Law and You > Labour Laws > The Industrial Relations Code, 2020 > Introduction to Industrial Relations Code, 2020

Modernization, the need for quality, and increased productivity are important for competing in the international market. Modernization may cause the introduction of modern automatic machinery and may require high skilled labours. Thus, modernization results in the displacement, laying off, and retrenchment of workers. Such condition results in hostility between the workers and the management.  In such a case, management and workers must come together and use the concept of collective bargaining. Collective agreements provide the climate for the smooth working of the business. An individual worker under financial constraint cannot bargain with the cash-rich employer. In such a situation, the individual may be tempted to accept undesirable conditions including low remuneration. Here there is a fear of loss of a job in the minds of the worker. This fear may be due to the ignorance, illiteracy and industry-specific skill factors. Sometimes employers are in a position to control the bulk demands for the labours, and they may through combined action, force the workers to accept low wages. Collective bargaining allows workers to band together into larger groups like trade unions, create a louder voice that can help provide the benefits for the workers and employers. In this article we shall study about “Trade Unions”.

Objects of Trade Unions:

• To Ensure Security of Workers: Security of workers involves continued employment of workers, prevent retrenchment, lay off or lock-outs. Restrict the dismissal or discharge and VRS.
• To Obtain Better Economic Return: Obtaining better economic returns involves wages hike at periodic intervals, bonus at a higher rate, other admissible benefits, and allowances, subsidized canteen, and transport facilities.
• To Secure Power to Influence Management: Securing power to influence the management involves workers’ collective bargaining, participation in management, decision making, the role of the union in policy decisions affecting workers, and staff members.
• To Secure Power to Influence Government: Securing power to influence government involves influence on government to pass labour legislation which improves working conditions, safety, welfare, security and retirement benefits of workers and their dependents, seek redressal of grievances as and when needed.

Functions of Trade Unions:

• To secure fair wages for workers.
• To safeguard the security of tenure and improve conditions of service.
• To improve working and living conditions.
• To offer responsive co-operation in improving levels of production and productivity, discipline and high standards of quality thus improving employer-employee relations.
• To work for collective bargaining.
• To enlarge opportunities for promotion and training.
• To provide for educational, cultural and recreational facilities.
• To promote the identity of interests of workers with their industry.
• To promote individual and collective welfare.

Characteristics of Trade Unions:

• A union is a part of the working-class movement.  A union normally represents members in many companies throughout the industry or occupation.
• A union is an employer regulating device. It sharpens management efficiency and performance while protecting the interests of the members.
• A union is a pressure organization originating in the desire on the part of a group with relatively little power to influence the action of a group with relatively more power. (The basis of collective bargaining).
• A union is a political institution (organization) in its internal structure and procedures.

Tools Used by Trade Unions:

• Collective Bargaining: It is the essence of industrial relations Through collective bargaining the terms and conditions of employment are determined and under which work is performed’ satisfactorily.
• Grievance Processing and Handling Procedures:  Under this method, the grievances are redressed or dealt with by a correction of the situation or by channelling up of these “up the line”.
• Arbitration: Unresolved grievances, unsettled or unresolved disputes can be settled by appointing a mutually acceptable outside agency. The decision of that agency is bound on both.
• Application of Political Pressure: This pressure is exercised through legislators associated with the trade unions who are capable of bringing about changes in labour laws; and
• Legal Strikes: When all other methods fail to achieve their objectives, trade unions can use a weapon of a legal strike.

Provisions in the Industrial Relations Code, 2020:

Registrar of Trade Unions:

Clause 5 of the Industrial Relations Code, 2020 provides for the appointment of a Registrar for Trade Unions. The Clause empowers the competent government to designate a qualified individual as Registrar of Trade Unions to register trade unions and monitor their operations. The competent government may additionally designate Additional Registrars of Trade Unions, Joint Registrars of Trade Unions, and Deputy Registrars of Trade Unions to carry out the Registrar’s tasks under the Registrar’s supervision and control. The Registrar’s duties and functions are outlined in the Code.

Criteria of Registration of Trade Union:

Clause 6 of the Industrial Relations Code, 2020 gives the criteria for registration of Trade Union.

• Any seven or more members of a trade union by subscribing to their names, apply for registration to the Authority according to Rules of the Trade Union (Clause 6(1)). All the seven-member applying for the registration shall be employed in the industrial establishment.
• At least ten percent of the workers employed or engaged in the industrial establishment or industry with which it is linked, or 100 workers, whichever is less, must be the members of the Trade Union on the date of making an application for registration (Clause 6(2)).
• At all times, a registered trade union of workers must have as members not less than 10% of the workers or one hundred workers, whichever is fewer, subject to a minimum of seven, employed or engaged in such an industrial establishment or industry with which it is associated (Clause 6(4)).
• It is to be noted that where an application has been made for registration of a Trade Union under the Code, such application shall not be deemed to have become invalid merely by reason of the fact that, at any time after the date of the application but before the registration of the Trade Union, some of the applicants have ceased to be members of the Trade Union or have given notice in writing to the Registrar dissociating themselves from the application. But this ceased members should not exceed half of the total number of persons who made the application (7) (Clause 6(3)).
• Registered Trade Union shall be a body incorporate by the registered name, having a common seal and perpetual succession with the power to hold property

In Tirumala Tirupati Devasthanam v. Commissioner of Labour, (1995) Supp (3) SCC 653 case, the Supreme Court held that any group of employees of an industry establishment can be registered as a Trade Union under the Trade Unions Act, 1929, to regulate the relationship between them and their employers, or between employees themselves, or between employers of the industry establishment.

Constitution or Rules of Trade Union:

Clause 7 of the Industrial Relations Code, 2020 deals with the Constitution or Rules of Trade Union. Following are the matters must be included in the rules of Trade Union:

• The name of the Trade Union;
• All the objects for which the Trade Union has been established;
• All the purposes for which the general funds of the Trade Union shall be applicable;
• The maintenance of a list of members of the Trade Union and adequate facilities for the inspection thereof by the office-bearers and members of the Trade Union;
• The admission of ordinary members (irrespective of their craft or category) who shall be persons actually engaged or employed in the industrial establishment, undertaking or industry, or units, branches or offices of an industrial establishment, as the case may be, with which the Trade Union is connected. The membership may also be honorary or temporary as per provisions in the Code;
• The payment of a subscription by members of the Trade Union from such members and others, as may be prescribed;
• 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 any member;
• The annual general body meeting of the members of the Trade Union, the business to be transacted at such meeting, including the election of office-bearers of the Trade Union;
• The manner in which the members of the executive and the other office bearers of the Trade Union shall be elected once in a period of every three years and removed, and filling of casual vacancies;
• The safe custody of the funds of the Trade Union, an annual audit, in such manner as may be prescribed, of the accounts thereof, and adequate facilities for the inspection of the account books by the office-bearers and members of the Trade Union;
• The manner in which the rules shall be amended, varied or rescinded; and
• The manner in which the Trade Union may be dissolved.

In M. T. Chandrasennan v N sukumaran, AIR 1947 SC 1789 case, the court held that the members of trade unions are members under Clause 6(ee). The payment of subscription by members to the trade union has been made compulsory under Clause 6 (ee) of the Act. The trade unions cannot refuse to receive subscription from its members.

In Bokajan Cement Corporation Employees Union v. Cement Corporation of India, 10 November, 2003 case, the Apex Court held that members of the union does not automatically cease upon termination of the employment.

Application for Registration of Trade Union:

Clause 8 of the Industrial Relations Code, 2020 deals with the application for registration of Trade Union. According to Clause 8(1) of the Code, every application for registration of a Trade Union shall be made to the Registrar electronically or otherwise and be accompanied by—

• A declaration to be made by an affidavit in such form and manner as may be prescribed;
• A copy of the rules of the Trade Union together with a copy of the resolution by the members of the Trade Union adopting such rules;
• A copy of the resolution adopted by the members of the Trade Union authorising the applicants to make an application for registration; and
• In the case of a Trade Union, being a federation or a central organisation of Trade Unions, a copy of the resolution adopted by the members of each of the member Trade Unions, meeting separately, agreeing to constitute a federation or a central organisation of Trade Unions.
• If a Trade Union has been in existence for more than one year before the making of an application for its registration, then, a general statement of the assets and liabilities of the Trade Union prepared in such form and containing such particulars as may be prescribed should accompany the application for the registration (Clause 8(2)).
• The Registrar may call for further information for the purpose of satisfying himself that the application complies with the provisions of this Code and the Trade Union is entitled for registration under this Code, and may refuse to register the Trade Union until such information is furnished (Clause 8(3)).
• If the name under which the Trade Union is proposed to be registered is identical with that of an existing registered Trade Union or in the opinion of the Registrar so nearly resembles the name of an existing Trade Union that such name is likely to deceive the public or the members of either Trade Union, the Registrar shall require the persons applying for altering the name of the Trade Union and shall refuse to register the Trade Union until such alteration has been made (Clause 8(4)).

Registration of Trade Union:

Clause 9 of the Industrial Relations Code, 2020 deals with the registration of Trade Union.

According to Clause 9(1) of the Code, when the Registrar is satisfied that the Trade Union has complied with all of the conditions of this Chapter about registration, he or she shall register the Trade Union by entering the particulars relating to the Trade Union included in the statement accompanying the application for registration in a register to be maintained in such form as may be required.

According to Clause 9(2) of the Code, when the Registrar issues an order for the registration of a Trade Union, he shall issue to the applicant Trade Union a certificate of registration in such form as may be required. The certificate of registration shall be conclusive evidence that the Trade Union has been registered under this Code.

According to Clause 9(3) of the Code, when the Registrar has issued a certificate of registration to a Trade Union, he shall enter the name and other particulars of the Trade Union in a register maintained in this behalf in such form as may be prescribed.

According to Clause 9(4) of the Code, every Trade Union which is registered under the Trade Unions Act, 1926 that had valid registration immediately before the beginning of this Code shall be regarded to have been registered under this Code only if, that Trade Union shall submit with the Registrar a statement stating the constitution of the executive of the Trade Union is in line with this Code, along with the rules of the Trade Union revised by Clause 7, and the Registrar shall change his record.

In Inland Steam Navigation Workers Union (in re), (1936) IC 378 case, where the workers’ union requested registration through an application, but the Registrar denied it, considering it unlawful based on its object to be for all practical purposes. The Registrar’s duties, according to Justice Derbyshire, were to assess the application and the objects for which the union was established. If such purposes were those specified in the Act, if they did not deviate from those specified in the Act, and if all of the requirements of the Act and the rules enacted thereunder were met, it was his obligation, in my opinion, to register the union.

In IFFCO, Phulpur Karmachari Sangh v. Registrar of Trade Unions, (1992) II LLJ 239 (All) case, the Allahabad High Court held that the certificate of registration remains valid until the registration is terminated.

In Telco Workers Union v. the State of Jharkhand (2015) II LLJ 448 (Jhar) case, the high court held that there is no provision in the Trade Unions Act, 1926 that gives the Registrar of Trade Unions the authority to handle the intense dispute between the parties. The Registrar has no authority under the Act to hear private members of Trade Unions’ grievances; nonetheless, a complaint may serve as a source of information for the Registrar in forming an opinion for issuing a show-cause notice under Clause 9 of the Act.

In ONGC Workmen’s Association v. the State of W.B., (1988) Lab. IC 555 at 560 case, the Court held that any order passed under Clause 9 by the Registrar must be administrative in nature. The Registrar is not deemed to be a quasi-judicial authority to decide any disputed question of fact or law. He has no authority to ask for any of the parties to lead evidence and to give an opportunity to the other party to cross-examine any witness.

According to Clause 12 of the Code, every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.

Cancellation of Registration:

The Registrar may withdraw or cancel a Trade Union’s certificate of registration as per Clause 9(5) of Code under following circumstances:

1. On the Trade Union’s application verified in the manner prescribed;
2. On information received by him regarding the Trade Union’s violation of the provisions of this Code or the rules made thereunder, or its constitution or rules;
3. If he is satisfied that the members in a Trade Union fall below ten percent of total workers or one hundred workers, whichever is less, only when the Registrar gives the Trade Union not less than sixty days prior written notice outlining the grounds on which it is planned to revoke the Trade Union’s certificate of registration before the certificate of registration is cancelled otherwise than on the Trade Union’s application.

The Registrar must give a previous notice of not less than sixty days in writing specifying the grounds on which it is proposed to cancel the certificate of registration of a Trade Union before the certificate of registration is cancelled otherwise than on the application of the Trade Union.

According to Clause 9(6) of the Code, the Registrar shall cancel a Trade Union’s registration certificate where a Tribunal has ordered the cancellation of such Trade Union’s registration. According to Clause 9(7) of the Code, when cancelling a Trade Union’s certificate of registration, the Registrar must record the reasons for doing so and notify the Trade Union in writing.

Appeal against Non-Registration or Cancellation of Registration:

According to Clause 10 of the Code, any person who is dissatisfied with the Registrar’s rejection to grant registration to a trade union or the cancellation of a certificate of registration may file an appeal with the Tribunal within the time limit allowed. If the appellant satisfies the Tribunal that the delay was caused by a sufficient reason or unavoidable circumstances, the Tribunal may entertain the appeal after the limitation set for preferring the appeal under this sub-clause.

After hearing the parties, the Tribunal may dismiss the appeal or make an order instructing the Registrar to register the trade union and issue a certificate of registration, or set aside the order of revocation of the certificate of registration. The Tribunal must send a copy of the order to the Registrar.

Recognition of Negotiating Union or Negotiating Council:

Clause 14 of the Code deals with recognition of negotiating union or negotiating council. The Code provides for a single negotiating union/council in an industrial establishment having a registered trade union for negotiating on such matters as may be prescribed. Where only one trade union of workers registered is functioning, then, the employer of such establishment shall, subject to such criteria as may be prescribed, recognise such trade union as the sole negotiating union of the workers. If more than one trade union is functioning, then, the union having fifty-one per cent or more workers shall be recognised as the sole negotiating union of the workers. Further, if more than one trade union of workers are functioning in an industrial establishment, and no such trade union has fifty-one per cent or more of workers, then, a negotiating council having not less than twenty per cent of the total workers of that industrial establishment shall be constituted by the employer.

Civil and Criminal Immunity:

Immunity to Trade Union from Civil Liability:

Clause 16 of the Code, confers immunity from civil proceedings in certain cases to a trade union or its office bears or members. In general, a person is liable in torts for inducing another person to breach his contract of employment or for interfering with the trade or business of another. However, a trade union, its officers, and its members are immune from this liability provided that such a lawful inducement is in contemplation or furtherance of a trade dispute.

According to Clause 16(1) of the Code, no suit or other legal proceeding shall be maintainable in any civil court against any registered Trade Union or any office-bearer or member thereof in respect of any act done in contemplation or furtherance of an industrial dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment or that it is an interference with the trade, business, or employment of some other person or with the right of some other person to dispose of his capital or of his labour as he wills.

According to Clause 16(2) of the Code, a registered Trade Union shall not be liable in any suit or other legal proceeding in any civil court in respect of any tortuous act done in contemplation or furtherance of an industrial dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union.

In P Mukundan v. Mohan Kandy Pavithran, (1992) IILLJ 160 Ker case, it was held that strike per se is not an actionable wrong. Further, it was held that the trade union, its officers, and its members are immune against legal proceedings linked with the strike of workmen by the provisions of section 18 of the Trade Union Act, 1926.

In Rohtas Industries Staff Union v. State of Bihar, AIR 1963 Pat 170 case, it was held that employers do not have the right to claim damages against the employee participating in an illegal strike and thereby causing loss of production and business.

In Simpson & Group Companies Workers & Staff Union v. Amco Batteries Ltd, 1991 (61) FLR 708  case, the Karnataka High Court held that physical obstruction of movement of management officials, contractors, goods, or vehicles carrying raw materials, is not a trade union right or a fundamental right under art 19. Immunity under section 18 of the Trade Union Act, 1926 cannot be claimed for such activities. Right to picket is a very intangible right and it extends only up to the right of free movement of others. The methods of persuasion are limited to oral and visual and do not include physical obstruction of vehicles or persons.

Immunity to Trade Union from Criminal Liability:

Clause 17 of the Code, exempts registered trade union officers from prosecution for criminal conspiracy. According to English law, a conspiracy is “an agreement between two or more persons to carry out an unlawful act or an authorized act in an unlawful manner.” Section 120-A of the Indian Penal Code, 1860, imposes penalties for criminal conspiracy.

A registered trade union is granted immunity under the Code. This immunity is only applicable to legal agreements made by a trade union’s members for the stimulation of legitimate objects of a trade union, so it is only partially available. One right given to registered trade unions to help them settle trade disputes is the right to call for a strike and try to get their members to join. All acts that give rise to civil lawsuits are considered illegal acts.

Indian Trade Union Movement:

The trade union movement in India began after the end of First World War due to the need for coordination of activities of individual unions. The movement, over a period of time, systematically spread to almost all industrial centres and became an integral part of the industrial process in India. Various trade unions were formed during such period, such as the Madras Labour Union in 1918, the All India Trade Union Congress (“AITUC”) in 1920, the Bengal Trade Union Federation in 1922 and the All India Railwaymen’s Federation in 1922. In March 1921, Shri N.M. Joshi, the then General Secretary of the AITUC, recommended through a resolution that the Government should introduce legislation for the registration and protection of trade unions in India. Eventually, the Trade Unions Act, 1926 (“TU Act”) was enacted for the purpose of ensuring governance and protection of trade unions. Today, the Bharatiya Mazdoor Sangh (“BMS”), the Indian National Trade Union Congress (“INTUC”) and the AITUC are considered to be the largest trade unions in India.

Problems Faced by Indian Trade Unions:

• Small Size: Most of the unions have low membership. The number of unions and union membership are increasing, but the average membership is inadequate.
• Uneven Growth: Trade unions are concentrated in the large-scale industry sector and in big industrial centers. The trade union activity in the small sector is very little. There is no trade union movement among agricultural labour and in the domestic sector. Thus the trade unionism has touched only a portion of the working class in India.
• The Apathy of Members: Majority of workers do not take a keen interest in union activities. Most of the workers think that their duty is to pay monthly subscription only. The attendance at the general meetings of unions is very poor.
• The Multiplicity of Unions: There exist many unions in the same establishment or industry. The existence of rival unions with a conflicting ideology is greatly responsible for the unhealthy growth of the trade union movement. Multiple unions create rivalry. Unions try to play down each other in order to gain greater influence among workers. Inter-union rivalry weakens the power of collective bargaining and reduces the effectiveness of workers in securing their legitimate rights. In some cases, employers encourage split in unions to undermine their bargaining power.
• Weak Financial Position: The average yearly income of unions is very low and inadequate. The subscription rates are low and many members do not pay the subscription in time. Due to lack of funds, most of the unions are not in a position to undertake welfare programmes for workers.
• Absence of Paid Office-Bearers: Union activists work on an honorary basis and hence devote only a little time and energy to union activities. Union officers require adequate knowledge and skill, proper training. Due to the weak financial position and political pressure, the union officers lack all those skills.
• Political Leadership: Trade unions are under the leadership and control of political parties and outsiders. Politicians exploit unions and workers for their personal and political gains. Thus, the political leadership had ruined the trade union movement in India.
• Problems of Recognition: Employers are under no obligation to give recognition to any union. Employers find it easy to deal with an unofficial and unrecognized trade union. Many employers try to victimize labour leaders, start rival union and bribe union officials. It is easy for them to ply such unfair labour practices with the unrecognized union.

Conclusion:

Labour serves as a back bone of the nation as it helps the country to march on the path of development. In our constitution Labour as a subject falls under the Concurrent List, therefore, both Parliament and state legislatures can make laws regulating labour. The Code provides for strong Trade Union and gives provision of recognition of Trade Union. The presence of a Trade Union during the formation of an industry aids in the establishment of a better relationship between workers and employers. The Trade Union serves as a link between workers and employers.