Unit - 12 : Trade Unions

Structure of Unit:
12.0 Objectives
12.1 Introduction
12.2 What is Trade Union?
12.2.1 Objectives of Trade Union
12.2.2 Role of Trade Union
12.2.3 Functions of Trade Union
12.3 Types of Trade Union
12.4 Importance of Trade Union
12.5 Rights and Liabilities of Trade Union
12.6 Phases of Growth of Trade Union in India
12.7 Multiplicity and Effectiveness of Trade Union
12.8 Summary
12.9 Self Assessment Questions
12.10 Reference Books

12.0 Objectives
After completing this unit, you would be able to:
 Understand the meaning of Trade Union;
 Understand the different types of Trade Union;
 Learn about the different growth phases of Trade Union;
 Know about the duties and responsibilities of Trade Union;
 Learn about the effectiveness of Trade Union in Present Scenario.

12.1 Introduction
A trade union is an organization of workers that have banded together to achieve common goals such as
better working conditions. The trade union, through its leadership, bargains with the employer on behalf of
union members (rank and file members) and negotiates labor contracts (collective bargaining) with employers.
This may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing
and promotion of workers, benefits, workplace safety and policies. The agreements negotiated by the
union leaders are binding on the rank and file members and the employer and in some cases on other non-
member workers.

12.2 What is Trade Union?

Trade union as per Trade Union Act 1926 – “Any combination formed primarily for the purpose of
regulating the relations between workmen and employers or workmen and workmen or employers and
employers or for imposing restrictive conditions on the conduct of any trade or business and includes any
federation of two or more trade unions.”
From the above definition it is clear that Trade union is not just an association of the workmen
of a factory or a trade or a business but also can be formed by officers and managers.
Under the Trade Unions Act, 1926, the expression trade union includes both employers and workers in
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organizations. The term trade union however is commonly used to refer to the organization of workers
formed to protect their rights and enhance their welfare.
According to V.V. Giri, “Trade unions are voluntary associations of workers formed together to promote
and protect their interests by collective action.”
12.2.1 Objectives of Trade Union
Trade unions are formed to protect and promote the interests of their members. Their primary function is
to protect the interests of workers against discrimination and unfair labor practices. Trade unions are
formed to achieve the following objectives:
 Representation : Trade unions represent individual workers when they have a problem at work.
If an employee feels he is being unfairly treated, he can ask the union representative to help sort
out the difficulty with the manager or employer. Unions also offer their members legal representation.
Normally this is to help people get financial compensation for work-related injuries or to assist
people who have to take their employer to court.
 Negotiation : Negotiation is where union representatives, discuss with management, the issues
which affect people working in an organization. There may be a difference of opinion between
management and union members. Trade unions negotiate with the employers to find out a solution
to these differences. Pay, working hours, holidays and changes to working practices are the sorts
of issues that are negotiated. In many workplaces there is a formal agreement between the union
and the company which states that the union has the right to negotiate with the employer. In these
organizations, unions are said to be recognized for collective bargaining purposes.
 Voice of Decision Effective Workers : The economic security of employees is determined not
only by the level of wages and duration of their employment, but also by the management’s personal
policies which include selection of employees for layoffs, retrenchment, promotion and transfer.
These policies directly affect workers. The evaluation criteria for such decisions may not be fair.
So, the intervention of unions in such decision making is a way through which workers can have
their say in the decision making to safeguard their interests.
 Member Services : During the last few years, trade unions have increased the range of services
they offer their members. These include:
 Education and Training : Most unions run training courses for their members on employment
rights, health and safety and other issues. Some unions also help members who have left school
with little education by offering courses on basic skills and courses leading to professional
qualifications.
 Legal Assistance : As well as offering legal advice on employment issues, some unions give help
with personal matters, like housing, wills and debt.
 Financial Discounts : People can get discounts on mortgages, insurance and loans from unions.
 Welfare Benefits : One of the earliest functions of trade unions was to look after members who
hit hard times. Some of the older unions offer financial help to their members when they are sick or
unemployed.
12.2.2 Role of Trade Union
Trade unions are unique organisations whose role is variously interpreted and understood by different
interest groups in the society. Traditionally trade unions role has been to protect jobs and real earnings,
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secure better conditions of work and life and fight against exploitation and arbitrariness to ensure fairness
and equity in employment contexts. In the wake of a long history of union movement and accumulated
benefits under collective agreements, a plethora of legislations and industrial jurisprudence, growing literacy
and awareness among the employees and the spread of a variety of social institutions including consumer
and public interest groups the protective role must have undergone, a qualitative change. It can be said
that the protective role of trade unions remains in form, but varies in substance.
There is a considerable debate on the purposes and role of trade unions. The predominant view, however,
is that the concerns of trade unions extend beyond ‘bread and butter’ issues. Trade unions through industrial
action (such as protests and strikes) and political action (influencing Government policy) establish minimum
economic and legal conditions and restrain abuse of labour wherever the labour is organised. Trade unions
are also seen as moral institutions, which will uplift the weak and downtrodden and render them the place,
the dignity and justice they deserve.
12.2.3 Functions of Trade Union
Trade unions perform a number of functions in order to achieve the objectives. These functions can be
broadly classified into three categories:
1. Militant Functions
2. Fraternal Functions
1. Militant Functions
One set of activities performed by trade unions leads to the betterment of the position of their members in
relation to their employment. The aim of such activities is to ensure adequate wages secure better conditions
of work and employment get better treatment from employers, etc. When the unions fail to accomplish
these aims by the method of collective bargaining and negotiations, they adopt an approach and put up a
fight with the management in the form of go-slow tactics, strike, boycott, gherao, etc. Hence, thesefunctions
of the trade unions are known as militant or fighting functions. Thus, the militant functions of trade unions
can be summed up as:
 To achieve higher wages and better working conditions
 To raise the status of workers as a part of industry
 To protect labors against victimization and injustice

2. Fraternal Functions
Another set of activities performed by trade unions aims at rendering help to its members in times of need,
and improving their efficiency. Trade unions try to foster a spirit of cooperation and promote friendly
industrial relations and diffuse education and culture among their members. They take up welfare measures
for improving the morale of workers and generate self confidence among them. They also arrange for legal
assistance to its members, if necessary. Besides, these, they undertake many welfare measures for their
members, e.g., school for the education of children, library, reading-rooms, in-door and out-door games,
and other recreational facilities. Some trade unions even undertake publication of some magazine or
journal. These activities, which may be called fraternal functions, depend on the availability of funds, which
the unions raise by subscription from members and donations from outsiders, and also on their competent
and enlightened leadership. Thus, the fraternal functions of trade unions can be summed up as:
 To take up welfare measures for improving the morale of workers
 To generate self confidence among workers
 To encourage sincerity and discipline among workers
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  To provide opportunities for promotion and growth
 To protect women workers against discrimination.

12.3 Types of Trade Union

Trade Union Act was established in the year 1926. TU is any association (temporary /permanent) for the
purpose of regulating the relationship between employers-workers, employer-employer, worker-worker
for imposing restrictive conditions on trade practices. It also includes federation of unions referred as
association of professional persons. In countries like England, trade union is referred as association of
professional person. In India it is considered as cursi - union /semi- union. In America, TU is considered
as the association of all persons in a trade. Functions of TU: functions can be categorized into: 1. Militant
/protective 2. Positive/fraternal. 3. Intramural/extramural
 Militant /protective: as the name suggests it protects their members, aims at securing better
conditions of work, employment for members. It uses instruments like strikes, lockouts etc. for
protecting the interest of their members.
 Positive/fraternal: It provides financial support to their members during time of temporary
unemployment.
 Intramural/extramural: intramural refers to welfare schemes & activities within the framework
of factory premises (safety, secure working environment, minimum wages, minimum working hours,
and leave with wages) Extramural refers to the welfare schemes outside the factory premises
(medical assistance, health care, education etc.)
TU are born out of the necessities of the workers to protect and defend them from injustice, encroachment
and wrong. Unions classified according to purpose: Under this head, normally two types of unions have
been kept 1) Reformist 2) Revolutionary
 Reformist Unions: These unions are those which aim at the preservation of the capitalist society
and maintenance of the usual employer-employee relationship, elimination of competitive system
of production. The reformist unions have been subdivided by hoxie according to the objectives:
into business unions and uplift unionism.
 Revolutionary Unions: These unions aim at destroying the present structure completely and
replacing it with new and different institution according to the ideas that are regarded as preferable.
The revolutionary unionism is also of two types namely, anarchist and political. Dr horie also
enumerates a third type of unionism namely predatory unions and gorilla union.
According to membership structure there are four types of Trade unions: 1.Craft unionism, 2. staff unionism,
3. Industrial union and 4.general union.
 Craft Union: Workers, those are working in same as similar type of work/trade/business. They
have similar skills, specialization. Members are mostly non manual workers. Members are craft
conscious than class conscious .They take the membership on the basis of similar type of work.
They strengthen their union by integration of their members.
 Staff Union: Organization, those are basing upon a sense of common status, same type of need.
They try to seek their membership from non manual sectors of the economy like clerical, supervisors,
operators, technicians, craftsmen etc. Unique feature of staff union was women workers were
also members of staff union. Staff union gained popularity by taking women workers as their
members.
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  Industrial Union: Irrespective of crafts, skill, grade, position, gender etc. The workers working
in one industry were members of industrial union. This union is more class conscious than trade
conscious.
 General union: It covers all types of industries. Labor class people from any type of industry can
be members of general union. It is more open than the industrial unions. Their numerical strength
is high.

12.4 Importance of Trade Union

The existence of a strong and recognized trade union is a pre-requisite to industrial peace. Decisions taken
through the process of collective bargaining and negotiations between employer and unions are more
influential. Trade unions play an important role and are helpful in effective communication between the
workers and the management. They provide the advice and support to ensure that the differences of
opinion do not turn into major conflicts. The central function of a trade union is to represent people at
work. But they also have a wider role in protecting their interests. They also play an important educational
role, organizing courses for their members on a wide range of matters. Seeking a healthy and safe working
environment is also prominent feature of union activity.
Trade unions help in accelerated pace of economic development in many ways as follows:
 By helping in the recruitment and selection of workers.
 By inculcating discipline among the workforce
 By enabling settlement of industrial disputes in a rational manner
 By helping social adjustments. Workers have to adjust themselves to the new working conditions,
the new rules and policies. Workers coming from different backgrounds may become disorganized,
unsatisfied and frustrated. Unions help them in such adjustment.
Trade unions are a part of society and as such, have to take into consideration the national integration as
well. Some important social responsibilities of trade unions include:
 Promoting and maintaining national integration by reducing the number of industrial disputes
 Incorporating a sense of corporate social responsibility in workers achieving industrial peace.

12.5 Rights and Liabilities of Trade Union

1. Disabilities of Unregistered Union: A trade union shall not enjoy any of the rights, immunities or
privileges of a registered trade union unless it is registered.
2. Immunity from Civil Suit in Certain Cases: No suit or other legal proceeding shall be maintainable
in any civil court against any registered trade union or any officer or member thereof in respect of any act
done in contemplation or in furtherance of a trade dispute to which a member of the trade union is a party
on the ground only that such act induces some other person to break a contract of employment, or that it
is an interference with the trade, business or employment of some other person or with the right of some
other person to dispose of his capital or of his labour as he will.
3. Liability in Tort:
(1) A suit against a registered trade union or against any members or officers thereof on behalf of
themselves and all other members of the trade union in respect of any tortuous act alleged to have
been committed by or on behalf of the trade union shall not be entertained by any court.
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 (2) Nothing in this section shall affect the liability of a trade union or any trustee or officers thereof to
be sued in any court touching or concerning the specific property or rights of a trade union or in
respect of any tortuous act arising substantially out of the use of any specific property of a trade
union except in respect of an act committed by or on behalf of the trade union in contemplation or
furtherance of a trade dispute.
4. Liability in Contract: Every registered trade union shall be liable on any contract entered into by it or
by an agent acting on its behalf: Provided that a trade union shall not be so liable on any contract which is
void or unenforceable at law.
5. Objects in Restraint of Trade Not Unlawful in Case of Registered Trade Union: The objects of
a registered trade union shall not, by reason only that they are in restraint of trade be deemed to be
unlawful so as to render any member of such trade union liable to criminal prosecution for conspiracy or
otherwise or to render void or voidable any agreement or trust.
6. Proceedings By and Against Trade Unions:
1. A registered trade union may sue and be sued and be prosecuted under its registered name.
2. An unregistered trade union may be sued and prosecuted under the name by which it has been
operating or is generally known.
3. A trade union whose registration has been cancelled or withdrawn may be sued and prosecuted
under the name by which it was registered.
4. Execution for any money recovered from a trade union in civil proceedings may issue against any
property belonging to or held in trust for the trade union other than the benevolent fund of a
registered trade union.
5. Any fine ordered to be paid by a trade union may be recovered by distress and sale of any
movable property belonging to or held in trust for the trade union in accordance with any written
law relating to criminal procedure.
6. In any civil or criminal proceedings in which a registered trade union is a party such trade union
may appear in such proceedings by anyone of its officers or by an advocate and solicitor.
7. Strikes and Lock-outs:
1. No trade union of workmen shall call for a strike, and no member thereof shall go on strike, and no
trade union of employers shall declare a lock-out –
a) in the case of a trade union of workmen, without first obtaining the consent by secret ballot of at
least two-thirds of its total number of members who are entitled to vote and in respect of whom
the strike is to be called; and in the case of a trade union of employers, without first obtaining by
secret ballot the consent of at least two-thirds of its total number of members who are entitled to
vote;
b) before the expiry of seven days after submitting to the Director General the results of such secret
ballot in accordance with section 40 (5);
c) if the secret ballot for the proposed strike or lock-out has become invalid or of no effect by virtue
of section 40 (2), (3), (6) or (9);
d) in contravention of, or without complying with, the rules of the trade union;
e) in respect of any matter covered by a direction or decision of the Minister given or made in any
appeal to him under this Act; or
f) in contravention of, or without complying with, any other provision of this Act or any provision of
any other written law.
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2. Any trade union which, and every member of its executive who, commences, promotes, organises or
finances any strike or lock-out which is in contravention of subsection (1) shall be guilty of an offence and
shall, on conviction, be liable to a fine not exceeding two

3. Any member of a trade union of workmen who commences, participates in, or otherwise acts in
furtherance of, any strike which is in contravention of subsection (1) shall forthwith cease to be a member
of the trade union, and thereafter such member shall not be eligible to become a member of any trade
union except with the prior approval of the Director General in writing; and the trade union of which he has
so ceased to be a member shall forthwith –
a) remove the name of such member from its membership register;
b) inform the Director General and the member concerned of such removal; and
c) exhibit conspicuously in its registered office in a place where it may be easily read a list of members
whose names are so removed.
4. The Director General may, where he is satisfied that subsection (1) has been contravened by any
person and the trade union concerned has failed to carry out the provisions of subsection (3), or where
there is undue delay in so doing, after such investigation as he deems necessary, order the trade union to
remove forthwith the names of the members concerned from its membership register.
5. The satisfaction of the Director General under subsection (4) that subsection (1) has been contravened
by any person may be arrived at regardless as to whether or not there is any prosecution of any person for
contravention of the said subsection (1).
6. Any registered trade union which, and every member of its executive who, fails to comply with subsection
(3) or with an order of the Director General under subsection (4) shall be guilty of an offence and shall, on
conviction, be liable to a fine not exceeding one thousand ringgit, and a further fine of one hundred ringgit
for every day during which such offence continues.
7. In every proceeding for an offence under this section the onus of proving that the requirements specified
in subsection (1) have been complied with shall be on the trade union, the member of its executive or the
member of the trade union, as the case may be.
Thousand ringgit, or to imprisonment for a term not exceeding one year, or to both, and a further fine of
one hundred ringgit for every day during which such offence continues.

12.6 Phases of Growth of Trade Union in India

Trade union is a direct product of Industrialization and a very recent development. In India, the foundation
of modern industry was laid between 1850 and 1870. Prior to that trade was confined to individuals and
families like craftsmen and artisans. They had expertise and specialized skills which was inherited by their
off springs. After Industrial revolution, these people started losing their individual identities and had to join
factories to earn their livelihood and compete with mass production. There was a psychological dislocation
as they were losing their identities.
Indian trade union movement can be divided into three phases.
The first phase falls between 1850 and 1900 during which the inception of trade unions took place.
During this period of the growth of Indian Capitalist enterprises, the working and living conditions of the
labour were poor and their working hours were long. Capitalists were only interested in their productivity
and profitability. In addition to long working hours, their wages were low and general economic conditions
were poor in industries. In order to regulate the working hours and other service conditions of the Indian
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textile labourers, the Indian Factories Act was enacted in 1881. As a result, employment of child labour
was prohibited. Mr. N M Lokhande organized people like Rickshawalas etc., prepared a study report on
their working conditions and submitted it to the Factory Labour Commission. The Indian Factory Act of
1881 was amended in 1891 due to his efforts. Guided by educated philanthropists and social workers like
Mr. Lokhande, the growth of trade union movement was slow in this phase. Many strikes took place in
the two decades following 1880 in all industrial cities. These strikes taught workers to understand the
power of united action even though there was no union in real terms. Small associations like Bombay Mill-
Hands Association came up.
The second phase of The Indian trade union movement falls between 1900 and 1947. this phase was
characterized by the development of organized trade unions and political movements of the working class.
It also witnessed the emergence of militant trade unionism. The First World War (1914-1918) and the
Russian revolution of 1917 gave a new turn to the Indian trade union movement and organized efforts on
part of the workers to form trade unions. In 1918, B P Wadia organized trade union movements with
Textile mills in Madras. He served strike notice to them and workers appealed to Madras High Court
because under ‘Common Law’, strike is a breach of law. In 1919, Mahatma Gandhi suggested to let
individual struggle be a Mass movement. In 1920, the First National Trade union organization (The All
India Trade Union Congress (AITUC)) was established. Many of the leaders of this organization were
leaders of the national Movement. In 1926, Trade union law came up with the efforts of Mr. N N Joshi
that became operative from 1927.
The third phase began with the emergence of independent India (in 1947), and the Government sought
the cooperation of the unions for planned economic development. The working class movement was also
politicized along the lines of political parties. For instance Indian national trade Union Congress (INTUC)
is the trade union arm of the Congress Party. The AITUC is the trade union arm of the Communist Party
of India. Besides workers, white-collar employees, supervisors and managers are also organized by the
trade unions, as for example in the Banking, Insurance and Petroleum industries.
LABOUR LAWS
Law-”Law is a rule or a system of rules recognized by a country or a community as regulating the actions
of its members and enforced by the imposition of penalties.”
Factors responsible for development of Labor laws
 Exploitation of the workmen by the capitalists
 Social pressure and pressure from trade unions
 Government policies based on Government philosophy which in turn was based on the political
ideologies
 Constitution of India (Directive Principles of state policy)
 Supreme Court’s recommendations on the cases that came up in the courts
 Recommendations of various commissions and committees set up by government from time to
time
 Conventions and recommendations of International labor organization (ILO)
 Awareness about environment
Common Features of All Laws
 Short title and commencement
 Preamble i.e. purpose of the law
 Definitions

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  Substantive provisions
 Penalty provisions
 Records/ Registers/ Returns
 Inspectorate/ Enforcement authority
Categories of Labor Laws
 Regulatory legislations to oversee the conditions of work at workplace
Eg. Machinery arrangement, spittoons, working hours, leave with wages etc.
 Legislations related to wages
Eg. Payment of Wages Act, 1936, Minimum Wages Act, 1948
 Legislations related to social security
Eg. ESI Act, 1948, Employees Provident Fund Act, 1952
 Legislations related to Industrial Relations (IR)
Eg. Industrial disputes Act, 1947, Industrial Employments (Standing Orders) Act, 1946, Trade
Union Act, 1926
 Legislations related to service conditions
Eg. Regulations of environment Act (for Dock workers), Conditions of Service Act (for Sales
Promotion employees)
 Miscellaneous:
Eg. Apprentices Act, 1961, Environment protection Act, 1986
The trade unionism in India developed quite slowly as compared to the western nations. Indian trade
union movement can be divided into three phases.
The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor markets
consist of three sectors:
1. The rural workers, who constitute about 60 per cent of the workforce.
2. Organized sector, which employs 8 per cent of workforce, and
3. The urban informal sector (which includes the growing software industry and other services, not
included in the formal sector) which constitutes the rest 32 per cent of the workforce.
At present there are twelve Central Trade Union Organizations in India:
1. All India Trade Union Congress (AITUC)
2. Bharatiya Mazdoor Sangh (BMS)
3. Centre of Indian Trade Unions (CITU)
4. Hind Mazdoor Kisan Panchayat (HMKP)
5. Hind Mazdoor Sabha (HMS)
6. Indian Federation of Free Trade Unions (IFFTU)
7. Indian National Trade Union Congress (INTUC)
8. National Front of Indian Trade Unions (NFITU)
9. National Labor Organization (NLO)
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 10.Trade Unions Co-ordination Centre (TUCC)
11.United Trade Union Congress (UTUC) and United Trade Union Congress - Lenin Sarani (UTUC
- LS)

12.7 Multiplicity and Effectiveness of Trade Union

Multiple unionism leads to multiple enrolment in unions and no subscribing members, causing delay or
failure to get recognition. This restrains a union’s bargaining power during a period of prolonged strife
while the unions are squabbling among themselves for dominance, the workers are deprived of their
wages and the plant suffers a loss of production. Multiple unionism qualitatively weakens the movement
resulting in the formation of small- sized unions without effective organization.
However it must be noted that in spite of foregoing there are many organizations where multiple unions
exist and the management does effectively negotiate, and conclude agreements. In many plants, workers
are unionized –on a craft basis –their special skills or training bonding them together. Multi-unionism is
more a problem where general unions exist, for whom all categories can be organized in one general
union.
Activity A:
1. Visit any organization and discuss the feasibility of relevance of Trade Union in global economy.

12.8 Summary
The trade unions are organized by workers to solve their problems created by modern industry. They are
voluntary associations of workers formed to promote and protect their interests by collective action. They
play different roles; for example, they act as agents of the government and help in maintaining social
discipline and administering its policies.
To achieve their objectives, trade unions may employ Variety of means – depending on the attitude of the
unions regarding the economic system in which they operate; the degree of group and class consciousness
among workers, the nature of political organization; and the nature and type of trade union leadership.
Trade unionism in India suffers from a variety of problems, such as politicizations of the unions, multiplicity
of unions, inter and intra-union rivalry, small size and low membership, financial weakness, and lack of
financial weakness, and lack of welfare facilities for the members, weak bargaining power, reliance on
litigation and strikes, and dependence on outside leadership. This vicious circles has adversely affected
their status and bargaining power, and must be broken at as many points as possible.
The factors that make a trade union strong and healthy and unflinching adherence to the union’s constitution
and rules, regular payment of dues, fully representative character of the union, co-operation with sister
unions and a sound leadership. A methodological organization with an enlightened labor force is essential.

12.9 Self Assessment Questions

1. Define Trade Unions?

2. Describe different growth phases of trade union in India.

3. Explain the characteristics of Trade Union?

4. Explain Trade Union objectives?

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12.10 Reference Books
- Mamoria C.B.(2008); “ Dynamics of Industrial Relations”; Himalaya Publishing House, Mumbai.
- Flanders, Alan,(1963);Trade Unions., pp.46-47.
- Punekar, S.D. and Madhuri (1967); “Trade Union Leadership in India: A survey”, Bombay.
- Crouch, Harold (1966), “Trade Unions and Politicism in India”, Preface.
- Yoder, Dale, (1972); “Personnel Management and Industrial Relations”, pp.159-160.
- Ghosh, S.T., “Trade Unionism in Underdeveloped Countries”, p.13.
- Joshi, N.M. “Trade Unionism in India”, P.9.
- World Labor Report (1998); I.L.O., , p.64.

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