Judicial Discourse on Trade Unionism in India

I. Introduction

The relation between the employers and the Trade Unions in India is of dynamic concept in settlement of industrial disputes where the relation between capital and labour is affected by poverty and illiteracy. This is due to ignorance of the majority of the workers in the organized industry as well as in the unorganized sectors.

Thus, in view of these factors industrial peace is being threatened frequently and many conflicts arise between the employers and the Trade Unions in India which affects the industrial peace and production which is an important part for the progress of the society. Therefore, it becomes the responsibility or obligation of the judiciary to settle the disputes by interfering into it.

Therefore, the role of judiciary is very significant in providing social justice to the workers by the eminent judges.

The strength of a Trade Union depends on the bargaining power but not of its membership. The Industrial Disputes Act, 1947 seeks to achieve social justice on the basis of collective bargaining.² The International Labour Organiz-ation has set up international standards for labour matters including dispute settlement. But in practice, collective bargaining in India failed as a method of settlement which has led to large scale of dependence on compulsory adjudication. In other works, preference to adjudication indicates the weakness of collective bargaining. The merits and demerits of collective bargaining vis-à-vis compulsory adjudication is of a serious concern the Trade Union movement should strengthen itself to enable unions to function as collective bargaining agents to bring about good employer-employee relationship and thus improve the economic and social conditions of workers.³

Karnal Leather Karmachari Sangathan v. Liberty Foot Wear Co., (1990) Labour Law Cases, 301, 307 (S.C)

In this case, Karnal Leather Karmachari Sangathan filed a case against its employer a registered partnership firm carrying on its trading activities in leather footwears at Karnal and some other places under the name and style of ‘Liberty Footwear Company’. It has its head office at Karnal in the State of Haryana. It had a serious dispute with the workers where the workers; union complained that the management has illegally terminated more than 200 workers. However, it was refused by the employer. Against this refusal and on the basis of the unsettled dispute the workers went on a serious and huge strike. The agitation was so serious that the Labour Minister and the Public Health Minister of that time was also altered and on March 31, 1988, both the parties entered into an arbitration agreement where a five member committee was formed where there were representatives from both the sides along with the Deputy Commissioner. The Committee on its award reinstate in all 159 workmen. But the management did not reinstate the remaining workmen. The validity of the award was challenged by filing a writ petition in the Haryana High Court challenging the procedural irregularity committed by the Committee of arbitrators and claimed that the arbitration agreement was not published in the Official Gazette as required under sub-section (3) of Section 10A of the Industrial Disputes Act, 1947 and the award made without such publication would be invalid and accordingly the High Court quashed the award and directed the State Government to publish the agreement in the Gazettee.

The employees union then filed a special leave petition before the S.C. the principal question arose before the Supreme Court was that whether non-publication of the arbitration agreement as required under sub-section )3) of Section 10-A within 30 days of the award renders the arbitral award invalid and unenforceable. The Trade Union claimed that publication is necessary but the Court held it not as mandatory.

The Supreme Court made reference of Remington Rand of India Ltd. v. The Workmen,⁴ that if there is sufficient reason for non-publication of the award within 30 days, the parties should not be harassed for that cause.

The Madhya Pradesh High Court⁵ took the view that the publication in the Gazette is obligatory but not mandatory. A similar view was expressed by the Punjab and Haryana High Court.⁶

But, the Kerala High Court in Kathyee Cotton Mills Ltd. v. District Labour Officers and Others,⁷ has expressed the view that the requirements of sub-section (3) are mandatory and a failure to comply with the provisions would vitiate the award.

In view of the above judgments, the apex Court held that collective bargaining is a method of solving dispute amicably rather than coercion. As the dispute was settled amicably and peacefully between the labour and the management, it is necessary that the workers must be made aware of the dispute as well as about the arbitral award.

Therefore, without involving the workers, there shall be no collective bargaining. The Union only helps the workers in resolving their disputes with management but ultimately it would be for the workers to take decision and suggest remedies. The arbitration agreement must therefore be published before the arbitrator. Considering the merits of the dispute and non-compliance of this requirement would be fatal to the arbitral award and therefore directed to publish the award within four weeks from the day of judgment and referred the case to the Industrial Tribunal.

Therefore, it was established that the strength of a Trade Union depends on the bargaining power but not of its membership. The Industrial Disputes Act, 1947 seeks to achieve social justice on the basis of collective bargaining.

The International Labour Organization has set up international standards for dispute settlement which is an important matter of labour. Collective bargaining is also a vital method of dispute settlement between the management and the workers. But in practice, collective bargaining in Indi has failed as a method of dispute settlement which leads to compulsory adjudication. In other words, preference to adjudication means failure of the process of collective bargaining. Therefore, it is the high time for the Trade Unions to strengthen themselves in the process of collective bargaining and to bring out a good employer-employee relationship and thus improve the economic and social conditions of workers.⁸

The main characteristics of the Industrial Disputes Act, 1947 are to maintain industrial peace and amity, investigation and settlement of disputes. It is the duty of the Trade Unions to play a very positive role to minimize the exploitative, discriminatory and arbitrary actions of employers and to bring out industrial peace in the establishment. Section 36 of the Industrial Disputes Act, 1947 recognizes ‘Industrial Dispute’ but not ‘Individual Dispute’. Therefore, according to the law, the trade disputes should be the collective disputes which are to be supported by the substantial section of workmen in an establishment. It also depends upon the facts of the case and nature of dispute what is the demand of substantial section and thus needed the action of collective bargaining.⁹

However, the Trade Unions failed to take proper role in the collective bargaining process and therefore, majority of the disputes of workmen now-a- days settled by the the judiciary. But, still there is a provision that the workmen individually can raise an industrial dispute at all. If a workman is discharged, dismissal or retrenchment. Such disputes shall also be considered as an industrial dispute notwithstanding that no other workman or any member of a Trade Union is a party to the dispute.¹⁰

Therefore, it is the duty of the Trade Unions to play a very important role in the adjudicatory process by espousing the cause of workmen, whether industrial or individual.

It may be stated that Trade Unions are increasingly getting into the political matters rather than with industrial and economic matters and therefore becoming inherently weak in matters of bargaining power. The Trade Union leaders therefore now rely on the written laws rather than on emphasizing on the collective bargaining process for settlement of disputes. Wherever the matters have been resolved in favour of workmen related to denial of employment, retrenchment, dismissal or discharge, it is only due to statutory requirements or negligence which are not fulfilled by the employers, instead where there is a duty of thetrade Unions to play a vital role in favour of the workers.

It is the duty of the unions that they should take active part from the time of signing the petition till the end of the justice ensured to the workers in the whole adjudication process if it is not settled by way of collective bargaining.

Indian Airlines Technical Assistant, Hyderabad v. Chairman and M.D., Indian Airlines (HQ), 1995 I LLJ 578 AP

In this case the Indian Airlines, even after conversion into Public Limited Company and wholly held by the Government of India continues to fall within the meaning of ‘State’ under Article 13 and should give a limited recognition to the union to represent its members and discuss their grievances in order to adopt fair play in its action.

The petitioners filed a writ of Mandamus to direct the respondent to recognize the petitioner union which was a union only ofTechnical Assistants and worked for betterment of its members with regard to their service conditions. According to their plea, the respondents were negotiating with Air Corporation Employees Union which was a majority union, but the petitioners were not satisfied with the efforts of that union and hence a separate recognition of the petitioner union was required.

The respondents filed a counter-affidavit claiming that no union can claim the right to be recognized and under Section 18 of the Industrial Disputes Act, 1947 the settlement entered into with the union will be binding only on the members of the union and therefore the petitioner union will not be affected by any settlement with the majority union and therefore the petitioner union had its own remedies by going to the Industrial Tribunals.

The petitioner union claimed that other minority unions including non-registered unions are recognized by the respondent except the petitioner which is of discriminatory nature is a violation of the Constitutional provision guaranteed under the freedom of association.

The respondent submitted that there was no right for the Trade Union to be recognized as was held in Delhi Police Non-Gazetted Karmachari Sangh v. Union of India,¹¹ and such right is not a fundamental right and cannot be entertained as was held in T.C.C. Thozhilali Union v. T.C.C. Ltd.¹²

After hearing both the sides the Court held that the Trade Unions ct, 1926 only regulates the incorporation and organization of the Trade Union and its rights and liabilities. There is no provision in the Trade Unions Act, 1926 itself for compulsory recognition. But, it does not mean that it can be denied recognition altogether. The High Court of Calcutta in E.R.E. Congress v. General Manager, E. Railway,¹³ noted the observation of the Supreme Court that there is no such fundamental right to obtain recognition from the government but it is limited to the circumstances of that case.

The respondent also argued that it is a matter of Industrial Tribunal as the respondent is not a ‘State’under Article 12 of the Constitution. But, the Court rejected this contention as the respondent undertaking has been converted to a Public Limited Company and wholly held by the Government of India and held that it may be a matter of policy-making but the Court is concerned to whatever policy may be adopted, it should be fir and reasonable to all and directed the espondents to afford an opportunity to the petitioner union to represent its own members and discuss their grievances.

Karnataka State Road Transport Corportaion Staff and Workers’ Federation, Bangalore v. Karnataka State Road Transport Corporation, Bangalore, 2000 III LLN 795 (Kar. H.C)

In this case restrictions were imposed by the KSRTC Regulation, that the supervisory and security personnel cannot form unions. The restriction was imposed in order to maintain public order. The petitioner claimed that it is the violation of Article 19 (1) (c) of the Constitution. Hence, the restrictions should be declared as void.

The Corporation has been able to maintain itself for more than 35 years with security/supervisory personnel being members of union. No case is pointed out to the Court to show that the public order has suffered on account of affiliation of security personnel to the petitioner union. In the absence of any factual detail and factual foundation, the contention of Article 19(4) is rejected. Hence the Court rule that sub regulation 5 to regulation 9 of the KSRTC Servants (Conduct and Discipline) Regulations, 1971, are in violation of Article 19(1) (c) of the Constitution and declare them to be unconstitutional and struck down the petitions.

Petrochemicals Corporation Ltd. and Another v. Sharmik Sena and Another, 2001 ILLJ 153

An appeal was filed by the management against the order of the Bombay High Court.

The petitioner management was running a canteen in accordance with the provision of Section 46 of the Factories Act, 1948 in which the workmen were employed purporting to be the employees under a contractor. Some of the above-mentioned employees filed a petition demanding that they should be absorbed as regular employees of the management with parity of pay scales and other service conditions applicable to regular employees with effect from their actual date of entry into service with the contractor. The Court relied upon an earlier judgment of M.M. R. Khan and Others v. Union of India¹⁴ THAT THE PROVISIONS OF THE Factories Act held that by virtue of Section 46 of the said Act, the factories are obligated to provide canteen services and termed as statutory canteens.

In this appeal the Supreme Court observed that the High Court was not justified in holding that the maximum age referred to in earlier direction given by the Supreme Court meant the age of superannuation. For regularization of service of workers in statutory canteens. In this case, the minimum and maximum age as on the date of initial apppotment has to be looked into the maximum age will not mean the age of superannuation.

Sarva Udyog Kamgar Sangh v. Jawar Engineers (Private) Ltd., (2002) III LLJ 905 (Bom)

The petitioner was a registered Trade Union under the provisions of the Trade Unions Act, 1926 and challenged an order of the State Government passed under Section 36 of the Payment of Bonus Act, 1965 which authorizes the appropriate Government to grant exemption to any establishment from the application of Payment of Bonus Act, 1965 after considering the financial position of the establishment and the public interest.

The Bombay High Court in this case referred the case of State of Tamil Nadu v. K. Sabanayagam and Another,¹⁵ WHERE THE Supreme Court has interpreted the scope and ambit of Section 36 of the Payment of Bonus Act, 1965 and held that the order of the State Government to grant exemption under the Act was quashed and the petition was allowed.

UCO Bank Employees Association, Madras v. Union of India and Other, (2003) I LLJ 20 (Mad)

The Trade Union filed a writ petition before the Madras High Court for declaring the ceiling on the wages of the employees with regard to entitlement for Bonus in Section 2(13) of the Payment of Bonus Act, 1965 as illegal and unconstitutional. At the time of enactment of the Payment of Bonus Act, 1965 the ceiling of salary or wage was fixed at Rs. 1600. It was subsequently increased to Rs 2500 and in the year 1995 during the pendency of the writ petition it was again raised to Rs. 3500. By this enhancement some employees are now ineligible for bonus.

The High Court observed that the state was the better judge of what the policy should be in economic matters. The Bonus Act, 1965 envisages minimum statutory bonus of 8.33 percent and a maximum of 20 percent. The scheme of payment of bonus to persons employed in certain establishments is on the basis of profit or productivity. The Central Government may from time to time revise the eligibility limit taking into account the economic situation prevailing in the country and the capacity to pay etc. and hence Section 2 (13) of the Payment of Bonus Act was held to be Constitutional.

Industrial Paper (Assam) Ltd. Employees’ Union v. Management, Assam Industrial Development Corporation Ltd., 2007 II LLJ 549 SC

The appellant Union of employees raised a dispute for non-payment of salaries of its members by respondent Assam Industrial Development Corporation. Labour Court upheld the claim of the appellant but a single Judge as well as a Division Bench of the High Court quashed that part of the award which upheld the claim of the appellant as agoresaid. Hence union preferred this appeal.

The Supreme Court observed the appellant claimed to be the union of employees of Industrial Papers (Assam) Ltd. AIDC was a nodal agency of the Government of Assam and was acting only as a promotional organization for promoting IPAl at the initial stages. AIDC could not be branded as owner of the establishment .AIDC was only a promoter and the Court held that a promoter could not be treated as owner.

Nashik Workers’ Union v. Hindustan Aeronautics Ltd. (2016) 6 SCC 224

The appellant union filed complaints under the Maharstra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 for reinstatement of trainees with continuity of services and back wages. The Labour Court grant the petition and the Industrial Court affirmed the order accordingly.

Thereafter, a writ petition was filed against this Order contended that the “appropriate Government” in respect of the dispute was the Central Government and not the State Government and therefore the concerned Act of 1971 was inapplicable and consequently complaints filed by the appellant Union ought to have been dismissed. Therefore, the Supreme Court referred the case of Tata Memorial Hospital Workers, Union¹⁶ and allowed the appeal and directed the employer to make an offer to some trainees as and when vacancies arose for consideration and in case they fulfilled the required qualification to consider them for regular job.

Nagaon and Cachar Paper Mill Case

The Cachar Paper Project WORKERS’ Union which is affiliated to the Indian National Trade Union Congress (INTUC) filed a suit in the National Company Law Appellate Tribunal (NCLAT) on May 29^th 2019 for functioning of the paper mill of Nagaon and Cachar which have been non-functional since March 2017 and October 2015 respectively and the NCLAT ordered accordingly.

It has been seen in this case that the employees and their families of both the paper mills are suffering for non-functioning of these industries. According to a report,¹⁷ the President of Cachar Paper Project Workers’ Union, Manobendra Chakraborty said that “the Tribunal’s order to make both the paper mills functional has unequivocally brought a ray of hope to the familiar suffered due to non-functioning of the mills and also to the industrial sector of the state because altogether a number of 55 employees committed suicide for failure to run their family as their source of income was lost due to non-functioning of these two mills. The unions raise their voice for protection of the human rights of the workers.”

But, afterwards on November, 2019, the NCLAT directed for liquidation of Nagaon and Cachar Paper Mills as neither the Government nor any private party come forward to run the two paper mills.

However, due to the failure of collective bargaining most of the disputes of the workmen are now settled by the judiciary and the trade Unions failed to take active role.

Conclusion

The laissez faire economy predominated the 18^th

and 19^th century where the government controlled the industrial economy and the employer-employee relationship can be considered as of least existent. Thus, sometimes these were seen in of exploitative nature. With the introduction of socialism, a coherent relationship started between the government and employee relationship and simultaneously the Trade Unions were formed and resorted collective resistance against the exploitation of the employers. This gave rise to a bipartite method of collective bargaining. For smooth functioning of the employer-employee relationship depends upon the balance of power between the parties. Gradually, the parties resorted to non-sharing of information lead to Industrial dispute and the most visible symptom of this conflict was the strike.¹⁸ Simultaneously, it is also the duty of the State to ratify the ILO Conventions specially Convention No. 87 and 98 and to enact laws on right to strike of the workers. It can also be said that if the workers are properly entitled with these democratic rights i.e. right to strike and collective bargaining obviously the Trade Unions will able to raise the labour issues in settlement of the industrial disputes and there will be no need to go to the judiciary for settlement of labour disputes by them.

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References

Books:

1. Agarwal, S.L., Labour Relations Law in India, Indian Law Institute,1980

2. Goswami, V. G., Labour and Industrial Laws, Ninth Edition, 2011, Central Law Agency

3. Mishra, S. N., Labour and Industrial Laws, 27^th Edition, 2013, Central Law Publication

4. Paul, Meenu., Labour and Industrial Laws, Eighth Edition, 2011, Allahabad Law Agency

5. Sinha, P.R.N, Indu Bala, Shekhar, Seema Priyadarshini, Industrial Relations, Trade Unions and Labour Legislation, First Indian Print, 2004, Pearson Education

Articles

6. Maya, John, Workers discontent and form of trade union politics, Economic and Political Weekly 2013, January 7, 19-22

7. Poddar, Tushar, Reforming the industrial dispute and Trade Union Acts, Indian Journal of Industrial Relations, July, 2014, 89-99

Journals

8. All India Reporter

9. Indian Journal of Industrial Relations

10. Labour Law Journal

11. Supreme Court Cases

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