Recognition of Trade Unions

In India, there are laws that deal with the recognition of trade unions, but there isn’t a single law for officially registering them. Recognising the importance of having a central law for registering trade unions, the Indian Parliament passed the Indian Trade Union (Amendment) Act in 1947. This Act was meant to add a new chapter, Chapter III-A, to the Trade Union Act of 1926.

This new chapter would have outlined the conditions necessary for trade unions to be officially recognised. However, this Act was never put into effect. As a result, there is currently no law in India that mandates the recognition of trade unions.

Need For Recognition of Trade Union

Collective bargaining is a crucial part of the relationship between employers and employees. However, not all trade unions have the right to engage in collective bargaining; this right is typically granted to recognised trade unions.

The process of registering a trade union is one thing, but being officially recognised as the exclusive representative for collective bargaining is another matter. Many industrial strikes have occurred due to disputes over trade union recognition.

In practical terms, management usually engages in negotiations and collective bargaining only with recognised trade unions. Therefore, recognition of trade unions plays a fundamental role in collective bargaining. The question of whether a trade union should be recognised or not has been a subject of debate, primarily because there is no enforced central legislation regarding trade union recognition.

In the case of Kalindi and Others v. Tata Locomotive and Engineering Co. Ltd, the Supreme Court ruled that there is no inherent right to representation unless a company’s standing orders explicitly acknowledge such a right. This decision was reaffirmed in the case of Bharat Petroleum Corporation Ltd. v. Maharashtra General Kamgar Union & Ors.

Rights Granted on Recognition of Trade Unions

In the case of Workmen of Kampali Co-operative Sugar Factory Ltd. v. Management of Kampli Co-operative Sugar Factory Ltd., the court ruled that if there is no statutory provision for trade union recognition, such a right cannot be enforced through a writ petition. In the absence of a statutory provision or a recognition agreement between the employer and the union, no legal right exists merely because the management has recognised the union. Furthermore, the withdrawal of recognition does not violate any legal right.

Indian law does not make it obligatory for managements to establish unions, recognise them or engage in collective bargaining. However, due to the Indian constitution’s guarantee of the freedom of association, managements cannot adopt anti-union policies. Just as tax avoidance is legal but tax evasion is illegal, union avoidance is legal, but evading unions is not.

Whether the right to grant recognition to trade unions is considered a fundamental right under Article 19(1)(c) of the Constitution of India is answered in the negative. This is because the right to form an association does not inherently include the right to be recognised by employers. Therefore, the withdrawal of recognition does not infringe upon the fundamental rights guaranteed under Article 19(1)(c) of the Constitution of India.

Methods of Recognition of Trade Union

Recognition of trade unions can be broadly categorised into two main types: voluntary recognition and statutory recognition.

Voluntary recognition of trade unions occurs when employers willingly acknowledge and engage with a trade union as a legitimate representative of their employees.

In contrast, statutory recognition of trade unions is a legal requirement imposed by government regulations, which mandates employers to recognise specific trade unions for the purpose of collective bargaining and negotiation.

Both forms of recognition serve to establish and formalise the relationship between employers and trade unions, allowing for organised discussions on employment terms, conditions and workers’ rights.

The other forms of recognition of trade unions are:

Recognition by Management

Recognition by management, a form of voluntary recognition, is crucial for the success of a trade union. To be effective in collective bargaining, it’s essential for an employer to acknowledge the union’s legitimacy. Even if a union is strong and stable, without employer recognition, its influence may be limited.

Election by Secret Ballot

Election by Secret Ballot is a system in which all eligible workers in an establishment vote for their preferred union, typically conducted by a neutral agent, often the Registrar of Unions, resembling general elections. The election results typically remain valid for a specified period, often around two years.

The Supreme Court, in the case of Food Corporation of India Staff Union vs. Food Corporation of India and Others, established guidelines for evaluating the representative character of trade unions through the Secret Ballot system.

Check-Off Method

The Check-Off method involves each worker authorising management, in writing, to deduct union fees from their wages and transfer them to the chosen union.

This method provides management with a clear understanding of the relative strengths of different unions but can be susceptible to manipulation, particularly when there is favouritism or a large workforce. It also relies on all unions accepting and cooperating with the method.

Verification of Union Membership

The Verification of union membership is a method used by the labour directorate, adopted as a resolution during the same session of the Indian Labour Conference (ILC). It is widely utilised in various establishments. This process involves the labour directorate collecting information on all unions in a plant, including their registration and membership details.

Claim lists, fee books, membership records and account books are examined for duplicate memberships. In some cases, unions also provide lists of their members to prevent dual memberships. After thorough cross-checking and, when necessary, physical sampling of workers, a final verified list is prepared for employers, unions and the government.

Rule of Thumb

Assessing union strength through a “Rule of Thumb” or intelligent guessing, general observation or response at gate meetings, strikes and employee discussions is not a reliable method, especially in large establishments and can be subject to frequent changes.

When an employer agrees to recognise a trade union, they should formalise the agreement through a Memorandum of Agreement (MoA) between the employer and the union’s officer or authorised representative. Such an agreement can cover various aspects, including:

• Bargaining procedures.
• Arrangement of meetings and their timing.
• Designation of employer and union representatives.
• Time off for union representatives to attend meetings.
• Communication of agreements and disagreements to the workforce.
• Conduct during negotiations, including how and when issues can be raised.
• Specific matters subject to joint agreement (e.g., pay and working hours).
• Dispute resolution mechanisms in case of a deadlock, such as conciliation and arbitration.
• Union recruitment activities within the workplace.
• Union representation of workers at disciplinary and grievance hearings.
• Deduction of union contributions from employees’ wages.

In the case of Karnataka State Road Transport Corporation (KSRTC) vs. Workmen of KSRTC Staff and Workers Federation, the employer issued a notification stipulating that 33.33% of votes in a referendum would be a precondition for recognition. The federation challenged this notification in the high court, but the court ruled that interfering in a policy decision was not justified and recognition should be determined by the order of the labour court.

A trade union seeking recognition can apply to the industrial court, provided it satisfies the necessary conditions, such as having all ordinary members employed in the same industry or a closely allied industry, being a registered trade union and complying with all the provisions of the law. If these conditions are met, a certificate of recognition is issued.

Different states in India have legislated various methods of recognition, one of which is the secret ballot system. In the case of the Food Corporation of India, the Supreme Court ordered a secret ballot and mandated the procedure for recognising trade unions.

Criteria for Recognition of Trade Unions under Code of Discipline)

Here are the key criteria for trade union recognition:

• Duration of Functioning: When there are multiple unions, a union seeking recognition should have been active for at least one year after its registration.
• Membership Requirement: The union’s membership should encompass at least 15% of the workers in the relevant establishment. Membership is counted only for those who have paid their dues for at least three months during the six months preceding the reckoning.
• Local Area Representation: A union can seek recognition as a representative union for an industry in a local area if it has a membership of at least 25% of the industry’s workers in that area.
• Stability Requirement: Once a union is recognised, its position should remain unchanged for a period of two years.
• Largest Membership: In cases where multiple unions exist in an industry or establishment, the one with the largest membership should be granted recognition.
• Representative Rights: A representative union for an industry in an area should have the right to represent workers in all establishments within that industry. However, if a union in a particular establishment has a membership of 50% or more of the workers in that establishment, it should have the right to address matters of purely local interest, such as handling grievances related to its own members. Workers who are not members of that union can either operate through the industry’s representative union or seek redress directly.
• Trade Union Federations: Recognition criteria for trade union federations not affiliated with any of the four central labour organisations need to be addressed separately.
• Code of Discipline: Only unions that adhere to a Code of Discipline would be eligible for recognition.

Advantages of A Recognised Trade Union

Recognised trade unions in India enjoy several advantages and rights, which include:

• Negotiation Rights: The executive of a recognised trade union is entitled to negotiate with the employer on various employment-related matters, including employment, non-employment, terms of employment or labour conditions. In case of disputes, the matter can be referred to the registrar and their decision is final.
• Display of Notices: Recognised trade unions have the right to display their notices in the premises where employees are employed and the employer is required to make necessary arrangements for this.
• Collection of Dues: These unions can collect dues payable by their members on the premises where wages are being paid.
• Representation in Inquiries: A recognised trade union can appear on behalf of employees in domestic or departmental inquiries.
• Nominee in Works Commission: The recognised union has the exclusive right to appoint its nominee to represent workers in the works commission under the Industrial Disputes Act of 1947.
• Sole Bargaining Agent: A recognised trade union can act as the sole bargaining agent or principal bargaining agent for the workers.

The Bombay High Court has ruled that only the recognised trade union can enter into settlements with the employer and other unions or employees acting independently are not authorised to do so.

In the case of Balmer Lawrie Workers’ Union, Bombay and Anr. v. Balmer Lawrie & Co. Ltd. and Ors., it was assumed that a recognised union represents all the workmen in the industrial undertaking or the industry.

Furthermore, recognised trade unions have a duty to submit returns to the registrar within the stipulated timeframe and failing to do so can result in penalties. These rights and responsibilities make recognition a significant achievement for trade unions in India, as it empowers them to effectively represent and negotiate for the interests of the workers they serve.

Problems in Recognition of Trade Union

Recognition of trade unions in India has been a complex issue with various problems. Two major challenges related to union recognition are:

Craft, Caste or Category-Based Unions: Many registered unions in India, whether officially or unofficially, have been enjoying industrial relation rights, even if they are based on craft, caste or category. This has been a problem because recognition of such unions may lead to fragmentation and create complexities in collective bargaining and negotiation.

Politicalisation of Trade Unions: Political affiliations and interference in trade unions, particularly in central trade unions (CTUs), have contributed to difficulties in the recognition process. Different political parties support various systems like the secret ballot or check-off system. This division can lead to coalition issues and hinder the recognition process.

Management, in several instances, has refused to recognise trade unions based on various grounds, including:

(1) Presence of Outsiders: Management has been reluctant to recognise unions when most of the office bearers are from outside the organisation, including politicians and former employees.

(2) Disapproval by Management: When management disapproves of the individuals leading the union, it can be a barrier to recognition.

(3) Small Membership: In cases where the union has a minimal number of employees as members, management may refuse recognition.

(4) Rival Unions: The existence of multiple rival unions in the same organisation can complicate the recognition process as it becomes challenging to determine which union truly represents the workers.

(5) Unregistered Trade Unions: Management often refuses to recognise trade unions that are not registered under the Trade Unions Act of 1926, which sets out the legal framework for trade union operations in India.

These problems underscore the complexities and challenges in the recognition of trade unions in India, including issues related to their composition, political influence and registration status. Balancing the interests of workers and employers while ensuring a fair and representative recognition process remains an ongoing challenge in the field of industrial relations.

Registration and Recognition of Trade Unions

In India, the concepts of registration and recognition of trade unions are distinct and have specific implications.

Registration refers to the formal process by which a trade union is legally recognised as a body corporate. A registered trade union gains legal entity status, allowing it to acquire and hold property, enter into contracts and engage in legal proceedings.

Registration also provides certain legal immunities to the union. However, it is important to note that registration is optional, not mandatory. Although a registered trade union enjoys these legal benefits, it does not automatically imply that the union has gained formal recognition by the employer. Registration primarily establishes the union’s legal standing under the Trade Unions Act.

Recognition of trade unions, on the other hand, pertains to the process by which an employer formally acknowledges a trade union as having representative character and agrees to engage in discussions and negotiations with the union concerning the interests of the workers. Recognition is vital for establishing a basis for collective bargaining and maintaining stable industrial relations.

Unlike registration, recognition of trade unions is not granted automatically but is generally a matter of agreement between the employer and the trade union. It’s important to recognise that recognition is not a statutory right granted to any trade union; instead, it relies on the mutual consent and understanding between the parties involved.

The key difference between registration and recognition of trade unions lies in their purpose and the entities involved. Registration is a legal formality, conducted with the registrar, which grants legal status to the trade union. Recognition, however, is an agreement reached with the management, designating the trade union as a representative entity for collective bargaining purposes.

Legislation pertaining to the recognition of trade unions remains an important subject, as the existing Trade Unions Act primarily addresses registration and lacks provisions for recognition. Certain states in India have developed their own regulations regarding recognition, but these may not be consistently enforced in practice.

Conclusion

Recognition of trade unions is the formal acknowledgement by an employer that a specific trade union has representative character and the authority to engage in discussions and negotiations on behalf of workers. It allows the trade union to act as a collective bargaining agent, addressing employment-related issues and workers’ interests.

Recognition is crucial for establishing a structured platform for dialogue between employers and unions, ensuring the smooth functioning of industrial relations. It is generally a matter of mutual agreement between the employer and the trade union, as there is no specific statutory right to recognition in India. Recognized trade unions enjoy certain rights and privileges for representing workers effectively.