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10. Trade Unions and Employers Associations

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10. Trade Unions and Employers Associations

Brief Description of Employees’ and Employers’ Associations

The ID Act and the Trade Unions Act have provisions relating to employer and employee associations at an industrial establishment.

a. Trade Unions Act

The Trade Unions Act defines 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’. As described under Section 1 herein, at least 10% of the workmen or 100 workmen at the establishment (whichever is less, subject however to a minimum of 7) must be members of the trade union at the time of making an application for registration. The registration of a trade union under the Trade Unions Act must be distinguished from the process of ‘recognition’ of a trade union. Recognition is the process through which an employer agrees to negotiate with representatives of a trade union on aspects such as working conditions, wages, etc. on behalf of a particular group of workers. There are certain State level rules with respect to recognition of trade unions; however the Trade Unions Act itself does not have extensive provisions in this regard. Refusal by an employer to collectively bargain in good faith with a recognised trade union (and vice versa) qualifies as an ‘unfair labour practice’ as defined under the IDA, attracting consequences that include imprisonment and/or monetary penalties.

b. Key Associations under the ID Act

In terms of the ID Act, establishments with 100 or more workmen have to constitute a ‘works committee’. The works committee should promote measures for securing and preserving amity and good relations between the employer and workmen and, to this end, can comment upon matters of common interest / concern and compose any material differences of opinion that arise between employers and workmen.

Establishments with 20 or more workmen have to set up a grievance redressal committee to address individual employee grievances. However, if the establishment already has a grievance redressal mechanism in place for its workmen, it may not establish a separate grievance redressal committee.

The setting up of the works committee will not affect the right of workmen to raise industrial disputes under the ID Act. Any workman who is aggrieved by the decision of this committee can appeal to the employer, and the employer shall, within 1 month from the date of receipt of such appeal, dispose of the same and send a copy of the decision to the workman concerned.

There are other committees that have to be set up as per State rules framed under the ID Act. In Gujarat for instance, a ‘joint management council’ has to be formed in industrial establishments that employ 500 or more workmen.

Rights and Importance of Trade Unions

 The Constitution of India guarantees the fundamental right of all citizens to form associations or unions, including the right to form or join trade unions. Some of the rights of registered trade unions are as follows:

  • immunity is granted to office bearers and members from proceedings relating to criminal conspiracy, in instances where the trade union has been engaged in furthering its objects.
  • trade unions can maintain a separate fund for political purposes from which payments may be made for the promotion of civic and political interests of its members.
  • trade unions can amalgamate with other trade unions in the manner prescribed.
  • agreements between members of a registered trade union shall not be void or voidable merely on account of the fact that any of its objects are in restraint of trade.
  • no suit or other legal proceeding can be maintained in any civil court against any registered trade union or any office-bearer or member in respect of any act done in contemplation of a trade dispute to which a member is a party, on the ground that such act induces some other person to break a contract of employment, or that it interferes with the trade, business or employment of some other person or interferes with the right of some other person to dispose of his capital or labour as he wills it.

Trade unions have immense significance both for the wellbeing of the industrial establishment and for the society at large. Trade unions play a major role in negotiating better work conditions for employees, settlement of existing disputes and in reducing instances of industrial disputes, thereby maintaining an amicable relationship between the employer and the workforce. They can also assist in the recruitment and selection of workers and help them adjust better to the organisational structure and hierarchy.

Types of Representation

Number of Representatives

The rules pertaining to each of the associations listed above, have detailed provisions regarding their roles and responsibilities as well as the appointment of members. For instance, in case of a works committee, the ID Act prescribes that it shall have an equal number of both employer and employee representatives and shall not exceed 20 members. Further, if the establishment has registered trade unions, then they would have to be consulted by the employer before finalising representatives from the workmen fraternity. A grievance redressal committee on the other hand, shall also consist of an equal number of employer and workmen representatives; however, the total number of members constituting the grievance redressal committee shall not exceed 6.

Appointment of Representatives

In relation to a works committee, the employer representatives shall be nominated by the employer and shall, as far as possible, be officials who are in direct touch with the working of the establishment. Employee representatives must be chosen by way of voting in the manner prescribed. In case the establishment has registered trade unions workmen representatives on the works committee should be divided into those who are trade union members and those who are not. The works committee should have a chairman, vice chairman and two joint secretaries, who term of office shall be 2 years. The works committee should meet at least once every quarter.

The chairperson of the Grievance Redressal Committee shall be selected from among the employer representatives and from the workmen representatives alternatively, on rotation basis every year. There shall, as far as practicable, be one female member on the grievance redressal committee, and depending on the total number of members on the grievance committee, the number of female members may be increased proportionately.

Tasks and Obligations of Representatives

Though trade unions, works committees and grievance redressal committees are all envisaged to ensure greater participation of workmen in the running of an establishment, there are subtle differences in relation to each of their terms of reference. Trade Unions are the principal collective bargaining agents and can enter into settlement agreements with employers. A works committee on the other hand, aims at pre-empting industrial disputes, smoothening working relationships and addressing any differences by way of direct negotiations between employer and workmen representatives. A works committee functions as a recommendatory body that addresses, at the first instance, problems arising in the day to day functioning of the industrial establishment. A grievance committee looks into individual employee grievances – unlike the other two committees which are concerned with employer-employee relations as a whole.

Employees’ Representation in Management

The nature and extent of employees’ representation eventually depends on the kind of establishment in question and the number of employees engaged at such establishment. It may be noted that the works and grievance redressal committees are only required where the requisite employee threshold is satisfied, as described above. Also, trade unionisation in India is entrenched primarily in the traditional manufacturing sectors, though the IT sector has recently seen some unionisation as well. In addition, certain other committees may also be required depending on the nature of the industry and any State specific requirements.

Other Types of Employee Representative Bodies

As per the FA Act, in every factory where a hazardous process takes place or where hazardous substances are used or handled, the occupier shall set up a ‘safety committee’ consisting of an equal number of representatives of workers and the management to promote co-operation in maintaining proper safety and health at work, and to periodically review the specific measures taken in this regard. Also, in factories where there are 250 or more employees, a canteen is required to be provided by the employer, which is then to be managed by a committee that would also have representatives of workmen. Furthermore, safety committees are required to be set up in mines where there are 100 or more persons employed.

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