Trade Unions in India: Changing Role & Perspective

sas Trade Unions in India: Changing Role & Perspective J.S. Sodhi Introduction Unions in India have been preoccu- The paper presents trade unions’ pied with protecting the interests of the economic contribution in the con- workers. The government worked in tan- text of the strong historical dem with the unions in setting up labor legacy. The thrust of trade union standards. In the process unions became activities has been to engage in strong and began asserting themselves the traditional functions of wel- not by contributing to the economic per- fare and economic improvement formance but by organizing a large num- of workers; they do not take an ber of strikes at the national and the en- active role in improving produc- terprise levels. The globalization process, tivity and economic perfor- since 1991, has adversely affected la- mance. Unions, working in tan- bor. There has been jobless growth for dem with the government in the many years. Most of the additional em- first thirty years after indepen- ployment has been of an informal na- dence, ensured that workers ture, even in the formal sector. At the were well protected and given all enterprise level, management’s quest for the benefits. In view of the glo- a lean and mean organization has led to balization challenges, there is a a reduction in workforce, replacement gradual change and the man- of permanent workers with causal or agements and unions are enter- contract workers. The employer is also ing into collective bargaining merrily into union bashing or resisting the agreements with clauses of im- formation of unions and taking a tough provements in productivity of the posture in collective bargaining. Unions enterprise. are, therefore, up in arms against the inaction of the government and unfair practices of the management. However, they are operating from a weaker plat- J.S. Sodhi is Professor and Director. Shri Ram form and the management in tandem (de- Centre for Industrial Relations, Human Resources, facto)with the government is asserting Economic & Social Development, New Delhi. itself. E-mail:[email protected]. The Indian Journal of Industrial Relations, Vol. 49, No.2, October 2013 169 J.S. Sodhi For a long time after 1947, neither ible; those that register but do not submit the government nor the management returns to the Registrar of Trade Unions; thought of the unions as a group who may and, those that register and submit returns contribute to the economic performance on membership figures (Venkataratnam, of the economy or the enterprise. Unions 1996). Recognition of trade unions is vol- too did not think of themselves in this role. untary except in states like Gujarat, This is now changing gradually. The Maharashtra, Rajasthan and Madhya unions and the management are entering Pradesh. In other states, it is governed by into agreements with bearing on produc- voluntary Code of Discipline and Inter tivity and growth of the enterprise. Union Code of Conduct. In practice, however, this voluntary recognition process leaves about half of the workmen without The unions and the management representation. are entering into agreements with bearing on productivity and growth Less than 2% of the workforce is of the enterprise. covered under collective bargaining although refusal to bargain by the employer Trade Unions in India as well as the trade unions in good faith is considered to be an unfair labor prac- Trade union membership data available tice in the Industrial Disputes Act, 1947 are somewhat outdated and ambiguous. as amended in 1982. Membership has remained very low although it increased marginally from 2.0 per In the first thirty years after indepen- cent in 1980 to 6.3 per cent in 2002. Most dence, there was greater emphasis on of the membership is in the formal sector centralized bargaining in view of the large although it is the informal sector employ- role of the State in labor market institu- ees who need to be unionized. While the tions. Centralized collective bargaining membership is low, the number of Trade had positive outcomes on wages Unions is very high since the Trade Union (D’Souza, 1998). It is also argued that Act, 1926, allows any seven persons to centralized bargaining took political over- form a union. The claims by unions of their tones as wages and working conditions membership are also flawed. This is evi- were being determined solely on such dent from the fact that the verified mem- considerations (Myers, 1958; Fonseca, bership of the unions was 24.48 million in 1964; Jackson, 1972). Collective bargain- 2002 although the central trade union or- ing in the private sector now usually takes ganizations claimed a membership of 41.18 place with the enterprise level unions. In million (Pong Sul Ahn, 2008). The ambigu- the public sector, it is with centralized ity in membership is further compounded trade union federations and politically by the fact that registration of unions is not affiliated trade unions at the national/or compulsory. As a result, there have been regional level (Jose, 2000). Most of the three types of unions in India; those that collective bargaining takes place in the do not register and are statistically invis- formal sector as over 94 per cent of the 170 The Indian Journal of Industrial Relations, Vol. 49, No. 2, October 2013 Trade Unions in India: Changing Role and Perspective workforce is in the unorganized sector downsizing; strong resistance to union in which the employer-employee rela- formation by the management at the en- tions are quite opaque in view of the near terprise level; and, an indifferent atti- absence of the principal employer. tude of the government towards the Venkataratnam’s (1999) study shows workers. The government has created that the institution and practices of col- Export Promotion Zones where labor lective bargaining have been on the de- laws are applicable but seldom enforced, cline over the years in view of: the shrink- largely due to the resistance from the ing size of the organized sector; capital employers. The government, though well intensiveness of industry; government aware of this fact, has not taken any granting permission to close enterprises action. Internally, the unions are con- and reduce employment through retrench- fronted with an indifferent attitude of ment and voluntary retirement schemes; workers; lack of internal democracy; promotion of export processing zones multiplicity of trade unions; weak orga- where labor rights exist only on paper; nization structure and financial position; acute need of the employers to meet fast emergence of independent unions; shift paced developments of the competitive of power from the federations to the scenario; and, government’s passive role enterprise level unions and their inabil- in cases of labor law violations and other ity to organize informal sector worker anti labor practices. (NCL, 1969; Industrial Relations Bill 1978 and 82; Standing Labor Confer- Employees’ voice in industrial com- ence in 1986; Trade Union and Indus- panies is further hushed up by the ab- trial Disputes Amendment Bill, 1988; sence of workers’ participation in man- Ramanujam Committee, 1992: NCL, agement despite the provision of Works 2002). Committees in the Industrial Disputes Act, 1947 in enterprises employing 100 Collective bargaining has been on or more workers. These committees ex- the decline. Pong Sul Ahn (2010) high- ist largely on paper only (Sodhi et al, lights some of the factors contributing 1996). to this are: absence of legal provisions for recognizing trade unions as a bar- Trade Unions today are besieged gaining agent; multiplicity of trade with problems due to the globalized en- unions in a single establishment and the vironment as well as their internal func- resultant lack of consensus of all the tioning. The former has resulted in sub- recognized trade unions; developments stitution of labor with capital by the man- in the field of management of human agement; changing forms of employment resources in a large number of enter- including the employment of contract la- prises which has taken over some of bor (almost 30% of the workforce in in- the functions of the trade unions; and, dustrial enterprises is contract labor with employment of flexible labor like the insignificant protection); management’s contract, casual, part time and contin- hostile attitude and their quest for gent work labor. The Indian Journal of Industrial Relations, Vol. 49, No. 2, October 2013 171 J.S. Sodhi Historical Perspective tution of India (Article 19) guarantees freedom to form unions and this is a fun- The deplorable conditions of work- damental right. The government enacted ers in the 19th century drew the attention the Industrial Disputes Act 1947, 1948 of a large number of social activists to Minimum Wages Act, Factories Act 1948, the plight of workers in the then indus- Industrial Employment (Standing Orders) tries like cotton, textile and jute. The first Act, 1948 and the Employees State In- strike occurred in 1877 followed by agi- surance Act 1948 during the early years tations and demonstrations in Bombay after Independence. The First Five Year (now Mumbai). The Bombay Mill Hands Plan (1951-56) highlighted that the Association was formed in 1890 and the worker is the principal instrument in the Printer’s Union of Calcutta and the fulfillment of the targets of the plan and Postal Union of Bombay were formed in in the achievement of economic progress 1905 and 1907 respectively. The first generally. The Second Five Year Plan trade union was established in 1918. (1956-61) reiterated that a strong trade Trade Union Act was enacted in 1926. union movement is necessary both for The conditions of workers, however, re- safeguarding the interests of the work- mained very poor. Whitley Commission ers and realizing the targets of produc- (1929-31) highlighted that the only effec- tion.

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