23

CHAPTER II

CONCEPTUAL ANALYSIS OF THE

DEFINITION OF TRADE UNION

2.1. Introduction

Generally the trade unions are understood as voluntary associations of

workmen, which are formed with the prime object of defending the interest of the

workmen and to strive to better the living conditions especially the economic

conditions. The need for the associations was felt by the workers due to the fact

that a workman as an individual is very weak at bargaining against the mighty

economic power of the employer. However under the legal frame work trade

unions do include the associations of employers. As the primary object of these

associations is to protect, preserve and advance the interest of their members.

Towards this end object these associations adopt various methods inter-alia,

collective bargaining, conciliation, adjudication strikes/lockouts etc. Such

associations gain the right to represent the members in the bargaining process.

These associations may be registered or unregistered. Certain privileges and

obligations are provided by registration. The collective bargaining or conciliation

process may end with an agreement or a settlement. The validity of

 24

agreements/settlements depends upon the nature of the associations and the

representative character. In day to day life we come across various types of

associations viz. Employers Credit Co-operative Societies, Workmens

Housing Co-operative Societies, etc., but all these associations though formed by

the workers or employers would not be coming within the frame work of trade

union. A trade union has a right to raise an industrial dispute and have it referred

for adjudication on failure of collective bargaining process or conciliation

process. An industrial dispute is necessarily a community dispute where the

majority of the workmen are interested in, save the dismissal, discharge,

retrenchment or otherwise termination of an individual workman under Section

2 A of Industrial Disputes Act, 1947.

Industrial peace and harmony not only are sine-quo-non for the industrial

development and economy of a country but also for the welfare of the workmen.

Trade union plays a vital role in maintenance of industrial peace and harmony.

Thus the term Trade Union attains significance. It is imperative to understand

the necessity of a trade union. The workers combine to form associations/trade

unions to achieve inter-alia the following main objectives.

 25

(a) To preserve and promote social security i.e. protection against

economic hazards like illness, old age, disability employment

accidents deaths etc;

(b) To air out their views, feelings and to communicate their

protest/frustrations. For this purpose trade union serves as a

medium/channel;

(c) To restrain the employer from taking irrational, discriminatory

action; which may be prejudicial to the labour. Sri V.V. Giri has

aptly described that a trade union is nothing but preservation

through the power of combination.

2. 2. Meaning and Definition of Trade Union

According to C.K. Johri trade unions are generally understood as

voluntary organizations of workers formed for the purpose of defending and

advancing the latters collective interest either mutually or in relation to outside

parties such as employers, Government and other trade unions. 4

4 Johri C.K. Unionism in a Developing Economy", (New Delhi: Asia Publishing House, 1967,

at 25.
 26

According to Sydney and Beatrice Webb a trade union is a continuous

association of wage earners for the purpose of maintaining the conditions of their

lives.5

According to S.D Punekar a trade union is a monopolistic combination of

wage earners who as individual producers are complementary to one another but

who stand to employers in a relation of dependence for the sale of their labour

and production and that the general purpose of association is in view of that

dependence to strengthen their power to bargain with the employers or

bargaining collectively.6

Sri V.V.Giri defined trade union as voluntary organizations of workers

formed to promote and protect their interest by collective action.

The Oxford Dictionary has defined a trade union as an association of

workers in any trade or allied trades for the protection and furtherance of their

interests in regard to wages, hours and conditions of labour and for the provision

5 See Dale Yoder, Personnel Management and Industrial Relations (1972) at 159-160.
6 Punekar S.D Trade Unionism in India (Bombay: 1st Ed. Himalaya Publishing House,

1948) at 23.
 27

from their common funds, pecuniary assistance to the members during strikes,

sickness, unemployment and old age etc.,

The British Trade Unions Act, 1871 has defined a trade union as any

combination, whether temporary or permanent, for regulating the relations

between the workmen and masters, or between workmen and workmen, or

between masters and masters, or for imposing restrictive conditions on the

conduct of any trade or business.

2.2.1. Statutory Definition of Trade Union in Indian Context

The term trade union has been defined under Section 2(h) in the Trade

Unions Act, 1926. Accordingly trade union means any combination, whether

temporary or permanent, formed primarily for purpose of regulating the relations

between workmen and employers or between workmen and workmen or between

employers and employers or for imposing restrictive conditions on the conduct of

any trade or business and include any federation of two or more trade unions.

Provided that this Act does not affect:

(i) Any agreement between partners as to their own business.

 28

(ii) Any agreement between an employer and those employed by

him as to such employment or

(iii) Any agreement in consideration of the sale of goodwill of a

business or of instruction in any profession, trade or

handicraft

This definition is similar to that of the definition of trade union as defined

under the Trade Unions Act, 1871 in England. The paramount purpose of the

combination is to regulate the relations between the employer and workmen and

to impose the restrictive conditions on the conduct of trade or business of some

other person. This definition is having a specific relevance to the immunities

provided under sections 17, 18 and 19 of the Trade Unions Act, 1926. The Act

also defines the term registered Trade Union under section 2(e). The purpose is

a trade union can exist without registration as required under the provisions of the

Act

2.3. The Concept of Combination

Combination is a coherent group formed by two or more persons with the

object to promote the interests of its members. In other words a combination is an

 29

association of persons with common intent or object of preserving and promoting

common interest. A combination is democracy in action.

The concept of combination was developed when the people realized the

power of concerted action. In Labour Jurisprudence combination played very

important role and contributed to the development of Labour Laws. It is viewed

synonym to its inherent power of concerted action i.e. strike or the economic

action. Thus in eighteenth century the English workers attempted to achieve

improvements in employment conditions through combination by direct

economic action. The economic action was the concerted refusal to work or

concerted withdrawal of labour to force the reluctant employer to accept and

grant the concessions demanded by the combination. The concept of combination

consisted merely of concerted exercise of individual freedom of contract acting

together by all the members of the combination with a common object. Holmes.
y
J in his dissenting note in Vegelahn v Guntner observed that one of the eternal

conflicts out of which life is made up is that between the effort of every man to

get the most he can for his services and that of society, disguised under the name

of capital, to get his services for the least possible return, combination on the one

7 (1896) 44 N.E. 1077

 30

side is patent and powerful, combination on the other is the necessary and

desirable counterpart, if the battle is to be carried on in a fair and equal way.

The concerted action of the combination many a time caused harm to

others. The courts evolved general principles and applied on the activities of the

combinations. The origin of these general principles can be traced to the Trilogy

of the House of Lords. The Trilogy consisted of three cases out of which one is

concerning to the combination of businessmen and the other two of workmen.

Mogul Steamship Company v McGregor Gow and Company8 was the first

case decided in 1892 among the Trilogy. To dislodge Mogul Steamship

Company which was a new shipping company, all others formed a combination

called Mc.Gregor Gow and Company. The combination offered concessions to

the shippers who sent cargo exclusively in its ships and refused to accept cargo

from any one who patronised the new company i.e. Mogul Steamship Company.

As a result shippers were forced to use only the ships of the combination

companies as the new shipping company served only few ports and the

combination served all the ports. Thus the new company went bankrupt. The

House of Lords held that there was a conflict between two equally protected

8
(1892) A.C. 25
 31

rights i.e. plaintiffs right to protection in the legitimate exercise of trade and

secondly the right of the defendants to carry on business as they see fit as long as

they observe the law. The combination of the defendants in this case have done

nothing more against the plaintiffs than to pursue to the bitter end of competition

waged in the interest of their trade. The decision of the house of the Lords in

this case had established the immunity of a combination causing serious harm

through the exertion of economic pressure in the guise of secondary boycott with

the ultimate motive for self advancement.

The principle that any combination intent to promote the interest of its

members was free to do so by using (ruthless) economic coercion against others

as long as it did not engage in conduct contrary to any established category of tort

or crime was recognized.

Allen vs. Flood 9 was the second case among the Trilogy. In this case a

Ship Repair Company employed 40 boiler makers. All the boiler makers were

members of a trade union called Boiler Makers Union. The Company employed

two shipwrights Flood and Taylor who were members of different trade union.

Allen, the representative of the Boiler Makers Union served a notice on the

9 (1898) A.C. 1
 32

company to discharge Flood and Taylor who are members of the other union or

else face the strike. The Company did not want a strike and hence fired the

shipwrights Flood and Taylor as the two shipwrights were not employed under

contract but employed at will. The House of Lords held that union men acted in

the interest of their class and as long as they do not resort to unlawful acts they

are entitled to further their interests in the manner which seems to them best and

most likely to be effectual.

Thus in the Trilogy the trade unions also got encouraged by the most

pleasing decision of the House of Lords in Allen vs. Flood10. The trade unions felt

that they are on par with business class in the use of economic pressure to

promote their interests. They perceived that they could wield their collective

privilege to work or not to work at their pleasure. Then the last of the Trilogy

case came as a disillusioning chapter to the combination of the workmen.

Quinn v. Leathern was the third of the Trilogy. Leathern was a

wholesale slaughterer. The meat workers union asked Leathern to hire help only

from among members of the union. The existing workers of Leathern who are not

members of the union should quit their jobs first; join union as members, wait for

10 id
11 (1901) A.C. 495
 33

their turn as Leathern should employ only those who are members of the union

by seniority. Leathern refused to comply. The union resorted to secondary

boycott. Munce was running a large retail market. He was purchasing his meat

from Leathern. All the workers of Munce were members of the union. Hence the

union represented by Quinn served a notice on Munce to cease dealings with

Leathern or face a strike. Munce to avoid strike stopped purchasing meat from

Leathern. Thus Leathern suffered loss of business and brought action against

Quinn and the members of the union. The House of Lords held that the

substantial factor was the struggle between the union and Leatherns old

employees for the opportunity to work. There is considerable evidence that the

union was not serving any useful purpose by their conduct but merely inflicting

aimless and unjustifiable harm on Leathern.

It would be very appropriate to consider the observation made by

10
Brampton in Quinn v Leathern ; whether assuming the existence of a

conspiracy to do a wrongful and harmful act towards another and to carry it out

by a number of overt acts, no one of which taken simply and alone would if done

by one individual acting alone and apart from any conspiracy, constitute a cause

of action such acts would become unlawful or actionable if done by conspirators

12
Id
 34

acting jointly or severally in pursuance of their conspiracy and if by those acts

substantial damage was caused to the person against whom the conspiracy was

directed.... Much consideration of the matter has led me to be convinced that a

number of actions and things not in themselves actionable or unlawful if done

separately without conspiracy may, with conspiracy become dangerous and

alarming just as a grain of gun powder is harmless but a pound may be highly

destructive or the administration of one grain of a particular drug may be most

beneficial as a medicine but administered frequently and in larger quantities with

a view to harm may be fatal as a poison. A conspiracy is a powerful and

dangerous engine which in this case has I think been employed by the defendants

for the perpetration of organized and ruinous oppression. These observations in

Quinn vs. Leathern13 brought in the concept of Civil Conspiracy in the Trade

Union activities.

The legal principles derived from the Trilogy were formulated by Lord Cave

in Sorrel vs. Smith14 as follows.-

13 Supra
14 (1925) A.C. 700
 35

1. A combination of two or more persons willfully to injure a

man in his trade is unlawful and if it results in damage to him

is actionable.

2. If the real purpose of the combination is not to injure another

but to forward or defend the trade of those who enter into it,

then no wrong is committed and no action will lie although

damage to another ensues.

The combination can be of workers or the traders or employers. There is

no necessity that there should be identity of interest between the parties

combining. Regarding the identity of combiners interest Lord Maugham has

observed in Grafter's case that it is sufficient if all the various combining

parties have their own legitimate trade or business interest to gain, even though

these interests may be of different kinds. If indeed some of these parties were

actuated merely by hate or vindictive spite or by no just excuse at all, I should

doubt very much whether the defense would succeed. I think however that

reasonable self interest in trade or business is a just cause or excuse for those

combining, even though each of them has his own axe to grind.

15
(1942) A.C. 435
 36

Thus the object of the employers or traders was to eliminate competition

whereas the object of the union of workers was to achieve cent percent trade

unionism. The joint aim of a combination is a desire for prosperity.

It is pertinent to note in the labour cases of the Trilogy that in both the

cases the trade union has acted with the basic object to consolidate the unionism.

The acts of the trade unions were sans the immediate benefit to the working class

as a whole except gamering the benefits to only its members. In the process

damage has been caused not only to the employer but also to some section of the

workers, i.e. Flood and Taylor lost there jobs. The total unionization of the

workforce was the fundamental object of both the unions in Allen vs. Flood16 as

well as Quinn vs. Leathern . Thus the concept of combination had suffered a set

back with the decision of the House of Lords in Quinn vs. Leathern . This has

also led the labour unions to realize that there was a need for legislative

protection from the concept of civil conspiracy faced by the labour combinations.

16 Supra
17 Supra
18 Supra
 37

2.4. Judicial Approach to the Concept of Trade Unionism in the

Indian Context

The expression Combination has been used in the Trade Unions Act,

1926. Unlike the word Association the word Combination has a wider

application/import. The Act does not specify whether the Combination: shall

be of workers or employers only. The Combination may even be of workers

AND the employers. Such Combinations of workers and employers has been

classified as quasi trade unions. But still such Combinations would be perfectly

trade unions under the Act provided the object of forming Combination is

statutory object i.e., regulating the relations between workmen and workmen or

between workmen and employers or between employers and employers or for

imposing restrictive conditions on trade or business. There can be

Combinations who can claim to be trade unions which are for workmen but not

of workmen.

The Madras High Court in Tamil Nadu NGO s Union vs. Registrar of Trade

Unions19 held that a trade union which included among its members Sub-

Magistrates of Judiciary, Tahasildars, Officers of Treasuries and Sub-Treasuries,

Officers of Civil Court establishment and Home Department of Government

19
AIR 1962 Mad. 234.
 38

could not be considered as a trade union. For these persons were civil servants

engaged in the task of sovereign and regal aspects of the Government which were

its inalienable functions.

According to the Trade Unions Act, 1926 temporary, casual, badli workmen

also enjoy the statutory right to form combination with the statutory objects as

primary object. Such combination falls with in the purview of the Trade Unions

Act, 1926. Nothing restricts the contract labour to form combination as a trade

union.

The objects of a trade union are dynamic in nature. They vary from time to

time, industry to industry, place to place and country to country. A trade union

may include in its rule book the sociological, religious, spiritual, ethical, and

economic or welfare objects.

It is the primary object of the combination which determines the nature

of the combination whether it attains the character of a trade union or not under

the Act. As long as the primary object of the combination is statutory, it is a

trade union whether or not such a combination included secondary objects.

Conversely if the primary objects is welfare or other than statutory object and
 39

even though the statutory objects included as secondary and such combination

cannot be called as a trade union under the Act.

2. 5. The Foundations of the Trade Unions Act, 1926 vis-a-vis the

Trade Disputes Act, 1906 of England

The pressure put on the workers by the haggling of the market caused them

to organize into unions to protect their economic interests. The conditions of

employment were determined by the chain of bargains linking together with the

manual worker, the capitalist employer, the wholesale trader, the shop-keeper and

the customer.

The pressure began with the customer, the final consumer and constantly

increased with each link in the chain until it finally gave the employer no choice

but to produce as efficiently as he could forcing him to hold wages and other

labour costs as low as possible. Each class of producers engaged in concerted

activity (Trade Associations) to over come this pressure. In case of workers it led

to Union activity.

20 Sidney & Beatrice Webb Indian Democracy''- (London) Longmans, Green& Co. Ltd 1897

at 16.
 40

2.5.1. The Evolution of Trade Unionism in England

Albeit the workers formed Associations as early as 14 century, the

modem trade unionism can be traced only in 18th century with the formation of

craft associations. The emergence of craft associations in the 18 century can be

attributed to the decay of the medieval system of wage fixing. During this period

the wage fixing was entmsted statutorily to the Justices of the peace. In 1562

Statute of Artificers (more commonly known as Statute of Apprentices) was

passed during Queen Elizabeths reign. The Act provided that rates of wages to

be fixed by Justices at their general sessions. The Statute also introduced a

system of compulsory apprenticeship, prohibiting employment of un-apprenticed

workmen. However the statute did not deliver the results as desired for the

reasons that there was no central control, no enforcement machinery, the justices

were reluctant to exercise and interfere in altering the existing wages. In 1811

certain Kent Millers attempted to enforce the statute of Artificer and a writ of

mandamus was issued ordering the Justices of Kent to hear and determine the

application for an assessment of wages.21

21 See R. vs. Justices ofKent (1811) 14East 395.

 41

This led the workers to form combinations. The object of these

combinations was to present petitions to the legislature calling for the

enforcement of the wage fixing or apprenticeship legislation. Though the

combinations were prohibited, these workers combinations were not treated as

being criminal conspiracies because the object of these combinations was to

enforce the existing Law and not to defeat. Besides this preservation and

improving the workers wage levels and conditions of employment were their

objects. They also made provision by floating a common fund to provide relief

during hard times like sickness, unemployment and old age.

However, industrial revolution brought in the up heaves and industrial

unrest caused due to the in ability of individual workmen to bargain effectively

with their employers. Despite the existence of combination Laws prohibiting

combinations trade unions were established. Act of 1800 made all combinations

of workmen to regulate the conditions of their work illegal. The Act of 1800 also

made illegal all contracts and agreements between employers and workers for

reducing wages or altering hours of work or increasing the quality or work. A

select committee on Artisans and Machinery in 1824 recommended that

employers and workmen should be free to make such agreements as they thought

fit, that the restrictions imposed upon this freedom by statute should be removed
 42

and also that the Law making combinations for such purposes criminal

conspiracies should be altered. Accordingly Combination Laws Repeal Act, 1824

was enacted which repealed all the Combination Laws including Act of 1800.

Further the Act of 1824 was replaced by Combination Law Repeal Act

Amendment Act, 1825 which penalized the acts of violence, threats and

intimidation.

For the protection of the funds the workers trade unions were registered

under the Friendly Societies Act, 1855. There were cases of embezzlement of

trade union funds. However, the Courts were reluctant to extend the protection on

the ground that the union was in unlawful restraint of trade. Besides the

vulnerability of its funds the trade unions also faced the draw back that they are

only voluntary associations with no corporate personality or a separate legal

entity. Thus trade union could not hold any property. The property of the trade

union was held to be joint property of all members. This deficiency led to the

passage of the Trade Unions Funds Protection Act, 1869. As a result of these

developments Royal Commission on trade unions was appointed in 1867. The

Commission gave its report in 1869 recommending legal recognition of trade

unions and also conferring upon them certain rights and powers. The result was

enactment of Trade Unions Act, 1871. The Act legalized trade unions and thrown
 43

an option for voluntary registration which conferred special legal status, powers

and imposing certain obligations. One of the most recognizable provisions of the

Act was that it made it clear that the members of a trade union shall not be liable

for criminal conspiracy because its purposes are in unlawful restraint of trade.

Then came the Trilogy of the famous House of Lords decisions. It was the

last case i.e. Quinn vs. Leathern22 that brought to light the deficiencies and the

vulnerability of the trade union under civil conspiracy. The House of Lords in

Quinn vs. Leathern held that although no unlawful act had been committed by

any of the defendants individually, the combination to injure was an unlawful

conspiracy entitling the plaintiff to recover damages and also held that 1875 Act

afforded no protection which referred to only criminal conspiracy. As a

consequence of Quinn vs. Leatherns24 decision the Trade Disputes Act, 1906

was passed. The risk of civil conspiracy was removed for the acts done in

contemplation or furtherance of a trade dispute, if the act is not unlawful,

combination will not make it so.

22 Supra n 8
23 Id
24 Id
 44

The Act, 1906 also confers immunity from tortuous liability for inducing a

breach of contract of employment in contemplation or furtherance of a trade

dispute.

2. 5. 2. Evolution of Trade Unionism in India

The workers used to unite to form combinations to redress their

grievances. Severe drought forced the agricultural workers to come out of

villages in search of work. .Industrialization had offered work to these workers.

There was phenomenal exodus of agricultural workers from villages to industrial

towns. This unparallel movement of agricultural workers led to surpassing of the

workers supply to workers demand. Thus the theory of demand and supply

played in determining to wage levels. Workers were exploited by the

Industrialists. They were paid starvation wages. The First World War added salt

to the injury as that has lead to increase in cost of living considerably. United

India was ruled by foreigners. For independence political agitations against the

foreign rule was gaining momentum. Economic discontent was conspicuous

among the masses. Political agitators were in search of issues. The discontented

industrial workers were in search of support. Thus the political upsurge found its

way in the discontent of industrial workers. Action committees were formed

 45

consisting of representatives of workers who lead the workers to strike at work.

Many of the strikes were successful and the demands of the workers were

fulfilled. These successes in term lead to jacking up the morale of the workers

associations. The Associations gained the confidence of the workers.

Incidentally labour consciousness was on upraising through out the world. The

trade union movement got impetus in India. During the same period International

Labour Organization was established which further influenced the growth of

trade union movement in India.

However, in India for the first time in 1890 the Mill Workers lead by

N.M. Lokhanday formed an Association christened as Bombay Milhands

Association. The purpose was to provide a clearing house for the grievances of

Mill workers and to help in drawing public attention to the cause of labour. This

was the first Union in India which earned for its founder the title of being the

FIRST TRADE UNIONIST of the country. He also published DINABHANDU, a

working class newspaper, to place before the authorities and the employers, the

legitimate grievances of workers. In subsequent years a number of unions were

formed, such as The Amalgamated Society of Railway Servants of India and

Burma (for European and Anglo-Indian Railway Employees) to cater to their

economic needs, through mutual insurance schemes. The Printers Union of

 46

Calcutta, 1905; the Bombay Postal Union, as also at Calcutta and Madras, 1907;

the Kamgar Hitwardhah Sabha, 1909; the Social Services League, 1910. All

India Trade Union Congress (AITUC) was established in 1920 as a result of a

resolution passed by the organised workers of Bombay and the delegates which

met in a conference on 31st October, 1920. The Indian National Trade Union

Congress came into existence on 4th May 1948, as a result of the resolution

passed on 17 November 1947, by the Central Board of the Hindustan Mazdoor

Sevak Sangh, which was a labour organization.

The pro labour leaders influenced by Gandhian Philosophy and Sarvodaya

worked under the direction of National Congress. The AITUC was under the

strong hold of the Communist, the Congress leaders thought of forming a Central

Trade Union Organization.26

Later the history in 1920 took a different turn when the Madras High Court

has granted an injunction restraining the union officials of Madras Textile Labour

Union to induce certain workers to break their contracts of employment by

refusing to return to work. Thus the leaders of trade union were exposed for

25 Dr. C.B. Memoria, Dr. Sathish Memoria and S.V. Gankar, Dynamics of Industrial
Relations (Mumbai: 14th Ed. Himalaya Publishing House, 2000) at page 96.

26 Id
 47

prosecution and imprisonment under Indian Penal Code for criminal conspiracy

besides for damages under torts even for bona-fide trade union activities. This led

the workers to feel the necessity of legislative protection of the trade union

activities. A resolution was moved in the central legislative assembly in AITUC

seeking enactment of law for the protection of trade unions. Against the

opposition of the employers finally the Indian Trade Unions Act, 1926 was

passed which came into force from First June 1927.

During pre-independence days the trade union movement was not

satisfactory due to various reasons. One of the main reasons was that of passing

of Government of India Act, 1932. The post independence led to development of

democratic spirit among the citizens including the working class. Thus in the post

independence days trade union activities were developed tremendously. Every

category of workers formed unions of their own.

2. 6. Kinds of Trade Unions under the Trade Unions Act, 1926

As per Section 2 (h) of the Trade Unions Act, 1926 a trade union is any

combination, whether temporary or permanent formed primarily for the purpose

of regulating relations between workmen and employers or between workmen

 48

and workmen or between employers and employers or for imposing restrictive

conditions on the conduct of any trade or business and includes any federation of

two or more trade unions.

There is no restriction as to who can form the combination to be called as

trade union as long as the objective of such a combination is one of the two

objects mentioned in the Act. The Trade Union Act 1926 impliedly defines two

kinds of trade unions namely, (i) trade union and (ii) registered Trade Union.

The Trade Unions Act, 1926 vividly illustrates that the legal status of

registered trade unions and their structural complexity. There is no provision

under the Trade Unions Act, 1926 for compulsory registration of trade union.

However, certain privileges and liabilities as discussed below are bestowed to

only on registered trade union under the Act.

2. 7. Incorporation of a Trade Union

Every registered trade union shall be a body corporate by the name under

which it is registered and shall have perpetual succession and a common seal
 49

with power to acquire and hold both movable and immovable property and to

contract, and shall by the said name sue and be sued.27

Registered trade union has been given more privileges under the Trade

Unions Act, 1926 for the effective functioning of the trade union with the object

to accelerate and maintain industrial peace and harmony. Regarding the outsiders

as office bearers or members of the executive of the registered trade union, the

Act distinguishes the unorganized sector from organized sector. Thus the Act

makes provision for more participation of the outsiders in case of unorganized

sector for the reason that illiteracy is rampant besides the job vulnerability of the

unorganized sector workers28.

The unregistered trade unions are not entitled for any privilege under the

Trade Unions Act, 1926. An unregistered trade union is not however precluded

from raising an industrial dispute, or participating in collective bargaining

process, conciliation, arbitration or adjudication. It is also not prevented from

declaring strikes duly following the conditions / procedures detailed under

Section 22 & 23 of the Industrial Disputes Act, 1947. But an unregistered trade

27 See section 9 and 13 of the Trade Unions Act, 1926

28 Section 22 of the Act provides that no office-bearer or member of a registered Trade Union shall be liable to
punishment under sub-section (2) of section 120-B of the Indian Penal Code, 1860 in respect of any agreement
made between the members for the purpose of furthering any such object of the Trade Union as is specified in
section 15, unless the agreement is an agreement to commit an offence.
 50

union is not entitled for the immunities under the Trade Unions Act, 1926. These

immunities under the Trade Unions Act, 1926 take a trade union out of the fear

of victimization and make a trade union strong. It boosts up the moral of the

executive of a registered trade union. However there are trade unions which are

unregistered yet they are strong and effective in imposing and restricting the

employers from unilateral and arbitrary decisions / policies. But such

unregistered trade unions derive the strength from the committed membership of

the workmen, the literacy, the position of the workmen in the industry such as

technical etc, and also the political affiliations it has. Such trade unions are

mostly class conscious trade unions, i.e. they are formed on category basis e.g.

Railway loco Running Staff Associations, State Transport Drivers Associations,

Tool and Die Makers Associations, Plumbers Associations, Carpenters

Associations etc.

On the other hand the Associations formed mainly of Administrative /

Ministerial staff does not enjoy the same strength. The trade unions of casual

labour, temporary labour, contract labour etc, of the unorganized sector

necessarily register and seek for strength from outside the industry such as

political support etc.

 51

2. 8. The Privileges of a Registered Trade Union

The Act under sections 17,18 and 19 provides various types of immunities

for registered trade unions. A registered trade union enjoys the immunity from

criminal conspiracy in respect of certain acts done in furtherance of trade objects

as defined under section 15. The immunity conferred under Section 1729 is not an

unfettered or unqualified but a limited one i.e. the immunity is available to any

office bearer or member only in respect of any agreement made between the

members for the purpose of furthering any such object of trade union as is

specified in Section 15. However, if the agreement is an agreement to commit an

offence this immunity is not available.

A registered trade union also enjoys the immunity from civil suit, under

Section 18 of the Trade Unions Act, 1926 in certain cases i.e. in respect of any

act in contemplation or furtherance of a trade dispute to which a member of a

trade union is a party on the ground only that such an 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 wills.

29
Section 17 of the Act provides that a registered
 52

Further a trade union shall not be liable in any suit or other legal

proceedings in any civil court in respect to tortuous act done in contemplation or

furtherance of a trade dispute by an agent of the Trade Union if it is proved that

such person acted without the knowledge of or contrary to express instructions

given by the executive of the trade union.30 Further section 19 of the Act

provides that an agreement between members of a registered trade union shall not

be void or voidable merely by reason of the fact that any of the objects of the

agreement are in restraint of trade.

2. 9. Kinds of Trade Unions as Referred in Common Parlance

Ever since the dawn of industrialization there has emerged a wide variety of

unions across the Globe. The unions are classified based on (i) the purpose for

which unions are formed and (ii) the composition of their membership. However,

unions are not rigid and rarely exist in their pure form. A brief discussion of

different types of unions is given below.

30 See section 18(2), of the Trade Unions Act, 1926.

2. 9.1. The Reformist Unions

These unions aim at the preservation of the capitalist society and the

maintenance of the usual employer-employee relationship, elimination of

competitive system of production. They neither seek comprehensive change nor

wish to destroy the existing social, economic or political structure of the state.

They desire only to modify these in accordance with what their members

consider to be current modes in society. For example, they may wish to increase

labours share in the increased production or they may aim at improving working

conditions by enforcing safety measures. They may try to generate increased

purchasing power by providing for worker various cooperative ventures,

insurance associations and educational programmes. They generally seek to

dignify labour by forcing upon the public and its leaders recognition of the

importance of labour in modem society. All these objectives, they believe, can be

attained without any extensive change in the present economic, social and

political institutions.
 54

In USA, the unions affiliated with A.F.L (American Federation of Labour)

the C.I.O (Congress for Industrial Organization) are predominantly of this type.31

In India I.N.T.U.C (Indian National Trade Union Congress) is of this class.

UPLIFT unions are also called as friendly unions which aspire to elevate the

moral, intellectual and social life of the workers and advocates idealistic plans for

social regeneration.

2.9. 2. Revolutionary Unions

These unions aim at destroying the present structure completely and

replacing it with new and different institutions according to the ideals that are

regarded as preferable. In USA the most common example of this type of union

is the Industrial Workers of the World (I.W.W). C.I.T.U (Centre of Indian Trade

Union) in India belongs to this class of unions. C.I.T.U believes that the

exploitation of the working class can be ended only by socialising all means of

production, distribution and exchange and establishing a socialist state, that is, it

stands for the complete emancipation of the society from all exploitation.

31
Dr. C.B. Memoria, Dr. Sathish Memoria and S.V. Gankar, Dynamics of Industrial
Relations (Mumbai: 14th Ed. Himalaya Publishing House, 2000) at 78.
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2. 9.3. Craft Unions

They referred to a particular organization of workers employed in a

particular craft or trade or in a single or two or three related

trades/crafts/occupations, Such organizations link together those workers who

have similar skills, craft training and specialization Historically speaking, it were

the craft unions that lent stability to the trade union movement because of their

relative stability in employment and higher earnings. The craft unions are mostly

found amongst non-manual employees and professional workers. The

Ahmedabad Weavers Union, The Kanpur Suti Mill Mazdoor Sabha, The

International Wood Carvers Association, The Indian Railway Loco Running

Staff Association and The All India Station Masters Association are the

outstanding examples of such unions. Their members are generally craft

conscious rather than class conscious. They derive their strength from the

strategic position of their workers. Such unions are horizontal in character, for

they enroll workers engaged in one or a single group of processes. 32

32 Id
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2.9.4. General Unions

These unions are usually formed by the workmen representing all

categories/ elasses/group/trades/crafts of workmen. They have large membership

base. Normally their negotiations take care of the effect of one privilege to one

category and its effect on other category, since the trade union is representing all

categories of workmen. Such types of trade unions are believed to be more

responsible, mature in their dealings with the employer and during the course of

collective bargaining process/ negotiations and conciliations proceedings.

2. 10. The Trade Unions Amendment Act, 2001 - A New Legal

Regime

The Amendment Act of 2001 introduced certain far reaching reforms to the

existing provisions in the Act in the areas more prominently relating to the (i)

registration of trade union, (ii) minimum subscription and (iii) composition of

Executive Committee as to the proportion of out-siders. These amendments were

long awaited as per the recommendations of the National Commission on Labour

constituted in the years 1966 and 1999 and the high power Committees

constituted from time to time by Government of India.

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Section 4 of the new amended version provides that no trade union of

workmen shall be registered unless at least ten percent or one hundred whichever

is less of workmen engaged or employed in the establishment or industry with

which it is connected, are on the date of filing the application for registration, the

members of such trade union and in no case a trade union shall be registered

without a minimum strength of seven members. Section 6 of the amended regime

introduces two types of subscription rates in respect of organized and

unorganized sector workers unions.

Further the amended version of section 22 provides that all office bearers

of a Registered Trade Union, except not more than one third of the total number

of office bearers or five whichever is less shall be persons actually engaged or

employed in the establishment or industry with which the Trade Union is

connected. The employees who have retired or have been retrenched not be

construed as outsiders for the purpose of holding an office in a trade union. In

case of unorganized sector, however, the present provision of section 22 of the

Act continues to be applicable.

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2.10.1. The Probable Adverse Impact

According to the definition under the Trade Unions Act, 1926 a trade

union is any combination (of workmen or employers). It is limpidly clear there is

no number restriction as to the structure of the combination. When the said

combination (of workmen) seeks to register, the amended Section 4 and the new

Section 9A inserted by the Amendment Act, 2001 puts a restriction that the

combination should have at least of ten percent or one hundred of the workmen

whichever is less but not less than seven members engaged or employed in the

establishment or industry. Hence a registered trade union (of workmen ) under

the Act is any combination of at least ten percent or one hundred of the workmen

whichever is less engaged or employed in the establishment or industry but not

less than seven such persons.

The Statement of objects and reasons clearly shows that one of the aims of

the amendment is at reducing the multiplicity of the trade unions. With this

ultimate object Section 4 was amended and section 9A was inserted in the Trade

Unions Act, 1926 making it obligatory upon a union of workmen to have at least

ten percent or one hundred workmen employed or engaged in the establishment

or industry but not less than seven such persons as its members. The object of the
 59

Amendment 2001 is highly laudable i.e. reducing the multiplicity of the trade

unions.

The Indian trade union movement is retarded because of the weakness it

suffers from the multiplicity of the trade unions. The multiple unions are mainly

the result of political outsider wanting to establish unions of their own with a

view to increasing their political influence, albeit in urban areas.33

The numbers of trade unions on Indian labour scene have increased many

folds since 1932. This increase dose not necessarily reflects that trade union

movement in India has strengthened. If the average membership of a trade union

is taken during this period, it shows that average membership of a trade union has

not increased proportionate to the increase in employment opportunities but

decreased to the base year 1932. Thus it is evident that trade union movement has

weakened by this mania of multiplicity of trade unions. Though the Amendment

Act, 2001 was aimed to reduce the multiplicity by prescribing the minimum

membership of a trade union, it is not effective one for the following reasons:

33
Amiya Rao, How relevant are our Trade Unions?, Economic and political weekly. Vol.
XVIII No.47- November 19,1983. at 1960
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(i) Hypothetically in an industry where two thousand workmen

are employed or engaged theoretically it is possible to have at

least twenty registered trade unions which is an anathema for

the industrial relations.

(ii) Secondly, the requirement of ten percent or hundred or at least

seven persons employed or engaged is applicable only for

registration of trade unions. Registration is only optional in

the Trade Unions Act, 1926. Hence where the trade union of

workmen which do not comply with this minimum

requirement may opt not to register and still it remains to be a

trade union on the scene (which is not conducive to industrial

peace and harmony). There is also no bar on number of such

trade unions.

(iii) Thirdly, to curtail the multiplicity of trade unions the

Amendment Act, 2001 also brought in provisions viz. that a

registered trade union shall at all times continue to have a

minimum number of persons engaged or employed as its

members and the registrar has been given power under

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Section 10 (c) to withdraw or cancel the certificate of

registration if he has satisfied that a registered trade union of

workmen ceases to have the requisite numbers. This provision

also does not check the growth of unregistered trade unions.

(iv) Fourthly, though the Amendment Act, 2001 with committed

emphasis has brought in provision regarding minimum

membership, but failed to delete sub section (2) of section 4

of Trade Unions Act, 1926 which is as under.

Further section 4 (2) of the Act (amended version) provides as follows:

Where an application has been made under subsection (1) for the

registration of a trade union, such application shall not be deemed to have

become invalid merely by reason of the fact that, at any time after the date of the

application, but before the registration of the trade union, some of the applicants,

but not exceeding half of the total number ofpersons who made the application

have ceased to be members of the trade union or have given notice in writing to

the Registrar disassociating themselves from the application.

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Keeping the above provision in the statute would have far reaching effect,

finally defeats the very object of the Amendment Act, 2001. According to

Section 4(1) and the proviso, the trade union should have the requisite number at

the time of the application for registration. If before the grant of certificate of

registration half of the total number of persons who made the application

disassociate themselves with the trade union or give notice to the Registrar even

though the required number has fallen (but not below half of the requisite

number), the Registrar has no option but to register and grant certificate of

registration.

The new insertion of Section 9A and clause C of Section 10 through the

amendment Act would be ineffective in the light of Section 4 (2). In as much as

under Section 4 (2) a trade union has a right to demand registration if it had

complied with regard to the requisite number of persons employed or engaged

only at the time of making the application. After submission of the application

but before the registration, even if the requisite number falls but not below fifty

percent of the requisite number the trade union has right to be registered under

the Trade Unions Act, 1926. In effect it means the requisite number has to be

maintained by a trade union of workmen only at the time of submission of the

application for registration. As such the provisions brought in by insertion of

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Section 9A and 10(C) are ineffective for the reason that when the Registrar has

no power to refuse to register a trade union of workmen which has complied with

the requisite number only at the time of making the application but at the time of

granting, the number dwindle to not less than half of the requisite number, the

Registrar would not be in a position to withdraw or cancel the certificate of

registration if a trade union of workmen maintain more than half of the requisite

number of persons as its members i.e. minimum number is five percent or fifty

but not less than four. In such situations the principle object of the Amendment

Act, 2001 may suffer.

The multiplicity of trade unions of workers leads to the loss of

representative character of the trade unions unless they form a federation which

is envisaged under the definition of the Trade Union. Under section 2(a) of the

Trade Unions Act, 1926 a trade union includes any federation of two or more

trade unions.

The multiplicity of trade unions of workmen also leads to inter union

rivalries, which ultimately cuts at the very root of unionism, weakens the power

of collective bargaining and reduces the effectiveness of workers and their

chances of securing their legitimate rights.

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The thrust of Section 22 (amended version) was for promoting internal

democracy, rank and file leadership of facilitating their orderly growth and

regulation. It is a fact that trade union movement in our country has been built up

by committed leaders who were not employed or engaged in the industry

concerned but committed for the welfare of the working class. In India the trade

union movement was closely associated with the freedom struggle. Sri

M.K.Gandhi was also instrumental in the growth of trade union movement prior

to Independence. (Eminent National leaders like S.C.Bose, J.L.Nehru acted as

Presidents of AITUC).

Outsiders are necessary to certain extent due to the present illiteracy of the

workers but it is considered to decrease the ratio with the advent of literacy

among the workers as there is always likelihood of the workers being exploited

by irresponsible labour leaders for political gains.34

There are many determinant factors which led to the growth and stay of

outsiders in trade unions .The chief among them are:

34 Report of the Plantation Enquiry Commission, New Delhi: Government of India, Ministry of
Labour, 1956-page 139.
 65

(i) Illiteracy: Illiteracy among the working class was rampant but now

with the raise in national literacy rate, it has narrowed in the

organized sector also. However in unorganized sector still it is at

high level. Illiteracy leads the workers to the lack of professional

and diplomatic tactics while bargaining across the table with the

employees, it thus generates feeling of helplessness, insecurity and

hopelessness and finally ends up with ineffective bargaining.

(ii) Lack of resourcefulness is another cause for the workers to seek

outside leadership.

(iii) Lack of finances is yet another reason for the workers to look at

outside leadership.

(iv) Fear of victimization is one of the most important factors that lead

to outside leadership.

Among the unorganized sector workers all the above major determinants

are still dominating. Based on these ground realities the Amendment Act, 2001

was brought with the following changes .Viz. Section 22 of Trade Unions Act,

1926 has been substituted and amended as under:

 66

(1) Not less than one half of the total number of the office bearers of every

registered trade union in an unorganized sector shall be persons

actually engaged and employed in an industry with which the trade

union is connected.

Provided that the appropriate Government may by special or general order,

declare that the provisions of this section shall not apply to any trade union or

class of trade unions specified in the order.

Explanation: For the purposes of this section unorganized sector means any

sector which the appropriate Government may by notification in the official

Gazette Specify.

(2) Save as other wise provided in Sub Section (i) all office bearers of a

registered trade union except not more than one third of the total

number of the office bearers or five which ever is less shall be persons

actually engaged in the establishment or industry with which the Trade

Union is concerned.

Explanation: For the purpose of this Sub Section, an employee who has

been retrenched shall not be construed as outsider for the purpose of

holding an office in a trade union.

L- 7 6.7S 7- P7
 67

(3) No member of council of Ministers or a person holding an office of

profit (not being an engagement or employment in an establishment or

industry with which the trade union is connected.) in the Union or

State shall be a member of the executive or other office bearer of a

registered trade union.

Another important provision brought in by the Amendment Act, 2001 is

that of insertion clause (hh) to Section 6 of Trade Unions Act, 1926 which reads

as the duration of period of being not more than three years, for which the

members of the executive and other office bearers of the trade union shall be

elected.

The intention and aim of the legislature is laudable in curtailing the

menace of professional leaders lending leadership to the trade unions. The main

thrust of the amendment should have been for the permanent solution rather than

adhoc in as much as only regulation of outsiders would not develop internal

democracy of a trade union. A trade union to be more effective should have three

qualities i.e. it should be internally strong, internally democratic and internally

responsible. These characteristics would be developed among the trade unions

only when legal provisions are made in the legislation regarding recognition of

the trade unions as a bargaining agent. The recognition brings in the much
 68

required confidence among the rank and file which further leads to stabilization

of trade union finances and develop internal leadership.

The Amendment Act also does not bar an outsider holding executive office

of more than one trade union simultaneously. Thus the Trade Unions

Amendment Act, 2001 does not check the growth of self centered, irresponsible

professionals who are unconnected and unconcerned with the problem of the

workers but interested only in their personal gains. Hence, the Amendment

should be to check the growth of such outside leaders and at the same time

should create an ambiance for the growth of internal leaders strengthening trade

union democracy. In this angle the Trade Unions Act, 1926 needs a thorough

reform.

On the whole the primary purpose of a trade union is to regulate the

relations between the workmen and the employer or to impose any restrictive

conditions on the conduct trade or business of some other person. A trade union

in the process necessarily has to conduct the disputes of variegating nature to

further the common interests of the workers. In this context it is very much

relevant to understand the scope and content of the term an industrial dispute in

order to have more clarity on the issue.