THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU

INDUSTRIAL RELATIONS

Assignment on
TRADE UNION

RADHIKAGANDOTRA
ROLL NO: 45MBA16
 INTRODUCTION TO TRADE UNION

A trade union is an organization that employees can join in order to have their interests and
goals better represented. It is a continuous association of wage earners for the purpose of
maintaining and improving the conditions of their working life. A worker will pay an annual
subscription and in return will have their interests more powerfully represented than if they had
to negotiate with employers on their own.

The Trade Union Act 1926 defines a trade union as a 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 condition on the conduct of any trade or business, and includes any
federation of two or more trade unions. Traditionally trade unions used to focus their attention on
obtaining a good standard of pay for their members but more recently unions are concentrating
on protecting the individual rights of their members.

Then this definition, primarily, talks about three relationships. They are the relationships
between the: workmen and workmen, workmen and employers, and employers and employers.

Thus, a trade union can be seen as a group of employees in a particular sector, whose aim is to
negotiate with employers over pay, job security, working hours, using the collective power of its
members. In general, a union is there to represent the interests of its members, and may even
engage in political activity where legislation affects their members. Trade unions are voluntary
associations formed of protecting the common interests of its members and also promote welfare.
They protect the economic, political and social interests of their members.

Features of trade unions:

I. It is an organization formed by employees or workers.

II. It is formed on a continuous basis. It is a permanent body and not a casual or temporary one.
III. It is formed to protect and promote all kinds of interests –economic, political and social-of its
members. The dominant interest with which a union is concerned is, however, economic.
IV. It includes federations of trade unions also.
V. It achieves its objectives through collective action and group effort.

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 Objectives of Trade Unions

 To improve the economic lot of employees by securing for them better wages.
 To secure better working conditions for the workers.
 To secure bonus for the employees from the profit of the concern,
 To resist schemes of the management which reduce employment, e.g., rationalization and
automation.
 To secure welfare of employees through group schemes which give benefit to every
employees.
 To protect the interests of employees by taking active participation in the management.
 To secure social welfare of the employees.
 To secure organisational stability, growth, and leadership.

HOW DO TRADE UNIONS OPERATE?

Structure of Trade Unions

Plant level Unions: The first level in the structure from below is the plant level union. This
comprises the unions in one organisation or factory. Please note that only seven members are
required to form a union. This has lead to multiple unions in one factory.

Local Level federations. This is the second level in the structure from below. The local trade
union federation holds together the plant level unions at the local level in a particular craft and
industry. These local level federations might be affiliated to either some regional level or
national level federation or these may be independent.

Regional level federations. These are the organisations of all the constituent unions in a
particular state or region. The importance of such federations cannot be exaggerated. In a country
like India, conditions vary form region to region. The style of living, languages, customs,
traditions, conditions, etc. are different. Therefore, it is better that workers are organised at
regional or state level
These regional federations may have members of two kinds:
(1)The plant ‘level unions affiliating themselves to these directly
(2) The local federations.

National federations. These are national level bodies to which plant level unions, local unions
or regional level unions may get affiliated. These are the apex bodies at the top of the structure.
They act as coordinating bodies. These national federations may have their own regional or state
level coordinating bodies to which the plant level unions may get affiliated.

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 Unions Structure

 Union Members
 Shop Stewards (Union Representatives)
 Branches District and Regional Offices
 National Office

Trade unions are democratic organisations which are accountable to their members for
their policies and actions. Unions are normally modelled on the following structure:

 Members - people who pay a subscription to belong to a union

 Shop stewards - sometimes called union representatives - who are elected by members of
the union to represent them to management.

 Branches - which support union members in different organisations locally. There is

usually a branch secretary who is elected by local members.

 District and/or regional offices - these are usually staffed by full time union officials.
These are people who are paid to offer advice and support to union members locally

 A national office - the union's headquarters which offers support to union members and
negotiates or campaigns for improvements to their working conditions. At the top of the
organisation there is usually a General Secretary and a National Executive Committee,
elected by the union's members.

Five important central organisations of workers in India:

1. The Indian National Trade Union Congress (INTUC). The Congress Party and the top
congress leaders formed the INTUC like Nehru and Patel were associated with it. Every
union affiliated to INTUC has to submit its dispute to arbitration after exhausting other
means of settlement of disputes

2. The All India Trade Union Congress (AITUC). This union serves as the labour forum of
Communist Party of India at present. It is considered as the second largest union in India.

3. The Hind Mazdoor Sabha (HMS). It was formed in Calcutta by the socialists who neither
approved INTUC nor AITUC. The HMS was organised with a view to keeping its
members free from any political or other outside interference.

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4. The United Trade Union Congress (UTUC). Those persons who were dissident socialist
formed it. It functions mainly in Kerala and West Bengal.

5. Centre for Indian Trade Unions (CITU). The Marxists separated from the AITUC in May
1970 and formed the CITU.In addition to the above, there are four other central trade union
organisations. They are:
Bhartiya Mazdoor Sangh (BMS)
National Labour Organisation (NLO)
National Front of Indian Trade Unions (NFITU)
Trade Union Congress Committee

Advantages of Trades Unions

Increase wages for its members. Industries with trade unions tend to have higher wages than
non-unionised industries.

Greater Bargaining Power. The individual employee possesses very little bargaining power as
compared to that of his employer. If he is not satisfied with the wage and other conditions of
employment, he can leave the job.

Represent Workers Trade Unions can also protect workers from exploitation, and help to
uphold health and safety legislation. Trades unions can give representation to workers facing
legal action.

Productivity deals. Trades Unions can help to negotiate productivity deals. This means they
help the firm to increase output; this enables the firm to be able to afford higher wages. Trades
unions can be important for implementing new working practices which improve productivity.

Important for Service Sector. Modern economies have seen a fall in trade union power. This is
because of a decline in manufacturing and rise in service sector employment. Service sector jobs
tend to more likely to be part time and temporary; unions are needed to protect workers in these
kind of jobs.

Sense of Participation. The employees can participate in management of matters affecting their
interests only if they join trade unions. They can influence the decisions that are taken as a result
of collective bargaining between the union and the management.

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 Disadvantages of Trades Unions
Uneven Growth. The trade unionism in India is characterised by uneven growth, both industry-
wise and area-wise. Trade unions are popular in big industries and the degree of unionisation
varies widely from industry to industry. Besides, trade union activities are concentrated in a few
states and in bigger industrial centers mainly due to concentration of industries in those places.

Limited Membership. The number of trade unions in India has increased considerably. But this
has been followed by the declining membership per union.

Multiplicity of Unions. There exist several trade unions in the same establishment. The
multiplicity of unions is the result of outside leadership and labour laws. The law permits and
gives sanctity to small unions. Any seven persons can form a union under the Trade Unions Act,
1926.There is no restriction on the number of unions to be registered in one establishment.

Outside Leadership. Trade unions in India are led largely by people who themselves are not
workers. These outsiders are politicians, intellectuals and professionals having no experience of
work in industry. Outsiders continue to dominate the trade unions to advance their personal
interests.

Financial Problems. The financial position of the trade unions is weak because their average
yearly income is very low and inadequate. The subscription rates are very low. Under conditions
of multiplicity of unions, a union interested in increasing its membership figures keeps the
subscription rate unduly low. As a result, the funds with the unions are inadequate and they
cannot undertake welfare programmes for their members.

Indifferent Attitude of Workers. In India, a large number of workers have not joined any
union. Moreover, all the members of the trade unions do not show interest in their affairs. The
attendance at the general meetings of the unions is very low. Under such circumstance, trade
unionism cannot be expected to make much progress.

Suggestions for Healthy Growth of Unionism

Sound trade union has the potentialities for generating a healthy circle of better labour
productivity, increasing earnings of labour, expanding their purchasing power, improving their
working and living conditions, increasing efficiency, and having more production. Such a state
of affairs would be beneficial not only to workers, but also to the industry and to the nation.
Therefore, it is essential to recognise the vital importance of trade union as an integral part of the
industrial structure of India. The Government and many enlightened employers do appreciate the
importance of the role of trade unions, and their policy is one of encouragement and assistance to
the trade unionism. But please note that the future of trade unionism in Indian depends mainly

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upon the effort of the unionists themselves. You must have heard that real strength must come
from within. For developing internal vitality, a strong and stable trade union movement is
essential for the proper functioning of industry.

 A few suggestions for the development of such unions are:

I. One Union in One Industry: Multiplicity of unions in the same plant leads to inter-
union rivalry that ultimately cuts at the root of the trade union movement. It weakens the
power for collective bargaining and reduces the effectiveness of workers in securing their
legitimate rights. Therefore, there should be only one union in one industry.
II. Paid Union Officials: Generally, the trade unions avail the services of the honorary
workers due to lack of funds. The practice should be stopped because honorary office
bearers cannot do full justice to the task entrusted to them because of lack of time at their
disposal. Suppose that you are asked to do something in the office, which requires a lot of
responsibility. You are not offered any thing in return. Of course the motivational levels
will come down unless and until you are a very passionate or a committed person. The
same applies to the officials of the unions. Therefore, paid union officials should be
employed who are persons of proven integrity and who are able to evaluate the demands
of workers so that they may negotiate with employers on equal footing.
III. Development of Leadership from Within: It is of crucial importance that trade
unions are managed by the workers, and not by outsiders. Leadership should be
developed from within the rank and file of the workers. We have already discussed the
problems related to the outside leadership in the organisations. The outside leadership
should not be encouraged in the organisations because of the following reasons:
The outsiders do not have any knowledge about the functioning of the organization. They
do not have any interest Their interests could only satisfy political interests.
IV. Recognition of Trade Unions. Till recently, the employers refused recognition to the
trade unions either on the basis that unions consisted of only a minority of employees or
two or more unions existed. You should be aware that the Trade Unions Act is
completely silent on the question of recognising a trade union for the purpose of
collective bargaining. Such a provision exists, however, in the Annexure A of the Code
of Discipline, which is a voluntary measure.
This Annexure lays down the following criteria for recognising a trade union:
1. Where there are more than one union, a union claiming recognition should have been
functioning for at least one year after registration. Where there is only one union, this
condition would not apply.
2. The membership of the union should cover at least fifteen per cent of the workers
in the establishment concerned. Membership would be counted only of those who have
paid their subscription for at least 3 months during the period of 6 months immediately
preceding the month of reckoning.
3. A union may claim to be recognised as a representative union for workers in all

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 establishments in an industry in a local area if it has a membership of at least 25% of the
workers of that industry in that area.
4. When a union has been recognised, there should be no change in its position for a
period of 2 years.
5. Where there are several unions in an industry or establishment, the one with the largest
membership should be recognised.
6. A representative union for an industry in an area should have the right to represent the
workers in all the establishments in the industry, but if a union of workers in a particular
establishment has membership of 50% or more of the workers of that establishment, it
should have the right to deal with matters of purely local interest such as, for instance, the
handling of grievances pertaining to
its own members. All other workers, who are not members of that union might either
operate through the representative union for the industry or seek redress directly.
7. Only unions that observe the Code of Discipline are entitled to recognition Another
way of strengthening the trade unions is the improvement in their financial conditions.
The subscription fees should be increased. The members should pay their dues in time so
that the unions have enough money to take care of the overall benefits and welfare of the
workers.
Functions of Trade Unions
Broadly speaking, trade unions perform two types of functions. They are:

Militant Functions. Trade unions leads to the betterment of the position of their members. The
aim of such activities is-
 ensure adequate wages
 secure better conditions of work and employment
 get better treatment from employers
When the unions fail to achieve these aims by the method of Trade unions perform a number of
functions in order to achieve the collective bargaining and negotiations, they adopt an approach
and put up a fight with the management in the form of strike, boycott, gherao, etc. Hence, these
functions of the trade unions are known as militant or fighting functions. Thus, the militant
functions of trade unions can be summed up as:
 To achieve higher wages and better working conditions
 To raise the status of workers as a part of industry
 To protect labors against victimization and injustice

Fraternal Functions. Another set of activities performed by trade unions aims

 help to its members in times of need, and improving their efficiency

 try to promote and encourage of cooperation and promote friendly industrial relations
 multiply education and culture activities among their members

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  take up welfare measures for improving the morale of workers and generate self
confidence among them
 undertake many welfare measures for their members, e.g., school for the education of
children, library, reading-rooms, in-door and out-door games, and other recreational
facilities

Other Functions of Trade Unions

 Negotiation
Negotiation is where union representatives, discuss with management, the issues which
affect people working in an organization. There may be a difference of opinion between
management and union members. Trade unions negotiate with the employers to find out a
solution to these differences. Pay, working hours, holidays and changes to working
practices are the sorts of issues that are negotiated. 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.
 Representation
Trade unions represent individual workers when they have a problem at work. If an
employee feels he is being unfairly treated, he can ask the union representative to help
sort out the difficulty with the manager or employer. 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.
 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 work.
 Member services
During the last few years, trade unions have increased the range of services they offer
their members. These include:
o 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.
o Legal assistance - As well as offering legal advice on employment issues, some
unions give help with personal matters, like housing, wills and debt.
o Financial discounts - People can get discounts on mortgages, insurance and loans
from unions.
o 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.