Trade Union 1According to Webbs, a trade union is a continuous association of wage earners for the purpose of maintaining and improving the conditions of their working lives. Under the Trade Union Act of 1926, the term is defined as “any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workers and employers, or for imposing restrictive conditions on the condition of any trade or business and includes any federation of two or more unions”. Let us examine the definition in parts.

  • Trade union is an association either of employees or employers or of independent workers.
  • It is a relatively permanent formation of workers. It is not a temporary or casual combination of workers.
  • It is formed for securing certain economic (like better wages, better working and living conditions), social (such as educational, recreational, medical, respect for individual) benefits to members. Collective strength offers a sort of insurance cover to members to fight against irrational, arbitrary and illegal actions of employers. Members can share their feelings, exchange notes and fight the employer quite effectively whenever he goes off the track.

A more recent and non-legislative definition of a union is “an organisation of workers acting collectively who seek to protect and promote their mutual interests through collective bargaining” (De Cenzo & Robbins, 1993). 


 There are three forms of trade unions:

1) Classical: A trade union’s main objective is to collectively protect the interests of its members in given socio-economic-political system. Trade Unions are the expressions of the needs, aspirations and wishes of the working class.

2) Neo-classical: It goes beyond classical objectives and tries to improve up other wider issues like tax-reliefs, raising saving rates etc.

3) Revolutionary: Change in the system. Establishing the rule of working class even through violence and use of force etc. 


Functions of trade unions are:

a) Militant or protective or intra-mutual functions: These functions include protecting the workers’ interests, i.e., hike in wages, providing more benefits, job security, etc., through collective bargaining and direct action such as strikes, gheraos, etc.

b) Fraternal or extramural functions: These functions include providing financial and non-financial assistance to workers during the periods of strikes and lock outs, extension of medical facilities during slackness and causalities, provision of education, recreation, recreational and housing facilities, provision of social and religious benefits, etc.

c) Political functions: These functions include affiliating the union with a political party, helping the political party in enrolling members, collecting donations, seeking the help of political parties during the periods of strikes and lockouts.

d) Social functions: These functions include carrying out social service activities discharging social responsibilities through various sections of the society like educating the customers. 


Unions concentrate their attention to achieve the following objectives:

a) Wages and Salaries: The subject which drew the major attention of the trade unions is wages and salaries. Of course, this item may be related to policy matters. However, differences may arise in the process of their implementation. In the case of unorganised sector the trade union plays a crucial role in bargaining the pay scales.

b) Working Conditions: Trade unions with a view to safeguard the health of workers demands the management to provide all the basic facilities such as, lighting and ventilation, sanitation, rest rooms, safety equipment while discharging hazardous duties, drinking, refreshment, minimum working hours, leave and rest, holidays with pay, job satisfaction, social security benefits and other welfare measures.

c) Discipline: Trade unions not only conduct negotiations in respect of the items with which their working conditions may be improved but also protect the workers from the clutches of management whenever workers become the victims of management’s unilateral acts and disciplinary policies. This victimisation may take the form of penal transfers, suspensions, dismissals, etc. In such a situation the separated worker who is left in a helpless condition may approach the trade union. Ultimately the problem may be brought to the notice of management by the trade union and it explains about the injustice met out to an individual worker and fights the management for justice. Thus, the victimised worker may be protected by the trade union.

d) Personnel Policies: Trade unions may fight against improper implementation of personnel policies in respect of recruitment, selection, promotions, transfers, training, etc.

e) Welfare: As stated earlier, trade unions are meant for the welfare of workers. Trade union works as a guide, consulting authority and cooperates in overcoming the personnel problems of workers. It may bring to the notice of management, through collective bargaining meetings, the difficulties of workers in respect of sanitation, hospitals, quarters, schools and colleges for their children’s cultural and social problems.

f) Employee-employer relation: Harmonious relations between the employees and employer is a sine quo non for industrial peace. A trade union always strives for achieving this objective. However, the bureaucratic attitude and unilateral thinking of management may lead to conflicts in the organisation which ultimately disrupt the relations between the workers and management. Trade union, being the representative of all the workers, may carry out continuous negotiations with the management with a view to promote industrial peace.

g) Negotiating machinery: Negotiations include the proposals made by one party and the counter proposals of the other party. This process continues until the parties reach an agreement. Thus, negotiations are based on ‘give and take’ Trade union being a party for negotiations, protects the interests of workers through collective bargaining. Thus, the trade union works as the negotiating machinery.

h) Safeguarding organisational health and the interest of the industry:

Organisational health can be diagnosed by methods evolved for grievance redressal and techniques adopted to reduce the rate of absenteeism and labour turnover and to improve the employee relations. Trade unions by their effective working may achieve employee satisfaction. Thus, trade unions help in reducing the rate of absenteeism, labour turnover and developing systematic grievance settlement procedures leading to harmonious industrial relations. Trade unions can thus contribute to the improvements in level of production and productivity, discipline and improve quality of work life. 


Adopting the model of Prof. Clark Kerr unions assume the following roles:

a) Sectional Bargainer: Interests of the workers at plant, industry, national level multiplicity of unions, Crafts Unions, white Collar Union etc.

b) Class Bargainer: Unions representing the interest of the class as whole as in France Agricultural Unions, Federations of unions, Civil Servants Union.

c) Agents of State: As in U.S.S.R., ensuring targets of production at fixed price. In 1974 Railway strike, INTUC stood behind Government and its agent.

d) Partners in Social Control: Co-determinator in Germany. Also, some examples are found in Holland, France, Italy and Sweden; some half-hearted attempts are being made in India also.

e) Unions role which can be termed as enemies of economic systems, driven by political ideologies than business compulsions. Leftist unions want to change the fundamental structure of economy and want to have control over it. Therefore, they encourage high wages, high bonus etc. without any consideration for the health of the economy.

f) Business Oriented Role: Here unions consider the interests of the organisation along with workers. They think that their members fate is inextricably linked with that of organisation and they swim or sink together.

g) Unions as Change Agent: Lead the changes than to be led by them and thus, performing the pioneering role.


Classification of trade unions is based upon ideology, trade and agreement. 

Classification based on ideology

a) Revolutionary Unions: Believe in destruction of existing social/economic order and creation of a new one. They want shift in power and authority and use of force – Left Unions.

b) Reformist or Welfare Unions: Work for changes and reforms within existing socio-political framework of society – European Model.

c) Uplift Unions: Advocate extensive reforms well beyond the area of working condition i.e., change in taxation system, elimination of poverty etc. 

Classification based on Trade

a) Many unions have memberships and jurisdictions based on the trades they represent. The most narrow in membership is the craft union, which represents only members certified in a given craft or trade, such as pipe fitting, carpentry, and clerical work. Although very common in the western world, craft unions are not common in countries like India and Sri Lanka.

b) At the other extreme in terms of the range of workers represented in the general union, which has members drawn from all trades. Most unions in India and Sri Lanka are in this category.

c) Another common delineation of unions based on trades or crafts is that between so called blue-collar workers and white-collar workers. Unions representing workers employed on the production floor, or outdoor trades such as in construction work, are called blue-collar unions. In contrast, those employees in shops and offices and who are not in management grades and perform clerical and allied functions are called white-collar workers.

d) In addition, trade unions may be categorised on the basis of the industry in which they are employed. Examples of these are workers engaged in agriculture of forestry: hence agricultural labour unions or forest worker unions.

Classification based on Agreement

Another basis on which labour agreements are sometimes distinguished is on basis of the type of agreement involved, based on the degree to which membership in the union is a condition of employment. These are:

a) Closed Shop: Where management and union agree that the union would have sole responsibility and authority for the recruitment of workers, it is called a Closed Shop agreement. The worker joins the union to become an employee of the shop. The Taft-Hartley Act of 1947 bans closed shop agreements in the USA, although they still exist in the construction and printing trades. Sometimes, the closed shop is also called the ‘Hiring Hall.’

b) Union Shop: Where there is an agreement that all new recruits must join the union within a fixed period after employment it is called a union shop. In the USA where some states are declared to be ‘right-to-work’.

c) Preferential Shop: When a Union member is given preference in filling a vacancy, such an agreement is called Preferential Shop.

d) Maintenance Shop: In this type of arrangement no compulsory membership in the union before or after recruitment exists. However, if the employee chooses to become a member after recruitment, his membership remains compulsory right throughout his tenure of employment with that particular employer. This is called a maintenance of membership shop or maintenance shop.

e) Agency Shop: In terms of the agreement between management and the union a non union member has to pay the union a sum equivalent to a member’s subscription in order to continue employment with the employer. This is called an agency shop.

f) Open Shop: Membership in a union is in no way compulsory or obligatory either before or after recruitment. In such organisations, sometimes there is no union at all. This is least desirable form for unions. This is referred to as an open shop.

The above classifications are more usual in the west than on the Indian sub-continent.


The Trade Union Act, 1926 legalises the formation of trade unions by allowing employee to form trade union. It allows trade union to get registered under the act. Registration provides legal status to the trade union and it becomes body corporate. It can hold moveable and immoveable property and can enter into contract and can sue and can be sued. The act also provides immunities to the unions from civil and criminal prosecution for bonafidy trade union activities. Union can generate General fund for day-to-day activities and Political fund for political activities. For details refer the Act.


The underline idea of former 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 employer recognises a trade union as bargaining agent and agree 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 union. Some attempts were made to include compulsory recognition in the Trade Union Act in 1947, 1950, 1978 and 1988, but it could not be materialised.

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

The usual methods used to determine union strength, which is the basis of the recognitions are following:

1) Election by Secret Ballot: Under which system, all eligible workers of an establishment may vote for their chosen union, elections to be conducted by a neutral agent, generally the Registrar of Unions, in a manner very similar to the conduct of general elections. Once held, the results of the elections would remain valid for a minimum period, usually two years.

2) Check-Off method: Under which each individual worker authorises management in writing to deduct union fees from his wages and credit it to the chosen union. This gives management concrete evidence about the respective strengths of the unions. But the system is also prone to manipulation, particularly collision between management and a favoured union. Sometimes, genuine mistakes may occur, particularly when the number of employees is large. It also depends on all unions accepting the method and cooperating in its implementation.

3) Verifiction of union membership method by the labour directorate as adopted as a resolution in the same session of the ILC and used widely in many establishments. This process is carried out by the labour directorate, which on the invitation of unions and management of an organisation or industry, collects particulars of all unions in a plant, with regard to their registration and membership. The claim lists of the unions, their fees books, membership records and account books are scrutinised for duplicate membership. Under a later amendment, unions also with lists of members in order to avoid dual membership. After cross checking of records, physical sampling of workers, particularly in cases of doubt or duplication, a final verified list is prepared for employers, unions and the government.

4) Rule of Thumb or intelligent guessing by management or general observation to assess union strength, either by the response at gate meetings, strikes or discussions with employees. This is not a reliable method, particularly in large establishments and can also be subject to change at short intervals. 

Of the above methods the first one is universally accepted method used all over the world but there has been no consensus amount among the trade unions on that in India.

The Second National Commission of Labour (2003) considered the issues seriously and made the following recommendations:

1) We recommend that the negotiating agent should be selected for recognition on the basis of the check off system. A union with 66% membership be entitled to be accepted as the single negotiating agent, and if no union has 66% support, then unions that have the support of more than 25% should be given proportionate representation on the negotiating college.

2) Secret ballot is logically and financially a difficult process in certain industries. Check-off system has the advantage of ascertaining the relative strength of trade unions. Check-off system should be made compulsory for all establishments employing 300 or more workers. For establishments employing less than 300 workers also the check-off system would be the preferred mode. Recognition once granted, should be valid for a period of four years, to be coterminous with the period of settlement. 


Recognised unions have certain rights, which are as follows:

a) the right to raise issues with the management,

b) right to collect membership fees within the premises of the organisation,

c) ability to demand check-off facility,

d) ability to put up a notice board on the premises for union announcements,

e) ability to hold discussions with employees at a suitable place within the premises

f) right to discuss members’ grievances with employer,

g) ability to inspect before hand a place of employment or work of its members, and

h) nomination of its representatives on committees formed by the management for industrial relations purposes as well as in statutory bipartite committees.

Multiplicity of trade unions create problems for both the employer and the trade unions. Therefore recognition of a trade union as negotiating agent is a business necessity. Sooner a central legislation is passed and industry and business houses start dealing with recognised unions, better it will be. Such a device is beneficial for both the employer and the trade unions. It provides strength, it provides opportunity for understanding and mutual appreciation and thus, provides opportunity for a matured employer-union relationship.

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