Trade Unions and Employers Association

Introduction

Association of employees or employers or of independent workers

A trade union, is a continuous association of wage-earners for the purpose of maintaining or improving the conditions of their working lives. Relatively permanent Formed for securing economic and social benefits Includes federation of trade unions also Emphasizes on joint, coordinated action and collective bargaining

Objectives of Trade Unions

Wages and salaries Working conditions Discipline Welfare Employee-employer relations Negotiating machinery

Personnel policies

Safeguarding organizational health and interest of the industry

Functions of Trade Unions

Militant or protective or intra-mural functions Fraternal or extra-mural functions Political functions Social functions

Why workers join a trade union ?

Improve their bargaining power Voice their concerns, grievances, problems, etc in a united manner Have a platform for self expression and exchange of ideas

Minimize discrimination and favoritism in matters relating to pay, work, transfer, promotion, etc
Secure adequate protection in case of illness, accident, unemployment Strike rapport with others and improve their working relationship

Union Structure
Craft Unions
A craft union is one whose members do one type of work, often using specialized skills and training. It enjoys strong bargaining power as its members possess specialized skills which cannot be replaced easily

Industrial Unions

Includes many persons working in the same industry or company, regardless of jobs held. Also enjoys strong bargaining power as it consists of all types of workers. The employer may find it easier to deal with one covering all workers

Union Structure
General Unions
This type of union consists of workers employed in different industries and crafts within a particular city or region. There is convenience in negotiation. However, the interest of a group may not be represented properly

Federations

These are national level entities to which plant level unions, craft unions, industrial unions and general unions are affiliated. These are apex bodies, coordinating the affairs of various unions in their fold.

Origin of Trade Unions

The trade union movement is the result of modern industrialization. Trade unions have grown in response to the peculiar needs and problems of the wage earners, which they had to face in the course of industrialization under capitalist economic system

Separation between Capital and Labour Philosophy of Laissez-Faire Lack of Bargaining power on part of workers Individual dispensability but collective indispensability

AITUC and other Central Trade Union Organizations

The AITUC was formed in 1920 followed by the establishment of All India Railwaymen's Federation in 1922. Unions began to adopt militant postures to achieve their demands. Splits and mergers were quite common. The influence of political parties was quite significant.

Indian National Trade Union Congress Bhartiya Mazdoor Sangh (BMS) Center of Indian Trade Unions (CITU) Hind Mazdoor Sabha National Labour Organization (NLO) United Trade Union Congress (UTUC)

The Trade Unions Act,1926 and the legal framework

The act legalizes the formation of trade unions by allowing the employees the right to form and organize unions. It permits any 7 persons to form a trade union and get it registered.

Status of a Registered Union

Becomes a body corporate Gets a common seal Can buy and hold movable and immovable property Can enter into contracts with others Can sue and be sued

The Trade Unions Act,1926 and the legal framework

Rights of a Registered Union Claim immunity from civil and criminal prosecution for bonafide Trade Union activities Create a political fund Spend general funds on salaries of staff Can represent workers to the works committee

The Registrar of Unions can cancel the registration of a union on the grounds of application given by the trade union or when the registration was obtained by fraud or mistake or when the union has ceased to exist.

Union Recognition
Collective bargaining cannot exist and function without recognizing the bargaining agent. The Trade Union Act, 1926 is silent on the aspect of recognition of trade unions.
The Bombay Industrial Relations Act, 1946, classified the registered unions as: i. Representative union having a membership of not less than 25% of the total employees as members in an industry;

ii.
iii.

Qualified union having at least 5% of membership in an industry; and

Primary union having a membership of at least 15% of employees in an undertaking.

The rights of a Representative union under the Act are:

a.
b. c. d.

First preference to appear or act in any proceedings under the Act as the representative of employees;
Right to submit a dispute for arbitration; To make a special application to the Labour Court to hold an inquiry; and Office-bearers of the union cannot be dismissed or discharged.

Employer decides everything!

Collective bargaining can succeed only when the employer recognises a trade union as the sole bargaining agent (in a multi-union situation) and agrees to negotiate with it on various issues affecting the lives of workers.
A union may be strong, having a large majority of workers standing by its side, but unless it is recognised by the employer it will not be able to deliver the goods.

If the employer refuses to recognise such a fact, for any reason whatsoever, it may not be able to obtain any concessions for its members.
Denial of recognition to a union enjoying majority may lead both parties to a tug-of-war situation, seriously impacting industrial activities. Since there is no Central Law for compulsory recognition of unions, the employers are free to recognise any union of their own choice. In a multi-union situation the employer is compelled to verify the claims of contending unions in a careful way, following the procedure recommended by the 16th Tripartite Labour Conference, 1958. The employer, by and large, is also free to grant recognition to any union, purely guided by his whims or political strength of the union.

Union Problems
Evil effects of outside leadership

Trade union leadership

Slow growth of unions Weakening of the overall goals for which unions existed Coming in the way of nurturing strong leaders from the ranks of workers Inability to understand the problems of workers

Multiple unions Union Rivalry Financial woes Other problems

Inhibiting the development of one union in one industry

Personal agendas of leaders gaining priority over workers' overall interests

Of late, trade unions have been pushed to the wall due to factors such as: global competition, restructuring exercises carried out by companies from time to time just to survive, rising costs of manufacturing, lack of support from the general public and the government; privatization, failure to deliver results in case of a prolonged battle etc.

Reasons for the Paradigm shift

Militancy does not pay Political base shrinking and Public sympathy disappearing Jobs vanishing at an alarming rate Membership figures sinking Right to strike also being questioned by judiciary

Measures to strengthen Trade Union Movement in India

United labour front Efficient leadership Membership fees Trade Union Act should be amended

Legal provision for recognition of Trade Unions

Unions must focus on important issues

Employers Associations
Employers Associations came into existence as a result of the formation of ILO and the growing presence of Trade Unions Employers association are required to:
Develop healthy and stable industrial relations Promote collective bargaining at different levels Bring a unified employers viewpoint on the issues of industrial relations to the government in a concerted manner Represent in the meetings of ILC and SLC boards in conformity with tripartite approach to labour matters

Employers Associations are formed to promote and protect interests of employers in trade and industry. They are formal groups of employers set up to defend, represent or advise affiliated employers. They perform several important functions:

Primary
Promote and protect the interests of employers engaged in industry, trade and commerce in India.

Study, analyse and disseminate information relating to labour policy, labourmanagement relations, collective bargaining, etc.
Offer advice concerning various aspects of labour policy. Liaise with Union Government and initiate steps that are representative and legislative in nature.

Secondary

Train and develop staff and members. Obtain data on wages and conditions of work in industries attached to them.

Come out with surveys, research-based reports on issues of importance to both labour and management.
Take up projects for social and family welfare. Deal with safety and health at work place and working environment. Initiate steps to improve public image and improve public relations. Educate the public regarding the character, scope, importance and needs of trade, industry and commerce represented by members.

Origin and Growth

Associated Chamber of Commerce (ASSOCHAM) was formed in 1920 and the Federation of Indian Chamber of Commerce was formed in 1927 The formation of ILO and the enactment of Trade Union Act in 1926 had a great influence in shaping of the role of employees

ILO wanted the government to nominate employers and workers delegates and advisors representing workers/employers on all India basis
The trade unions were quick to form the AITUC in 1920 However, due to differences among the employers they were not able to organize themselves to form an all India body

Origin and Growth

FICCI took the initiative and formed the All India Organization of Employers (AIOE) in 1932. AIOE represented the interests of Indian employers This was followed by the formation of Employers Federation of India (EFI) in 1933 by ASSOCHAM and others. EFI represented the British and Parsi business interests All India Manufacturing Organizations (AIMO) was set up in 1941 to represent the medium and small sectors

Structure
Local Organizations They serve the interests of local businessmen. The Bombay Mill Owners Association has been formed to protect the local interests of manufacturing units operating within the city.

Central Organizations As stated earlier AIOE,EFI, and AIMO operate as apex bodies governing the affairs of several regional and local associations. To have better coordination, a superstructure called the Council of Indian Employers was formed in 1956, bringing AIOE and EFI under a single umbrella.

Regional Organizations The regional outfits are affiliated to central employers organization. They offer consultancy service, and take care of training, safety and welfare measures.

The employers associations may be registered under any of the following pieces of legislation:
The Trade Unions Act, 1926 The Indian Companies Act, 1956 The Societies Registration act, 1960

Membership in these associations is voluntary. There are only 22 employers union submitting returns with 400 members in all. The number has fallen steadily from 112 in 1998 to 91 in 1999 and 22 in 2000 The principle source of income is the subscription amount paid by members. They also get income in the form of interest on deposits, conference fee, etc.