Labor Law- Make-up Assignment Shivani Reddy

(20151140)
Question 1

“Every Trade Union is an association but every association is not a trade union”. Discuss
the issue of recognition of trade unions in India.

There exists an undeniable divide between the interests of the workman and that of an employer

in a capitalist society. The masters are almost always ignorant of the world of the worker and

worker’s voices often unheard. A Trade Union recognizes the divide and uneven power

structure. At its core, a trade union is an organization of workers, united together for the

preserving the integrity of their trade labour. Through their collective bargaining power, they

seek to achieve higher pay and ensure a safe and humane working environment.

In India, a Trade Union is defined under Sec. 2(h) of the Trade Unions Act. The Act defines

trade unions as any combination, whether temporary or permanent, formed with the primary

motive of:

1. Regulating the relationship be employee – workmen, workmen inter se or between the

employers inter se;

2. Imposing restrictive of condition in the conduct of any business or trade.

The primary objective of legislating the Trade Unions Act, 1926 was to provide for the

registration of trade unions and create certain law that governs the law relating to registration

of Trade unions and the rights and liabilities of the governing trade unions. The registration of

trade union is not compulsory. However, registration of a trade union is desirable as a registered

trade union is vested with certain rights and privileges under the Trade Unions Act. There has

to be a minimum seven workers of an establishment (or seven employers) can form a trade

union and apply to the Registrar for it registration.

Registration under the Trade Unions Act does not guarantee recognition of the said employer.
Labor Law- Make-up Assignment Shivani Reddy
(20151140)
The need for recognition of trade unions by employers is critical to working class in order to

ensure that an appropriate modes of collective bargaining took place and that the agreements,

which were collectively reached, were mutually observed. It is considered that recognition of

trade unions was a step towards securing reasonable levels of pay and working conditions. This

in turn will be achieved if workers stood united in representing their demands through a trade

union, which is adequately recognized.

In the case of Kampali Cooperative Sugar Factor Ltd. v. Management of Kampali Coperative

Sugar Factory Ltd., the court held that since there is no explicit provision under the Trade

Unions Act with respect to the recognition of Trade Unions, the same cannot be enforced via

a writ petition. There exists a key distinction between the registration of trade union and the

recognition of a trade union. Neither registration of trade union nor recognition of trade union

are compulsory under the Act. Trade unions once recognized are vested with certain rights

under the Act. However, there is not inherent right to be recognised under the act and the same

lies as a discretion with the management. Recognition of a trade union is crucial in determining

the rights of the employees. Its through recognition process that the employer accepts that a

particular trade union has a representative character and be willing to engage in discussions

with respect to the interests of the employees and is critical to smooth collective bargaining

and stability in the industrial relations.

National labour commission in 1969 after reviewing the legislations, strongly recommended

the following:

(1) Compulsory registration of trade unions,

(2) Registrar must be time bound in deciding issues related to registrations,

(3) Effective cancellation measures must be in place when Trade Unions don’t comply

with rules of membership and filing returns.

Labor Law- Make-up Assignment Shivani Reddy
(20151140)
(4) Recognition of trade unions by the employers to be made compulsory by central

legislations

(5) Give equal opportunity for collective bargaining

Conclusion:

Withdrawal of recognition does not infringe the fundamental rights granted by article 19(1)(c)

of the Constitution of India. Since, the right to recognition is covered under the article 19(1)(c)

as a fundamental right, because the right to form associations doesn’t carry a connected right

that the employers must recognize the associations.

Question 2

“Sovereign function alone qualify for exemption under section 2(j) of the Industrial
Dispute Act and not the welfare activities of the Government and their commercial arm.”

Examine the above statement in light of changing definition of ‘industry’ with reference

to relevant case law.

Legal provisions:

Section 2(j) of the industrial disputes act, 1947 defines ‘industry’ as any business, trade,

undertaking, manufacture, or calling of employers and includes any calling, service,

employment, handicraft or industrial occupation or avocation of workmen.

There needs to be a relationship of employer and employee for existence of an industry. While

the employers are engaged in business, trade, undertaking, manufacture. The employees are

engaged in calling, service, employment, handicraft or industrial occupation and avocation.

Labor Law- Make-up Assignment Shivani Reddy
(20151140)
Bangalore water supply case1 has defined ‘industry’, supreme court has given a broad and

liberal definition.

Determining what is an Industry: The triple test given by the Bangalore water supply case

determines Industry.

This case has also given exemption under section 2(j) of the industrial disputes act, it said that

sovereign function alone is enough for exemption and welfare activates etc. by the governing

bodies is not needed.

The reason for the court to give a liberal definition of the term ‘industry’ was to ensure all the

employers and employees are at peace and avail maximum output. Court ensured that the

enterprises from the central act is included. This gave both the parties are given an opportunity

to raise an issue.

Following the Bangalore water supply case, in case of the agricultural produce market case2

the court held that an industry will not be exclude from the definition of industry under the

central act merely because of a statute created by an enterprise.

Courts will have to look into the pith and substance test and the dominant activity and

objectives, for determination of the industry. The term ‘enterprise is not excluded from the

term ‘industry’ under the central act. The reason being that any statute essentially supporting

the states trading activity will be encouraged for the welfare the state. Thus, these features can’t

be construed to be sovereign in nature or of an inalienable character.

Conclusion:

The definition of the word industry has been given a wide and farfetched definition by the

Bangalore water supply case. But now, both the employer and employee are given

opportunities to be raise issues. But the parties are trying to be the sole occupiers under the

1
Bangalore water supply and sewage board v R. Rajappa & others, 1978 SCR (3) 207
2
Agricultural Produce Market Committee V. Ashok Harikuni (2000) 8 Scc 61
Labor Law- Make-up Assignment Shivani Reddy
(20151140)
definition provided. Their intention to be the sole beneficiary of the statute and violate the

principle of mutuality.

The wide definition has created many disputes and confusion among the industrial community.

Also, as mentioned in the Bangalore water supply case, sovereign function is outside the

preview of the term ‘industry’. Sovereign function is confined to the traditional concept but

should comprehend public welfare activities which the government undertakes in discharge of

the constitutional obligation.