Trade unions and their implications in labour law and Constitution of India

INTRODUCTION The essence of trade unionism is social uplift. The labour movement has been the haven for the dispossessed, the despised, the neglected, the downtrodden, the poor. A. Philip Randolph Trade Unionism is a dynamic concept, which has been continuously debated upon all around the globe. The idea of Trade Unionism is based on the […]


The essence of trade unionism is social uplift. The labour movement has been the haven for the dispossessed, the despised, the neglected, the downtrodden, the poor.

A. Philip Randolph

Trade Unionism is a dynamic concept, which has been continuously debated upon all around the globe. The idea of Trade Unionism is based on the cardinal principles of Welfare Society, wherein each and every section has a room for the development from every front, right from the economic to the social front. In India, prior to Independence, before the second world war there was massive shift of the demographic elements from the self-employment to the industrial-employment and working as the worker for other people in their industry. This had some mixed effects, where the employer in some cases deployed such harsh measures and unethical practices from the perspective of common human understanding, it became extremely difficult and an ordeal for the worker to work in that environment. This was in the form of unequal bargaining power, untimely wages, no grievance redressal, no room for collective bargaining, no health benefits, to name a few. All these issues, led to a massive awakening of the conscience, of the working class, with an urge for recognition, acknowledgement of their rights, settlement of disputes, collective bargaining brought the Trade Union Act, 1926.

The paper is a heterogenous attempt in analyzing the status of the Trade Unions in India, within the paradigms of labour law legislation, identifying the changes and its Constitutional perspective. The paper makes an attempt to strike at the raw problems of the Trade Unions which poses as an obstacle to their objective and to what extent the new labour code is beneficial for the concerned class.


History of Trade Union:

The aroma of trade unionism can be traced back to the spirit of expansion in the industrial society in Britain, back in the 18th Century and its cumulative presence along with the idea of Collective Bargaining was evident in the Ordinance of Labourers enacted in UK in the middle of 14th Century. In the late 1880’s the trade unionism underwent unprecedented transformation in Britain which provisionally continued till 1920’s which gave a contemporary and probable present-day picture of this dynamic idea to the world. These gave a huge uplift to the idea of eradicating the disparity within the movement of miners and transport workers moving their stature from ‘general’ to ‘industrial’.


It is to be noted that the first venture at establishing National General Union was made in 1820s and 1830s. Some of the following are listed below, namely,

i. National Association for Protection of the Labour (1830) by John Doherty

ii. Grand National Consolidated Trade Union (1834) by Robert Owen

iii. London Trades Council (1860)

These were some temporary foundations or some firm steps in this direction, which eventually lead to the formation of a permanent and a long-lived trade union, called Trade Union Congress in 1868. The renowned political thinker, John Stuart Mill in his book Principles of Political Economy (1871) elucidated that, “ If it were possible for the working classes, by combining among themselves, to raise or keep up the general rate of wages, it needs hardly be said that this would be a thing not to be punished, but to be welcomed and rejoiced at. Unfortunately the effect is quite beyond attainment by such means. The multitudes who compose the working class are too numerous and too widely scattered to combine at all, much more to combine effectually. If they could do so, they might doubtless succeed in diminishing the hours of labour, and obtaining the same wages for less work. They would also have a limited power of obtaining, by combination, an increase of general wages at the expense of profits.”

Finally, in 1872 Britishers legalised the status of trade unions for the benefit of employees and employers. This period also provided a spark for the development of trade unions in various countries including France and USA.


There are three keywords associated with this dynamic idea, namely identity, ideology and strategy. The facets of identity linked through Unionism is that, identity relates dialectically to the interconnecting dynamics of interests, democracy, agenda and power in a nutshell the ‘very nature’ of the union. The purpose of the union is to pursue objectives that reflect its identity, with the help of these strategies.

The objectives of the Trade Union can be broadly economic and non-economic in nature, right from the concerns of the wages to the idea of rationalizing their welfare policies.

Some of which are as follows,

i. To monitor the terms and conditions of the employment (Wages, Standard of Living, Leaves)

ii. To maintain the aroma of the working condition of the workstation favorable for both the parties.

iii. To make a room for genuine negotiation between the employee and the employer.

iv. To keep a check on the welfare policies for the workers.

v. To maintain industrial peace for the betterment of the Organizational health.


On analyzing the given data, we can definitely say that, in India the Trade Union has attained the status of a fundamental and powerful institution, which needs a desired direction for its optimum utilization.

The probable reasons for setback suffered by such institutions can be numerous, some of which are as follows,

i. Trade Unions have not considerably worked in the direction of creating a model brigade of young workers in various organizations.

ii. The idea of Collective Bargaining has not attained the ample momentum.

iii. The strikes ended without drawing optimum benefit and were short-lived.

iv. The unitary aspect of Trade Union- mostly prominent in the business lines.

Therefore, it is good to observe the gradual increment in the number of the registration of the trade unions in India, but the ground level uncertainties, need to be tackled with some dynamic functionary coupled with public faith to bring this dynamic idea into a full-fledged action plan.


In India, the organized labour confederations comprise of four major conglomerates, namely,

a. Indian National Trade Union Congress

b. Hind Mazdoor Sabha

c. All India Trade Union Congress

d. United Trade Union Congress

The labour movement gained the full momentum in India between 1947 and 1949 in the heady atmosphere of political independence, each political group tried to capture the allegiance of industrial proletariat.

The dynamics of Collective Bargaining in the Industrial Relations in India has to studied under there strands namely,

a. Which favours collective bargaining and pure and simple trade unionism, is primarily a British concept.

b. Which favours collective bargaining without necessarily rejecting conciliatory and persuasive government intervention, stems directly from the basic faith of Indians in the reasonableness of men in the ultimate power of the ‘Right Cause’.

c. The objective complexity of the issues, delights in macroeconomics and concludes that India cannot afford to let the forces of the market operate freely


There are two facets of the challenges associated with the functionality of the Trade Unions in India, categorized as Internal and External Challenges respectively.


Trade Unions are major industrial component in the modern industrial relations which are now considered as a sub-system which seeks to serve the specific sub-groups interest and also considered itself as a part of the organization in terms of its viability and contribution to the growth of the community of which it is a part. The motive for formulation of this dynamic idea is to achieve such objectives which are not possible in personal capacity and includes,

To ensure job security

To ensure right payment of wages

To ensure redressal of grievances

To maintain a good working environment and promote welfare

To promote industrial peace and take up Collective Bargaining.


In Central Inland Water Transport Corporation v Brojo Nath, the Hon’ble Supreme Court elucidated that,

“Trade Union play a central role through Collective Bargaining in the unequal relationship, where the workers are at constant risk of unemployment when employers are large corporation.”

The Industrial Relation Code, 2019 replaced the Trade Union Act, 1926 with an objective to attain the industrial peace and security and the promote the spirit of harmony in dissolving the industrial dispute and to promote the cordial relationship between the employees and employers.


The Code has changed the definition of a worker, widened the scope of Industrial Dispute and defined the term strike as a casual leave, if 50% or more workers do not work on a particular day.

Since labour laws fall under the concurrent list both the centre and the state have the right to draft laws on the matter. Several states like Uttar Pradesh and Gujarat have already diluted their laws during the ongoing crisis of the Covid-19 Pandemic.

Initially the archaic laws were said favour to labours, since the provision regarding permission of government for termination, retrenchment and lay-offs in an organisation with 100 or more workers and also because of the red tapism involved in the process of shutting businesses. Till now 14 states have already done increased the threshold to 300 workers or more, and now with the permission the Act has made this threshold universal in nature.

The provisions about the negotiating union which is, a union with more than 51% of workers as members, will be the sole negotiating union while in cases no union has this number, a council will be formed including 20% members of all the unions present.

The act, introduces Fixed term contracts (FTC), whereby a person earning up to 18000 Rupees, is not labour but an FTC employee, considered as the same as a permanent employee. Based on a contract, the worker is employed for a fixed tenure, he is entitled to the benefits that are given to a permanent employee who is performing the same task, he is eligible for statutory benefits as are available to any permanent worker, lastly, he is eligible for gratuity if the tenure is for a period of one year.

The number of reasons for cancellation of registration of an existing union have been increased from three to five, the members who could join the union’s office-bearers team, and were not a part of the industry is reduced to two officers.


The dynamicity of the Trade Unions can be assessed through its interlink within the Constitutional Realm of India. The Trade Unionism will be categorically analyzed under the two heads basically,

The Fundamental Right

The Directive Principle of the State Policy

This will provide us the exact position of Trade Unions in India, because these two heads provide the dual coverage of the idea, one from the people involved in the Union and other, the view of the state towards it.


The Legislative Assembly Debate’s official report, discusses about the urgency of trade unions in India, in the year 1921. The cardinal points stated and upvoted were following,

i. Conditions of work

ii. Joint Demand vis-à-vis Collective Bargaining

iii. Recognition

iv. Proper use and allocation of Funds

v. Dispute Resolution

This is important to note, ‘Conditions of Work’, encapsulates the idea of just and humane conditions of work, which includes right to minimum wages, leaves, livelihood etc. The Article 21 of the Indian Constitution provides us with these diverse coverages and includes the right to Minimum Wages , the right to livelihood, the right to shelter, the health of labour under the ambit of quality of life enshrined under the Indian Constitution.

Furthermore, it is important to analyze the position from the perspective of Article 19(1)(c), which deals with the right to freedom to form associations. The SC has, not countenanced this extended dimension sought to be given to Article 19(1)(c). The Court has ruled that the right guaranteed by Article 19(1)(c) doesn’t carry with it a concomitant right that unions formed for protecting the interests of labour shall achieve their object such that any interference to such achievement by law would be unconstitutional unless it would be justified under article 19(4) as being in the interest of the public order or morality. The right under Article 19(1)(c) extends only till the formation of an association or union and insofar as the activities of the association or union are concerned, or as regards the steps, which the union might take to achieve its object, they are subject to the laws as may be framed and such laws cannot be tested under Article 19(4). The court has held that even a very liberal interpretation of Article 19(1)(c) cannot mean that the trade unions guaranteed right to strike. The right to strike can be controlled by appropriate industrial legislation.


Directive principles of state policy, under Part IV of the constitution, though not enforceable in the court of law, provide the roadmap to the governments to take necessary steps to upliftment of workers and also eradicating any such violence that occurs due to unjust labour practices. DPSP includes right to social justice (Article 38(1)), living wage and proper working conditions for worker (Article 43), maintain heath (Article 47), maternity benefits (Article 42).


The IR code which replaces some of the very core Labour Laws, seem to have taken a few steps back in the process of reform. It is a big irony that the government has given very counter-intuitive reasons such as reduction of labour protection for the benefit of labours. This exposes the lack of knowledge and understanding about the evolution of labour laws and practices which are have been achieved by the efforts of these Trade Unions over the years. It offers flexibility to employers, it may impact the number of permanent jobs in such establishments, thereby increasing contractualisation in the workforce.

Currently, employers in industrial establishments such as mines or plantations with at least 100 workers are required to take prior permission of the central or state government for lay-offs, retrenchment or closure. The central government had planned to increase the limit to 300 workers, but protests by trade unions and activists prevented this change, opposing it as “unilateral and anti-worker”. The bill allows safeguards that the state governments of Gujarat, Jharkhand, Uttar Pradesh, Haryana, Andhra Pradesh, Maharashtra and Assam utilised–they have amended state laws to set the threshold higher.

The bill also introduces a negotiating union (or sole bargaining agent) of workers to resolve disputes. If the company has only one union, that one becomes the negotiating union or sole bargaining agent. If an organisation has more than one trade union, the union with the support of 75% of the workers on the rolls of the establishment would be designated as the sole negotiating union. If there is no trade union with such support, the government or an authorised officer could institute a negotiating council. 

This code does not have a provision noting that existing permanent worker vacancies cannot be converted into fixed-term. This means that theoretically, a company could hire only contract workers. Contract work should be slowly regularised, but the government has introduced fixed-term employment which is negating the law for contract labour regularisation. Globally, workers with fixed-term contracts had a significantly higher rate of transition into unemployment or into inactivity as compared to regular workers, suggesting less stability in work or income for workers on fixed-term contracts, according to a March 2015 International Labour Organization (ILO) policy brief.

This furthers the ease of doing business but not worker’s welfare and interest. The 75% threshold is unrealistic, and must be revised downwards to half or, at most, two-thirds. “Hardly a handful unions in India or anywhere in the world would be able to satisfy such a high threshold. The overall objective of the Act seems more focused on ease of doing business and not on the welfare of the labours.

The lawmakers have tried to facilitate employment while protecting the workers’ rights, which has turned into a hasty affair, while trying to solve the various problems they have provided an inadequate manner (union recognition) and given a false sense of status quo by giving state governments the power to execute the reforms on the pretext or universalization of the same.

Now the battle seems to hard and long for the Trade Unions, the industry heads have got the icing on the cake without even asking for it. The present government has brought itself in a tight corner, by pulling all these acts all at once, in a pandemic situation with lock downs, farm law protest and an overeager opposition, breathing down its neck. What remains to be seen is how they will pull themselves out of this muddle.


The focus of the code should be on the idea of recognizing the Trade Unions in every establishment, irrespective of the numerical strength and protocols.

The position of permanent employees and contractual workers must be analyzed pragmatically to reduce the rate of transition into the unemployment.

The nature of the dispute resolution must shift from the latent idea of unilateralism to bilateralism. This has to be a two-way process, which has to remain constant throughout irrespective of the numerical strength protocols. (In Negotiation)