A SEMINAR REPORT ON

RECOGNITION OF TRADE UNIONS

IN PARTIAL FULFILLMENT OF THE DEGREE OF MASTERS OF BUSINESS ADMINISTRATION (M.B.A.) BY

2009-2010

RECOGNITION OF TRADE UNIONS

I] DEVELOPMENT OF TRADE UNIONISM

BACKGROUND: Trade Unions are the groups set-up with the aim of trying to create fairness and job security in a workplace. A trade union is an organization of workers who have banded together to achieve common goals in key areas such as wages, hours, and working conditions. Basically a trade union bargains with the employer on behalf of union members and negotiates with employers. Freedom of association has been the corner stone of society. This freedom finds its expression in a democratic form of government. Trade unionism has been a movement launched against the concentration of economic power in the hands of a few individuals of society and for the purpose of promoting the welfare of working class. Trade union movement is not confined to the premises of one nation or country but it has widened to the international field as well. It may be desirable to mention that besides trade unions in specific countries, there is one international organisation of working class known as International Labor Organisation (ILO) for promoting labor welfare. HISTORY OF TRADE UNION MOVEMENT: Modern trade unionism is a product of conditions created by industrial revolution. The industrial revolution in Great Britain and later on in other countries brought about a sudden and drastic change in the economic sphere. These changes were so sudden that it was difficult to bring about a complete social, economic and political adjustment. The factory system of production completely tore the relationship between the capitalist and the labour class without replacing it with a new one. The new economic order that was created was a challenge, which workers sought to meet

through the formation of associations known as trade unions to defend their living and working conditions.

II] TRADE UNIONS ACT, 1926

The object of Trade Unions Act, 1926 is to provide for registration of Trade unions and to define law relating to registered trade unions in certain aspects. In the year 1925 the Government of India, after consulting the State Governments drew up a Bill providing for the registration of trade unions and introduced the same in the Legislative Assembly on the 1st August,1925. The Indian Trade Union Act was passed in 1926and came into force on the 1st June,1927. Although two amending Acts were passed in 1928 and 1942, no major changes were introduced in the Act till 1947. In 1947, an amending Acct was passed which provided for compulsory recognition of the representative Unions by the employers, and listed certain practices on the part of recognized Unions. These provisions of the amended Act, however, have not been brought into force. HISTORY OF TRADE UNION MOVEMENT IN INDIA The first cotton mill in India was established in 1951 in Bombay and the first jute mill in 1855 in Bengal. This was the beginning of the modern factory system in India. After 1851 and 1855, the number of factories began to increase both in Bombay and Bengal. Prof. S. N. Dhyani has observed that the year 1875 is landmark in the history of trade union Movement. For the first time, in India factory workers united together for securing better working conditions in the factories. DEFINITION

Section 2(h) of the Trade Union Act,1926 has define a trade union as: Any combination, whether temporary or permanent, former primarily for the purpose of regulating the relation between workman and workmen or between employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions. Thus, technically, there can be union of employers also, though, almost universally, the term trade union is associated with union of workmen or REGISTRATION OF TRADE UNIONS: Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can form a trade union and apply to the Registrar for it registration. The application for registration should be in the prescribed form and accompanied by the prescribed fee, a copy of the rules of the union signed by at least 7 members, and a statement containing (a) the names, addresses and occupations of the members making the application, (b) the name of the trade union and the addresses of its head office, and (c) the titles, names, ages, addresses and occupations of its office bearers. If the union has been in existence for more than a year, then a statement of its assets and liabilities in the prescribed form should be submitted along with the application. The registrar may call for further information for satisfying himself that the application is complete and is in accordance with the provisions. LEGAL STATUS OF A REGISTERED TRADE UNION: employees.

 A registered trade union is a body corporate with perpetual succession and a common seal. It can acquire, hold sell or transfer any movable or immovable property and can be a party to contracts. It can sue and be sued in its own name No civil suit or other legal proceeding can be initiated against a registered trade union in respect of any act done in furtherance of a trade dispute under certain conditions. No agreement between the members of a registered trade union shall be void or voidable merely on the ground that any of its objects is in restraint of trade. REGISTRATION DOES NOT MEAN RECOGNITION: Registration and recognition of Union by an employer are independent issues. Registration of Trade Union with Registrar has nothing to do with its recognition in a particular factory/company. Recognition of Trade Union is generally a matter of agreement between employer and trade union. In States like Maharashtra and Madhya Pradesh, there are specific legal provisions for recognition of a trade union. TRANSFORMATION OF THE TRADE UNIONS ACT, 1926 The history of trade union movement indicates that the trade union movement in India had not to face the onslaught of legislation as in England. In Great Britain, trade unions were regarded against the common law, and were also looked down as criminal conspiracies.

III] RECOGNITION OF A TRADE UNION

INTRODUCTION: The need for recognition of trade unions by employers was felt by the working class to ensure that appropriate modes of collective bargaining took place and that the agreements, which were collectively reached, were mutually observed. It was considered that recognition of trade unions was a step towards securing reasonable levels of pay and working conditions. This in turn will be achieved if workers stood united in representing their demands through a trade union, which is adequately recognized. It was the late 1990s that it was realised that trade unions have become massive bureaucratic bodies with interests and agendas of those who comprise its membership. However, there is a growing debate as to the extent to which they represent and pursue the interests of their members. It is often argued that this is slight and coincidental. There are elements in the discussion, such as the argument about whether it is acceptable to require a level of support from among the whole of a workforce, in order to be recognized - an idea with history and resonance, which need to be debated thoroughly. Trade union recognition works as much in the interests of the employer as it does in the interest of the worker. The recognition of a trade union has several repercussions in defending people on disciplinary charges, accompanying members in meetings with managers and negotiating local conditions of service. After the passing of the Trade Unions Act, 1926, it may be observed that from criminal and illegal associations trade unions have now become legalized and recognised institutions, from institutions which were only very small bodies they have now become gigantic associations, from

institutions that were primarily interested in the advancement of the cause of their own membership they have now become institutions which are interested in the social, cultural and political development of the country. This was a remarkable process. Recommendations of the Royal Commission on Labour Indian Trade Unions (Amendment) Act of 1947 remained only on paper. Recommendations by the National Labour Commission, 1969 The Commission has, inter alia, strongly recommended that: (1) trade union registration be made compulsory; (2) the registrar must be time bound to decide the issue of registration (3) effective measures must be taken for cancellation if the unions do not comply with conditions regarding filing of returns or membership; (4) trade union recognition by the employers be made compulsory by Central legislation as specified undertakings; (5) such recognised unions, must be given statutorily exclusive rights and facilities like right of sole representation, entering into collective bargaining agreements, holding discussions and negotiations, inspection, check-off etc; and (6) the minority unions must also be allowed to represent workers in redressal of individual grievances like dismissal, discharge etc. The suggested measures are likely to promote growth of healthy and strong trade unionism and eliminate inter-union rivalry to some extent. Compulsory recognition of one union for one undertaking will make the unions effective instruments of collective action and give them requisite bargaining equality.

THE MAHARASHTRA RECOGNITION OF TRADE UNIONS AND PREVENTION OF UNFAIR LABOUR PRACTICES ACT, 1971
An Act to provide for the recognition of trade unions for facilitating collective bargaining for certain undertakings, to state their rights, and obligations; to confer certain powers on unrecognised unions; to provide for declaring certain strikes and lock-outs as illegal strikes and lock-outs; to define and provide for the prevention of certain unfair labour practices; to constitute courts (as independent machinery) for carrying out the purposes of according recognition to trade unions and for enforcing the provisions relating to unfair practices; and to provide for matters connected with the purposes aforesaid. Whereas, by Government Resolution, Industries and Labour Department, No. IDA. 1367-LAB-II, dated the 14th February 1968.

DEFINITION OF RECOGNITION: A union must be recognised before it may effectively represent any employees. Once a union is recognised it serves as the bargaining agent for the workers in a particular bargaining unit. An employee may not circumvent the union, because recognition entails willingness to negotiate with a view to striking a bargain and this involves a positive mental decision. NEED FOR RECOGNITION: Recognition of trade union is the backbone of collective bargaining. It has been debated time and again. But inspite of the government stated policy to encourage trade unions, there is no enforced central legislation on this

subject. There are however voluntary code of discipline and legislations in some states Definition of Collective bargaining as the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment. absence of any central legislation, management in several states have refused to recognise a trade union mainly on five grounds: (1) most of the office bearers of the union were outsiders, (2) and sometimes, those disapproved by management, particularly politicians and ex-employees; (3) the union consisted of only small number of employees; (4) there were many rival unions in existence; and (5) the trade union was not registered under the Trade Unions Act, 1926. CONSTITUTION AND RECOGNITION OF TRADE UNIONS: The right to grant recognition to trade unions within the meaning of Constitution of India, art. 19(1)(c) is a fundamental right or not is answered in negative because the right to form association does not carry with it the concomitant right that the association must be recognised by the employers. Hence withdrawal of recognition does not infringe the fundamental rights guaranteed under the Constitution of India, art. 19(1) (c).

CONDITIONS FOR RECOGNITION: Trade Unions (Amendment) Act, 1947, s. 25D provides that a trade union will not be entitled for recognition by order of a labour court under s. 25E unless it fulfills the following conditions, namely: (1) that all its ordinary members are workmen employed in the same industry or in industries closely allied to or connected with another; (2) that it is representative of all the workmen employed by the employer in that industry or those industries; (3) That its rules do not provide for the exclusion from membership of any class of the workmen referred to in cls. (b); (4) that its rules do not provide for the procedure for declaring a strike; (5) that its rules provide that a meeting of its executive will be held at least once in every six months; and (6) that it is a registered trade union and that it has complied with all provisions of this Act. The aforesaid provisions of the Act raise various problems (1) Can an employer voluntarily recognise a union that is not registered under the Act, which is in fact a majority union? (2) Can an employer be compelled to recognise more than one union? Notwithstanding the relative importance of these questions and rather unsatisfactory answer than we get from the statute, the significance of Trade Unions (Amendment) Act, 1947, must not be overlooked. But even this might not be put into force.

Re-Recognition of Trade Unions The Trade Union (Amendment) Act, 1947, s. 28H permits the registered trade union whose recognition is withdrawn under sub-s. (3) of s. 28G to make an application for re-recognition after six months from the date of withdrawal of recognition. Rights of Trade Unions in India The trade union rights in our country are found scattered in various laws, voluntary measures like the Code of Discipline and the constitutional provisions under the Constitution of India, art. These trade union rights may be divided into the following categories: (1) right of freedom of speech and expression which includes right of picketing and demonstrations; (2) right regarding the formation and the registration of the trade union; (3) right regarding the recognition of the trade union by the employers; (4) right regarding collective bargaining and collective actions; (5) Right regarding conduct and functioning of the trade union; and Miscellaneous rights: Right to form a Trade Union A Constitutional Right of citizens of India The right to form and continue36 a trade union is a fundamental right guaranteed under the Constitution of India, art. 19(1)(c), which may only be subjected to reasonable restrictions in the public interest as provided by art. 19(1)(6)

RECOGNITION OF TRADE UNIONS BY EMPLOYERS: After the registration of the trade union, the question of its recognition by the employer comes to the forefront in as much as if it is recognised by the employer for the purpose of collective bargaining, then it will have certain privileges and an opportunity to fulfill its role. There is no provision in the Indian Trade Unions Act or Industrial Disputes Act, 1947, the only two central enactments in this respect in the country regarding recognition of the trade union by employers. No union registered or otherwise may lay claim to recognition by the management for participation in negotiations as a matter of a legal right. However it may not be denied that fair play requires the management to consider grant of recognition when a body of persons legitimately expects to be affected. This right of recognition has to be secured by the trade unions by raising an industrial dispute. The Code of Discipline regulates this aspect, though not on a statutory level. The National Commission on Labour has recommended such a statutory right for unions. Nonrecognition of a trade union for collective bargaining constitutes an unfair labour practice. Provisions has however been made in the State of Maharashtra by Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. CODE OF DISCIPLINE AND TRADE UNION RECOGNITION With the evolution of the voluntary measures in the nature of the Code of Discipline in the industry, an attempt has been made to make a provision for recognition of the unions by the employers. Under the Code of Discipline, the recognized unions have been given certain rights in preference to unrecognised unions.

These rights are: (1) to raise issue and enter into collective agreements with employers on general questions concerning terms of employment and conditions of service of workers in an establishment of in the case of a representative union, in an industry in a local area; (2) to collect membership fees/subscriptions payable by members to the union within the premises of the undertaking; (3) to put up or cause to put up a notice board on the premises of the undertaking in which its members are employed and affix or cause to be affixed thereon notices relating to meeting, statements of accounts of its income and expenditure and other announcements which are not abusive, indecent or inflammatory or subversive of discipline or otherwise contrary to the Code; (4) for the purpose of prevention or settlement of an industrial dispute: (a) to hold discussion with the employees who are members of the union at a suitable place or places within the premises of office/factory/establishment as mutually agreed upon; (b) to meet and discuss with an employer or any person appointed by him for the purpose, (c) to inspect to prior arrangement, in an undertaking, any place where any member of the union is employed; (5) to nominate its representatives on the grievance committee constituted under the grievance procedure in an establishment; (6) to nominate its representative on joint management councils, and (7) to nominate its representative on non-statutory bipartite committees for instance production committee, welfare committee, canteen committee, house allotment committees set up by managements.

The Trade Unions Act, 1926 is completely silent on the question of recognising a trade union for the purpose of collective bargaining. This annexure A lays down the following criteria for recognising a trade union: (1) where there are more than one union, a union claiming recognition must have been functioning for at least one year after registration. Where there is only one union, this condition would not apply; (2) the membership of the union must cover at least fifteen per cent of the workers in the establishment concerned. Membership would be counted only of those who have paid their subscription for at least three months during the period of six months immediately preceding the month of reckoning; (3) a union may claim to be recognised as a representative union for workers in all establishments in an industry in a local area if it has a membership of at least 25 per cent of the workers of that industry in area; (4) when a union has been recognised, there must be no change in its position for a period of two years; (5) where there are several unions in an industry or establishment, the one with the largest membership must be recognised; (6) a representative union for an industry in an area must have the right to represent the workers in all the establishments in the industry, but if a union of workers in a particular establishment has membership of 50% or more of the workers, it must have the right to deal with matters of purely local interest as, for instance, the handling of grievances. All other workers, who are not members of that union might either operate through the representative union for the industry or seek redress directly; and (7) only unions that observe the Code of Discipline are entitled to recognition.

RECOGNISED CENTRA TRADE UNION ORGANISATIOS: Trade Unions All India Central Council of Trade Unions All India Trade Union Congress All India United Trade Union Centre Bharatiya Mazdoor Sangh Centre for Indian Trade Unions Hind Mazdoor Sabha Indian National Trade Union Congress Labour Progressive FederationSEWA Trade Union Coordination Committee United Trade Union Congress All India Forward Bloc Revolutionary Socialist Party Political affiliation Communist Party of India (MarxistLeninist) Liberation Communist Party of India Socialist Unity Centre of India Rashtriya Swayamsevak Sangh Communist Party of India (Marxist) socialists Indian National Congress Dravida Munnetra Kazhagam