employed in making groats; Vapa-saver of
grains.

Besides these, following categories of craftsmen/tradesmen have been named

in industrial pursuits.

Increased Mobility: With the standardization of work methods, increased

work, education and training, to-day worker no longer tag themselves to a
particular industry life! They generally move to greener pastures as and when
opportunity arises. In fact, not geographical mobility, but also occupational
mobility of the working class is on increase.
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Industrial Relations: Concept

Of all the human resource management problems that have emerged on the
corporate forefront in recent times, the problem of industrial relations is the
most prominent. The increased popularity of this vital aspect of Human
Resources Management is due to one single factor, it deals with people who are
the base of industry-a class of people that makes things to happen. Their
inaction or violent action very often makes newspaper headlines. Certainly, the
strict redundancies, gheraos by the workforce and the indifferent and inhuman
attitude of employers, in dealing with various labour problems are a matter of
great concern for one and all who concerned about the nation's welfare. In fact,
the very relationship between labour and management creates a host of
opportunities and bring parties to a conflict.

Before discussing the dynamics of industrial relations, it will be useful to

industrial concept. There are as many definitions of industrial relations as the
authors on the subject. Industrial relations are viewed here as the process by
which people and their organisational interact at the place of work to establish
the terms and conditions of employment. The process of interaction stresses
not just the resulting standard. Finally, the whole process is viewed as "system",
in order to emphasize the interrelation among people, their work organisation
and Il standards in industrial milieu" The term "industrial relations commonly
denotes "employee-employer relations", in both organised and unorganized
sectors of the economy.

This book, however, takes a narrow view on the term Industrial relations (also
known as labour-management relations or labour relations) be treated here as
the study of employee-employer relationship and the outcome of such
relationship and the outcome of such relationship. The basic thrust of the
discussion is to examine the relationship between the management workers
and the trade unions representing the firm's workforce. Further, it studies the
industrial relations in manufacturing and service sectors and omits the industrial
relations situations foetid in small-scale, agriculture and other sectors of the
economy though they provide employment to more workers in comparison with
the organised sector. A few notable features pertaining to Industrial relations
are as under:
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(i) Industrial relations do not emerge in vacuum; they are born out of
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"employment relationship" in an industrial setting. Without the existence of two
parties, i.e., labour and management, this relationship cannot exist. It is the
industry which provides the environment for industrial relations.

(ii) Industrial relations are characterized by both conflict and co-operation. This
is the bass of adverse relationship. So the focus of industrial relations is on the
study of the attitudes, relationships, practices and procedures developed by the
contending parties to resolve or at least minimize conflicts.

(iii) As the labour and management do not operate in isolation but are part of a
larger system, so the study of industrial relations also includes vital
environmental issues like technology of the workplace, country's
Socio-economic and political environment, nation's labour policy, attitude of
trade unions, workers and employers and impact of the new wave of global
markets, global supply demand and economy.

Industrial relations also involve the study of conditions conducive to the labour,
man agreement co-operation as well as the practices and procedures required
to elicit the desired co-operation from both the parties.

Industrial relations also study the laws, rules, regulations, agreements, awards
of court. Custodians and traditions, as well as policy framework laid down by
the government for eliciting co-operation between labour and management and
defining rights obligation of both the parties. Besides this, it makes an in depth
analysis of the interference patterns of the executive and judiciary in the
regulation of labour-management relations.

The concept of industrial relations is very broad-based, drawing heavily from a

variety of lines like social sciences, humanities, behavioral sciences, laws etc. In
this context, it has rightly remarked that if we make industrial disputes (the
absence of positive industrial nations) the centre of a circle, it will have to be
divided into various segments. A study of the work, mainly the level of wages
and security of employment, comes under the dew of economics; their origin
and development under history; the resultant social conflicts er sociology; the
attitudes of the combatants, government and the press under social
psychological their cultural interactions under cultural anthropology; state
policies. bearing on the issues ved in the conflict under political science; legal
aspects of disputes under law, issues involving national aid (to combatants)
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under international relations; the degree of effectiveness with ch labour policy
is administered under public administration; the technological aspects (e.g. troi
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of temperature, and introduction of rationalization) of disputes under
technology: and tentative assessment of losses incurred by the parties and the
country's economy under schematics.

The levels covered by these subjects range from individual relations at the shop
floor to the regional, national and international bodies. The subject has grown
exceedingly complex in certain as, for instance, the man-machine interface.
(technology) sweeps the entire system, the legal e of business has become quite
complex and ever-changing. The specialism of industrial, nations has given rise
to sub-specialism in a variety of areas. That has further complicated the em. In
fact, industrial relations encompass all such factors that influence behaviour of
people work. A few such important factors are detailed below:

(i) Institutions: They include government, employers, trade unions, union

federations. employers federations or associations, government bodies, labour
courts, tribunals and other organization which have direct or indirect impact on
the industrial relations system.

(ii) Characters: It aims to study the role of workers, unions and employers'
federation Officials, shop stewards, industrial relations officers/manager,
mediator/conciliators/arbitrator, Judges of labour court, tribunal, etc.

(iii) Methods: Here the focus is on collective bargaining, workers" participation

in the industrial relation schemes, discipline, procedure, grievance redress
machinery, dispute settlement machinery, working of dosed shops, union
recognition, organisation of protests through methods, like strikes, gheraos,
bandhs and lockouts, formulation and revision of existing rules, regulations,
policies, procedures, decisions of labour courts, tribunals etc. in defining t and
obligations of the parties.

(iv) Contents: They include matter pertaining to employment conditions like pay
a monetary non-monetary demands of the workers hours of work, leave with
wages, health safety disciplinary actions, lay-off, dismissals, retirement etc.,
laws relating to such a legislation governing labour welfare, social security,
industrial relations, issues concern workers' participation in management,
collective bargaining, sharing gains of productivity

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Importance of Industrial Relations

Prior to the Industrial Revolution, the problem of industrial relations was literall
existent as the owners were themselves producers or the production was
carried out by the members themselves. However, with the industrial revolution,
in Europe and its subs impact on the entire globe, the scenario changed
considerably. As with the emerge factories, the cottage industries were thrown
in back gear, which compelled a large number workers to leave their farms and
become wage earners in factories with meagre wages under working conditions.
With the passage of time, a substantial population including men, w and
children started concentrating in industrial centers; and this population was
character ignorance, poverty, conflicting Ideologies. Gradually two groups the
haves, the dominated and aspiring class and other haves not, il-clad, -fed and
l-educated, both radically different interests and ideologies developed their own
unions to give a tough fi other. The government came on the scene for
regulating the working conditions of employees who had little bargaining power.
Further, the changes in the techniques and method production, work methods,
supply of better skilled workers etc. changed the complex industrial relations
considerably. To-day, with the increased sophistication of work method: the
techno-based HRM policies have given a new dimension to the industrial
relation system.

Coming to the Indian industrial scene, which is rapidly transforming from the
agricultural system to the industrial one, the study of manpower management
relations cannot be underestimated. The country which has a population of 38
million (1991) of which 14 million (1991 in the workforce but only 25.5 of total
working population is organised. In the light of these f the question that pricks
one's mind is that, is it really worthwhile to study the industrial relation that
affect only a small chunk of workforce. The answer to this query lies in the fact
that relations that influence such a small segment of workers has far-reaching
implications not only the attitude of unorganized workers but on economy as a
whole. Hence, there is a case for study of industrial relations.

(i) Industrial Relations Patterns, Organised Sector and their Impact on

Unorganized: Sector: The pattern of industrial relations in the organised sector
of economy has a different impact on labour-management relations in the
unorganized sector. The trends and paths established in the organised sector
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"spills over" or influences the practices of even the unorganized industries. This
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happens because there is always pressure from a variety of groups on
unorganized firm to match its employment and working conditions, benefits etc.
with that organised one.

(ii) Unions are Important Force In the Indian Political System: The impact of
India trade unions on the political system is much wider than on industry. The
India. Trade unions some of which are a fall-out of the political system are
invariably used by both the ruling and oppositic for electioneering purpose. In
addition, the unions sponsored by the ruling party clo ce the legislative process
through their intense lobbying activities. The representatives of national unions
are consulted by the government in formulating various Socio economic in
general and labour policies, in particular. Because of these diverse activities in
the sphere, the trade union becomes a strong political force in the country. This
in turn ces the system of industrial relations in a variety of ways. Varying
Patterns of Industrial Relations: In India, the patterns of industrial tions are not
only in sharp contrast both in unorganized and organised sector, but also within
ter, they exhibit a considerable variation. In the unorganized sector due to
non-unionization and workers, the grievances are usually redressed by the
threat of dismissal or literal beating am the problem of industrial relations,
however, acute is not allowed to surface.

iv) Status Difference in the Workers of Public and Private Sector: in India, with
host of constraints in its growth and development.

ce tin Adoption of socialistic pattern of society and subsequent acceptance of

industrial policy ution of 1956, the public sector was entrusted with the
responsibility to accelerate the

omic development of the country. As such basic and heavy industries were
allowed to entrate in this sector and the private sector was not given an
opportunity to come up as there ed

atve The workers in the public sector were considered to be government

employees and ordingly, were given a fair deal. In contrast to it, the workers in
the private sector had to suffer

yer many counts, which is reflected in its industrial relations scenario. Though
there are brighter ss in the private sector, on the whole, the workers suffered at
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the hands of employers.
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nwever, with the passage of time, the situation staried changing It is interesting
to note that with aniberalisation of Indian economy, the man-management
relations are now improving in the

nate sector and in the public sector they are getting strained everyday. This
really tempts one

gudy as to how the dynamics of the industrial relations changes over a period of
time an rewoch, in turn, influences the economy of the country.

Scope and Aspects of Industrial Relations

of An industry is a social world in miniature where an association of variety of

people like Uployers, executives and supervisory personnel and workmen
interact and create a relationship own as industrial relations. This association of
people not only influences labour relations but th the social, economic, political
and moral lives of the whole community. In other words. ustrial life creates a
series of social relationship which regulate the relation and working of a de
variety of people either directly, indirectly of both. The industrial relations are,
therefore, t and parcel of industrial life, as such they include:

(i) Labour relations, i.e., relations between union and management (also known
as labour management relations).

(ii) IP Employer-employee relations, i.e., relations between management and

employees.

(iii) Group relation, i.e., relations between various groups of workmen.

(iv) Community or public relations, i.e., relations between industry and society.
The last two generally do not fall under purview of industrial relations, but form
part of the Longer discipline sociology. Further, the two terms,
labour-management relations and employee relations are synonymous used.

The main aspects of industrial relations are:

(i) Promotion and development of healthy labour-management relations

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Maintenance of industrial peace and avoidance of industrial strife
(iii) Development of industrial democracy

(iv) Development of Healthy Labour-Management Relations

The promotion of healthy labour management relations pre -

supposes:

(a) The existence of strong, well-organised, democratic and responsible trade

unit associations of employers. These organisations enhance the job security of
emp help in increased workers' participation in management (affecting the
terms and tions of their employment) and give labour a dignified role in society.
These asso also tend to create vantage grounds for negotiations, consultations
and discussion mutual basis which ultimately lead to good labour-management
relations;

(b) The spirit of collective bargaining and willingness to take recourse to

voluntary tion. Collective bargaining recognizes equality of status between two
conflicting and prepares the ground in an atmosphere of trust and goodwill, for
discu consultations and negotiations on matters of common interest to both
indust labour. In an industry, collective bargaining, plant discipline and union
relations principal items which form the core of industrial relations;

(c) Welfare work, whether statutory or non-statutory, provided by the state,

trade and employers create, maintain and improve labour-management
relations and to contribute to industrial peace.

Maintenance of Industrial Peace:

Industrial peace pre-supposes the absence of industrial strife which is essential

for increased productivity and harmonious labour-saving relations. The
industrial peace can be largely nurtured through the following means:

(a) Machinery should be set up for the prevention and settlement of industrial
dispu can be brought about by developing various legislative and administrative
enact like Trade Unions Acts, Industrial Disputes Act, Industrial Employment
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(State Orders) Act, Works Committees and Joint Management Councils;

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Conciliation ( and Boards of Conciliation; Labour Courts, Industrial Tribunals,
National Tribe Courts of Enquiry, and provisions for voluntary arbitration.

(b) The Government should have the power to refer disputes to adjudication
when situation tends to get out of hand and industry is faced with economic
collapse d continued stoppage of production on account of long strikes/lockouts;
or when i the public interest to do so during periods of emergency; or when
there is fear of fc attack; or when production needs to be carried on without
interruption.

(c) The Government enjoys the power to maintain the status quo: This power is
exer when the government, after referring the dispute to arbitration, finds that
either pa continuing the strike or lockout and that strike or lockout is likely to
jeopardize the of the community and to create chaos in industry.

The provision of the bipartite and tripartite forums for the

settlement of disputes

These forums act on the basis of the Code of Discipline in industry, the Code of
Conduct, the Code of Efficiency and Welfare, Model Standing Orders, Grievance
Procedure and the granting of voluntary recognition to trade unions by the
employer. These non-statutory measures help to create satisfaction among
employers and employees. Industrial peace can also be attained by the creation
and maintenance of implementation cells and evaluation committees which
have the power to look into implementation of agreements, settlements and
awards and also violations of statutory provisions laid down under various
labour laws.

Development of Industrial Democracy: The idea of industrial democracy

exhorts The labour should have the right to be associated with the management
of an industry. To Achieve this objective, the following techniques are usually
employed.

Establishment of the Shop Councils and Joint Management Councils:

at the floor and plant level, which endeavour to improve the working and living
conditions of employee, to improve productivity, encourage suggestions from
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employees, to assist in the administration of laws and agreements, serve as a
channel of communication between management and employees, create
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among the employees a sense of participation in the decision-making process
and a sense of belonging to the industry. These methods and activities provide
the necessary climate for the development of industrial democracy in the
country.

Recognition of Human Rights in Industry: This implies that labour is not a

commodity of commerce which can be purchased and disposed of at the whims
and caprices of employers. The workers are required to be treated as human
beings whose sense of self respect is to be fostered. Certainly better
understanding of their role in the organisation by the employer would be
brought home to them. Their urge for self-expression (through closer
association with management) should be satisfied. These are the basic
pre-requisites for achieving industrial democracy

Increase in Labour Productivity: The factors which contribute to higher

productivity are: improvement in the level of efforts and skills of workers;
improvement in production process, materials, equipment, layout, work
methods etc. It can be brought about by the suggestions of workers, research
and development, including special studies and technological development
elsewhere; improvement in the output resulting from capital intensification
within the frame-work of the same technology, and increasing the productivity
of labour by adopting a proper motivational system which may lead to a
satisfactory performance of job and maintenance of good industrial relations.

The availability of proper work environment is necessary so that the worker can
effectively carry out his assignment, as it is this environment which stimulates
or depresses, improves or destroys the relations between labour and
management.

In the words of Lester: "Industrial relations involve attempts at arriving at

solutions between conflicting objectives and values; between the profit motive
and social gain; between discipline and freedom, between authority and
industrial democracy; between bargaining and operation; and between
conflicting interests of the individual, the group and the community."

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Components of Industrial Relations System

An industrial relations system is made up of certain institutions, which are

popularly k as "three actors" of the system. In all developed and developing
economics, these actors a workers (employees) and their organisations (trade
unions), management (employers) and organisations (employer's
associations/federations), the government. These actors jointly mine the output
of the system, which largely consists of rules/regulations relating to term:
conditions of employment. On the face of it, the system seems to be very simple
but in fact is complicated as it is for this reason that the management of
industrial relations system regarded as a quite an uphill task. Let us now
deliberate on the role behaviour of three act industrial relations system.

Workers and their Organisations: When the bulk of workforce is employed it

production of goods and services, the relations between them become
impersonal and de-human Further, if they are forced to work in an alienated,
monotonous, unhygienic work environment where their activities are closely
regulated and controlled by the managerial personnel, dissatisfaction with the
system forces them to revolt against it, so workers form their unions. basic
activity normally includes political action and safeguarding workers' interests,
both wi and outside the plant/unit. In fact, they act as sectional bargainers by
representing the inter of the workers, on whose behalf they bargain with the
management at all levels particularly at plant level, in countries like Norway,
Sweden, Austria etc. and at the national level in o countries. As sectional
bargainers, the unions may combine into a larger national federation the Trade
Union Congress in the UK, the AFL and the CIO in the USA and Labour
Organization in Sweden.

In India, there are ten central organisations of workers to which, a large number
unions are affiliated to them: Moreover, there are unions of white collar
workers, like that of union of LC employees, the Bank Employees' Association,
the Air-India Employees' Association etc. They represent and protect the
interests of their members through collective bargaining all important issues,
often by the use of pressure tactics or threats of strikes and gheraos. The unions
believe that the right to strike, i.e., the flexing of economic muscles, is essential
always, as a last resort for effective collective bargaining." In some countries,
such as France, Norway, Sweden, Denmark and Austria, the central to unions or
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federations like the unions of transport workers, railway employees, civil
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servants e also play the role of "class bargainers". They normally enter in
long-term collective bargain agreements with employers on various matters
affecting labour-management relations. This tree is now picking up in Indian
industries, too.

The trade unions of erstwhile socialist countries used to play the role of "State
Agents." The propagated the policy of the State and acted as controlling groups
working together with the management to raise productivity besides assisting
management in the administration of various social security and welfare
measures. Earlier the trade unions has also acted as partners in the social
control of industries as West Germany, Russia, Italy and Yugoslavia, where the
representatives of the workers sat on the Board of Management and
participated in the decision-making process with the ultimate aim to gain
control over industries. However, with the downfall of communism across the
globe, the unions of such economies, too, have alleged their philosophy and
modus operandi. .In India, workers participate in management through Works
Committees, Joint Management Councils and even workers representatives on
the Board of Directors, such as in public sector banks and public sector
undertakings.

The Trade Unions Act, 1926

The present Trade Unions Act, 1926 was passed in 1926 under the title of the
Indian Trade Unions Act and was brought into operation from 1st June, 1927, by
notification in the Official Gazette by the Central Government. The Act was
amended in 1947, 1960 and 1962. Subsequently, the word 'Indian' was deleted
in the amended Act of 1964, which came into force from 1st April, 1965. A
comprehensive Trade Unions (Amendment) Act was passed in 1982 another in
the year 2001.

Introduction

The Trade Unions in India are governed by the Trade Unions Act, 1926 which
was primarily enacted to accord protection to the union leaders for the acts
done by them in connection with the legitimate trade union activities. It was in
the year 1920 that the Madras High Court in a suit field against the officials of
the Madras Textile Labour Union by Binny and Company granted an injunction
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restraining the union official to induce certain workers to break their contract of
employment by refusing to return to work. The labourers had refused to return
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to work. The union leaders found themselves liable to prosecution and
consequently imprisonment even for bonafide Trade Union activities. The above
judicial pronouncement gave rise to a spate of protests from the Trade Union
leaders. Ultimately the Government had to yield to the demands of the union
leaders and afford them legal protection for legitimate Trade Union activities.
The Trade Unions Act was enacted in 1926 which was subsequently amended in
1929 so as to provide the procedure for registration of a Trade Union. The
object of the act is to make provisions for the registration of Trade Unions
formed by the workers to protect their legitimate rights while fighting with the
employers. The Act provides for the first time in the trade union movement in
India various immunities to the leaders of Trade Unions while engaging
themselves in the union activities. The Royal Commission on Labour in India
while commenting on the object of the nactment observed "one of its object is
to give Trade Union, which accept registration under the ct, the necessary
protection from civil suits and criminal laws relating to conspiracy, in order to
able them to carry on their legitimate activities. The detailed provisions are laid
down for formation, procedure, registration, including conditions of registration,
advantages of procedure, registration, including conditions of registration,
advantages of registration and the immunities available to the union leaders
both from civil and criminal laws while themselves in the union activities of a
registered Trade Union. It was, again, an attempt for the first time to define the
concept of Trade Union as controversies had arisen in the past regarding the
word Trade Union which was the association of workers formed with the object
of prolecting the workers' interest in the competitive market as the workers
were always in a disadvantageous position in the then existing system due to a
weak bargaining power. Therefore, in order to provide certain advan ages to an
association registered under the Act after fulfilling the conditions laid down in it,
the Act has defined the Trade Union in the most comprehensive terms.

Objects of the Act

The Act was enacted with the object of providing for the registration of trade
unions and verification of the membership of trade unions registered so that
they may acquire a legal and corporate status. As soon as a trade union is
registered, it is treated as an artificial person in the eyes of law, capable of
enjoying the rights and discharging liabilities like a natural person. In certain
respects, the Act attempts to define the law relating to the registered trade
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unions. The Act, apart from the necessary provisions for administration and
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penalties, makes provisions for:
 Conditions governing the registration of trade unions
 Laying down the obligations of a registered trade union
 Fixing the rights and liabilities of registered trade unions

The Amendments to the Act in 1982 have been made with a

view to achieve the following objectives:

To reduce multiplicity of unions, the existing provision of enabling any seven

workmen to form a trade union has been changed by providing for a minimum
qualifying membership of 10% of workmen (subject to a minimum of ten)
employed in an industry or an establishment where the trade union is proposed
to function, or 100 workmen, whichever is less, for the registration of trade
unions.

There is at present no machinery for resolution of trade union disputes arising

from inter-union and intra-union rivalries. Therefore, "trade union dispute" has
been defined afresh to make provision for resolving such disputes through
voluntary arbitration, or by empowering the appropriate government and the
parties to the dispute to refer it to the Registrar of Trade Unions for
adjudication.

The Act of 1926 did not prescribe any time limit for registration of trade unions.
Now, a provision has been made for a period of 60 days for the registration of
trade unions by the Registrar, after all the formalities have been completed by
the trade unions. A provision has also made that a trade union whose certificate
of registration has been cancelled, would be eligible for re-registration only
after the expiry of a period of 6 months from the date of cancellation of
registration, subject to certain conditions t fulfilled by the trade union.

Under the existing provisions of the Act, 50% of the office-bearers in the executi
a registered trade union, shall be persons actually engaged or employed in an
indi with which the trade union is connected. Now this limit is to be enhanced
to 75% 1 to promote the development of internal leadership.

To empower the Registrar of Trade Unions to verify the membership of

registered to unions and connected matters and report, the matter to the State
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and the Central Governments.
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Applicability of The Act

The Act extends to the whole of India. The word "except the State of Jammu &
Kashr has been omitted by the amended Act of 1970 with effect from 1st
September, 1971. The Act applies not only to the unions of workers but also to
the associations of employ

Certain Acts do not apply to a registered trade union, namely, the Societies
Registrar Act, 1860; the Co-operative Societies Act, 1912; and The Companies
Act, 1956. Registration of any such union under any such Act is null and void.

The Act is a Central legislation, but it is administered and enforced mostly by the
St Governments. For the purpose of this Act, the Central Government handles
the cases of o those unions whose objectives are not confined to one state. All
other types unions are concern of State Governments. The respective Registrars
of Trade Unions are appointed both the Central and the State Governments.
They can also appoint additional or Deputy Registrar who may exercise the
powers and functions of the Registrars, as it thinks fit, so as to ob-via delays in
the disposal of applications for registration of trade unions.

General Scheme of the Act

The Act is divided into 33 sections and contains 5 chapters :

Chapter I deals with the title, extent and commencement of the Act, along with
importa definitions (Secs. 1 and 2). Chapter II discusses the various aspects of
registration of trade unions, viz., appointment Registrars (Sec. 3); mode of
registration (Sec. 4); submission of application for registration (Sec. 5);
provisions to be contained in the rules of a trade union (Sec. 6); power to call for
further particulars and alteration of name (Sec. 7); registration (Sec. 8); issue of
certificate of registration (Sec. 9); cancellation of registration (Sec. 10); making
of appeals (Sec. 11); situation of the registered trade unions (Sec. 13); and the
non-applicability of certain Acts to the registered tradi unions (Sec. 14). Chapter
Il describes the rights and liabilities of registered trade unions, i.e., it deals with
the object for which general funds may be spent (Sec. 15); the constitution of a
separate fund for political purposes (Sec. 16); criminal conspiracy in trade
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unions (Sec. 17); immunity from civil suit (Sec. 18); enforce-ability of
agreements (Sec. 19); right of inspecting books of trade unions (Sec. 21);
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disqualification of office-bearers of trade unions (Sec. 21A); proportion of
officers to be connected with the industry (Sec. 22); change of name of trade
unions (Sec. 23); amalgamation Trade unions (Sec. 24); notice of change of
name or amalgamation of trade unions (Sec. 25), ts of change of name and
amalgamation (Sec. 26); dissolution of trade unions (Sec. 27); and of returns by
trade unions (Sec. 28).

Chapter IV deals with powers to make regulations (Sec. 29) and publication of
regulations 30). Chapter V deals with the consequence of failure to submit
Returns (Sec. 31); supplying false

Information regarding trade unions (Sec. 32); and cognizance of offences and
penalties.

Provisions of the Act

Below are discussed the main provisions of the Act:

 Definitions.
 Registration of trade unions.
 Cancellation of registration of trade unions and appeals.
 Re registration of trade unions.
 Incorporation of a registered trade unions.
 Duties and liabilities of a registered trade union.
 Rights and privileges of a registered trade union.
 Amalgamation and dissolution of a trade union.
 Dissolution of registered trade unions.
 Submission of returns.
 Power to make regulations.
 Penalties and procedures.

Definitions Under The Act

"Executive" means "any body, by whatever name called, to which the

management of the fairs of a trade union is entrusted, i.e., a body, should be
responsible for managing the affairs of a trade union."
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"Office-bearer" means and includes "any member of the executive of a trade
union". No one can be appointed an office-bearer unless he has attained the
age of 18 years; or has not been convicted by a court for any offence involving
moral turpitude, or sentenced to imprisonment unless a period of 5 years has
elapsed since his release). Not less than 75 per cent of the total number of
office-bearers of every registered trade union shall be persons actually engaged
employed in an industry with which the trade union is concerned. "Registered
Office" means office of a trade union which is registered as the Head Office
under the Act."

"Registrar of Trade Unions" means "a Registrar appointed by the

appropriate government for each State. The Registrar also includes an
Additional or Deputy Registrar of Trade Unions."

"Trade Dispute” means any dispute between employers and workmen; or

between workmen and workmen; or between employers and employers which
is connected with the employment or non-employment, or the terms of
employment, or the conditions of labour of any person."

According to the new amended Act, "trade union dispute"

means any dispute:

 between one trade union and another

 between one or more members or office-bearers of a trade union and the
trade union

(whether also with any of the other members or office-bearers of the trade
union or nc relating to its affairs, including the appointment of the members of
the executive or oth office bearers of the trade union, validity of any such
appointment, the area of th operation of the trade union, verification of
membership and any other matter arisin out of the rules of the trade union, but
excluding matters involving determination c issues as to the title to, or
ownership of, any building or other property or any funds)

"Workmen" means "all persons employed in trade or industry, and it is

immaterial that th persons employed in a trade or industry are or are not in the
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employment of the employer with whom the trade dispute arises."
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Industry has been defined in a case of State of Bombay u. Hospital Mazdoor
Sabha (A.I.R 1960), "an activity systematically or habitually undertaken for the
production or distribution a goods or for the rendering of material services to
the community at large or part of such community with the help of employees.
Industrial activity involves the cooperation of the employer and the employees
and its object is the satisfaction of human wants."

"Trade Union" means "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 Trade Unions Act does not affect:

 Any agreement between partners as to their own business

 Any agreement between an employer and those employed by him as to such
employment
 Any agreement in consideration of the sale of the goodwill of a business or
of instruction in any profession, trade or handicraft.

A trade union is not only a combination of workmen but also of the employers;
and such the Act applies not only to the unions of workers but also the
association of employers.

Registration of Trade Unions

Mode of Registration (Section 4): "Any number of members of a trade union,

being not less than the minimum number determined in accordance with the
provisions of sub-Section (1A)' may, by subscribing their names to the rules of
the trade union and by otherwise complying

The minimum number of members of a trade union who may apply shall be:
Where such trade union is a trade union of workmen which is not a federation
of trade unions;

If the aggregate of the number of workmen who are members of such trade
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union and the number of workmen eligible to be members of such trade union
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is 100 or less: such aggregate is more than one hundred, such number is equal
to 10 per cent of such workmen, or 100 whichever is less: In any other case
seven.

For the purposes of this Sub-section, the workmen who are eligible to be
members of a trade union shall be all such workmen employed in the industry
or industries with which the trade union is connected as are, in accordance with
the rules of the trade union, eligible for admission as members of such trade
union The Trade Unions Act, 1926

the provisions of this Act with respect to registration, apply for registration of
trade union." Ethan half of the members, who apply for registration of the trade
union cease to be the s of that trade union or disassociate themselves from the
application by giving a notice Registrar before the registration is granted to the
trade union, the application shall be ed to have become invalid. In all other
cases the application for registration shall stand as

Application for Registration (Section 5): An Application for registration of a trade

on shall be sent to the Registrar. This application should be accompanied by a
copy of the rules trade union and a statement of the following particulars,
namely: The names, occupations and addresses of the members making the
application: The name of the trade union and the addresses and occupations of
the office-bearers of the trade union; The titles, names, ages, addresses and
occupations of the office-bearers of the trade union; and

A general statement of the assets and liabilities of the trade union, prepared in
the prescribed form and containing such particulars as may be required, should
be sent with application to the Registrar, where a trade union has been in
existence for more than one year before making an application for its existence.

Provisions to be Contained in the Rules (Section 6): Every registered trade union.
Required to have written rules dealing with certain matters specified in
Schedule Il of the Central de Unions Regulations, 1938. These rules generally
gover and determine the relationship ween the trade union and its members.
They also provide guidance for the internai acminis ion of the trade union. The
executive of the trade union is constituted in accordance with the ovision of the
Act.
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To get itself registered, the trade union should provide for the
following information:

 the name of the trade union;

 the whole of the objects for which the trade union has been established
 the whole of the purposes for which the general funds of the trade union
shall be applicable, all of which purposes shall be purposes to which such
funds are lawfully applicable under this Act
 the maintenance of a list of members of the trade union and adequate
facilities for the inspection thereof by the office-bearers and members of the
trade union
 the admission of ordinary members who will be persons actually engaged or
employed in any industry with which the trade union is connected, and also
the admission of the number of honorary or temporary members as officers
to form the executive of the rade union
 the payment of a subscription by members of the trade union which shall
not b: less than 25 paise per month per member
 the conditions under which any member shall be entitled to any benefit
assured by the rules and under which any fine or forfeiture may be imposed
on the members
 the manner in which the rules shall be amended, varied or rescinded
 the manner in which the members of the executive and other officers of the
trade
 shall be appointed and removed
 the safe custody of the funds of the trade union, and annual audit, in such
manner may be prescribed, of the accounts thereof, and adequate facilities
for the inspection the account books by the officers and members of the
trade union
 the manner in which the trade union may be dissolved.

In M.T. Chandersenan u. Sukhmaran' case, it was held that if the subscriptions

are not pai in accordance with the bye-laws of the trade union, the person who
failed to pay cannot b regarded as a member of the union. But subscription
cannot be refused under some pretext whic results in denial of membership. In
I.T. Commissioner W.B. v. Indian Sugar Mills Association case, the association
was registered trade union and the Rules 4 and 64 were repungnant to each
other. It was submitted that Rule 64 should be treated as void as it was
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inconsistent with the cited objectives of trade union. It was held that "we have
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no right to assume some of the stated objects of the association as primary to
deciare others in apparent conflict with them as of no effect. All the rules frame
by the association co-exist. Further, we have no right to rewrite the rules of a
registered trad union by deleting any of them."

In B.S.V. Hanumanth Roo & Others u. Deputy Registrar of Trade Unions and
Deputy Commissioner of Labour and Others, the rules of Hyderabad Allwyn
Workers' Union went amended to provide for the president of the union as
election authority, empowering him to nominate all office-bearers and denying
authority to the general body to remove the presiden from the office before the
expiry of the term. These amendments were registered by the Registrar It was
held that the amendments were contrary to the letter and spirit of the Trade
Union Act... As it is case of a person being given authority to perpetuate himself
in the office, sucha procedur amounts to constituting a person, a judge in his
own case.

Power to Ask for Alteration of Name and Further Clarification (Section 7): The
Registrar of Trade Unions is empowered to ask the union to alter its name, if it is
identical with that of any registered union. He may refuse to register the union
until such ateration has been made. Further, he may ask for any type of
information which he feels necessary for the purpose of seeing that the
application duly complies with the provisions of Section: 5 and 6 cl the Act.

Registration (Section 8): The Registrar on being satisfied that the trade union
has complied with all the requirements of the Act in regard to registration, will
register the trade union within a period of sixty days from the date of such
compliance, by recording its particulars in a register to be maintained in such
form as may be prescribed.

In cases where the Registrar does not take any action on the application for
more than three months; a write under Article 266 can be issued commanding
the registrar to deal with the case.

Where different names of office-bearers are filed by rival groups in a trade

union, the Registrar has no power to hold a quasi-judicial enquiry. He has no
power for adjudication, although he enjoys quasi-judicial power for the
registration or cancellation of a trade union. He has an administrative authority
to record changes in the name of office-bearers. In dealing with this
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