Sharat Sachin Maximizing my potential

Trade Unions Notes

This post gives quick bullet points on the fifth chapter of the Industrial Management book by T.N. Chhabra in the IP University syllabus. It is concisely edited to contain the maximum info in the minimum amount of text. It is also pretty comprehensive, and is probably all you need to know for the exams. Fifth part in a ten part series.

Nature, Objectives and Functions of trade unions

Labour union/trade union is an organisation of workers formed to promote protect and improve, through collective action, the social economic and political interests of its members

Features of a Trade union

  1. It’s an organisation formed by employees for workers
  2. It is formed on a continuous basis. It is a permanent body and not a casual or temporary one.
  3. It is formed to protect and promote all kinds of interest- economic, political, and social of its members the dominant interest with which a union is concerned is however economic.
  4. It includes federations of trade unions also.
  5. It achieves its objectives through collective action and group efforts.

Objectives of Trade Unions

  1. to improve to improve the economic lot of employees by securing them better wages
  2. to secure better working conditions for the workers
  3. to secure a bonus for the employees from the profit of the concern
  4. to resist schemes of the management which reduce employment example - rationalization and automation.
  5. to secure the welfare of employees through group schemes which give benefit to every employee
  6. to protect the interests of employees by taking my active participation in the management
  7. to secure the social welfare of the employees
  8. to secure organisation stability growth and leadership

Functions of Trade Unions

One classification:

  1. Militant functions :
    • performed for the betterment of the position of the members in relation to their employment
    • when unions fail to accomplish their aims they adopt an agitational approach and put up a fight with the management in the form of so-slow, strike, boycott, gherao, etc.
  2. Fraternal functions :
    • rendering help to its members in times of need and improving the efficiency
    • try to foster a spirit of cooperation and promote friendly relations and diffuse education and culture among the members
    • they extend financial help to the members when the latter are suffering from illness/accident
    • arrange for legal assistance to members if necessary
    • undertake many welfare measures for their members
    • may even undertake publication of some magazine or journal

Second classification:

  1. Intramural activities :
    • involve militant functions
  2. Extramural activities :
    • involve fraternal functions
  3. Political activities :
    • modern trade unions also take political activities to achieve their objectives
    • attempt to seek influence on public policy relating to matters of interest to working class

Importance of Trade Unions

Functions relating to Trade Union members

  1. safeguarding workers against all sorts of exploitation by the employees by union leaders and by political parties
  2. protecting workers from the atrocities and unfair labour practices of the management
  3. to ensure healthy safe and conducive working environment for the workers
  4. exerting pressure for enhancement of rewards associated with the work
  5. Ensuring an undesirable standard of living by providing various types of social services for the workers
  6. Ensuring a fair and square deal and social justice to workers
  7. removing the dissatisfaction and redress the day today grievances and complaints of workers
  8. encouraging workers participation in the management of industrial organisation and trade union and to foster labour management and leader-follower co-operation
  9. making the workers conscious of the rights and duties
  10. raising the status of trade union members in the industrial organisation and in the society at large

Functions relating to the industrial organisation

  1. making the organisation as a joint enterprise between workers and management and promoting the identity of interests
  2. increasing production quantitatively as well as qualitatively by laying down the norms of production and ensuring their adequate observance
  3. maintenance of discipline at the place of work
  4. creating opportunities for workers participation in management and strengthening labour management cooperation
  5. redressal of day to day grievances promoting cordial relations between the workers and management by settling disputes through negotiations join consultation and voluntary arbitration and by avoiding litigation
  6. exert pressure on the employers to enforce legislative provisions beneficial to the workers, to share the profits equally and keep away from various types of unfair labour practices
  7. two-way communication with management

Functions relating to Society

  1. rendering constructive cooperation in the formulation and implementation of plans and policies
  2. participating in the development of programs of national development
  3. launching special campaigns against social evils of corruption, nepotism, communalism, casteism, regionalism, etc.
  4. helping the unorganised sector to organise itself
  5. creating public opinion favourable to government policies and plans
  6. pressuring the government to enact legislation conducive to the development of trade unions and their members

Criticism of Trade Unions

  1. lack of education makes the workers narrow-minded and prevents them from taking long-term views
  2. trade unions do not welcome rationalization and improved methods of production
  3. when labour unions strike on flimsy ground, incalculable losses occur
  4. they create artificial scarcity of labour
  5. by the insistence of the payment of standard rates of wages, they have levelled down earnings of efficient workers

Motivation to join Unions

  1. greater bargaining power
  2. to make their voice heard
  3. minimise discrimination
  4. sense of security
  5. a sense of participation
  6. sense of belongingness
  7. background factors, such as historical factors

Methods of Trade Unions

  1. method of mutual insurance
  2. method of collective bargaining
  3. legal enactment
  4. political action

Origin of trade unions

  1. hopelessly low wages
  2. long hours of work
  3. job insecurity
  4. no social security and welfare measures
  5. women and children were employed in the factories
  6. mass illiteracy
  7. indifferent attitude of the government
  8. rural background of labour
  9. unsympathetic public

Size of Trade Unions

In India 75% of unions are having members <500 and unions with members >2000 constitute only 4% of total unions. This picture is small compared to the size of unions in the UK or US where union membership runs into millions.

Factors responsible for the small size of unions

  1. minimum membership required by the Trade Unions act
  2. multiplicity of unions
  3. ego of trade union leaders

Problems and Weaknesses of trade unions

  1. uneven growth
  2. low membership
  3. multiplicity of unions
  4. outside leadership
  5. financial problems
  6. indifferent attitude of workers

Suggestions for strengthening of trade union

  1. one Union in one industry
  2. paid union officials
  3. development of leadership from within
  4. recognition of trade unions
  5. improvement of union finances

Rights of a recognised Union

  1. it can raise and enter into collective agreements with employees on general questions
  2. it can collect membership fees from the members within the premises of the undertaking
  3. it can put up a notice board on the premises of the undertaking
  4. it can hold discussions on the premises of the undertaking with the employees who are members of the union
  5. it can discuss with the employer or with any other person appointed by him in that behalf the grievances of employees in the undertaking
  6. it can inspect any place in the undertaking where any members of the union are employed
  7. it can appoint its nominees on :
    • Joint Management Council
    • Grievance Committee
    • and any other non-statutory bipartite committee set up by the management

Trade Unions Act, 1926

An Act to provide for the registration of Trade Unions and in certain respects to define the law relating to registered Trade Unions.

Registration of Trade Unions

Mode of Registration

Any seven or more members of a Trade Union may, by subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Act with respect to registration, apply for registration of the Trade Union under this Act.

Application for Registration

  • Every application for registration of a Trade Union shall be made to the Registrar of Trade Unions, and shall be accompanied by a copy of the rules of the Trade Union and a statement of the following particulars, namely: -
    1. the names, occupations and addresses of the members making the application
    2. the name of the Trade Union and the address of its head office
    3. the titles, names, ages, addresses and occupations of the office-bearers of the Trade Union.
  • Where a Trade Union has been in existence for more than one year before the making of an application for its registration, there shall be delivered to the Registrar, together with the application, a general statement of the assets and liabilities of the Trade Union.

Difference between Registered and Unregistered

Registered Trade Union:

  1. A registered Trade Union has several advantages.
  2. It is a juristic person.
  3. It can sue or can be sued on its own name.
  4. It has perpetual succession.
  5. It can be affiliated to any national or International Union Federation.
  6. It can acquire properties on its own name.
  7. It can contract on its own name.
  8. The employers come forward for discussions and collective bargaining with the executives of a registered trade union.
  9. Proper accounting, auditing and submission of Returns within the prescribed time, etc., are compulsory to the registered trade union.

Unregistered Trade Union:

  1. An unregistered Trade Union has no advantages.
  2. It is not a juristic person. It is only an association of persons.
  3. It cannot sue or be sued on its own name.
  4. It has no perpetual succession.
  5. It cannot be affiliated to any national or International Union Federation.
  6. It cannot acquire properties on its own name.
  7. It cannot contract on its own name.
  8. The employers do not come forward for discussions and collective bargaining with the executives of an unregistered trade union, as it has no legal status.
  9. Proper accounting, auditing and submission of Returns within the prescribed time, etc., are not necessary to an unregistered trade union.

Cancellation of Registration

A certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar -

  1. on the application of the Trade Union to be verified in such manner as may be prescribed, or
  2. if the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that the Trade Union has ceased to exist or has willfully and after notice from the Registrar contravened any provision of the Act

Provisions in Rules of Trade Union

  1. the name of the Trade Union;
  2. the whole of the objects for which the Trade Union has been established;
  3. the whole of the purposes for which the general funds of the Trade Union shall be applicable;
  4. the maintenance of a list of the members of the Trade
  5. the admission of ordinary members who shall be persons actually engaged or employed in an industry with which the Trade Union is connected
  6. the payment of a subscription by members of the Trade Union which shall be not less than twenty-five paise per month per member;
  7. 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 the members;
  8. the manner in which the rules shall be amended, varied or rescinded;
  9. the manner in which the members of the executive and the other office-bearers of the Trade Union shall be appointed and removed;
  10. the safe custody of the funds of the Trade Union, an annual audit
  11. the manner in which the Trade Union may be dissolved.

Objects on which general funds may be spent

  1. the payment of salaries, allowances and expenses to office-bearers of the Trade Union
  2. the payment of expenses for the administration of the Trade Union, including an audit of the accounts
  3. the prosecution or defence of any legal proceeding to which the Trade Union or any member thereof is a party
  4. the conduct of trade disputes on behalf of the Trade Union or any member
  5. the compensation of members for loss arising out of trade disputes
  6. allowances to members or their dependents on account of death, old age, sickness, accidents or unemployment
  7. the issue of policies of assurance on the lives of members, or under policies insuring members against sickness, accident or unemployment
  8. the provision of educational, social or religious benefits for members
  9. the upkeep of a periodical published mainly for the purpose of discussing questions affecting employers or workmen as such;
  10. the payment, in furtherance of any of the objects on which the general funds of the Trade Union may be spent
  11. subject to any conditions contained in the notification, any other object notified by the appropriate Government in the official Gazette.

Change on Name of Trade Unions

Any registered Trade Union may, with the consent of not less than two-thirds of the total number of its members and subject to the provisions of section 25, change its name.

Amalgamation of Trade Unions

Any two or more registered Trade Unions may become amalgamated together as one Trade Union with or without dissolution or division of the funds of such Trade Unions or either or any of them, provided that the votes of at least one-half of the members of each or every such trade Union entitled to vote are recorded, and that at least sixty per cent of the votes recorded are in favour of the proposal.

Dissolution of Trade Union

  1. When a registered Trade Union is dissolved, notice of the dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution, be sent to the Registrar, and shall be registered by him if he is satisfied that the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such registration.
  2. Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution of funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the members in such manner as may be prescribed.
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