The Unrecognizable Law on (Un)Recognizing Unions

Collective bargaining is an instrument for better standard of living, bringing workers together against an irascible management. It serves to articulate collective demands, and challenge powerful managements and governments, who are often hand in hand. A trade union is an organisation for the working-class action. In the India we inhabit today, which is rapidly altering to an entirely fascist and capitalist enterprise, a trade union enables workers to unite as a class, outside identities of caste, gender and religion.


This right to collectively bargain is well settled in both custom and international law, through ILO Convention No. 87 - Freedom of Association and Protection of the Right to Organize Convention, 1948, which recognises the right of workers to organise without interference from public authorities, right against being suspended or dissolved by administrative authorities, and the duty of all member countries to take all necessary measures to ensure workers freely exercising the right to organise (Articles 3, 4, and 11).


Collective bargaining is exercised in several ways: through formation of unions, by holding protests and strikes on collective demands, or by negotiating with the management to enter into settlements. In order for a union of workmen to collectively articulate their demands to the management, the majority union of the industrial establishment will seek that the management recognises it as a “recognised union” of the establishment, such that any settlement entered into between that union and the management binds all workers in the establishment. The concept of recognition of unions is meant to facilitate negotiations by placing on record which union is officially authorised to represent the interests of the workers in that establishment to the management.


Law on recognition of trade unions

Unlike the adjudication of industrial disputes or wages, there is no central law governing recognition of trade unions. The right to collectivize is recognized in Article 19 of the Constitution, through which all citizens have the right to form associations or unions,  right to freedom of speech and expression as well as right to assembling peaceably without arms. Once formed, a union may register itself under the Trade Union Act, 1926. However, such registration is not a precondition to collectivize, and merely allows for the union to be a legal entity which holds funds, and enjoys some immunities from civil cases arising out of industrial disputes. Thus, once a union is formed, it has the immediate ability to present the demands of its workers to the management as well as the government.


In establishments, often, there are multiple unions in existence. A majority of workers may be members of one union with a minority being members of another union. Or, the more realistic scenario is that the management foists a management sponsored union in order to weaken the bargaining power of the existing majority union. The management will then refuse to engage with the majority union, claiming that it is not a recognized union, while the management foisted union is entitled as the recognized union representing the interests of workers. Although foisting a management sponsored union is an unfair labour practice, this is a regular tactic utilized by the management to refuse to enter into negotiations with the majority union, or to victimize union office bearers for participation in union activities. The management will also enter into anti-worker settlements with the sponsored union, which they will then claim binds all workers in the establishment. In this manner, the management uses the concept of “recognized unions” to arm-twist workers into leaving majority unions for sponsored minority unions, to delegitimize majority unions, and to refuse to engage with the collective bargaining of workers in the establishment.


In this context, the concept of “recognition of trade unions” or a “recognized union”, gains relevance. It is pertinent to note that there is generally no provision in either the industrial disputes law or trade union law that requires that a trade union be “recognized” in order to articulate the demands of workers, either in court or outside the court.  Recognition of unions (outside of public sector undertakings, railways, defence sectors) is a mostly informal process through which the management of the companies will recognize the unions which are a part of an establishment, and will enter into negotiations with the said unions. The management will either conduct membership verification by obtaining a list of union members and verifying with each worker regarding their membership; the employees may be asked by the management to check-off whether they belong to a union or not; or, more preferably, the union may hold a secret ballot of all workers in the establishment to determine the majority union.


The rules governing unions formed by workmen in public sector undertakings differ, and generally in all industrial establishments, are largely based on the rules framed by each undertaking, the model standing orders, or the settlements entered into between the workmen and the management. Such rules may state that the union enjoying more than 50% membership of workmen will only be recognized as the sole bargaining agent, subject to elections being regularly conducted. In the absence of a central law that makes it compulsory for recognition of trade unions, it becomes a highly subjective process that can be arbitrary. Often, the management is known to have sponsored minority unions or paper unions without any workers support, to hold an wishy-washy elections and claim to be the only majority union in the establishment.


Recognition of Unions under the Code of Discipline

The only formal document of the Union Government regarding recognition of trade unions is the “Recognition of Unions under the Code of Discipline” issued by the Ministry of Labour (Department of Labour), Government of India, first issued in 1961 and revised subsequently in 1963, 1969 and 1980, and adopted at the Indian Labour Conference.[1] Attached to the document is also the Code of Discipline. The said Code of Discipline provides for two types of recognition a union can claim: for an industry in a whole local area or for in a particular establishment. It provides the following rules, amongst others:

1.    Where there is only one union in the industry or establishment it can claim recognition provided it hasn’t breached the code of discipline in the 1 year preceding the claim.

2.    Where there are several unions in an industry, the one with the largest membership of not less than 25% of the workers of the industry, functioning for atleast 1 year after registration under the Trade Unions Act, 1926, can claim recognition. Where there are several unions in a single establishment, it must have majority of atleast 15% of the workers.

3.    Membership of the union for the purpose of recognition is only of those workers who have paid subscription for atleast 3 months during the preceding 6 months.

4.    Such a Union should first request the management to accord recognition with all relevant particulars. If not accepted, the union may seek assistance of the concerned implementation machinery.

5.    The recognition lasts for a period of 2 years from the date of recognition.

6.    A union can be derecognized if it breaches the code of discipline.

7.    Such recognized unions enjoy the right to raise and enter into collective agreements with the employers on general questions regarding terms of employment and conditions of service, collect membership fees, cause to put up a notice board and affix notices, hold discussions with workmen at a suitable place within the factory premises, meet and discuss with the employer, inspect premises, nominate representatives.

8.    Further, the code of discipline prohibited any unilateral actions relating to an industrial matter - no strike/lock-out without notice, no intimidation/coercion/victimization, parties must avoid litigation, utilize the existing mechanism for settlement and not engage in unfair labour practices.


This code of discipline has been critiqued as being inadequate, unable to formalize a largely informal process, and as leaving to the whims of the management many aspects of negotiating with unions. Nonetheless, it exists as a guiding mechanism for recognition of unions, but has not attained any legislative sanction as yet.


State-wide laws

Outside of the Code of Discipline, certain States in India have enacted laws that provide for recognition of unions, such as the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The Act states that any union which, for 6 months preceding, has not less than 30% membership, may apply to the industrial court for being a recognized union for the establishment. Another union may also subsequently claim to be the majority union, and upon hearing both parties on notice, the industrial court will pass an order recognizing it in place of the other union. Consequent to recognition, the union has the right to put up a notice-board, hold discussions on the premises, inspect the undertaking where the workmen are present, appear on behalf of workmen in domestic inquiries, participate in the Works Committee, etc.


West Bengal also has a legislation called the West Bengal Trade Union Rules, 1998 by virtue of which an application has to be submitted for recognition as the union in the industrial establishment. Similarly, Kerala has the Kerala Recognition of Trade Unions Act, 2010, and in Odisha, Verification of Membership and Recognition of Trade Union Rules, 1994 - all specifying a minimum percentage of workmen membership required for a union to be recognized as a recognized union.


Recent changes in the law

Presently, the BJP-Union Government has passed the Industrial Relations Code, 2020, in Parliament and the Draft Industrial Relations Central Recognition of Negotiating Union or Negotiating Council and Adjudication of Disputes of the Trade Unions Rules, 2021. However, the Code is yet to come into force and be implemented. It governs the relations between workmen and the management as well as the registration and working of trade unions. The Section 14 states that for a negotiating union or council to be present in an industrial establishment it must be a registered trade union. It states that if there is only one registered union in the establishment, the employer shall recognize the union as the sole negotiating agent of the workers. If there are multiple trade unions in the establishment who do not enjoy 51% membership, the employer will constitute a negotiating council consisting of representatives of the registered unions having not less than 20% of the total workers as members. Consequently, certain provisions of the Code require the employer to negotiate with the recognized union or council, such as “consulting” the recognized union in respect of draft standing orders. It also provides for the Union Governments or State Governments to recognize a central trade union or any other trade union in the industry or establishment. The Code provides rule making powers to the Union Government regarding recognition of trade unions, granting an anti-worker government the power to decide, by executive power, the manner in which unions will be recognized.


Rule 4 of the aforementioned Rules states that where there is only one registered trade union in an industrial establishment having not less than 30% workers employed, then that trade union shall be recognized as the sole bargaining agent. It also provides for a Verification Officer in Rule 5, which states that the verification officer shall carry out the work of membership verification in the industrial establishment “in a time bound manner determined by the employer”. Thus, the Rules themselves leave the process of recognition entirely to the employer, without any involvement of the workmen and unions.


The insidious nature of the Code becomes evident in its details. When enumerating the unfair labour practices on the part of the management which are prohibited, the Code deems it an unfair labour practice for an employer to show partiality or favor to one of several trade unions, where such a union is not a recognized trade union. It further prohibits as an unfair labour practice to refuse to bargain collectively in good faith with the recognized trade unions. Pertinently here, these actions of the management are only unfair labour practices if done to a recognized trade union, and not otherwise. Given that the manner in which a trade union will be recognized has been almost entirely left to the rules to be framed by the Union Government, and that the management has been given absolute discretion in recognizing unions, it is reasonable to apprehend that the management will abuse this phrasing of the unfair labour practices to first refuse to recognize pro-worker unions as the recognized unions, and will then refuse to engage with unrecognized unions who will genuinely represent the cause of workers, on the ground that it is unrecognized.


The way forward

Registration of unions is done formally under the Trade Unions Act, 1926, whereas, the recognition of unions is a largely informal process that is left to the mercy of the management. The Constitutional Courts of our country have yet to evolve labor jurisprudence in a manner that recognizes the power imbalance between workmen and the management, or to interpret provisions in a manner to achieve the objective of social justice in labor legislations. Such a need is apparent in areas uncovered by legislation as well, requiring Courts to step in, in favor of the industries or the working class while filling the lacunae in the law.


Some argue that a legal imposition regarding recognition will formalize discrimination by the management and also legitimize it, and for this reason, the issue of recognition should be left purely to the unions and the management to work out. Further, the manner in which the Union Government has formalized recognition in the Industrial Relations Code, 2020, further leaves workers at the mercy of the management. This is a prime example of formalization by law not necessarily being the answer to anti-worker practice by the management. Through the struggles, the management will be forced to voluntarily accept the workers’ desire to unionize. Formalization of recognition of unions, especially in an atmosphere wherein the Union Government is increasingly fascist, will be subject to the unions filing application, which may also be rejected on the ground that the union is indulging in political or “anti-national” activity.


Others argue that a legal obligation of recognition can bring about a formal recognition of the union, and do away with arbitrariness on the part of the management to recognize trade unions. It may also provide a path to unions to raise disputes against the managements refusing to recognize. A lack of formal recognition also leaves high discretion at the hands of the management to select any unions favorable to the management. At the same time, the management may also not be able to float a sponsored union and recognize it in order to break a strong union.


A possible answer to the arbitrary nature of recognition of unions, is not legislative sanction, but political unionism. Political unionism is characterized by labor movements being imbued with ideology based political activities, including struggles for a working-class government. A way forward with the haphazard and arbitrary manner in which recognition of unions is taking place under the management is political unionism, to hold the management accountable to their arbitrary actions against unions and victimization of unions. In this manner, "political” unions may guard against the managements that are acting against the interests of collective bargaining.