Page 245 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes 11.5 Problems of Trade Union

Over the years, trade unions in India have been taken for a ride by outside political leaders. In
the process, the interests of workers and their aspirations have been totally neglected. The Trade
Union Act, 1926, did not go for recognising a representative union. As a result, multiple unions
have cropped up, often with blessings from management and outsiders. The union fi nances
have not been very sound in the beginning. The average membership figures for each union

remain poor and have not improved. The forces of liberalisation unleashed in the early ‘90s have
strengthened the hands of employers in closing down unviable units. The new corporate ‘mantras’

– productivity, performance, efficiency, survival of the fittest-have virtually pushed them to the
wall, where their very survival looks uncertain. Let’s recount the factors responsible for their
ever-increasing woes and depreciated status thus:
11.5.1 Trade Union Leadership

The nature of leadership signifi cantly influences the union-management relations as the
leadership is the linchpin of the management of trade unions. The leadership of most of the trade
unions in India has been outside leadership mainly drawn from political parties.

11.5.2 Reasons for Emergence of Outside Leadership

Outside leadership has been playing a pivotal role in the Indian Trade Union Movement due to
the inability of insiders to lead their movement. In view of the low education standards and poor
command over English language which is still the principal language of labour legislation and
negotiations, low level of knowledge about labour legislation, unsound financial position, fear

of victimisation by the employer and lack of leadership qualities, outside leaders have come to
stay. The main reason for this trend is that the Trade Unions Act, 1926, itself provided the scope
for outside leadership. Section 22 of the Act requires that ordinarily not less than half of the

officers of the reregistered union shall be actively engaged or employed in an industry to which
the union relates. Thus, this provision provides the scope for outsiders to the tune of 50% of the

office bearers. The Royal Commission of Labour (RCL) 1931 recommended for the reduction of
the statutory limit of outsiders from 1/2 to 1/3 but no efforts were taken in this direction.
11.5.3 Evil Effects of Outside Leadership

The evil effects of outside leadership analysed by the National Commission on Labour are as
follows:
1. Outside leadership undermined the purposes of Trade Unions and weakened their
authority. Personal benefits and prejudices, sometimes, weighed more than unions.

2. Outside leadership has been responsible for the slow growth of Trade Unions.
3. Internal leadership has not been developed fully.
4. Most of the leaders cannot understand the workers’ problems as they do not live the life of
a worker.
Even though outside leadership is permissible in the initial stages it is undesirable in the long
run because of many evils associated with it. Political differences of leaders have been inhibiting

the formation of one union in one industry. Most of the Trade Union leaders fulfill their personal
aspirations with their knowledge and experience gained in the Trade Unions.

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