MS-24

Industrial Relations
Indira Gandhi
National Open University
School of Management Studies

Block

2
TRADE UNIONISM
UNIT 6
Trade Union Development and Functions 5
UNIT 7
Trade Union Structure, Registration and Recognition 20
UNIT 8
Managerial Unionism 39
UNIT 9
Employers’ Organisations in India 48
Course Design and Preparation Team (2017)
Prof. A.M. Sarma Prof. Srilatha
Retd. Professor, TISS School of Management Studies
Mumbai IGNOU, New Delhi
Prof. G.C. Patro Prof. Neeti Agarwal
Course Editor School of Management Studies
Retd. Professor, IGNOU, New Delhi
Berhampur University
Dr. Gopal Jadav
Berhampur
School of Management Studies
Prof. B.P. Rath IGNOU, New Delhi
Retd. Professor,
Dr. Kamal Vagrecha
Berhampur University
School of Management Studies
Berhampur
IGNOU, New Delhi
Prof. P.K. Singh
Dr. Nayantara Padhi
IIM, Indore
Course Coordinator
Dr. Babu P. Ramesh School of Management Studies
SOITDS, IGNOU IGNOU, New Delhi

Course Design and Preparation Team (2004)

Prof. E.M. Rao Dr. B.B. Khanna
Course Editor Director
XLRI, Jamshedpur School of Management Studies
Jamshedpur IGNOU, New Delhi
Prof. A.M. Sarma Prof. Madhulika Kaushik
Management Consultant School of Management Studies
Mumbai IGNOU, New Delhi
Prof. D.V. Giri Dr. Srilatha
Berhampur University School of Management Studies
Berhampur IGNOU, New Delhi
Mr. Gopal
Course Coordinator
School of Management Studies
IGNOU, New Delhi

Print Production
Mr. K.G. Sasi Kumar
Assistant Registrar (Publication)
SOMS, IGNOU, New Delhi

September, 2017
 Indira Gandhi National Open University, 2017
ISBN-978-93-87237-14-8
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BLOCK 2 TRADE UNIONISM

This block comprises of four units:

The first unit dwells upon the growth and development of trade unionism in
India, and the legal framework governing trade unionism through the Trade
Unions Act.

The second unit deals with the structure and also registration and recognition of
trade unions in India.

The third unit gives an account of the managerial unionism in India, covering
such aspects as evolution of managerial unionism in India, covering such aspects
as evolution of managerial unions, factors responsible for the formation of these
unions and the activities of the managerial unions.

The last unit gives an idea about the employers’ organisations and discusses
different aspects viz., their origin and growth, structure, aims and objectives,
functions, and legal status.
Trade Unionism

4
 Trade Union Development
UNIT 6 TRADE UNION DEVELOPMENT and Functions

AND FUNCTIONS

Objectives
After going through this unit, you should be able to understand:
• the growth and development of trade unions in India, and
• the functions and problems of trade unions.
Structure
6.1 Introduction
6.2 Meaning
6.3 Origin and Growth of Trade Unions
6.4 Development of Trade Unions in India
6.5 Indian Unions Today
6.6 Functions of Trade Unions
6.7 Recent Trends and Future Role
6.8 Summary
6.9 Self-Assessment Questions
6.10 Check your progress
6.11 Further Readings

6.1 INTRODUCTION
Trade Unions have become an integral and powerful factor in the contemporary
system of production and distribution of goods and services. Modern
industrialisation has paved the way for trade unions. They are now exercising a
strong influence on the methods of production of goods and services, their
distribution, the allocation of economic resources, the volume of employment
and unemployment, the character of rights and privileges, policies of governments,
the attitude and status of large masses of population, and the very nature of
economic and social organisations. Under such conditions their role has evoked
deep and wide controversies. For a developing economy such as ours, trade unions
and their policies are of special significance. As such, in order to assess their
functions, role and prospects, it is essential to go into the origin and development
of trade union movement and to outline the factors that helped them reach such
a strong and forceful position from a small and humble beginning.

6.2 MEANING
The term trade union has been defined variously by different authors. Some
view that these are only associations of employees or persons working in industry
and wage earners engaged in one or more professions, undertakings or business,
while others view that these also include employers organisations and friendly
societies.

5
Trade Unionism According to G.D.H. Cole, a trade union means “an association of workers in
one or more professions-an association carried on mainly for the purpose of
protecting and advancing the members’ economic interests in connection with
their daily work.”

Dale Yoder defined a trade union as “a continuing long term association of

employees, formed and maintained for the specific purpose of advancing and
protecting the interest of the members in their working relationship.”

Sidney and Beatrice Webb define a trade union as “a continuous association of

wage earners for The purpose of maintaining and improving the conditions of
their working life.” This classical definition still holds good so far as actual
practices of unions are concerned.

Under the Trade Unions Act, 1926, this term is defined as any combination
whether temporary or permanent, formed primarily for the purpose of regulating
the relations between workmen and employers, or imposing restrictive conditions
on the conduct of any trade or business, and includes any federation of two or
more trade unions. In other words, the term union applies not only to combination
and associations of employees only, but also to that of the employers.

6.3 ORIGIN AND GROWTH OF TRADE UNIONS

Trade unions have grown in response to the peculiar needs and problems which
the wage-earners have had to face in the course of industrialisation under tile
capitalist economic system. The main features of the process of industrialisation
that necessitated the origin of trade unions are: (i) separation between capital
and labour; (ii) philosophy of lassez-faire i.e., least/non-interference of the state
in the affairs of labour and management; (iii) lack of bargaining power on the
part of workers (which forced the workers (as individuals) to either accept the
jobs with wage rates, hours of work etc. unilaterally determined by the employers,
or to remain unemployed); and (iv) the realisation by the working class that
while the individual worker was dispensable to the employer, workers collectively
were indispensable to him, and as such, he could not dispense with all his workers
and replace them. It is this realisation that sowed the seeds of collective bargaining
which later resulted in trade unionism.

The workers, working under a common employer, faced common problems and
common tasks. They developed common sentiments, and organised themselves
into associations which could meet the employers on a basis of equality. The
inchoate Iabour organisations had to cross many hurdles before they could develop
into full- fledged stable trade unions. There were internal dissentions, persistent
and determined opposition from the employers, merciless persecution and
suppression by the state (For example, in England, France, Germany and the
United States, combinations of workmen per se were declared illegal), and the
full-throated condemnation of trade unionism by the advocates of free competition
and laissez-faire. In spite of these efforts at suppression, they continued to grow,
sometimes working trade unions working underground and sometimes openly.
They continued to defy the laws prohibiting the combination of workmen
(Combination Acts of 1799 and 1800 in Great Britain, for example) and the
judicial pronouncements (particularly, the judgement in the Philadelphia
Cordwainers Case of 1806 in the United States) against the combinations of
6
workmen. Under incessant pressures from the workers and their organisations, Trade Union Development
and Functions
the law and the attitude of the courts gradually came to be modified. The history
of the trade union movement everywhere is a history of blood, tears and toils.
Trade unions in all the capitalist countries have passed through three stages: (a)
outright suppression, (b) limited acceptance and tolerance, and (c) general
acceptance and recognition. However, trade unions in the world today are not at
the same stage of development everywhere. In some countries, especially in those
under hitherto colonial rule and dictatorships, trade unions had to struggle hard
till recently to cross the first stage; in many underdeveloped countries free from
colonial yoke, they are in the second stage; and in the full-fledged industrially
advanced capitalist democracies, they are in the third stage. In the communist
countries, trade unions occupy an altogether different position and status.

6.4 DEVELOPMENT OF TRADE UNIONS IN INDIA

Early Period (up to 1918)
The Indian trade union movement is about a century old. As compared to the
trade unions of Great Britain and LISA, the Indian unions have a shorter history.
It is the delayed start and the slow growth of modern capitalist industrial
enterprises in India that was responsible for the delay in the emergence of the
trade union movement in India. It was in 1851 that the first cotton mill was set
up in Calcutta. Subsequently, a few big industrial enterprises were established in
the second half of the nineteenth century. During this period, the working and
living conditions of labour presented a pathetic picture -the hours of working
were long, the wages were very low, and general labour conditions in industrial
areas were harsh. Inevitably, the industrial workers, especially in The cotton
textile industry, protested against these inhuman working and living conditions
by going on strikes. In 1877 textile workers of the Empress Mill, Nagpur remained
on strike for a long time demanding short working hours, adequate wages arid
other improvements in their employment conditions. Between 1882 and 1890,
twenty five strikes were recorded in the Bombay and Madras presidencies. These
strikes took place spontaneously, though there were no formal organisations of
workers. From these strikes workers learnt the power of united action.

During the early period of industrial development efforts towards organising

workers for their welfare were made largely by social workers and philanthropists,
both Indian and foreign, mostly on humanitarian grounds. In 1875, a number of
social reformers of Bombay under the leadership of Shorabji Shapurji Bengalle
took upon themselves the responsibility of drawing public attention to the terrible
working conditions obtaining in factories. In particular, they drew attention to
the inhuman conditions under which women and children were required to work
in factories.

On March 25, 1875, the Government of Bombay appointed the first Bombay
Factories Commission to investigate factory conditions. The members of the
Commission failed to see any necessity of legislation. But due to the agitation
started by the social reformers led by Sorabji Bengalle and other reasons the first
Indian Factory Act was passed in 1881. But this Act was so inadequate (the Act’s
focus being mainly on children, it was considered as a children’s welfare
enactment) that workers in Bombay protested against it. N.M. Lokhande, a skilled
worker in a textile mill in Bombay and a social reformer of the Satyashodhak
7
Trade Unionism Samaj, organised two public meetings of mill operatives in Bombay in
September1884 and had a memorandum signed by 5,500 workers, demanding a
weekly holiday, half an hour’s recess and regular payment of wages, and submitted
the same in October 1884 to the second Factory Commission.

In 1890, Lokhande established the Bombay Milllhands Association primarily to

provide a clearing house for the grievances of the mill-workers and to help in
drawing public attention to them. The Association had no existence as an organised
body, heaving no membership, no funds and no rules. The leaders acted as
voluntary advisers to mill-workers. The Association also took over the
Dinabandhu (Friend of the poor), a social reform journal, and converted in into
the first labour journal in India. Some of the important organisations set up before
the First World War were the Amalgamated Society of Railway Servants of India
and Burma (I 897), the Printers’ Union, Calcutta (I 905), the Bombay Postal
Union (1907) and the Social Service League (1 910). However, all these
organisations were ad-hoc bodies, and they could hardly be regarded as trade
unions in the true sense. Besides Lokhande, some other persons (including P.C.
Mazumdar in Bengal) and organisations (Theosophical Society in Madras,
Servants of India Society in Bombay, and Brahmo Samaj in Calcutta) took interest
in drawing public attention to the cause of labour. Most of the workers’
organizations that were established before the First World War disappeared after
a short and stormy career.

1918-1947 (Prior to Independence)

The immediate post-war period (191 8-20) saw the birth of the trade union
movement in the modern sense of the term. The main factors which favoured its
birth and early beginnings include public expectations of a new social order,
intense industrial and economic unrest because earnings did not keep pace with
prices and profits, the Russian Revolution (1 917) and the formation of the
International Labour Organisation ( 1919).

The Russian Revolution, which ushered in workers’ rule, placed an ideal before
the workers, namely, that the exploitation of labour could be stopped by political
means. In its early stage, the Indian trade union movement was influenced by
communism.

The International Labour Organisation (ILO) came into existence as a result of

the Peace Treaty of Versailles for the well-being-physical and intellectual of the
industrial wage-earners. The ILO has profoundly influenced India’s trade union
movement, labour legislation and labour policy. When the first ILO conference
was held in 1919 in Washington, there was no central federation of Indian trade
unions.

As such, the Government of India nominated a delegate without consulting trade

unions. This action led to dissatisfaction in the ranks of labour. On October 30,
1920, representatives of 64 trade unions, claiming membership of 1,40,854, met
in a conference in Bombay and established the All India Trade Union Congress
(AITUC) with Lala Lajpat Rai as its first President. As a central federation of
Indian trade unions, the AITUC developed the trade union movement. The ILO
also encouraged the movement by providing training, literature and other
resources, including an international platform for trade union leaders from various
countries.
8
During this period, the Madras Labour Union, the first trade union in India to be Trade Union Development
and Functions
formed on systematic lines, was established on April 27, 191 8, by B.P. Wadia,
editor of an outspoken nationalist paper. At Ahmedabad, under the inspiration
and guidance of Mahatma Gandhi and Ansuyaben, spinners’ union and weavers’
unions were formed, which later on federated into the industrial union known as
Ahmedabad Textile Labour Association (ATLA). This association, ever since its
inception, has been a model of sound trade unionism in our country, based on
Gandhian philosophy of mutual collaboration and non-violence. The formation
of this association was also started with a strike for a wage rise in I917 when
Mahatma Gandhi had to go on fast following which Ahmedabad Mill Owners’
Association conceded the right of workers to be compensated for the rise in
price. The workers were given 10 per cent rise in wages in the form of war bonus
in 1917, and which increased to 15 per cent in the following year.

The year 1920 is also important in the history of trade union movement due to
the agitation of workers of Bukingham and Carnatic Mills in Madras for better
wages and other employment conditions. The management declared lockout and
filed a suit for damages against the union leader B.P. Wadia and other leaders of
Madras Labour Union. The Madras High Court granted an injunction declaring
formation of union an illegal conspiracy and also awarded to the management
damages amounting to Rs.75,000. This judgment of the Court brought to the
fore the need for legal protection to trade unions for their survival. This was very
powerful demonstration of the methods used in our country to crush early trade
union movement. The labour leaders became conscious of the fact that in the
absence of any base they could be prosecuted for bonafide trade union activities.
In 1921 an effort was made by N.M. Joshi to introduce in Indian legislature a
trade union legislation. However, his effort succeeded after five years in 1926
when the Trade Unions Act was enacted legalising the right of workers to combine
and form unions, and granting them immunity from civil and criminal prosecution
for bonafide trade union activities and the action flowing from the same. This
Act still continues to be the basic law governing trade unions in the country. This
gave further boosting to the trade union movement in the country by providing
that any seven persons can form their union and get it registered under the Act in
the prescribed manner. The registration which is still optional provides necessary
security to the union and its members against any prosecution for legitimate
trade union activities.

The Indian trade union movement, which was in ascendancy from 1920 to 1929,
suffered a setback during 1930-34. Since 1930, the world economic crisis, known
as the Great Depression, intensified the misery and poverty of the working class.
But instead of meeting the challenge the trade union movement divided itself on
political grounds. In 1929, at the Nagpur Session of the AITUC, the reformist
group (moderates) led by N.M. Joshi broke away on the ground that the AITUC
was dominated by Communists. In 1930, the reformists formed their own
organisation, the Indian Trade Union Federation, later renamed (in 1933) as the
National Trade Union Federation (NTUF). The AITUC had another split in 1931
in Calcutta, when the hardcore communists walked out and started a rival labour
federation, the Red Trade Union Congress (RTUC).Thus, it could be said that
the Indian trade unions were divided into four groups by 193 1, that is, (a) the
original AITUC under the control of the radicals, (b) the ITUF (NTUF) controlled
by moderates, (c) the RTUC under the leadership of the communists, and (d) the
9
Trade Unionism group of independent trade unions unattached to any central organisation, the
chief among them being, the All India Railwaymen’s Federation and the ATLA.

The splits had been caused mainly on account of differences on the role of the
Indian trade union movement in the field of political and class struggle. The
union movement ultimately reunified in 1940 through a series of compromises,
mainly due to the sustained efforts of R.R. Gokhale, V.V. Giri, N.M. Joshi and
Diwan Chamanlal.

The Second World War (1 939-45) posed a serious question to Indian trade unions:
“What should be the attitude of Indian workers to the war?” This was a difficult
question to answer, for the war was between an anti-labour, Nazi Germany and
Great Britain, our traditional enemy. The Communists, following the Russian
line, first supported Germany when it invaded Great Britain, opposed it when it
invaded Russia. Congressmen opposed Great Britain with their Quit India
movement and went to jail. M.N. Roy and his followers bitterly opposed Germany;
and when the AITUC failed to accept their line, tliey started their own organisation,
the Indian Federation of Labour (IFL) in 1941 in support of thewar against
Germany. In return, the government recognised the IFL as the most representative
organisation of Indian workers.

Besides the formation of the IFL, some other events that took place during the
war had an impact on the trade union movement. These were: the establishment
of the Indian Labour Conference-a tripartite labour machinery -in 1942, providing
a platform for discussions between the government, employers and trade unions;
ordinances relating to the Defence of India, National Service (Technical
Personnel), Essential Services (maintenance), etc. placing restrictions on the
freedom of association and the right to strike, and the Quit India Movement and
consequent arrest of many trade unionists, leaving the field for control to
communists. During the war, trade union membership registered a substantial
increase from 3,99,000 in 1938-39 to 8,89,000 in 1944-45.The economic distress
that followed the war, the new spirit of awakening, the change in the outlook
towards the unions both on the part of the Government and employers, and the
enactment of the Industrial Disputes Act, I947 (which enabled the unions to
represent workers for settlement of their disputes under the Act) contributed to
the growth of trade union movement in the country after the war.

From the point of view of its impact on the Indian trade union movement, the
most important of the events was the establishment of the Indian Trade Union
Congress (INTUC) on May 3, 1947. The divided trade union movement was
further divided when the INTUC was set up on the initiative of Gulzari Lal
Nanda and other like- mined persons who believed in the Gandhian ideology.
Sardar Vallabhbliai PateI, a powerful congress leader, became its first president.

Post-Independence Period
The post-Independence period witnessed further disintegration of the AITUC.
In 1948, the socialists who had hitherto been working in the AITUC left it arid
established a separate national federation called Hind Mazdoor Panchayat (HMP).
The Indian Federation of Labour (IFL), which was languishing since the end of
the war and the partition of the country in 1947, merged with the HMP, and a
new organisation -the Hind Mazdoor Sabha (HMS) came into being in December
1948. Some trade union leaders, who attended the meeting called by the socialist
10
leaders in December 1948 to form the HMS, did not agree with the principles Trade Union Development
and Functions
and objectives of the HMS. They, therefore, decided to set up another organisation.
Consequently, on April 30, 1949, the United Trade Union Congress (UTUC)
was formed by radicals outside the Communist and Socialist groups.

After, the adoption of the constitution in 1950, the role of political parties became
all the more important. Not only new political parties came to be formed, but
also the existing political parties witnessed splits for one reason or the other. The
political parties tried their best to keep as many trade unions and workers as
possible under their influence and control. These developments had their
repercussions on the trade union movement also. In 1955, Bharatiya Jan Sangh
established the Bharatiya Mazdoor Sangh (BMS), which later came under the
influence of the Bharatiya Janata Party. When the Indian National Congress was
divided into the Ruling Congress and the Organisation Congress, the former
took over the INTUC, while the latter established in Ahmedabad a new
organisation called the National Labour Organisation (NLO). Similarly, when
the Communists divided into the CPl and CPM, the AITUC came under the
control of the former, while the latter set up the Centre for Indian Trade Unions
(CITU).

The UTUC broke into two -one with headquarters at Central Avenue and the
other at Lenin Sarani, Calcutta. Both the UTUC (Central Avenue) and the UTUC
(Lenin Sarani) claim to be the genuine UTUC. Later on, two other central
federations of trade unions, namely National Front of Indian Trade Unions
(NFITU), an Independent organisation and Trade Union Coordination Centre
(TUCC). There are a few other organisations such as the Hind Mazdoor Kissan
Panchayat (HMKP), the Indian Federation of Free Trade Unions (IFFTU), and
Bharatiya Kamgar Sena (Shiv Sena, Mumbai). But they are not as prominent as
the other central trade union organisations. Table 1 shows the membership figures
often central trade union organisations, number and membership wise, as claimed
by them and as verified by the Chief Labour Commissioner for recognising them
for consultation and giving them representation on national and international
tripartite forums as on December 3 1, 1989.

Table 6.1: Central Federations of Trade Unions and their Membership (1989)

Name of the Central Federation Membership

1. INTUC 27,06,451
2. CITU 17,98,093
3. BMS 31,17,324
4. AITUC 9,23,517
5. HMS 14,77,472
6. NLO 1,38,877
7. UTUC 5,39,523
8. UTUC-LS 8,02,806
9. NFITU 5,29,982
10. TUCC 2,30,347
11
Trade Unionism The central federations of trade unions have also associated themselves with
world labour organizations, such as International Confederation of Free Trade
Unions (ICFTU), a non-communist organisation, World Federation of Trade
Unions (WFTU) (Communist), and World Federation of Labour (WFL)
recognised by the ILO and the UNO.
Growth of Trade Unions:
• The total number of registered Trade unions was 18602 in 2010. Only 2937
(15.80%) submitted returns.
• Out of 18602 registered unions 18546 (99.7%) are workers’ unions and
remaining 56 (0.3%) were employers’ returns. If this only 1 union submitted
returns.
• Manufacturing accounted for 34% of unions followed by Transport and
Storage (16.6%) Agricultures Foresty and Fishery account for 7.9 %
unionization.
• Real Estate and construction industry s least returns with 0.1%.
• In 2012 returns from only 15 states wee received, where means that many
trade sums do not submit annual returns despite the provisions of law.
• As many as 29 registered federations of Workers’ Trade unions wee reported
in 2010. But only 1 has submitted returns.
The above information states the apathy of trade returns towards projecting them
own image as socially relevant institutions. This indicates the declining prospects
of trade unionism in India.

6.4 INDIAN UNIONS TODAY

Unionism is in recession today and India is no exception. The decades of the1980s
and 1990s have been bad years for trade unionism all over the world. Union
membership has been declining in most developed countries, with the USA and
UK leading, and even Japan not far behind. Paralleling the de-recognition of
unions in other countries has been the cancellation of registration in India. Worker
apathy is not a small factor either-. The reassertion of capitalism under the New
Economic Policy (1991) has been a major reason but a wedge also appears to be
operating between trade unionists and their rank and file members. The overall
trends are of declining unionised workforce, increased unemployment,
unfavourable public sentiment and management and government pressure on
unions. This combination is certainly ominous.

Commenting on the Indian trade union movement, Rao and Patwardhan observed
that :The Indian trade union movement is marked by multiplicity of federations
at the apex level, with little coordination inter se. Almost every political party -
be it capitalist or socialist in its ideological orientation -has floated its trade
union wing. In addition, there are host of independent unions operating at the
sectoral and local levels. The pluralist-fragmented structure of Indian trade unions
aligns itself with British French and Italian structures. At any rate, it is certainly
nowhere near the US,German, Swedish or Spanish models, which are more
inclined towards consolidation and/or coalition. Thus, the Indian trade union
movement has witnessed the retrogressive evolution of trade unions from strength
to weakness, weakness to infirmity and possibly from infirmity to extinction.
12
Far from initiating proposals so motto for consolidating the working class, Indian Trade Union Development
and Functions
trade unions have consistently opposed all attempts in infusing an element of
rationality into the structural and functional aspects of trade unionism as well as
reforms in the industrial relations code.

Activity 1
Why do trade unions in India often fail to achieve their objectives? Suggest
measures for the successful functioning of trade unions.
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6.6 FUNCTIONS OF TRADE UNIONS

The underlying idea of forming a trade union is to acquire collective strength
for:
i) Protecting and advancing terms and conditions of employment of its
members;
ii) Negotiating and setting terms and conditions of employment and
remuneration;
iii) Improving the status and working and living conditions of workers;
iv) Promoting economic and social interests of its members.
Some unions have also as their objectives to undertake social security measures
where the State has not assumed this responsibility, and organise welfare activities
and organise them to become literate leaders and union-conscious. From the
above objectives reflected in various theories of trade unions (summarised in
Appendix B) it is obvious that the primary function of a trade union is to promote
and protect the interest of its members. The union draws its strength from the
funds and general support provided by its members. It has, therefore, to strive to
secure better wages and improve their terms and conditions of employment and
generally to advance their economic and social interests so as to achieve for
them a rising standard of living. Originally and traditionally the only function of
trade unions was economic, that is, rescuing workers from exploitative
employment and working conditions, and use their collective strength to ensure
workers adequate and fair wages, reasonable working hours, safe and healthy
conditions at work, periodical rest and leave, some essential amenities at work
place like wholesome drinking water, first aid, washing and resting facilities. In
fact, most of the early demands of the unions which caused disputes resulting in
strikes, were economic regarding wages, hours of working, safe and healthy
working conditions, and job security. It is gradually that the unions started adding
to the list of their demands such facilities as housing, medical aid, recreation,
constitution of welfare funds, and social security measures like sickness, disability,
maternity benefits, gratuity, provident fund, and old age and family pension.

13
Trade Unionism Social Functions
Besides the main economic functions consisting basically of organising unions
and improving their terms and conditions of employment to enable workers to
meet their physical needs, some unions have now started undertaking and
organising welfare Activities and also providing variety of services to their
members and sometimes to the community of which they are a part, which may
be grouped under following heads:
i) Welfare activities provided to improve the quality of work life including
organisation of mutual fund, cooperative credit societies for providing
housing, cooperative stores, cultural programmes, banking and medical
facilities and training for women in various crafts to help them to supplement
their family income.
ii) Education: Education of members in all aspects of their working life
including improving their civic life, awareness in the environment around
them, enhancement of their knowledge particularly in regard to issues that
concern them, their statutory and other rights and responsibilities, workers’
participation scheme, and procedure for redressing their grievances. Some
central union organisations are also assisting the Government in
implementing the Workers’ Education Scheme.
iii) Publication of periodicals, news letters or magazines for establishing
communications with their members, making the latter aware of union policy
and stand on certain principal issues and personnel matters concerning
members, such as births, deaths, marriages, promotion and achievements.
iv) Research: Of late, this is gaining importance and is intended mainly to
provide updated information to union negotiators at the bargaining table.
Such research is to be more practical than academic, concerning problems
relating to day-to- day affairs of the union and its activities and union and
management relations. Some of the research activities are : (i) collection
and analysis of wage data including fringe benefits, and other benefits and
services through surveys of comparative practices, data on working
conditions and welfare activities; (ii) preparation of background notes for
court cases and also position papers for union officials; (iii) collection and
analysis of macro data relating to the economy, industry sectors etc.

All the above mentioned activities and services are considered normal activities
of unions in the Trade Unions Act which stipulates the objectives on which general
funds of the union can be spent.

Political Functions
For discharging above functions unions have to operate not only on social,
economic and civic fronts, but also on political front. Union have to influence
Government policy decisions in the interest of workers. Legislative support which
unions require for realising some of their objectives and achievement of their
long-term interests has taken them into the region of politics. Unions are not
only to contribute in the formulation of policies but have also to see that policies
are implemented. In several countries therefore, political process of the
Government and participation in it have been attracting the interest of unions
increasingly. Whether a union gets directly associated with a political party, or
14
has its own wing, should depend upon circumstances in each country. Considering Trade Union Development
and Functions
that such political action/association is legitimate, the Trade Unions Act, 1926,
permits the constitution of separate political fund to facilitate political action by
a union.
The type and the extent of unions’ participation in the political process of the
Government depends largely upon the stage of economic and social development.
It ranges from the joint consultation at the plant/industry level to work on bodies
like the Economic and Social Council in France, Planning Commission in
Sweden, or the Economic Council in Denmark. In a number of countries law
specifies the activities in which a unions may engage. In Sweden and Netherlands
unions are made responsible for the implementation of the labour and social
security legislation. Thus, while a union functions in the interest of its members,
it should also accept community responsibilities. Consciousness of this wider
responsibility will vary from country to country, depending upon the extent of
wage employment. In a country like India where self-employment is sizeable,
unions have to make special effort ill understanding the interest of the total
community. This aspect of the role of unions in a developing economy has been
emphasised in our successive five year plans. It is in recognition of this fact that
the very first Planning Advisory Board constituted in 1950, had two labour
representatives on it. Since then the labour representatives have been associated
with Development Councils set up for individual industries and othertripartite
bodies like the Indian Labour Conference and Advisory Boards at the Central
and State levels in the formulation and implementation of labour programmes.
This has enabled trade unions to perform their primary function for meeting the
basic needs of their members as listed by the First National Labour Commissionon
Labour ( 1969). The functions are:
(i) Securing for workers fair wages; (ii) Safeguarding security of tenure and
improvement in service conditions; (iii) enlargement of opportunities for
promotion and training; (iv) improvement of working and living conditions; (v)
provision for educational, cultural and recreational facilities: (vi) promotion of
individual and collective welfare; (vii) Facilitation of technological advance by
broadening the understanding of workers with their industry; (viii) offering
responsive cooperation in improving levels of production and productivity,
discipline, and high standard of quality.
In fact, most of the unions at craft. unit and plant levels which are still described
as fighting unions, attend mostly, if not only, the basic needs of their members
mentioned above at (i) to (vi). It is only the trade union organisation which are
attending to some extent the functions and needs mentioned at (vii) and (viii).
This is attributed to the fact that employment and service conditions of workers
still need considerable improvement. So, the primary function of unions still
remains that of improving the economic conditions of workers either by collective
bargaining, or by other peaceful means, or by direct or militant action.
Activity 2
Explain the functions of trade union or any organisation you are familiar
with.
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
15
Trade Unionism
6.7 RECENT TRENDS AND FUTURE ROLE
Recent Trends
There has been a steady decline in both union membership and influence of
trade unions in India. There are several reasons for such a decline:

1) There are some employers who are keeping their businesses union-free.
Some are active in their opposition and lookout for legal strategies to combat
unions. Also there are employers who put workers on their management
team by establishing profit-sharing plans to reward employees.

2) The new additions to the labour force particularly women and white-collar
employees have less loyalty to trade unions.

3) Industrial and manufacturing jobs, long the bastion of union membership,

have declined in recent years. Indian workers are now more highly educated
than ever before and have tended to move towards white collar jobs not
traditionally associated with union membership.

Regardless of origins, characteristics, and patterns of national trade union

movements, trade unions worldwide face virtually the same problems:
• decline in membership
• decline in state support or state neutrality
• deregulation, decentralisation, denationalisation, and consequent reduction
in the job, income, and social security, creating anxiety among workers about
the effectiveness and utility of union(s).
• repudiation of their rights by employers, consumers, and other actors/
institutions in civil society
• changing aspirations and needs of new-generation workforce
• direct communication, direct participation, growth of atypical, non-standard
patterns of employment, and individualisation of employment contracts
diminishing the role of unions
• reduced capacity to mobilise workers for conflict
• imperative need to cooperate with managements
Future Role
Historically, unions have played an important and positive role. Unions are very
much necessary in many work places. Management strategy to get rid of a union
is folly. Such a strategy clearly violates the law and, notwithstanding the legal
implications, makes no sense. When employees form a union they need it, and
any attempt to break a union, affects their morale and commitment adversely.

When management thinks it has union problems, it usually has management

problems. Employees usually form unions because they do not trust management,
and poor labour management relationships usually exist because the parties do
not trust each other. Whatever the cause, lack of trust leads to personal antagonism,
game playing, and reliance on rights and coercive power. Employees are primarily
loyal to the union, or at best have split loyalties between company and union.
16
Union leaders may try to enhance their power by continually challenging the Trade Union Development
and Functions
credibility or trustworthiness of management.

Unions today serve several purposes of continuing importance. Even if unions

do not have a strong direct impact upon the real income of their members, their
presence helps to gain general acceptance for the rates of pay and working
conditions that prevail.

Unions have made what is perhaps their greatest contribution in securing fairer
treatment for their members at the workplace. As the most potent organised body,
they have represented the political interests of workers, and to a lesser extent of
the poor and disadvantaged. Unions have in fact performed their positive role
for millions who would otherwise have remained unrepresented.

What the unions have to do for their effective functioning? They have to carry
out both long range and short range planning. In order to know what to plan for,
a union must first make clear the purposes of the organisation. The union leaders
must inform themselves about emerging problems and opportunities that may
affect the ability of the organisation to pursue its aims over a period of years. In
the light of this information, more precise objectives can be fixed over the period
in question and strategies can be devised by which to reach these goals.

Although, the aims of unions may vary in detail, almost every labour leader
would affirm that his organisation seeks to increase the economic welfare and
job security of the members, to increase the membership and thereby extend the
benefits of unionism to new groups of employees, and to render constructive
service to the community.

Training programmes are especially important for unions in view of the special
constraints that limit labour organisations in selecting their leaders and staff.
Despite the apparent move, union training programmes have not penetrated very
deeply. The nature and scope of training vary widely among the unions. A handful
of unions have developed extensive training programmes for their members. In
recent years, the larger unions have been making greater efforts to develop training
programmes for leaders and staff. Outside the labour movement, labour education
centres of some universities and other independent groups sponsor a number of
training courses for union executives.

Under changed economic scenario, the role of trade unions needs a drastic change.
Trade unions have to realise that their objective is to not only protect interest of
workmen but also of the organisational interest. They have to develop a positive
and participative work culture.
Unions can play a developmental role by:
• Building human resource management philosophy, values and practices in
trade unions as an integral part of human resource development.
• Providing workers with right information regarding role of trade unions in
an organisation by explaining mission and plans of the organisation.
• Redefining trade union role as one of the developmental rather than a protest
institution in the organisation.
• Establishing linkages between union and different groups through human
resource development. 17
Trade Unionism • Counselling or guidance of workers on their social problems, i.e. drinking,
indebtedness, etc.
• Co-operating with the management for the survival of the organisation under
competitive environment.
• Assisting the family members in vocational guidance like children’s
education, career growth, and financial investment.

6.8 SUMMARY
In this unit we have considered the growth of trade unions in India since the
middle of the 19th century.
• Trade union movement in Indian has been following the same course as in
the developed countries.
• But it has not been so turbulent as in Great Britain and USA, and some
other countries.
• Quantitative growth of trade unions has been tremendous. Perhaps in no
other country the number of unions at craft, plant/unit, industrial and national
levels is so large as in this country. But this does not reflect the real strength
of the trade unions, which is much less.
• Qualitatively the growth has not been so healthy as in some countries. It
still suffers from so many weaknesses, such as: small membership, paucity
of funds, multiplicity, politicalisation, external leadership, and inter-union
rivalries.
• While many unions are still struggling to improve wages and employment
and working conditions of their members, but there are a few unions which
are financially somewhat sound, and they are undertaking welfare,
educational and cultural activities.
• Most of the central labour organisations are operating on political front,
and some of them are participating in the formulation and implementation
of the Governments’ labour policies and enactment of labour legislation.

6.9 SELF ASSESSMENT QUESTIONS

1) Trace the historical evolution of trade union movement in India.
2) The functions of trade unions are that of basic, economic, social and political.
Discuss.
3) What are your suggestions for strengthening the trade unions in India?
4) Briefly discuss the trade union scenario of an industrial area with which
you are familiar.

6.10 CHECK YOUR PROGRESS

State whether the following statements are True or False:
1) The first session of All India Trade Union Congress (AITUC) was held in
1920 under the president ship of Lala Lajpat Rai.
18
2) The growth of white-collar unionism has not affected the traditional blue- Trade Union Development
and Functions
collar workers and their unionism.
3) According to Mahatma Gandhi, the aims, objectives, and policy of unionism
are anti-capitalist.
4) There are no international trade union federations operating at international
level.
5) Mahatma Gandhi’s philosophy of Sarvodaya is based on the principles of
truth, non-violence, and trusteeship.
6) HRD efforts should be construed as managerial strategies to wean employees
from their unions.
Answers:
1. True     2. False     3. False     4. False     5. True     6. False

6.11 FURTHER READINGS

Government of India, Ministry of Labour and Employment and Rehabilitation.
1969, Report of the National Commission on Labour, Delhi.

Sarma, A.M, Industrial Relations: Conceptual and Legal Framework, Himalaya

Publishing House, Mumbai, 2016.

Sen, Ratna. Industrial Relations in India: Shifting Paradigms, Macmillan India

Ltd, Delhi, 2003.

Sinha, P.R.N. Indu Bala Sinha and Seema Priyadarshini Shekhar. Industrial
Relations, Trade Unions, and Labour Legislation, Person Education (Pvt.) Ltd,
Delhi, 2004.

19
Trade Unionism
UNIT 7 TRADE UNION STRUCTURE,
REGISTRATION AND RECOGNITION

Objectives
After going through this unit, you should be able to:
• understand the structure of trade unions;
• have a clear idea about the structure of Indian trade unions; and
• examine the importance, process and problems of recognition of trade unions
and legal framework for the same, if any.
Structure
7.1 Introduction
7.2 Structure of Trade Unions
7.3 Structure of Unions in India
7.4 Registration of Unions
7.5 Recognition of Unions
7.6 Recommendations of the First and Second National Commissions on
Labour
7.7 Summary
7.8 Self-Assessment Questions
7.9 Check Your Progress
7.10 Further Readings

7.1 INTRODUCTION
Unions in different countries have developed on different lines, depending on
social and economic compulsions of industrialisation, political and economic
factors and the institutional framework of the respective societies. As such, there
are a variety of bases for the formation of trade unions. For example, in the UK,
where the unions grew out of guild system, the occupation/ trade became the
basis for the formation of trade unions. Similarly, in the USA, beginning as local
associations of skilled craftsmen (craft unionism), the labour movement developed
slowly from workshop societies to local unions, city central bodies, industrial
unions/ national unions ; and finally to federations of unions (Sandver: 1987). In
the 1990s a new model of union structure emerged in the USA which is based on
geographical area/occupations -geographical/occupational unionism, which is
essentially craft unionism without craft skills.

In Belgium, Denmark, France, Germany, Luxembourg and the Netherlands unions

are divided not only on industrial/occupational/sectoral/company or plant basis,
but also have religious denomination- Confederation of Christian Trade Unions
in Belgium, the Danish Christian Trade Union in Denmark, the French Christian
Workers’ Confederation in France, Christian Trade Union Confederation in
Germany, the Luxembourg Confederation of Christian Trade Unions, and the
Christian Trade Union Federation in the Netherlands (European Industrial
20
Relations Observatory: 2000). In Japan, the trade unions are predominantly Trade Union Structure,
Registration and
(approximately 95% of unions and about 85% of the organised workforce) Recognition
organised as enterprise unions, uniting the regular employees -both the white-
collar and the blue-collar employees -of one industrial unit (enterprise) rather
than uniting people of different companies doing similar jobs. Besides the
enterprise unions, the industrial unions and national Iabour organisations do exist
in Japan. However, the enterprise union is the core of union structure. In
establishments having one or more trade unions, it becomes necessary for the
Trade Union Structure employers to recognise one or more than one union as the
most representative unions(s) of the workers of the concerned establishment (s)
for the purpose of negotiations on matters like wages, bonus and other terms and
conditions of employment. The employers have to follow certain criteria for
according recognition status to any union or unions. The recognition process
involves determining the actual membership of a particular union, among other
things. For establishing the actual membership of a union, different methods are
followed in India. In this Unit, we shall discuss different aspects of union
recognition. Besides this, we shalI analyse trade union structure in general and
the trade union structure in India.

7.2 STRUCTURE OF TRADE UNIONS

As mentioned earlier, various structural types of unions have emerged over a
period of time. These are: craft unions, industrial unions, general unions,
occupational unions, and national unions/federations. Here, the main features of
each of these types of unions are outlined.

Craft Unions
A craft union is an organisation of workers engaged in a particular craft or a
trade or in a single or related trades/crafts. Such organisations link together those
workers who have similar skills, craft training and specialisation. Craft unions
are found amongst non-manual employees and professional workers. Examples
are: Crane Drivers’ Association in a steel plant, Air India’s Pilots’ Association,
stenographers’ associations etc. The logic behind the formation of such unions is
that the skilled workers belonging to the same craft face similar problems.
A craft union may cover all workers engaged in that craft in a particular plant /
unit of an industry or in different plants of a particular industry located in a
particular area or in different industries located in a particular area. Again, craft
unions may cover all workers engaged in that craft irrespective of the industry in
which they are employed. Thus, stenographers though working in different
industries may form a union of stenographers only.
One of the advantages of the craft unions is that they provide firm basis for
solidarity of trade unions. Skilled craft unions have a greater ability to organise
than unskilled workers, because they have stronger individual bargaining power
and the organisational skills to operate a successful, business-like organisation.
The natural bonds of common interest, friendship and mutual respect among the
members of a craft ensure intensive solidarity. Craft unions have been the hardiest,
surviving even in the most difficult times. Historically speaking, it was these
unions that lent stability to the trade union movement.

21
Trade Unionism The craft unions, however, have some weaknesses. The main weakness is that
when several small unions of craft type are organised in a plant, and each signing
its own agreements with the employer, which may expire at different times, not
only does the joint action become difficult for the whole lot of unions operating
in the plant, but also the employer may play one union against the other taking
advantage of the multi-union situation.

Another source of weakness for the craft union flows from the gradual extinction
of craft distinctions due to the rapidly advancing technology, which leads to the
displacement of the traditional crafts.

Yet another point of weakness of the craft unions is that the members of these
unions (skilled workers) have the tendency of being self-centred, and as such,
they do not provide any support and guidance needed by the bill k of unskilled
workers. Needless to say, such tendency of the members of the craft unions
undermines labour solidarity.

Industrial Unions
An industrial union is an organisation of workers which links all categories of
workers in any one industry regardless of the differences in craft, skill, grade,
position, or sex. The membership of an industrial union is normally large.
Industrial unions may be formed at the plant level (e.g. Tata Workers’ Union in
TISCO), regional level (Bihar Sugar Workers’ Federation), and national level
(Colliery Mazdoor Sabha of India).

One of the advantages of an industrial union is that the union in a particular

industry can cover the interests of all categories of workers in a single agreement
with the employer (s). Another point of strength of the industrial unions is that
by attempting to organise different categories of workers- skilled, semi-skilled,
and unskilled- into homogeneous organic groups, they create a feeling of solidarity
among the workers, and thus contribute significantly to the trade union movement.

A major weakness of the industrial unions is that these unions, crowded with the
unskilled workers are, evidently, unable to meet the specific needs and protect
the interests of the skilled workers whose number is small.

General Unions
A general unionis one whose membership covers workers employed in many
industries, employments and crafts. The Jamshedpur Labour Union is an example
of this type of union. The membership of this union covers workers belonging to
the steel industry and the engineering industries such as cable, tube, locomotive,
tinplate etc. located in Jamshedpur.

The general unions are ideal from the solidarity point of view. However, it requires
a very high degree of consciousness among the workers representing various
industries to form this type of unions.

Occupational Unions
Cobble (1991) has coined thee term occupational unionism in her book on
unionism in her book on unions of waitresses in the American context. Later, in
1993, Wial (1993) used this term in his paper on emerging organisational structure
of unionism in low-wage services in USA.
22
An occupational union is essentially a craft union minus the skilled workers. Trade Union Structure,
Registration and
Recognition
Wail describes an occupational union as one in which low wage workers are
organised geographically along loose lines. For example, in USA, Justice for
Janitors, a programme of the Service Employees International Union, organises
all janitors (working in building services industry) in a geographical area into a
single local union. It then seeks to persuade all the employees in the area to have
a uniform set of economic terms of employment for janitors. A similar strategy
is utilised Hotel and Restaurant Employees Union for hotel workers, and “District
1199' of the Health care Employees Union in nursing homes. This form of
unionism may be especially appropriate where there are grounds for solidarity
such as race and ethnicity that are capable of taking the place of the bonds of
craft. (Wheeler: 2000, p. 109).

Trade Union Federations

As trade unions realise that in the competitive business environment most of
their problems cannot be tackled on their own, they formed large unions and
trade union federations at the industrial, national and international levels. All
India Port and Dock Workers’ Federation is an industrial federation operating at
the national level. UP Chini Mazdoor Federation is an example of industrial
federation operating at the regional level. The British Trade Union Congress and
the AFL-CIO (American Federation of Labour and Congress of Industrial
Organisations), AITUC, INTUC, HMS, UTUC and CITU are the examples of
national level centres of trade unions.

The World Federation of Trade Unions (WFTU) and the International

Confederation of Free Trade Unions (ICFTU) are examples of international level
federations.

The federations are loose associations. As such, the individual unions that federate
themselves possess the real power and enjoy maximum autonomy. While the
federations formulate policies and provide guidance to the unions that are under
theirfold, it is the local units that implement the policies. The local units, due to
their direct and day-to-day contact with the real rank-and-file workers, enjoy
more power as compared to the federations. Another reason for their being
influential is that it is these units that are the main sources of providing funds to
the federations.

7.3 STRUCTURE OF UNIONS IN INDIA

The main instrument of the trade union movement in India consist of primary
unions and of the large central organisations of trade unions (for e.g. AITUC) to
which they are affiliated. In between these, there are two other types of
organisations, namely, industrial federations of unions (at the regional and the
national levels) and the State branches of the central organisations. Figure 1
gives an idea about the structure the Indian trade unions.

23
Trade Unionism
Central Federations

(may be affiliated to)

State Branches of
Central Federations Industrial Federations
Regional Level National Level (may be independent)

(may be affiliated to) (may be independent)

Primary Unions

Primary Unions of Industrial type Primary Unions of general type Primary Unions of crafy type
a. Plant level industrial unions/ a. Employer-cum-local level a. Local-cum-industry level craft unions
establishment level unions general union
b. Region-cum-industrial level b. Local level general unions
industrial unions

Figure 7.1: Structure of Indian Trade Unions

Primary Unions
Primary unions are the basic units of the Indian trade unions. They are nearest to
the workers and the workplace. They recruit their members, run the local offices
and conduct industrial disputes. It is they who are in constant and closest touch
with the union members. They are organised on a variety of bases depending
upon the concrete local situations and problems, have made a broad classification
of the primary unions in India into the following three categories in order of
their numerical importance:
i) Primary unions of the industrial type;
ii) Primary unions of the general type; and
iii) Primary unions of the craft type.
As indicated in Figure 5.1, these unions may function as independent unions or
they may be affiliated to the regional and /or national level industrial federations
(which may or may not be affiliated to the State branches /central federations of
the central federations of trade unions). The primary unions may also be directly
affiliated to any of the central federations /State branches of the central federations.

i) Primary Unions of the Industrial Type

Unlike the Western countries, where the trade union movement began with craft
unions, the Indian trade union movement started with the industrial unions.

On the basis of their units of organisation, the primary unions are again classified
into
a) Plant-level industrial unions /establishment-level unions, and
b) Region-cum-industry level industrial unions
a) Plant-Level Industrial Unions I Establishment-Level Unions
This type of unions are most common in India. They cover a single plant and the
membership of these unions is open to all categories of workers of the plant.
There are some establishments which do not come under the purview of the
24 word ‘industry’.
Examples are: shops, agriculture. personal services etc. The unions that form Trade Union Structure,
Registration and
these establishments, covering all categories of workers employed in them are Recognition
therefore called as Establishment-Level Unions.

b) Region-cum-Industry Level Industrial Unions This type of unions cover all

categories of employees of a particular industry (irrespective of the number
of plants or the employers) located in a particular city/ region. Examples
are: Rashtriya Mill Mazdoor Sangh and Girni Kamgar Union located in
Mumbai. located in Mumbai.

ii) Primary Unions of the General Type

The primary unions of the general type may be further classified into two types:
a) Employer-cum-local level general unions; and b) local-level general unions.

A union that is formed for all the categories of workers employed in a variety of
Industries that are located in the same place and are owned by a single employer
is called as an employer-cum-local level general union. Example: Rohatas
Workers’ Union of the Rohtas Industries (covering such industries such as cement,
sugar, paper, chemicals. asbestos) located in Dalmianagar. On the other hand, a
union that is formed for all categories of workers employed in a variety of
industries that are located in the same place, but are owned by different employers,
is known as a local-level general union. Example: Jamshedpur Labour Union.
iii) Primary Unions of the Craft Type

Primary unions that are organised at a local level or regional level or national
level on the basis of a particular craft of a particular industry come under this
category of unions.In India, this type of unions have come up in the coal, textile,
port and dock, railway, air transport, and Posts & Telegraphs industries.

In the coal industry, for example, the Indian National Mines Overmen, Surveyors,
Sardars Association is a prominent craft union operating at the national level.
However, the number of craft unions prevailing in the country is quite
insignificant. Industrial Federations Workers belonging to a particular industry
have certain problems in common, which can at best be settled at the industrial
level. In order to deal with these problems effectively, the plant level and for
locality level unions have tended to form federations at two levels: regional and
national levels. Examples of regional level federations are: the UP Chini Mazdoor
Federation and the Bihar Sugar Workers’ Federation. Some examples of the
national level industrial federations are: All India Coal Workers’ Federation, All
India Bank Employees’ Federation, National Federation of Posts and

Telegraph Employees, and All India Railway Men’s Federation. Industrial

federations at the national level are also existing in cotton textiles, sugar,
chemicals, insurance, engineering, iron and steel, and oil-refining industries.

An interesting feature of the structure of the Indian trade union movement is that
in most of the industries, more than one federation have formed and a good
number of them function on political lines depending upon the allegiance of the
primary unions to the political parties. For example, in the coal industry, there
are a number of national level industrial federations: the INTUC-affiliated Indian
National Mine Workers’ Federation; the AITUC-affiliated Indian Mine Workers’
Federation; the CITU- affiliated All India Coal Workers’ Federation; the HMS- 25
Trade Unionism affiliated All India Khadan Mazdoor Federation; and the BMS-affiliated Akhil
Bharatiya Khadan Mazdoor

The industrial federations play a crucial role at the industry-level bargaining

forums. Evidently, in these forums, the representatives of the rival forums work
as cohesive teams, temporally cutting across their differences, political and /or
personal, in the larger interests of the members of the affiliated unions.

Another important function that the industrial federations perform is undertaking

research activity and publishing the relevant information for the benefit of the
workers of the concerned industries.

Central Federations
The central federations of trade unions are at the apex of the trade union structure
in India. These federations provide guidance and formulate broad policies of the
unions that are affiliated to them and give these policies a national character.
Further they act as coordinating authorities for their affiliates. They come to the
rescue of the affiliates whenever the latter face crises. However, in the negotiations
at the lower levels, they

At present, there are 12 central trade union organisations/ federations in India.

They are:

AITUC , INTUC, I-IMS, UTUC, UTUC (Lenin Sarani), CITU, BMS, National
Federations of Indian Trade Unions (NFITU), Trade Union Coordination
Committee (TUCC), National Labour Organisation (NLO), Hindu Mazdoor Kisan
Panchayat (HMKP), and Indian Federation of Free Trade Unions (IFFTU). Out
of these, the following 5 are considered major: INTUC, BMS, HMS, AITUC,
and CITU. All these independent federations.

State Branches of Central Federations

The central federations have their State branches. These branches are free to
manage their own affairs. However, in actual practice these federations seek the
guidance of the central federations on various issues.
The Informal Sector and its Alternative Forms of Organisation The above
discussion relates to the union structure in the organised sector / formal sector/
industrial and services wage sector which accounts for 7% of the total labour
force in the country. The informal sector/ unorganised sector which accounts for
nearly 93% of the country’s working population has been neglected by the Indian
trade union movement. The informal sector is the prime employer of women. It
also employs substantial number of child workers and bonded labourers. This is
the abode of the unprotected worker. There is no such thing as employment
security here, nor the payment of statutory minimum wages unless enforced
through collective effort which is uncommon. The problem is not merely that
mainstream trade unions have no interest in this sector; it is also that their methods
are singularly unsuitable.
In recent years, the informal sector witnessed some alternative forms of labour
organisations. Although these organisations may call themselves trade unions
and register under the Trade Unions Act, they do not have any identification
with the trade union movement. The best known of them is Self-Employed
26
Women’s
Association (SEWA), formed in 1972 in Ahmedabad which has organised about Trade Union Structure,
Registration and
2 lakh women engaged in vending and hawking, carrying head-loads of goods, Recognition
pulling hand-carts, rag-picking, home-based production, and other forms of self-
employment.

SEWA is the largest trade union of the self-employed women in India. It draws
its membership from five states: Gujarat, Madhya Pradesh, Uttar Pradesh, Bihar,
and Kerala. Other important organisations in the informal sector are the Tamil
Nadu Construction Workers’ Union with 20,000 members, and unions of fish
workers in Kerala and forest workers in Uttar Pradesh.

Unlike conventional unions, which refuse to move beyond collective bargaining,

these alternative forms of organisation have been vastly more innovative in their
choice of strategy. SEWA is both a trade union and a cooperative. As a trade
union, it organises women to struggle for their rights, and as a cooperative it
promotes development. Fish and forest workers have done exactly the same. For
construction workers, the combination is of trade union struggle with mass
mobilisation to influence legislation.

These organisations are as yet diminutive force given the vast size of the informal
sector but they will undoubtedly grow. More ominously for mainstream trade
unionism, a national forum of unorganised workers, the National Centre for
Labour was formed due to the initiatives taken by SEWA, the unions of fish
workers, construction workers and forest workers, other independent unions
concerned with the unorganized workers, and academics engaged in the field of
unorganised sector during the period 1991 -95. The NCL started making news
by November 1996 though it was not registered yet.
Activity 1
Briefly describe the structure of Trade Union known to you of any organisation
you are familiar with.
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.......................................................................................................................

7.4 REGISTRATION OF UNIONS

Under the Trade Unions Act 1926, 10 percent of workmen or 100 workmen
(whichever is less) of an establishment/factory can form a trade union and then
apply to the registrar of trade unions for registration. Any union seeking
registration must have a minimum of seven members. An establishment can
have any number of registered trade unions. It is essential that the workmen are
engaged in the trade, i.e., everyone cannot form a trade union. The purpose of
forming a trade union, as per the Act, is to impose restrictive conditions on the
conduct of any trade, or business, or regulate relationship between employers

27
Trade Unionism and employees. A trade union cannot be formed for any other purpose. There is
also a provision for the formation of federation of two or more trade unions.

There can be an unregistered trade union. However, to carry out trade union
activities fearlessly and legitimately, it is necessary for a union to be registered.
After registration, a trade union becomes a body corporate and a legal entity. It
becomes entitled to acquire a common seal and possess movable and immovable
property. It can also enter into contracts, sue others and be sued. A registered
trade union and its office-bearers enjoy certain immunities from criminal and
civil liabilities that are not available to unregistered unions. This immunity,
however, is not available for an agreement to commit an offence. They are also
not liable for any unlawful act done by a worker, provided he acted without the
knowledge, or contrary to the instructions of the trade union executives. They
are also not liable for prompting workers to break the contract with the
management.

7.5 RECOGNITION OF UNIONS

The main objective of forming trade unions is to improve the employment and
service conditions of workers. The unions seek to achieve this objective by
negotiating/ bargaining with the employers / managements about the terms and
conditions of employment. Collective bargaining can be possible only when
employers recognise trade unions as bargaining agents. There is no central
legislation in India regarding recognition of unions for collective bargaining and
other purposes. As such, recognition of trade unions has become a vexatious
problem in India. The Central Government has made several efforts in this regard:
in 1947, by proposing the Trade Unions (Amendment) Act, 1947; in 1950, by
proposing two bills-the Labour Relations Bill and the Trade Unions Bill; and in
1978 and 1988, by working out Industrial Relations Bills to bring out a central
legislation covering, among other things, the subject of the recognition of trade
unions. However, these turned out to be futile exercises for one reason or the
other. On the other hand, the states of Maharashtra, Gujarat, Madhya Pradesh,
Rajasthan, West Bengal, and Andhra Pradesh have legislated for the recognition
of unions. For the rest of the country, except Bihar and Orissa, the criteria
prescribed under the Code of Discipline adopted at the 16th Session of the Indian
Labour Conference, 1958, are followed for the purpose of recognition. However,
it is not mandatory for the employers to follow the criteria prescribed under the
Code of Discipline for according recognition status to the trade unions operating
in their establishments.

What is Recognition?
The Royal Commission on Labour in India (193 1) in its Report explained that
recognition “should mean that the employer recognised the right of the union to
negotiate with him in respect of matters affecting either the common or the
individual interests of the members.” Sen (2003) defines trade union as “the
process through which management acknowledges and accepts a trade union as
representative of some or all of the workers in an establishment or industry and
with which it is willing to conduct discussions on all issues concerning those
workers. “

28
States’ Provisions for Union Recognition Trade Union Structure,
Registration and
Statutory Provisions Recognition

The Maharashtra Industrial Relations Act, 1946

Prior to 1946, no provision existed in any state regarding the grant of recognition
to trade unions. The Bombay Industrial Relations Act, 1946 is the first state
legislation which provides for recognition of unions. This Act is applicable only
to certain industries like silk, cotton, hosiery, woollen, textile processing, sugar,
cooperative banking, generation and supply of electric energy and transport.

Among other things, the Act provides for a classification of registered trade
unions as represenatative unions, qualified unions and primary unions.

a) Representative Union
Any union which has 15 per cent of the total number of employees employed
in an industry in a local area is eligible to apply for registration as a
representative union for that industry in that local area.

b) Qualified Union
If in a local area no union qualifies for registration as a representative union
in respect of an industry, then a union having a membership of at least 5 per
cent of the total number of employees employed in that industry in that
local area can apply for registration as a qualified union for that industry in
that local area.

c) Primary Union
If, however, no union becomes eligible to apply for registration as a qualified
union, then, a union having membership of at least 15 per cent of the total
number of employees employed in any undertaking in that industry could
apply for registration as a primary union for that industry in that local area.
Thus, the representative union are unions in respect of a whole industry in a
local area, whereas a primary union is in respect of a particular undertaking
in the area in that industry. A representative union of any industry could act
as the representative of the employees, including non-members, in that
industry in a local area. Where there is no representative union, a ‘qualified’
or ‘primary’ union could act on behalf of the employees. In other words, the
representative union has the first preference to appear or act in any proceeding
under the Act as the representative of employees. Next in order of preference
is a ‘qualified union’ or a ‘primary union’.

The Act confers upon unions in each category certain privileges and imposes
certain obligations on them. In case no union gets recognition, the employees
may elect their own representatives or authorise the Government Labour Officer
to speak on their behalf to the employer.

Rights of the Representative Union

Some of the rights of a representative union under this Act are:
a) A representative union is entitled to make a special application to a Labour
Court to hold an enquiry as to whether a strike/lock-out is illegal.

29
Trade Unionism b) Management cannot dismiss, discharge or reduce ally employee of such a
union or punish him in any other manner merely because lie is an officer or
a member of a registered union which has applied for recognition under the
Act.

c) In case of an agreement, award, etc. in which representative union is a party,

the State Government may, after giving the parties an adequate opportunity
of being heard, direct that such agreement shall be binding upon such other
employers or employees as may be specified.

This Act has been made applicable to Gujarat State also. The Gujarat Government
has framed the State rules under the Act for verification of fee-paying membership,
providing an opportunity to a union to challenge the membership of its
counterpart.

Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour

Practices Act, 1971
This Act came into effect from September 8, 1975. It provides for recognition to
a union having a paid membership of at least 30 per cent of the total number of
employees employed in an undertaking for six months preceding the month in
which the application for recognition is made to the Industrial Court. Such union
is known as Representative Union. The union enjoys recognition status for a
period of two years.

Some of the rights of the recognised union under this Act are: authorising the
employer to deduct the monthly membership subscriptions of its members from
their wages (check-off system), sending union representatives to the works
committee, and representing a member in an industrial dispute, apart from acting
as the sole bargaining agent. A union representative while doing work for the
union is to be regarded as on duty.

Although the Act covers industries falling within tile purview of the Maharashtra
Industrial Relations Act and the Industrial Disputes Act, 1947, the provisions
relating to recognition of unions do not apply to the industries covered under the
MIR Act.

Madhya Pradesh Industrial Relations Act, 1960

This Act provides that a union shall be recognised as a Representative Union, if
it is having a membership of 51 per cent (originally 25 per cent) of the total
number of employees employed in an industry in a local area. The union enjoys
recognition status for a period of two years from the date of recognition.

Industrial Disputes (Rajasthan Amendment ) Act, 1970

Under this Act a union to get registered as a Representative Union should have
membership of not less than 1 5 per cent of the total number of the workmen
employed in the unit. Where there are two or more unions, the union with the
largest membership shall be registered as the Representative Union.

West Bengal (Trade Unions) Amendment Act, 1993

This Act was passed in 1983 by the state legislature and got presidential assent
only in late 1992. But the Act did not come into force till 1999 because the rules
30
under the Act were not finalised even though the State Cabinet approved the Trade Union Structure,
Registration and
Draft Rules in February 1996. The Rules became effective after they were placed Recognition
before the Assembly and voted into effect. Under the provisions of this Act, a
registered union should apply to the Registrar of Trade Unions for recognition
either in industry or in a plant /factory. If the union fulfils criteria and no other
union exists in the establishment, the Registrar will direct the employer to extend
recognition. If there is more than one union, or two or more unions apply for
recognition, or there is some recognised union whose term of office has already
expired, the Registrar will arrange for verification of membership of the union(s)
through secret ballot. Based on the results of the voting by the workers

(i) a union which secures more than 50 per cent of the votes would get recognition
as the Sole Bargaining Agent; (ii) if no union secures 50 per cent votes, the
unions with 40-50 per cent of votes would become Join Bargaining Agents with
the larger one being Principal Bargaining Agent of a Bargaining Council. Besides
the Principal Agent and the Joint Bargaining Agents, the Bargaining Council
would consist of members. All unions with I0 per cent or more of the votes in an
industry or 15 per cent of the votes in a plant / factory / establishment are eligible
to become members of the Bargaining Council. The Bargaining Council would
bargain with the employer. The employer would be liable to punitive fine if the
Registrar’s directive is not implemented.

Voluntary Recognition of Unions Under the Code of Discipline

The need for a provision for recognition of unions was stressed in the Second
Five Year Plan (1956-6 1 ). As the Government wanted to go slow on legislation
at that time, voluntary criteria were provided for the recognition of unions under
the Code of Disciplines in 1958. The Code was adopted at the 16th Session of the
Indian Labour Conference (a tripartite body comprising the Government’s
representatives, the employers’ representatives and the workers’ / unions’
representatives) held at Nainital in May. 1958.

The criteria prescribed under the Code of Discipline are:

1) Where there is more than one union, a union claiming recognition should
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 should cover at least 15 per cent of the workers
in the establishment concerned. Membership would be counted only of those
who had paid their subscriptions for at least three months during the period
of six months immediately preceding the reckoning.
3) A union may claim to be recognised as representative union for an industry
in a local area if it has a membership of at least 25 per cent of the workers of
that industry in that area.
4) When a union has been recognised, there should be no change in its position
for a period of two years.
5) In case of several unions in an industry or establishment, the one with the
largest membership should be recognised.
6) A representative union for an industry in an area should have the right to
represent the workers in all the establishments in the industry, but if a union
31
Trade Unionism of workers in a particular establishment has a membership of 50 per cent or
more of the workers of that establishment, it should have the right to deal
with matters of purely local interests, such as, for instance, the handling of
grievances pertaining to its own members.

All other workers who are not members of that union might either operate through
the representative union for the industry or seek redress directly.

Methods Used for Verification of Trade Union Membership

The methods used for determining the union strength are: (a) election by secret
ballot; b) check-off method; and c) physical verification of union membership.

a) Election by Secret Ballot: The secret ballot method is similar to the conduct
of elections in general for the purpose of entrusting the reins of Government
to a political party. Under this system all eligible workers of an industrial
establishment may vote for a union of their choice. Generally, elections
through the method are conducted by the Registrar of Unions who acts as a
“neutral agent”. The elected union enjoys the recognition status for a
minimum period, usually two years. The state of Odisha has adopted this
method for under recognition.

b) Check-off Method: Under this system an employer is authorised by each

individual worker to deduct the union membership fees every month from
his / her wages and credit the same to the union of which he / she is a
member. Through this system, the employer can have a fair idea about the
majority union in the establishment.

c) Verification of Union Membership: In India, verification of union

membership is carried out by an official organisation designated by the
Government to ascertain the strengths of the unions. For estimating the
actual membership strengths of the registered unions in an establishment,
the verification team members scrutinise the claim lists of the unions, their
membership fees books, membership records and account books, and make
physical sampling of workers of the three methods, election through secret
ballot is the most democratic for ascertaining the majority status of a union
claiming to be certified /recognised as the bargaining agent. Because of
these merits, most western countries have provided a machinery for the
purpose of election through secret ballot of the workers. But in India, this
method has not gained popularity. In India the most commonly used method
for ascertaining the strength of unions is the ‘verification of union
membership’. This method is not a reliable one as there are numerous ways
of inflating membership figures. One most common method is to show that
a large amount was collected as membership fees from non-existent members
and that it was spent on union activities.

Such fictitious receipts and expenses cannot be exposed in audit and are
specifically cooked up for the benefit of the official agency scrutinising
membership strengths for various recognition and representation purposes. ‘The
secret ballot method has never found favour with the Government at the Centre
headed by the Congress Party, and the non-Congress Governments did not last
long enough to introduce an enactment covering the recognition of unions through
secret ballot method.
32
The Labour Relations Bill, I950 did not provide for the holding of secret ballot. Trade Union Structure,
Registration and
It stated that the labour court, for the purpose of certifying a bargaining agent, Recognition
should take such evidence and make such enquiries and examine such records as
it deemed necessary.

The Code of Discipline, 1958 prescribed the criteria for union recognition, but it
did not specify any method for membership verification.

The First National Commission on Labour (1969) recommended that it would

be desirable to make recognition compulsory under a central law in all
undertakings employing 100 or more workers or where the capital invested is
above a stipulated size. While prescribing the criteria for recognition, the NCL
recommended that the National I State Industrial Relations Commissions (as
proposed in its Report) will have the power to decide the representative character
of a union, either by examining membership records or, if necessary, by holding
election through secret ballot open to all employees. But this recommendation
was subject to a Minute of Dissent by the INTUC members of the NCL, who
were opposed to secret ballot. The Congress- dominated INTUC’s stand has not
changed since. The INTUC maintains that the representative character of unions
should be settled through a scrutiny of union memberships and that election has
no meaning due to the following reasons: First, in an election even workers who
are not members of any union will have the right to vote and this is not acceptable.
Secondly, irresponsible trade union leaders are likely to make wild pledges and
the one that promises the most without any intention of fulfilling the promises
will be elected. Thirdly, a parliamentary system cannot work without an official
opposition, but in the trade union movement there is no need for SLICII an
opposition. Lastly, if there is election by secret ballot, there world be recourse to
law to seek injunctions against opponents and disputes of all kinds. Most of the
other centres of trade unions are, however, in favour of the secret ballot method.

The Janata-led Government’s abortive Industrial Relations Bill, 1978 provided

for selection of representative union by secret ballot or by verification of
membership, as recommended by the First NCL. The Industrial Relations Bill,
1988 introduced in the Rajya Sabha by the Congress-Iled Government, as
expected, did not provide for secret ballot in the selection of trade unions as
bargaining agents. The Bill proposed to introduce the check-off clause for
verification arid certification or recognition of trade unions. In Bipartite
Committee headed by G. Ramanujam, the employers, the INTUC and the
representatives of the National Labour Organisation, which was formed by the
Old Congress, favoured the membership verification, while the other labour
representatives favoured the secret ballot as the only democratic mechanism for
determining negotiating agent. Although the recommendations of the Ramanujam
Committee were not implemented, the fact remains that there has been no change
in INTUC’s stand on secret ballot.

The Second National Commission on Labour (2002) suggested that a negotiating

agent should be selected on the basis of check-off system in establishments
employing 300 or more workers. For establishments employing less than 300
workers, the Second NCL suggested secret ballot to be conducted by the Labour
Relations Commission (which would form a part of the adjudicatory system
envisaged by it).

33
Trade Unionism At present, the secret ballot is being used in some states -Andhra Pradesh, Orissa,
West Bengal, and in a limited number of cases in Bihar. In recent years, the
Supreme Court’s decision in the Food Corporation of India (FCI) case provides
the best arguments for secret ballot. In the case of the FCI Staff Union Vs. FCI
and others, the three-Judge Bench of Supreme Court ruled that to assess the
representative character of trade unions in an establishment / undertaking or in
an industry the secret ballot system should be adopted. The Bench also laid down
the norms and procedures to be followed for conducting the secret ballot to
determine the relative strengths of all eligible unions. As per the procedure, the
Chief Labour

Commissioner (Central) has to supervise the election to be conducted by a

Returning Officer (an officer of the Union Ministry of Labour) with the FCI
assistance. The Bench directed the Chief Labour Commissioner and the FCI to
hold the election as per the procedure before April 30, 1995. It held that the
union obtaining highest number of votes in the election should be given
recognition by the FCI for five years. The Bench observed that the method of
secret ballot “is being gradually accepted” and all concerned would, however,
like to see that this method “is adopted and adjusted that it reflects the correct
position on membership of unions operating in one and the same industry,
establishment or undertaking”. The High Courts in some states also ruled in
favour of secret ballot in several cases.
Activity 2
Briefly describe the procedure of conducting the election of Trade Union in
your organisation or any organisation you are familiar with.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

7.6 RECOMMENDATIONS OF THE FIRST AND

SECOND NATIONAL COMMISSIONS ON
LABOUR
The First National Commission on Labour’s Recommendations on Recognition
of Unions

The First National Commission on Labour (1969) attached considerable

importance to the matter of union recognition. According to it “industrial
democracy implies that the majority union should have the right to sole
representation i.e. the right to speak and act for all workers and to enter into an
agreement”. The First NCL suggested that “it would be desirable to make union
recognition compulsory under a central law in all undertakings employing 100
or more workers, or where the capital invested is above a stipulated size”.
Regarding the qualification for recognition, the Commission made the following
recommendations:
34
“A trade union seeking recognition as a bargaining agent from an employer should Trade Union Structure,
Registration and
have a membership of at least 30 per cent of the workers in the establishment. If Recognition
it is for an industry in a local area, the minimum membership should be 25 per
cent. Where more unions than one contend for recognition, the union having a
larger following should be recognized”. On the issue of the manner in which the
membership of a union is to be determined for the purpose of recognition, the
Commission noted that serious differences exist on the manner in which the
following of a union is to be determined: whether it should be by (a) verification
of the fee-paying membership of the unions, or (b) election by secret ballot. The
Commission, after carefully examining the merits and demerits of both the views,
expressed that:

“Much of the opposition to membership verification today is the outcome of

fears of manipulation and interference by the administration authority, fears which
are always not unfounded. It is reasonable to expect that verification will be
more acceptable, if entrusted to an independent quasi-judicial authority. Similarly,
elections by secret ballot may find favour with those who now oppose it, when
an independent authority conducts it, strictly according to accepted regulation.
The best course, therefore, seems to be to leave the choice of methods, in any
particular case, to the discretion of an independent authority. We suggest that
this task be entrusted to the Industrial Relations Commission(s)’ proposed by us.
The Commission will have the power to decide the representative character of
unions either by examination of membership records, or if it considers necessary,
by holding an election through secret ballot open to all employees. We are
confident that this proposal will be welcomed by all parties.

The Commission will deal with the recognition work in its various its aspects:

i) determining the level of recognition -whether plant, industry, centre-cum-

industry -to decide the majority union,

ii) certifying the majority union as the recognised union for collective
bargaining, (iii) generally dealing with other related matters. The union thus
recognised will retain its status for a period of two years and also there after
till its status is effectively challenged. However, the recommendations of
the First NCL, could not be implemented by the Government.

Recommendations of the Second National Commission on Labour

On the issue of union recognition, the Second National Commission on Labour
(2002) recommended that: (i) provisions must be made in the law for determining
the negotiating agents, particularly on behalf of the workers; (ii) negotiating
agents should be selected for the recognition on the basis of the check-off system,
with 66 per cent entitling the union to be accepted as the single negotiating
agent, and if no union has 66 per cent support, then unions that have support of
more than 25 per cent should be given proportionate representation on the
(negotiating) college. Commenting upon the methods of membership verification,
the Second NCL expressed the following views:

“Secret ballot even on a restricted basis is logically and financially a difficult

process in industries like railways, banks, post offices, coalmines and other
undertakings in a number of states”. “Check-off system has the advantage of
ascertaining the relative strengths of trade unions based on continuing loyalty
35
Trade Unionism reflected by the regular payment of union subscription. The argument advanced
against the check-off system is that it exposes the loyalty of the workers, and this
may make him vulnerable to victimisation by the management or persecution by
members of other unions”. “Check-off system in an establishment employing
300 or more workers must be made compulsory for members of all registered
trade unions”. “Though the check-off system will be preferred in the case of
establishments employing less than 300 persons too, the mode of identifying the
negotiating agent in these establishments may be determined by the Labour
Relations Commissions2. Any union in such smaller enterprises may approach
the LRCs for conducting a secret ballot. We are recommending a slightly different
dispensation for units employing less than 300 as we feel that it is in such units
that the possibility of victimisation has to be provided against”.

7.7 SUMMARY
• In this unit we have explained the structure of trade unions in general and in
India in particular.
• We have made passing reference to the trade union structures in other
countries and the bases on which the union structures in those countries are
organised.
• We hake outlined the importance of recognition of unions for attaining their
objectives.
• We have reviewed the abortive efforts made by the Government to enact a
central legislation for compulsory recognition of unions.
• We have outlined (i) the legal provision is prevailing in the states of
Maharashtra, Gujarat. Madhya Pradesh, Rajasthan, Andhra Pradesh and West
Bengal regarding the recognition of unions; and (ii) the non-statutory rules
/principles followed in the states of Bihar and Orissa.
• We have briefly discussed the methods of verification of union membership
and examined the advantages and disadvantages of these methods. We have
stated the recommendations made by the First and Second National
Commissions on Labour regarding the verification of union membership
and also recognition of unions.
According to the First National Commission on Labour, a recognised union should
be given certain exclusive rights and facilities to enable it to effectively discharge
its functions (NCL: 1969, para 23.58). These rights, in the Commission’s opinion,
would include:
a) the right to raise issues with the management;
b) right to collect membership fees within the premises of the organisation;
c) ability to demand check-off facility;
d) ability to put up a notice board on the premises for union announcements;
e) ability to hold discussions with employees at a suitable place within the
premises;
f) right to discuss member’s grievances with employer;
g) ability to inspect beforehand a place of employment or work of the members,
and
36
h) nomination of the representatives on committees formed by the management Trade Union Structure,
Registration and
for industrial relations purposes as well as in statutory bipartite committees. Recognition

7.8 SELF ASSESSMENT QUESTIONS

1) Outline the structure of trade unions in lndia.

2) What is union recognition? Mention the criteria prescribed under the Code
of Discipline for recognition of unions.

3) Briefly discuss the methods of verification of union membership, and state

the advantages and disadvantages of each of these methods.

4) Do you agree with the suggestions made by the First and the Second National
Commissions on Labour for enacting a central legislation on union
recognition? Justify your answer.

7.9 CHECK YOUR PROGRESS

State whether the following statements are True or False:
1) A craft union is an organisation of workers engaged in a particular craft or a
trade or related crafts/trades.
2) The Bombay Industrial Relations Act, 1946 is the first piece of state
legislation which provides for voluntary recognition of trade unions.
3) The Trade Unions Act, 1926 provides for the recognition of a trade union.
4) The Maharashtra Recognition of Trade Unions and Prevention of Unfair
Labour Practices Act, 1971 provides for the recognition of unions for an
undertaking employing 50 or more employees on any day in the preceding
twelve months.
5) All recognised unions are registered unions, but all registered unions are
not recognised unions.
6) There is no provision in the Trade Unions Act, 1926 for the formation of
federation of two or more trade unions.
Answers:
1. True     2. False     3. False     4. True     5. True     6. False

7.10 FURTHER READINGS

Chatterjee, N. N. 1984. Industrial Relations in India’s Developing Economy,
Calcutta: Allied Book Agency.
Government of India, Ministry of Labour and Employment and Rehabilitation.
Report of the First National Commission on Labour, 1969.
Government of lndia, Report of the Second National Commission on Labour,
2002.
Punekar S.D., S. B. Deodhar and Saraswathi Sankaran. 2003. Labour Welfare,
Trade Unionism, and lndustrial Relations, Mumbai :Himalaya Publishing House.
37
Trade Unionism Ramaswamy, E. A. 2002. Managing Human Resources: A Contemporary Text,
New Delhi: OxfordUniversity Press.

Sen, Ratna. 2003. Industrial Relations in India : Shifting Paradigms, Delhi:

Macmillan lndia Ltd.

Subramanian, K. N. 1968. Labou- Management Relations in India, Bombay :

Asia Publishing House.

Venkata Ratnam. C. S. 2000. “NGOs and Trade Unions” in Venkata Ratnam, C.

S. Trade Union Structure and Recognition and Pravin Sinha (Eds.). Trade Union
Challenges at the Beginning of the 21st Century. New Delhi: Indian Industrial
Relations Association and Excel Books.

38
 Trade Union Structure,
UNIT 8 MANAGERIAL UNIONISM Registration and
Recognition

Objectives
• After going through this unit, you should be able to understand:
• the evolution of managerial unionism in India;
• the top managements’ reactions to managerial unions;
• the factors influencing the formation of managerial unions; and
• the activities of the managerial unions.
Structure
8.1 Introduction
8.2 The Evolution of Managerial Unions in India
8.3 Boundaries of Managerial Associations
8.4 Managements’ Reactions to Managerial Associations
8.5 Why Managerial Unionism?
8.6 The Activities of Managerial Unions
8.7 Summary
8.8 Self- Assessment Questions
8.9 Check Your Progress
8.10 Further Readings

8.1 INTRODUCTION
Managers and officers in India belonging to such diverse organsiations as
manufacturing enterprises, commercial banks, insurance companies, research
and development laboratories, electricity boards, trading corporations, merchant
navy and the civil service are increasing banding themselves into collectivities
of associations, which are gaining the aspects of trade unionism. The word
‘managers’, is not the only possible label for this diverse group of people. Industry
employs ‘managers’, the civil service and merchant navy have ‘officers’, as do
the banks and insurance companies; research institutes and laboratories employ
‘scientists and technologists’, electricity boards and sections of commercial
airlines have ‘ engineers’. Although called by different names, and doing varied
jobs, it is quite clear that these men and women have a great deal in common.
They belong to the higher echelons of organizational hierarchy. They are different
from the white-collar groups (such as clerks, draftsmen, technicians, salesmen
and laboratory assistants whose tasks are routine and repetitive, although non-
manual) and the blue-collar employees (who are paid for exertion of physical
effort). They may be simply be titled ‘managers’.

In India, collectivities/ organisations of managers are popularly known as ‘officers’

associations’. The officers’ associations as well as trade unions exist to protect
and advance the work interests of their members. As such, the terms ‘association’
and ‘trade union’ can be used synonymously.

39
Trade Unionism The following sections cover the evolution of managerial unions in India, the
reasons for the formation of managerial unions, and the activities of these unions.

8.2 THE EVOLUTION OF MANAGERIAL UNIONS

IN INDIA
In India, no coherent chronological account is available of the evolution of
managerial unionism, much less its spread or density. Organisations of managers
appear to have been in existence for decades, with associations of merchant
navy officers, airlines pilots and flight engineers dating back to the period around
Independence. Civil servants have similarly been organized for a long time.
Mamlottam (1989) believes that the first impetus for managerial unionization
came from workers’ unions, with the first having been formed among supervisors
and promoted officers, who had been accustomed to unionization. But, with the
phenomenal expansion in banking and insurance sector, and the massive
investment in the public sector enterprises in the country during the sixties, there
was a spurt in the number of managerial unions. Thus, perhaps there is almost
no public sector enterprise today whose managers are not organized. The
managerial union movement in reported to have grown and spread during the
seventies, especially in the coal, steel, petroleum, engineering, chemical, textile,
electronics, banking and insurance industries.

Managerial unions, like trade unions in general, suffered a minor setback towards
the mid-seventies on account of national emergency (1975-77). However,
immediately after lifting of the National Emergency, managerial unionism gained
its momentum. In fact, during the Janata Government regime that followed the
Emergency, several officers’ associations were registered as unions under the
Trade Unions Act, 1926, and some of them were formally recognized by the top
managements.

In 1978, the associations of officers in the public sector witnessed a major shift
in their character an direction from a rather passive and non-assertive stature to
an active and assertive style. Many existing associations merged during this period,
thus consolidating the movement. This also led to a change in the relations
between these associations and the management, which became more cordial in
general, though bitterness continued in several cases. Together with consolidation,
many senior level managers also began to join these associations.

In the public sector, the managerial union movement entered an new phase in the
eighties. In the year 1983, the National Confederation of Officers’ Associations
(NCOA) was formed mainly to protect the interests of the officers in the Central
Public Sector Undertakings (CPSUs).

The year 1983 witnessed another significant development in the managerial

association movement. In that year, the Government of India asked all the CPUs
that were following the Central Dearness Allowance (CDA) pattern to switch
over to the Industrial Dearness Allowance (IDA) patter. The officers’ association
of one of the 69 CPSUs affected by this decision of the government filed a case
in the Supreme Court against the Government. The decision of the Government
regarding change of Dearness Allowance patter from CDA to IDA and filing of
a suit against it in the Supreme Court acted as a spur for the formation of officers’
40
association not only in all affected CPSUs, but also in many other. Subsequently, Managerial Unionism
in 1986, the officers’ associations of the 69 affected CPSUs joined hands to form
a separate confederation of associations of officers.

The economic and industrial policies of the new Government that came to power
in June 1991 have created pressures and insecurities for all public sector
employees including officers. As such, the role of the NCOA has become all the
more important as well as challenging. Officers/managers of giant corporations
like coal, steel, oil and power sector enterprises are not members of the NCOA,
but they have come closer to the NCOA through their respective industrial
federations of officers/ managers/ executives after the introduction of the New
Economic Policy in 1991.

A major development that occurred in June 1992 was the formation of a new
organisation called the Professional Workers’ Trade Union Centre (PWTUC) to
look after the interest of the managerial and supervisory staff, officers and
scientific workers. Among the major organisations that have joined together to
form the PWTUC are: All Indian Bank Officers’ Confederation, NCOA, All
India Life Insurance Officers’ Association, National Confederation of General
Insurance Corporation Officers’ Associations, and Council of Scientific and
Industrial Research Scientific Workers’ Association. These five organisations
together represent about 4.5 lakh professional workers. The most important
objective of the PWTUC is security of service for the managerial and supervisory
staff.

The development occurring in the managerial union front in the public sector
industries had their impact on the private sector. As a result, the private sector
managers both in the MNCs and the family-controlled enterprises, have formed
their associations. The industries in which managerial unions formed in the MNCs
include pharmaceuticals, engineering, chemicals, and consumer products (Glaxo,
Guest Keen Williams, General Electric). Among the indigenously owned
companies which have officers’ associations are: Grasim, Tata Electric, Mafatlal
Group, Kamanis, etc.

The estimates of the number of managerial associations and their membership

even in the mid-eighties were around two hundred and 3,00,000 respectively.
The more intensely organized are public sector white-collar undertakings like
government departments, banks, insurance, etc. The State Bank Officers’
Association was estimated to be about 50,000- strong.

8.3 BOUNDARIES OF MANAGERIAL

ASSOCIATIONS
It is problematic to determine the limits of association constituency of managerial
associations in India. Ramaswamy (1985) describes the boundaries of managerial
associations with the caveat that his description presents only a general picture
of the boundaries of a typical managerial association, and, as such, vast differences
do exist in the managerial association boundaries in different organisations or
even in different enterprises within the same industry.

According to Ramaswamy, at the base the managerial associations take up from

where white-collar clerical and staff unions stop. At the apex, the managerial
41
Trade Unionism associations would evidently leave out the top layer of managers who may not
join, or be acceptable to the associations. What lies in between these two points
is association territory.

Apex (where top layer of managers are

left out)
Base (where whit-collar clerical and staff
unions stop)

Figure 8.1: Managerial Association Territory.

If we turn our attention to the differences in the boundaries of the managerial

associations in different organisations/ industries, we may notice white-collar
workers (at the base) teaming up with mangers in some banks. Similarly, at the
apex the reach of the managerial association varies from one organisation to
another. In some commercial banks, association membership normally stops at
the Regional Manager, which is a middle management position. Officers of the
level of the Assistant or Deputy General Manager would normally keep out. In
the Life Insurance Corporation, the membership extends a little further, with the
Zonal Managers also joining the association. The Steel plants and coal mines
probably represent the ultimate, with the association membership reaching right
up to the level of General Manager.

8.4 MANAGEMENTS’ REACTIONS TO

MANAGERIAL ASSCIATIONS
1) Managements’ response to officers’ / mangers’ associations in public sector
have varied over time. The initial response in almost all cases was one of
antagonism and hostility (resulting either in dismissal or transfer of activists,
which continued till the mid-seventies). However, in the late-seventies i.e.
in the Post-Emergency period there was a change in the attitude of the
managements towards managerial associations. In most cases, these
associations were accepted as something to be tolerated. Thus, the earlier
hostility gave way to a new relationship based on a mixture of love and
hate.

2) As the managements started dealing with the managerial associations, they

discovered that the association of officers/ managers is not an evil force. as
such, many of them gave de facto recognition to these associations and a
working relationship got established between managements and managerial
associations. A few enlightened employees shed their inhibitions and gave
formal recognition to their officers’/ managers’ associations for the purpose
of having discussions/ consultation in respect of issues such as salaried and
benefits. Examples are: HAL, SAIL, BHEL, HMT, IOC, IPCL, Hindustan
Cables, Indian Airlines, and Air India.

3) In the private sector, the attitude of the top management towards the
managerial associations was in general hostile till early nineties. Many private
sector organisations mercilessly sacked the officer activists. Although the
managerial associations do continue to exist in this sector, reportedly, they
are not quite comfortable with their top managements.
42
 Managerial Unionism
8.5 WHY MANAGERIAL UNIONISM?
Some of the major causes for the formation of managerial unions in India are:

1) Narrowing Wage Differentials

There is a wide-spread feeling among the managers that compared to
unionized cadre of workmen they are getting a raw deal from their employers
in terms of remuneration. They complain about the narrowing differentials
between the emoluments of junior officers and the wages of the senior
workmen. This feeling of relative deprivation/ comparison has contributed
significantly to the emergence of managerial unionism. The managers hope
that collectively they can exert enough pressure on the management to give
them a comparable salary hike whenever workers’ wages are raised.

2) Loss of Identity
Like workers, managers too experience a loss of power, facelessness among
the changes and reorganization of enterprises in the modern world. Many
managers, especially the junior one have little access to information
pertaining to the company.

3) Job Insecurity
While one of the hardest things in Indian industry is to terminate the services
of a worker, it is not very difficult to remove the managers form their jobs.
Even in the public sector, the junior and middle level managers do not have
the job security.

Under the Industrial Disputes Act, 1947, the workmen enjoy job security;
and they are entitled to: a) Lay-off compensation, if laid-off; b) retrenchment
compensation, if retrenched; and c) some sort of statutory compensation in
case the establishment is closed down or its ownership is transferred. The
managerial employees are not entitled to such security and benefits.

If a workman is terminated from service or suspended or retrenched, his

dispute connected to this issue will be treated as industrial dispute. On the
other hand, if the service of a managerial employee is terminated, he cannot
raise an industrial dispute. The job security issue is, therefore, one of the
major causes for the formation of managerial unions.

4) Perceived Need for Protection from Militant Trade Unionism.

As the junior and the middle level managers are responsible for translation
managerial decisions into action, they are in the direct line of union fire.
The unionized workmen and staff could make it difficult for the mangers to
take work from them due to their unions’ support and the protection they
enjoy from labour legislation. Because of this the managers are uncertain as
to how to go about with the unionized labour. If the young manager decides
to charge-sheet an offender, his boss may drop the charge on grounds of
expediency (due to the pressures from the unions). Laxity on his part, might
on the other hand, evoke the comment that he is not sufficiently firm. As
such, the middle ranks of managers seem convinced that they cannot count
on support from above with regard to the unions even when they have acted
in good faith towards the organisation. 43
Trade Unionism 5) Bureaucratic Culture
The bureaucratic culture which characterises the working environment of
all public enterprises is another factor contributing to the emergence of
managerial unionism. In these organisations, the junior and the middle level
managers feel lost, as the decisions are taken unilaterally by the higher
authorities or concerned Ministries. It is to make their presence felt and to
have some say in matters affecting them that these managers/ officers are
organizing and forming their associations.
6) Absence of Participative Forum
The government and the managements who are so concerned with the
workers’ participation in management hardly give a thought to the managers’
need to participate in management. As such, the junior and the middle
mangers feel that the faceless and voice-less entity is not the unionised
workers, but themselves. These managers draw the lesson that they need an
organisation/ association to focus attention on their problems. They use the
collective negotiation/ bargaining that takes place between their associations
and the top management as a participative forum for being associated with
the management as closely as possible.
7) Promotion Policies
The promotion policies of organisations also have had their effect on
association formation. The nationalized banks have to fill by promotion
three- fourths of the positions at the lowest point in the officer category.
Many organisations promote employees from the ranks to the managerial
cadre as a matter of personnel policy even through there is no explicit
compulsion. Another common practice is to attach the problem of stagnation
through a change of designation while letting the job itself unchanged.
These ‘promotee officers’ have often been in the forefront of association
formation. These employees find it difficult to reconcile to the loss of power
they have experienced as union activists and members, and association
formation naturally comes to them. However, the promotion polices in some
organisations have a flip-side- discrimination in promotion processes;
promotions not based on merit etc. Thus, the promotion or lack of it or
discrimination in the promotion process has been managers. All this justifies
the formation of managerial associations.
8) To be a Third Force between the Working Class and the Management
Being denied the protection of labour laws, and the privilege of a real
manager, the junior and middle level mangers have gone for the only option
left to them, that is, the formation of the officers’ associations. They would
not like to be considered as part and parcel of either of the working class or
the management, but as a ‘third force’ between these two groups.
Activity 1
What is your opinion about managerial unions, whether these unions are
required or not required? If yes, why. If not, substantiate your stand supported
by reasons.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
44
 Managerial Unionism
8.6 THE ACTIVITIES OF MANAGERIAL UNIONS
The activities of managerial associations reflect the character and personality of
managerial unionism. The day-to-day activities of managerial activities may be
categorized as: a) protection, preservation, and improvement of occupational
interests; b) welfare activities; c) organizational interests; and d) channel of
communication.

a) Protection, Preservation and Improvement of Occupational Interests

The main thrust of managerial associations is on protection, preservation
and improvement of the occupational interests of their members, which
include, among other things, opportunities for promotions, pay revision,
grievance redressal, improvement of working conditions, and introduction
or enhancement of various fringe benefits. While pursuing the occupational
interest, some associations resort to agitational methods such as strikes,
demonstrations, gheraos, displaying posters in vile and objectionable
language, processions in the streets etc.

b) Welfare activities
The welfare activities of the managerial associations, in general, include:
establishment and management of cooperative societies, management of
officers’ clubs and canteens, organisation of cultural, recreational and sports
activities, management of educational trusts, collection of a certain amount
as part of managerial association subscription and financing the same for a
Group Insurance Scheme of the Life Insurance Corporation, etc.

c) Organisational Interests
One of the important activities of managerial associations is to supplement
the efforts of the management that are aimed at professional development
of managers, by way of organising seminars, and talks on various topics.
Another important activity is to help the management in improving the
productivity of the organisation.

d) Channel of Communication
Managerial associations are proving to be an effective channel of
communication in their respective establishments. By raising the concerns
of officers before the management and by presenting the views of the
management to the officers (members), a managerial association operates
like a bridge for two-way communication.

Activity 2
Briefly discuss the activities of managerial unions and how these unions are
being used for improving employment relations in your organisation or any
organisation you are familiar with.
........................................................................................................................
........................................................................................................................
........................................................................................................................
........................................................................................................................
45
Trade Unionism
8.7 SUMMARY
• In this unit, we have outlined the evolution of managerial unions in India.
• We have attempted to give a general picture of the boundaries of a typical
managerial association.
• We have briefly described the managements’ reactions to the managerial
associations.
• We have examined the main causes for the formation of managerial unions
in India.
• We have given a brief account of the activities of the managerial associations
in general.
• We may categorise the activities of managerial unions as: (a) protection,
preservation, and improvement of occupational interests of members; (b)
welfare activities; (c) organisational interests; and (d) channel of
communication.

8.8 SELF-ASSESSMENT QUESTIONS

1) Outline the evolution of managerial unions in India.
2) Give a brief account of the various activities of a managerial association
with which you are familiar.
3) “The general reaction of managements towards managerial associations in
India is one of antagonism”. Do you agree with this statement? Justify your
answer.
4) Distinguish between the workers’ trade unions and managerial trade unions.

8.9 CHECK YOUR PROGRESS

State whether the following statements are True or False:
1) There is narrowing differentials between the emoluments of junior officers
and the wages of the senior workmen.
2) Managerial associations are not expected to be an effective channel of
communication in their respective establishments.
3) The growth of white-collar unionism has also affected the traditional blue-
collar workers and their unionism.
4) The activities of managerial associations reflect their character and
personality.
5) Managers and officers were drawn to unionism by a host of internal and
external factors operating both within and outside the organisation.

Answers:
1. True     2. False     3. True     4. True     5. True

46
 Managerial Unionism
8.10 FURTHER READINGS
Mamkottam, kuriakose. 1989. “ Emergences of Managerial Unionism in India”,
Economic and Policitical Weekly, Vol. XIV, No. 43.

Ramaswamy, E.A. 1986. Workers Consciousness and Trade Unions, New Delhi:
Oxford University Press.

Sharma, Baldev R. 1993. Managerial Unionism: Issues in Perspective, New Delhi:

Shri Ram Centre for Industrial Relations and Human Resources.

47
Trade Unionism
UNIT 9 EMPLOYERS’ ORGANISATIONS IN
INDIA

Objectives
After going through this unit, you should be familiar with:
• the origin and growth of employers’ organisations in India;
• the structure of employers’ organisations;
• the aims and objectives of employers’ organisations ;
• the functions of employers’ organisations; and
• the role of employers’ organisations in employment relations
Structure
9.1 Introduction
9.2 Origin and Growth of Employers’ Organisations
9.3 Structure of Employers’ Organisations
9.4 Aims and Objects of Employers’ Organisations
9.5 Functions of Employers’ Organisations
9.6 Membership, Structure and Functioning of Employers’ Organisations in
India
9.7 Legal Status of Employers’ Organisations
9.8 Observations of the First National Commission on Labour on Employers’
Organisations
9.9 Summary
9.10 Self-Assessment Questions
9.11 Check Your Progress
9.12 Further Readings

9.1 INTRODUCTION
While workers get together for joint action through a union, an employer is in
many cases an organisation in himself and meets the union on equal terms. At
the same time, employers find themselves in furtherance of common objectives
of evolving attitudes to labour or approaches to national policies, as also for
standardisation of wages and other conditions of employment in an industry
within a local area (National Commission on Labour: 1969). Thus, Employers’
Organisations (EOs) are formal groups of employers set up to defend, represent
or advise affiliated employers and to strengthen their position in society at large
with respect to labour matters besides economic matters. While trade unions,
which are composed of individual persons, employers’ organisations are
composed of enterprises. Nevertheless, the Trade Unions Act, 1926 includes in
its purview both associations of workers and employers.

48
 Employers’ Organisations
9.2 ORIGIN AND GROWTH OF EMPLOYERS’ in India

ORGANISATIONS
The first employers’ association in the form of the Chamber of Commerce was
established in Marseilles in France in 1599. Such chambers are voluntary
organisations of the business community established to promote the commercial,
industrial and civic interests of their members. They also function as Central
Agencies of individual firms, companies, trade and industrial associations for
protecting and promoting business interests by evolving and projecting collective
thoughts. The utility of these chambers was quickly realised in practically all
important countries of the world. It is therefore not surprising , as disclosed by
one survey, that there are nearly 10,000 chambers of commerce in all important
countries together with the underlying membership of millions of business
organisations and firms. They have also formed a body at the international level
known as International Chamber of Commerce with headquarters in Paris. The
latter has National Committees in different countries.

Developments in India
The origin, growth and development of EOs have three distinct phases: (i) the
period up to 1933; (ii) the period between 1934 and 1946; and (iii) the post-
Independence period. Each phase reveals its own structural and functional
characteristics; in each phase the organisations had to undergo changes because
of contemporary economic, social and political developments. The periods
referred to also coincide with important developments in the labour field, and
these have had a great impact on the pattern and development of employers’
organisations and their functioning.

Period up to 1933
With the withdrawal of the East India Company in 1833, the British business
interests as well as the interests of other individual businessmen had to be
represented to the Government of the day. As such, the first Chamber of
Commerce was established by the British businessmen in India based in Calcutta
in 1833, followed by establishment of Chambers of Commerce in Madras and
Bombay in 1836.

Indian businessmen did become members of these British Chambers, but in small
number. It is only after the 1880s that they started setting up an independent
organisation and engaging in a struggle with British business interests. The first
Chamber of Commerce, the native Merchant Chamber of Commerce of
Coconada, subsequently known as Godavari Chamber of Commerce, was set up
in 1885, the year of establishment of the Indian National Congress. In 1887, the
Bengal National Chamber of Commerce was established in Calcutta.
Subsequently, the British-oriented Chambers of Commerce and the giant Indian
(especially the Parsi) industrial and business interests formed a federal association,
the Associated Chamber of Commerce (ASSOCHAM), with its headquarters at
Bombay. Now, ASSOCHAM has in its fold maximum number of MNCs and
foreign companies including the British Airways, Cadbury India, Citi Bank, Coca-
cola India, Hindustan Lever, Glaxo India, Johnson & Johnson, Procter & Gamble
India, Nestle India, Pepsi Foods, Philips India, Thomas Cook India (The Hindu,
April 29, 1997).
49
Trade Unionism In 1927, the Indian businessmen (supporters of Swadeshi movement) organised
a central body of the Chambers of Commerce and Trade Associations of Indian
business, known as Federation of Indian Chambers of Commerce and Industry
(FICCI). With its headquarters at Delhi, today FICCI embraces all types of trade
and industry interests. It speaks directly or indirectly for 1,00,000 business units
— small, medium and large— employing around 10 million people.
India as one of the original members of the International Labour Organisation
(set up in 1919 by the Treaty of Versailles, also known as Peace Treaty) had the
responsibility of sending a tripartite delegation to the annual meetings of the
ILO. According to the Constitution of the ILO, the Government of the each
member country, besides nominating the Government’s delegates should nominate
employers’ and workers’ delegates in agreement with their respective
organisations, which are most representative of the interests concerned.
The FICCI, whose representative was attending the annual meetings of the ILO
since 1927 to 1930, was informed by the Government of India that under the
Treaty of Versailles, the Chambers of Commerce could not be treated as
organisations of employers which could be consulted by the member-governments
in nominating employers’ delegates to the ILO meetings for discussions relating
to labour matters. It was to meet this situations that a separate central body of the
industrial employers was established by FICCI on December 12, 1932, and this
was called the All India Organisation of Industrial Employers. This name was
changed later on, and now it is known as All India Organisation of Employers
(AIOE). The headquarters of the AIOE is located in New Delhi. Following this,
another central organisation of employers – Employers’ Federation of India
(EFI)— with its headquarters at Bombay was established by ASSOCHAM in
1933. The modest objective of the EFI, like that of the AIOE, in the beginning
was to facilitate the selection of employers’ delegates for the meetings and
conferences of the ILO.

Period between 1934 to 1946

Since the AIOE and EFI began to represent mainly the large-scale industrial
employers, the need for a third limb of EOs representing the medium and small
size employers was felt. Under the inspiring leadership of M. Vishwesvarayya, a
renowned engineer, the All India Manufacturers’ Organisation (AIMO) was set
up in Bombay in 1941 to represent both the trade and labour interests of the
member firms in the medium and small sectors. However, the membership of
AIMO is not necessarily restricted to medium and small size employers. The
AIMO could secure recognition from the Government of India for representation
at the national level and in the 1980s for the International Labour Conference, as
any other employers’ organisation.
The Government of India Act, 1935 made provision for representation of
employers and labour in legislative bodies through special constituencies. The
constituents of the AIOE and the EFI thus got an opportunity to be represented
in the Central and Provincial Legislatures. Labour legislations in the thirties in
some provinces made it necessary for employers’ associations to expand their
services in the labour field. The creation of the Labour Department in the Central
Government and the constitution of tripartite bodies like Indian Labour
Conference, Standing Labour Committee and Industrial Committees during the
years of Second World War (1939-45), helped further these activities within
50 local associations and federations.
1947- Present Employers’ Organisations
in India
In the wake of the Independence of the country in 1947, a plethora of labour
laws were enacted, the industrial fabric of the country began to change with the
implementation of successive five-year plans, and the demographic profile and
aspirations of the employees also began to undergo major changes. All these
provided new opportunities and challenges for EOs.

After Independence, the indigenous private industrialists began to train their

guns against the public sector which had witnessed a rapid growth (at least until
1990s, when privatisation became the “in-thing”). The small and medium sectors
have formed their own associations. With the proliferation of EOs, the need for
their unification began to find expression. After several initiatives and meetings,
it was in 1956 that a super structure called the Council of Indian Employers
(CIE)1 was formed to bring AIOE and EFI, the two national level employers’
organisations under one umbrella.

The CIE got itself affiliated to the Geneva-based International Organisation of

Employers (IOE)2 in the same year, in place of the AIOE and EFI which till then
were affiliated to the IOE separately. The growth of public sector consequent
upon Government’s endeavour to raise it to the “commanding heights” of the
economy led eventually to the claim by the public sector to represent employer’s
interests. As a result, a representative organisation for public sector, called the
Standing Conference on Public Enterprises (SCOPE) was set up and registered
as a society on September 29, 1970. In the year 1973, the SCOPE joined the
CIE3 .

Confederation of Indian Industry (CII)

Established in the year 1895, the CII was a sectoral association till 1991 confining
mainly to the engineering industry. The head office of the CII is in Kolkota.
Since, 1991, the CII became broad based and employers belonging to other
industries are associated with it. The total number of companies that are associated
with the CII is 4,000; and 25 per cent of this membership is from IT companies,
financial services and other services like consultancy (The Hindu, November 1,
2000). The CII has 35 offices all round the world including offices in the Middle
East, UK, USA , Canada and Singapore. It performs the combined role of
defending the interests of employers in both economic and labour matters.

Commenting on the proceedings of one of the CII’s annual quality summits,

Ramaswamy (2002) observes that the proceedings “scarcely make a mention of
worker involvement or empowerment. The closest they get to workers is a fleeting
reference to Quality Circles, but no details can be had on worker or union response
to them”.

Federation of Associations of Small Industries in India (FASII)

Besides the FICCI, ASSOCHAM, and CII, another federation, the Federation of
Associations of Small Industries in India (FASII) came into existence in the
private sector in the year 1959 to protect the interests of the small industries.
FASII has its headquarters in Delhi.

51
Trade Unionism
9.3 STRUCTURE OF EMPLOYERS’
ORGANISATIONS
EOs in India have a three-tier structure: local associations, industrial associations,
and all-India federations.

Local Associations
This type of associations have been formed in most of the industrial cities and
other industrial areas of the country in the form of Chambers of Commerce or
Factory Owners’ Associations. These associations cover all industries in their
respective areas. Their field of activity is not confined to industrial and commercial
matters only, but also extends to labour matters.

Industrial Associations
Industrial Associations are the general pattern of organisations of employers in
India. They are formed at the area/ regional level as also at the all-India level.
The regional industrial associations are generally associated with / affiliated to
the central organisations at the apex level (all-India level). The main reasons for
the development of industry-wise associations is the common nature of the
problems confronting each industry. Individual employers are also admitted at
the apex level. Most of the industrial associations, in turn, are affiliated to national
level federations (all-India federations) of employers’ organisations. The setting
up of industry-wise wage-boards , industrial committees at the Central and State
levels, and development of collective bargaining at the industry level in certain
regions / industries (like jute, cement, cotton, textiles, engineering, tea, sugar,
paper, and chemicals) helped the growth of these associations.

All-India Federations
They comprise representatives of both industries and geographic centres. AIOE,
EFI and AIMO are the three federations operating at the national level. They
have representation s on consultative bodies in labour matters. Unlike the AIOE
and EFI, the AIMO combines in itself both the trade and labour interests of its
members. The membership of these organisations open to individual firms or
joint stock companies engaged in any industry, and to any association / chamber
of commerce representing any industry in the country.

All the three federations have special committees to deal with specific problems.
Besides, they operate through their regional committees and maintain close links
with the national level chambers of commerce as well.

9.4 AIMS AND OBJECTS OF EMPLOYERS’

ORGANISATIONS
All India Organisation of Employers
The objects of the AIOE are inter alia:
i) To take all steps which may be necessary for promoting, supporting or
opposing legislative and other measures affecting or likely to affect directly
or indirectly, industries in general, or particular industries;
52
ii) To nominate delegates and advisers, etc. to represent the employers of India Employers’ Organisations
in India
at the International Labour Conference, United Nations Organisation,
International Chamber of Commerce and other conferences and committees
affecting the interests of trade, commerce and industries, whether as
employers or otherwise;

iii) To promote and support all well-considered schemes for the general uplift
of labour and to take all possible steps to establish harmonious relations
between capital and labour”.

Employers’ Federation of India

The principal objects for which the EFI has been established are embodied in its
Constitution. These are:
i) ”to promote and protect the legitimate interests of employers engaged in
industry, trade and commerce;
ii) to maintain harmonious relations between management and labour and to
initiate and support all well considered schemes that would increase
productivity and at the same time give labour a fair share of the increased
return;
iii) to collect and disseminate information affecting employers and to advise
members on their employer-employee relations and other ancillary
problems.” These objects lie within the field of what may broadly be termed
‘industrial relations’. Although consideration of broad economic problems
is not altogether excluded, the EFI does not generally comment on
commercial questions of customs, taxation and the like which lie in the
sphere of the ASSOCHAM.

The All India Manufacturers’ Organisation

The objectives of the AIMO are:
i) ”To help bring about the rapid industrialisation of the country through sound
and progressive economic policies;
ii) To help in increasing the aggregate wealth of India;
iii) To raise the standard of living of the people of India by utilising to the
fullest possible extent all the available national resources and talent in the
country; and
iv) To play a positive role in relieving the pressure of population on land”.
The industrial relations functions of the AIMO are similar in material particulars
to those of the AIOE and EFI.

Standing Conference on Public Enterprises

The objectives of the SCOPE 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 advice to the community and the Government.
Besides improving performance of the public sector, its objective is to participate
in the policy-making process of public enterprises.
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Trade Unionism
Activity 1
Briefly describe the structure, aims and objects of employers organisations
of your own organisation or any organisation you are familiar with.
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9.5 FUNCTIONS OF EMPLOYERS’

ORGANISATIONS
The main role of an employers’ organisation is to protect and promote the interests
of its members. Its activities are designed and directed on a broader plan; labour
problems are only a part of their overall responsibilities. Economic, commercial
and fiscal matters and policies are equally or even more important for them.
Employers’ organisations find it necessary to have legislative support for the
realisation of their objectives. Their main functions in the field of labour are:

a) 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.

b) Advisory Functions: 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.

c) 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 agreements, role of
the private sector in national development, etc. have been carried out by the
Employers’ Federation of India.

d) 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 problems.

e) Undertaking 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 in improving levels of production and productivity, pursuing policies
that are conducive to the development of industry and the economy, adopting
neighbourhood, social development schemes, etc.

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 Employers’ Organisations
9.6 MEMBERSHIP, ORGANISATION in India

STRUCTURE AND FUNCTIONING OF

EMPLOYERS’ ORGANISATIONS IN INDIA
Membership
As in most countries in India too membership in EOs is voluntary. AIOE has two
categories of members: individual (enterprise) and association (group of
enterprises). EFI additionally has provision for honorary membership whereby
individuals with special skills or experience, such as legal luminaries or
professionals are co-opted to serve on various committees of the federation. While
the predominantly private sector EOs do not bar public sector enterprises
becoming members and rather welcome their entry and indeed have a few, the
SCOPE remains an EO exclusively for the public sector that too mainly the
public sector enterprises in the central sphere.

In the year 2002, the AIOE had 72 associate members (i.e. industrial employers
/ chambers) and 183 individual members. The EFI had 31 association members
and 247 individual members as of 1986. The SCOPE had over 95 per cent of the
CPSUs as its members as of 1986.

Organisation Structure
The AIOE has a unitary type of organisation. It has no sub-organisation on an
industrial or geographical basis. Even though there are important clusters of
members in Kolkata and Bombay, there has been no attempt to create local
committees or offices. The EFI, however, has federal type of organisation structure
with its activities distributed over a central body and the regional committees.
Both the AIOE and the EFI have a governing body, executive committee and the
secretariat. The governing body is the supreme policy-making body, the executive
committee is responsible for implementing the policies and objectives of the
organisation and the secretariat with a permanent staff, is responsible for carrying
out the decisions of the governing body.

The SCOPE has two administrative organs, the Governing Council and the
Executive Board besides the Secretariat with permanent staff. The Governing
Council lays down policy and elects office-bearers, the Executive Board oversees
implementation of policies. The Chief Executive of a member enterprise /
organisation shall automatically be a member of the Governing Council.
Additionally, it has three government representatives nominated by the Director-
General, Department of Public Enterprises as ex-officio members of the
Governing Council with full voting rights.

Finances
EOs are referred to as rich men’s poor clubs. Nearly half of the income of the
EFI and one fourth of the income of the AIOE are from membership subscriptions.
Other incomes include interest on corpus/ deposits, conferences, publications,
etc. Excessive dependence on income from subscription makes EOs financially
vulnerable. The surest way for them to raise funds is to upgrade the quality,
relevance and usefulness of services to their members and other constituents,
including the community.
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Trade Unionism Functioning
EOs in India play two types of roles in representing the interests of their members:
One, they are called to nominate representatives of employers in voluntary or
statutory bodies set up not only to determine wages and conditions of employment
of workers in a particular industry / sector, but also for consultation and
cooperation on social and labour matters in national and global context (See
Table 1 for an indicative list of representation of EOs in various tripartite fora
and public bodies / institutions ). Secondly, they seek to redress the grievances
arising from legislative or other measures by making submissions to concerned
authorities. It is difficult to recapitulate and synthesise the role played by EOs in
representing the interests of employers in the ILO, various committees /
institutions , bipartite and tripartite fora at the national level and on various
issues such as legislation, voluntary codes, social security, bonus, etc.

The real worth of an EO and the best justification for its support is the range of
services that it provides to its members. Within the overall framework of the
need to develop enlightened human resource management practices, the kind
and range of services that an EO could provide should rest mainly on the needs
of the members and their priorities as also the resources and competence within
the leadership and secretariat of the EO. Some of the basic services every EO
may be expected to provide include the following: (i) study and analysis of
problems and dissemination of information — advice, advocacy and dispute
settlement; (ii) guidance or conduct of collective bargaining. In India this role is
voluntary and at the initiative and request of the members; (iii) training and
development of staff and members; (iv) safety and health at workplace and
working environment; and (v) public image and public relations.

9.7 LEGAL STATUS OF EMPLOYERS’

ORGANISATIONS
EOs could be registered in any of the following legal forms: The Trade Union
Act, 1926; the Indian Companies Act, 1956; or the Societies Act, 1860. The
AIOE remained a registered body till 1969 when it was registered under the
Trade Unions Act. The EFI came into being in March 1933 as a company under
the Indian Companies Act. A quarter century later, it was reorganised as an
unregistered Association, a position which continued till 1963 when it too was
registered under the Trade Unions Act.
The main reason for the AIOE opting for registration under the Trade Unions
Act was to allow it to take up test cases before the courts and industrial tribunals.
In the case of the EFI, the motivation was to overcome the burden of income-tax
on its steadily rising income and surplus.
The SCOPE, however, continues to be registered under the Societies Act.

9.8 OBSERVATIONS OF THE FIRST NATIONAL

COMMISSION ON LABOUR ON EMPLOYERS’
ORGANISATIONS
The First National Commission on Labour made the following observations/
recommendations with regard to the employers’ organisations.
56
1) Registration of employers’ associations should be made compulsory. Employers’ Organisations
in India
Arrangements should be made through the Industrial Relations Commissions
(proposed by the NCL) for certification of employers’ organisations at the
industry/area level for the purpose of collective bargaining.
2) Employers’ organisations should encourage collective bargaining and
voluntary arbitration and avoid third party intervention as far as possible.
3) Regular and scientific arrangements for training of supervisors and middle
management personnel in the art or handling labour should receive due
attention from the employers’ organisations.
4) From the view point of labour management relations, employers’ associations
should accept the following functions:
i) undertake promotion of collective bargaining at various levels;
ii) encourage observance and implementation by their members of
bipartite and tripartite agreements in real spirit and form;
iii) expedite implementation of wage awards by members without undue
delay and reservations;
iv) work towards elimination of unfair labour practices by employers;
v) encourage adoption by members of personnel policies conducive to
productivity and industrial peace;
vi) promote rationalisation of management or organisation to improve
productivity;
vii) arrange employers’ education (a) in the concept of labour partnership
in industry, (b) for ensuring identity of interests of labour and
management and (c) for promoting harmony between the goals of
industry and of the community; and
viii) work towards the collective welfare of its members through training,
research and communication in the field of labour-management
relations.

Activity 2
Briefly explain the legal status of employers organisations in general and
functioning of employers organisations in particular with regard to your
organisation or any organisation you are familiar with.
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Trade Unionism
9.9 SUMMARY
•In this unit we have outlined the origin and growth of employers’ organisations
in India.
• With the growth of workers’ unions, labour matters started receiving the
attention of the employers’ associations, whose main functions were to
protect and promote industrial and commercial interests of the members.
The EOs have a three-tier structure: local associations, industrial associations,
and All-India federations.
• In the private sector, four federations — ASSOCHAM, FICCI, CII and FASII
form the industrial wing.
• The CIE representing the EFI, AIOE, and the SCOPE forms the labour wing.
• The CIE nominates employers’ representatives for the annual ILO
conferences.
• CIE is affiliated to the Geneva-based IOE. The membership of the employers’
organisations are rather small, compared to the potential for coverage.
• Subscriptions being the main source of revenue, low membership coverage
affects their finances.
• The organisation structure of an EO typically consists of a general body of
members, office-bearers, and executive committee, and the Secretariat.
• The EOs provide a wide variety of services in the area of industrial/
employment relations.
• The EOs could be registered under the Trade Unions Act, 1926 or Societies
Act, 1860 or Companies Act, 1956

9.10 SELF-ASSESSMENT QUESTIONS

1) Outline the origin and growth of the employers’ organisations in India.

2) What are the aims and objectives of the employers’ organisations in India?

3) Briefly discuss the structure and functions of the employers’ organisations

in India.

4) State the first NCL’s observations on the employers’ organisations in India.

9.11 CHECK YOUR PROGRESS

State whether the following statements are True or False:
1) The Standing Conference of Public Enterprises (SCOPE) is an apex
professional organisation representing both the central and state public sector
enterprises.
2) The main role and functions of employers’ organisation is to protect and
promote the interests of workers.
58
3) The main aim of employers’ organisations in India is to monitor the Employers’ Organisations
in India
performance of public and private sector undertakings and their employees.
4) The intention in covering employers’ organisations under the Trade Unions
Act, 1926 is to place both workers’ and employers’ organisations on a par in
matters of rights and responsibilities.

Answers:
1. True 2. False 3. False 4. True

9.12 FURTHER READINGS

Chatterjee, N. N. 1984. Industrial Relations in India’s Developing Economy,
Calcutta: Allied Book Agency.

Government of India, Ministry of Labour and Employment and Rehabilitation,

1969. Report of the National Commission on Labour, Delhi.

Oechslin, J.J. 1990. Employers’ Organisations, Geneva: Industrial Organisation

of Employers.

59
 MS-24: INDUSTRIAL RELATIONS
Block 1 Conceptual Framework of Industrial Relations
UNIT 1 Concept, Scope and Approaches to Industrial Relations
UNIT 2 Evolution of Industrial Relations and Current Developments
UNIT 3 Constitutional and Legal Framework of Industrial Relations
UNIT 4 Labour Administration in India
UNIT 5 Global Trends in Industrial Relations

Block 2 Trade Unionism

UNIT 6 Trade Union Development and Functions
UNIT 7 Trade Union Structure, Registration and Recognition
UNIT 8 Managerial Unionism
UNIT 9 Employers’ Organisations in India

Block 3 Collective Bargaining

UNIT 10 Concept and Theories of Collective Bargaining
UNIT 11 Bargaining Process and Agreements
UNIT 12 Negotiation Skills
UNIT 13 Issues and Trends in Collective Bargaining

Block 4 Employee Participation

UNIT 14 Evolution, Structure and Processes of Employee Participation
UNIT 15 Design and Dynamics of Participative Forums
UNIT 16 Implementing Participative Strategies

Block 5 Grievance, Discipline and Dispute Resolution

UNIT 17 Grievance Handling
UNIT 18 Discipline in Industry
UNIT 19 Dispute Resolution Machinaries