Page 253 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes Recognition of Trade Union

The Bombay Industrial Relations Act, 1946, classified the registered unions as:

1. Representative union having a membership of not less than 25% of the total employees as
members in an industry;

2. Qualified union having at least 5% of membership in an industry; and
3. Primary union having a membership of at least 15% of employees in an undertaking.

The rights of a Representative union under the Act are:
1. First preference to appear or act in any proceedings under the Act as the representative of
employees;
2. Right to submit a dispute for arbitration;

3. To make a special application to the Labour Court to hold an inquiry; and
4. Office-bearers of the union cannot be dismissed or discharged.

One of the long pending problems of the Indian Industrial Relations System is to evolve a
satisfactory and acceptable means of setting the problem of recognising a bargaining agent from
out of rival unions. Collective bargaining cannot exist and function without recognising the
bargaining agent. Since there is no law for compulsory recognition of trade unions, it is left to the
choice of the employees. In view of the union rivalry and multiple unions, the employer fi nds it

is difficult to recognise a union in the context of political affiliation. The employer may recognise
those unions with the highest number of members. But more than one union may claim the
highest number of membership in view of dual and multiple memberships. Efforts have been
made to bring about legislative measures for compulsory recognition of unions immediately
after Independence.

The Bombay Industrial Relations Act 1946 provided for the largest trade union in an undertaking
with a total membership of at least 15% of the workforce. Madhya Pradesh and Rajasthan laid
down, more or less, similar conditions for the recognition of a representative union. In other
States, unfortunately, there is no statutory provision for union recognition (they follow the Code
of Discipline adopted in 1958).

The underlying idea of forming a trade union is to negotiate and bargain with employers to
improve the service and employment conditions of workers on their behalf. This collective
bargaining process can be possible only when the employer recognises the trade union as a

bargaining agent and agrees to negotiate with it because it is difficult to negotiate with multiple
trade unions in a single organisation.
The Trade Union Act, 1926, the only Central Law, which regulates the working of the unions,
does not have any provision for recognition of trade unions. Some attempts were made to include
compulsory recognition in the Trade Union Act in 1947, 1950, 1978 and 1988, but these did not
get materialised.

There are, however, state legislations like the Maharashtra Recognition of Trade Union and the
Prevention of Unfair Labour Practices Act 1971, the Madhya Pradesh Industrial Relations Act,
1960 and other states like Gujarat, Andhra Pradesh and Orissa, etc., which have gone for such
legislations, of late.

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