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Trade unions are a major component of the modern industrial relations system. A Trade
union of workers is an organization formed by workers to protect their interests, improve
their working conditions, etc. All Trade unions have objectives or goals to achieve, which
are contained in their constitution, and each has its own strategy to reach those goals.

Trade unions are now considered a sub-system, which seeks to serve the specific interest
(i.e. the workers’) and also considers itself a part of the organization, in terms of the
latter’s viability and contribution to the growth of the community of which it is a part.

Section 2(h) of the Trade Unions Act, 1926 has defined a trade union as:

“Any combination, whether temporary or permanent, formed primarily for the 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 includes any federation of two or more trade

Trade Unions came into being for variety of purposes.

• Workers found it more advantageous to band together and seek to establish their
terms and conditions of employment.
• Since a group’s contribution is much larger than an individual’s, so are the effects
of withdrawal.
• Also, an individual may not be able to organize and defend his interests as well as
a group can.
• Employers also found it advantageous to deal with a group or a representative of a
group rather than go through the process of dealing with each individual over a
length of time.

With the changed political, social and educational environment in terms of awareness
of rights-the right to organize, the right to bargain, and settle terms and conditions of
employment-labour or worker unions sprang up in order to protect and further worker
interests. Additionally, the influence of political parties interested in acquiring a
foothold in the labour movement also provided the impetus for the formation of
labour unions.
Historical Evolution Of Trade Unions In India

In India the foundation of modern industry was laid between 1850 and 1870.this was also
the period of emergence of the Indian Working class.
Indian enterprises started growing side by side with the British ones in all spheres of the
national economy. During this period of the growth of the Indian capitalist enterprises,
the working and living conditions of the labour were poor and their working hours were
long, wages were low, and the general economic condition was poor in industries. This
was testified by commissions like the Indian Factory Labour Commission (1908) and the
Royal Commission of Labour (1931).
In order to regulate the working hours and other service conditions of the Indian textile
laborers, the Indian Factories Act was enacted in 1881. Another Factor whish provided
the background for Indian trade union movement was the birth of Indian National
congress in 1885.

A-Social Welfare Period (1875 to 1918)

• This period witnessed growth of industries as well exploitation of women and child
labour and unhealthy work conditions.
• Conditions were taking a bad shape as days passed by but there was no sign of
opposition from the side of workers.
• In addition to it there was no attempt at obtaining redress through concerted effort.
• The labour movement in India began around 1850. Few enactments which marked the
beginning of trade unions movement in India are:

1. The factory Commission in 1875

2. The factories Act, 1881
3. The Second Bombay Factory Commission in 1884.

• Bombay Millhands association in 1890 commenced the labour movement in India.

The purpose of this movement was to provide a platform to workers where their
grievances could be foreword to management and to draw public attention to the
cause of labour.
This movement was followed by formation of various groups, which were running in the
similar lines:

• The Amalgamated society of Railway servants of India.

• The Bombay postal unions.
• The social service league
• the printers’ union of Calcutta
• Promote welfare activities
• Spread literacy among the factory workers and

Redress grievances through constitutional methods.

These associations were not exactly Trade Unions but they carved the way for formation
of trade unions.

B-Early Trade Unions Period (1918 to 1924):

• The year 1918 holds significance for Indian Trade Unions Movements.

• It was the year when leadership of trade unions passed from hands of social
workers to the hands of politicians.

• By this time various unions were formed, some of them are:

a. Indian Seamen’s unions,
b. The Punjab Press employees Association,
c. The madras textile labour unions,
• It was estimated that between 2.5 and 5.00 lakh were organized into unions by
this time.

• Various political; leaders were also actively involved in the activities of trade
unions, some key figures are C.R Das, Moti Lal Nehru, J.L Nehru, S.C Bose.

• However, unions formed suffered from various limitations, they had little
continuity and there major interests lied on wage increment.

C-Left Wing Unionism Period (1924-1934):

This period saw tremendous growth of trade unions.

But the three major Trade Unions which emerged strongly during this time were:
1-AITUC, All India Trade Unions Congress led by militant nationalists.

2-AITUF, All India Trade Unions Federation, led by congress nationalists and moderates.

3-RTUC, Red Trade Unions Congress, led by certain orthodox communities.

D-Trade Union’s Unity Period (1935-1938)

• During this period initiative were taken by All-India Railways Federation to

provide unity to trade union movement this federation in its conference formed a
trade union committee in Bombay in 1932.
• The committee adopted a platform of unity under which it was conceived by all
that trade union is an organ of class struggle whose basic task is to organize
workers for advancing and defending their rights and interests .
• It was also realized that representation, negotiation and other methods of
collective bargaining are an integral part of the activities of trade unions.

E-Post Independence Period (from 1947 to date)

• Post independence period in India several strong changes in trade union

movement of India.
• There was a tremendous increase in the number of trade unions and those of
which existed turned out be more conscious and award of their rights and
emerged strongly.
• As mentioned earlier this period experienced rapid changes in trade union
movement in India.

The most important factors being:

1. The constant influence of outside and international happenings.

2. The pressure of trade union rivalries.
3. Government’s Industrial Relations Policy with its provision for compulsory
adjudication machinery.
4. The enhancement of labour laws conferring special privileges on registered trade
5. Desire of workers to unite for safeguard their interest.
6. Attempts made by some employers to set up unions under their influence.

Structure & Finance

• In India, in the earliest stages, the general pattern of union was the plant level
• Industry wise or area-wise union have been a later development.
• Industrial unions have been organized mainly as a result of the need felt platform.
• Trade unions covering all workers, irrespective of their craft or category, either at
the plant to the industrial level, have become common in our country.
• In general, in the industrial sector, unions are mostly organized at the enterprise
level while in the service sector; there are industry-wide unions as, for example,
railways, banking, insurance or government service.
• The degree of unionism varies widely fro industry to industry.
• The mushroom growth of unions was not accompanied by a proportionate growth
in the total membership.

As a consequence, the total membership has been fragmented among too many unions
leading to a significant decline in the average membership of individual unions
Functions Of Trade Unions:

The primary function of a trade union is to protect the basic interests and needs of the
members by striving to better the terms and conditions of employment, secure for
workers better wages and to improve their working and living conditions.

• Negotiation
• Representation
• Information and advice
• Member services

1. Negotiation

Negotiation is where union representatives discuss with management issues, which

affect people working in an organization. The union finds out the members' views and
relays these views to management. There may be a difference of opinion between
management and union members. 'Negotiation' is about finding a solution to these
differences. This process is also known as 'collective bargaining'.
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.
Pay, working hours, holidays and changes to working practices are the sorts of issues that
are negotiated. People who work in organizations where unions are recognized are better
paid and are less likely to be made redundant than people who work in organizations
where unions are not recognized.

2. Representation

Trade unions also represent individual members when they have a problem at work. If an
employee feels they are being unfairly treated, he or she can ask the union representative
to help sort out the difficulty with the manager or employer.
If the problem cannot be resolved amicably, the matter may go to an industrial tribunal.
Industrial tribunals make sure that employees and employers properly adhere to
employment laws. They are made up of people outside the workplace who listen to the
employer's and the employee's point of view and then make a judgment about the case.
People can ask their union to represent them at industrial tribunals. Most cases that go to
industrial tribunals are about pay, unfair dismissal, redundancy or discrimination at work.
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.
3. Information and Advice

Unions have a wealth of information, which is useful to people at work. They can
advise on a range of issues like how much holiday you are entitled to each year, how
much pay you will get if you go on maternity leave, and how you can obtain training at

4. Member services

During the last ten 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
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.

This is briefly stated in following points:

• Welfare activities; organizing mutual benefits/ cooperative/ employment

assistance/ games/ libraries/ cultural & recreational programmes.
• To secure for workers fair wages
• To sage guard securities of tenure.
• To improve conditions of service.
• To enlarge opportunities for promotion & training.
• To improve working & living conditions.
• To provide for education Facilities.
• To cooperate in and facilitate technological advancement by broadening the
understanding of workers on its underling issues.
• To promote identity of interest of workers with their industry.
• To offer responsive cooperation in improving levels of production & productivity,
discipline & standard of quality.
• To promote individual & collective welfare.
Objectives of Trade Unions In modern times as follows:

• To replace managerial dictatorship by workers’ democracy and to bring about a

change in the social order.
• The overthrow capitalism and bring about a revolutionary and fundamental
change in the political order.
• Organization of all eligible members under one platform.
• To represent the workers to management in case of disputes or differences.
• To enter in collective Bargaining and other agreements on behalf of workers.
• To represent workers on various participative functions.
• To undertake various activities for the welfare of its members.
• To provide benefit to members in case of sickness, old age, trade disputes,
unemployment, and litigation and also provide funeral expenses.
• Further Nance of political objectives

Role of Trade unions in industrial disputes:

• Most 'collective bargaining takes place quietly and the union and the employer
quickly reach agreements. Occasionally disagreements do occur and the two sides
cannot agree. In these cases the union may decide to take industrial action.

• Industrial action takes different forms. It could mean an over time ban, a work-to-
rule or a strike. There are strict laws, which unions have to follow when they take
industrial action.

• A strike is only called as a last resort. Strikes are often in the news but are rare.
Both sides have a lot to lose. Employers lose income because of interruptions to
production or services. Employees lose their salaries and may find that their jobs
are at risk.

• Usually employers and employees will go to some lengths to avoid the costs of
strike action to both groups.

• The Advisory, Conciliation and Arbitration Service (ACAS) are often used to
help find a solution to a dispute which is acceptable to both sides.
Growth of Trade Unions.

With the changed political atmosphere in the country and the spreading of ideas about
democracy, socialism, the right to a living wage, leveling of inequalities the building of a
welfare state and similar thoughts, there is no doubt a steadily increasing number of
workers, particularly in the large metropolitan centres, have begun to realise that a trade
union organization is very essential for the protection and advancement of the working
classes. and their interests. However, this realization alone can not account for the vast
expansion that has taken place in the movement.

The more important factors that have led to this development are the creation of new
central organizations, the growth of political parties at the national and regional levels,
the encouraging labour policies of the government after independence and the
propagation of the philosophy of trade unionism.

Certainly one of the effects of this mushroom growth has been the problems at the plant
level, especially in situations where more than one union .

Unionisation: Laws and Environment

The Role Of Government

Two factors are relevant to the process of unionization in India. They relate to trade
union law and to political parties and their labour strategy.

THE TRADE UNION ACT 1926 ,(25th March)

Any seven or more members of a trade union may, by subscribing their names to the
rues of the trade union and by otherwise complying with the provisions of this Act
with respect to registration, apply for registration of the trade union under this Act.
Undoubtedly, this provision in labour legislation has contributed to the formation of
any unions as the data on the number of registered trade unions shows. Needless to
add, there are many more unregistered trade unions.
There are certain Provisions to be contained in the rules of trade union:

A Trade Union shall not bee entitled to registration under this Act, unless the executive
thereof is constituted in accordance with the provisions of this Act, and the rules thereof
provided for following matters, namely:

(a) The name of the Trade Union;

(b) The whole of the object for which the Trade Union has been established;
(c) The whole of the purposes for which the general funds of the Trade Union shall be
applicable, all of which purposes shall be purpose, to which such funds are lawfully
applicable under this Act;

(d) The maintenance of a list of the members of the Trade Union and adequate facilities
for the inspection thereof by the [Subs. by Trade Unions (Amendment) Act No.33 of
1954] and members of the Trade Union;

(e) The admission of ordinary members who shall be persons actually engaged or
employed in an industry with which the Trade Union is connected, and also the
admission of the number of honorary or temporary members as [Subs. by Trade Unions
(Amendment) Act No.33 of 1954] required under Section 22 to form the executive of the
Trade Union;

(ae) [Ins. by Act 42 of 1960] The payment of a subscription by members of the Trade
Union which shall be not less than twenty five naye paise per month per member;

(a) The conditions under which any member shall be entitled to any benefit assured by
the rules and under which any fine or forfeiture may be imposed on members;

(b) The manner in which the member shall be amended, varied or rescinded;

(c) The manner in which the members of the executive and the other [Subs. by Trade
Unions (Amendment) Act No.33 of 1954] of the Trade Union shall be appointed and

(d) The safe custody of the funds of the Trade Union, and annual audit, in such manner as
may be prescribed, of the account books by [Subs. by Trade Unions (Amendment) Act
No.33 of 1954] and members of the Trade Union; and

(e) The manner in which the Trade Union may be dissolved.

Registration - The Registrar, on being satisfied that the Union has complied with all the
requirements of this Act in regard to registration, shall register the Trade Union by
entering in a register to be maintained in such form as may be prescribed, the particulars
relating to the Trade Union contained in the statement accompanying the application for

This section is mandatory. The Registrar cannot refuse to register a Trade Union if the
application for registration complies with the technical requirement as laid down in this

This Registrar has only to see if it fulfils the technical requirements and not whether it
could be described as unlawful. If the applicant for registration complies with technical
requirements of this Act, he has no option but to register the Trade Union, no matter what
happens to it subsequently even if it, in fact, proceeds counter to law or seeks to carry out
its lawful objects in an unlawful way. (Inland Steam Navigation Workers Union In
re.1635 Cal.57 : 63 Cal.565 : C. W. N. 91).

An application for registration cannot be rejected on the ground that it is an attempt to

revive an old, already unlawful, union under a new name (Ibid.).

The functions of the Registrar are prescribed by this Act and his office is also created by
this Act (Ibid.).

Certain Acts not to apply to registered Trade Unions - The

following Act, namely -

(a) The Societies Registration At, 1863.

(b) The co-operative Societies Act, 1912.


(c) The Companies Act, 1956

shall not apply to any registered Trade Union, had the registration of any such Trade
Union under any such Act shall be void.

There are certain Rights and liabilities of registered trade unions:

Objects on which general funds may be spent:

The general funds of a registered Trade Union shall not be spent on any other objects
than the following, namely:-

(a) The payment of salaries, allowances and expenses to (Note: Subs. by Act No.38 of
1964 for the word) "officers" office bearers of the Trade Union;

(b) The payment of expenses for the administration of the Trade Union including audit of
the accounts of the general funds of the Trade Union;

(c) The prosecution of defence of any legal proceeding to which the Trade Union or any
member thereof is a party, when such prosecution or defence is undertaken for thee
purpose of securing or protecting any rights of the Trade Union as such or any rights
arising out of the relations of any member with his employer or with a person whom the
member employs;

(d) Thee conduct of trade disputes on behalf of the Trade Union or any member thereof;
(e) The compensation of members for loss arising out of trade disputes;

(f) Allowance to members or their dependants on account of death, old age, sickness,
accidents or unemployment of such members;

(g) The issue of, or the undertaking of liability under policies of assurance on the lives for
members or under policies insuring members against sickness, accident or

(h) The provision of educational, social or religious benefits for members (including the
payment of the expenses of funeral or religious ceremonies for deceased members) or for
the dependants of members;

(i) The upkeep of a periodical published mainly for the purposes of discussing questions
affecting employers or workmen as such;

(j) The payment, in furtherance of any of the objects on which the general funds of the
Trade Union may be spent, of contributions to any cause intended to benefit workmen in
general, provided that the expenditure in respect of such contributions in any financial
year shall not, at any time, during that year be in excess of one-fourth of the combined
total of the gross income which has up to that time accrued to the general funds of the
Trade Union during that year and of the balance at the credit of those funds at the
commencement of that year; and

(k) Subject to any conditions contained in the notification, any other object notified by
the [appropriate Government] in the official Gazette.

Constitution of a separate fund for political purposes

1. A registered Trade Union may constitute a separate fund, from contributions

separately levied for or made to that fund, from which payments may be made, for
the promotion of the civic and political interest of its members, in furtherance of
any of the objects specified in sub-section (2).

2. The objects referred to in sub-section (1) are

• The payment of any expenses incurred, either directly or indirectly, by a candidate

or prospective candidate for election as a member of any legislative body
constituted under [Note: Deleted by Act 42 of 1960] the Constitution or of any
local authority, before, during or after the election in connection with his
candidature or election; or
• The holding of any meeting or the distribution of any literature or documents in
support of any such candidate or prospective candidate; or
• The maintenance of any person who is a member of any legislative body
constituted under [Note: Deleted by Act 42 of 1960] the Constitution or for any
local authority; or
• The registration of electors or the selection of a candidate for any legislative body
constituted under [Inserted by Act No.51 of 1970] the Constitution or for any
local authority; or
• The holding of political meetings of any kind or the distribution of political
literature or political documents of any kind.
• [(Note: Inserted by Act No.51 of 1970) (2-A) In its application to the State of
Jammu and Kashmir references in sub-section (2) to any legislative body
constituted under the Constitution shall be construed as including references to
the Legislative of that State].

No member shall be compelled to contribute to the fund constituted under sub-section

(2), and a member who does not contribute to the said fund shall not be excluded from
any benefits of the Trade Union, or placed in any respect either directly or indirectly
under any disability r at any disadvantage as compared with other members of the Trade
Union (except in relation to the control of management of the said fund) by reason of his
contributing to the said fund; and contribution to the said fund shall not be made a
condition for admission to the Trade Union.

Criminal conspiracy in trade disputes

No officers or members of a registered Trade union shall be liable to punishment under

sub-section (2) of Section 120-B of the Indian Penal Code, 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


• When a registered Trade Union is dissolved, notice for the dissolution signed by
seven members and by the Secretary of the Trade Union shall, within fourteen
days of the dissolution, be sent to the Registrar and shall be registered by him if
he is satisfied the dissolution has been effected in accordance with the rules of
the Trade Union, and the dissolution shall have effect from the date of such
• Where the dissolution of a registered Trade Union has been registered and the
rules of the Trade Union do not provide for the distribution and funds of the
Trade Union on dissolution, the Registrar shall divide the funds amongst the
member in such manner as may be prescribed.
• The Role Of government is vital for the growth of trade unions, to monitor,
regulate, and control the actions of trade union for benefit of both employees
and employers to promote social welfare at large. Government has set up few
organizations and issued certain other acts regarding these matters.



The Organization of the Chief Labour Commissioner (C)) known as Central Industrial
Relations Machinery was set up in April, 1945 in pursuance of the recommendation of
the Royal Commission on Labour in India and was then charged mainly with duties of
prevention and settlement of industrial disputes, enforcement of labour laws and to
promote welfare of workers in the undertakings falling within the sphere of the Central

CIRM is headed by the Chief Labor Commissioner (Central) [CLC (C)]. It is entrusted
with the task of maintaining good industrial relations in the Central sphere. At the
headquarters, CIRM has a complement of 25 officers who perform line and staff
functions. In the field, the machinery has a complement of 253 officers and their
establishments are spread over different parts of the country with zonal, regional and unit
level formations as presented in the organogram.

Objectives of the CLC(C) Organization.

1. Promotion of peaceful and harmonious Industrial Relations in the Central Sphere

through prevention & settlement of I.ds. in the Industries for which Central Govt.
is the appropriate Govt.
2. Verification of the Trade Union's Membership.
3. Enforcement of labour laws in central sphere.


The CIRM administers the Labour Laws in the industries for which The Central Govt. is
the `appropriate Government' under that Act, Its functions therefore are:

• Prevention and settlement of industrial disputes;

• Enforcement of Labour Laws;
• Verification of membership of Trade Unions;
• Enforcement of Awards and Settlements;
• Conduct of inquiries into the breaches of Code of Discipline;
• Promotion of Works Committees and Workers' Participation in Management;
• Collection of statistical information;
• Defence of court cases and writ petitions arising out of

• Implementation of labour laws.

Important Legislations Administered.

• The Industrial Disputes Act, 1947 and Rules made there under.
• And Rules made there under.
• The Industrial Employment (Standing Orders) Act, 1946 and Rules made
there under.
• The Contract Labor (Regulations & Abolition) Act, 1970 and Rules made
there under.
• Payment of Wages Act, 1936 in relation to Railways, Mines, and Air
Transport Services and (in the major Ports as Authorized by respective State
Government) and Central Rules made In respect of above industries.
• The Minimum Wages Act, 1948 and Minimum Wages (Central Rules),
• The Payment of Bonus Act, 1965 and Rules made there under.
• Chapter XIV of the Indian Railways Act, 1989 (Hours of Employment
• The Child Labour (P&R) Act, 1986 and Rules made there under.
• The Payment of Gratuity Act, 1972 and Rules made there under.
• The Equal Remuneration Act, 1976 and the Rules made there under.
• The Maternity Benefits Act, 1961 (in Circus Industry only).
• The Inter-State Migrant Workmen (Regulation of Employment and
Conduit ons of Service) Act, 1979 and the Rules made there under.
• MES Contractors Labour Regulations.
• Labour Laws (Exemption from furnishing Returns and maintaining
registers by certain Establishments.
• Building and other Construction Workers' (Regulation of Employment and
Conditions of Service) Act, 1996.