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History and growth of trade

unions

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ENRICHMENTS
Trade union:

Trade union is a union formed when individuals


related through employment organize themselves
together to form a group that will safeguard their
interests as workers. The individuals may be unskilled
workers, skilled, professional or even unemployed.
The major purpose of a union is to maintain and or
improve the prevailing conditions of employment. The
unions are used as a tool by which employees and
their companies relate in the working place to create
rules and regulations of employment. Good working
relationships are required from both parties to
maintain high production in the working place. (Arkers
and Payne 1998)

Main objectives of trade union:

1. To protect the interest of workers and the


management by providing common understanding
between the workers and the industry management
2. To evade industrial disagreements or conflicts and
enhance good relations which are an important factor
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in workers’ productivity and progression of the
industries.
3.To create and develop the growth of democracy in
the industries that is founded on labour partnership
that promotes sharing of profits and also management
decisions to foster individual growth of workers and at
the same time benefit the industry and the country as
a whole.
4. Provide collective bargaining for employees in
terms of better wages and improved working
conditions.
5. Take industrial actions by organizing strikes and
lockouts to further their objectives.
(Reference: http://www.articlesnatch.com, The
Long Period of Trade Union Decline Is
Over. By Sherry Robert
Business today, McGraw-Hill
publications)

TYPES OF TRADE UNIONS:


4. White Collar Unions:
They represent office workers.
Example: National Union of Teachers.

Industrial action:

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The majority of worker-to-manager and therefore
union-to-employer problems are worked out
peacefully through negotiation. However occasionally
an issues arises where no agreement or solution can
be reached. This is when a trade union may conduct
some form of industrial action in order to force the
employer to back down.

There are several different types of industrial action


that could be taken:

• Strike – Workers select a day(s) on which they


will not come into work.
• Work to rule – Workers apply the firm’s rules
and procedures to the ‘letter’ with the objective of
slowing down production. For example a machine
worker may be told to ensure his machine is clean
and safe before starting work and so he will be
deliberately nit-picking and spend hours doing
exactly this.
• Go slow – Employees carry on working but at the
minimum pace possible in order to slow down
production but avoid disciplinary action.
• Picketing – Workers may stand at the entrance
to the employer’s factory or place of work and
demonstrate with banners or slogans.
• Overtime ban – Workers simply refuse to work
overtime as they are not obliged to. This can
prevent a firm being able to produce quickly
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enough to meet demand and they may lose
orders.

If unions and employers continue in dispute then


either side can bring in ACAS to help resolve the
disagreement. ACAS is the Advisory, Conciliation and
Arbitration Service and is an independent body
financed by the government. It is responsible for
giving advice to both sides, sitting in and helping with
negotiations and ultimately it can provide an
individual, or arbitrator, who can judge the right
outcome of the dispute.

(references: http://www.tutor2u.com)

Indian trade union movement


It can be divided into three phases.
The first phase:
It falls between 1850 and 1900 during
which the inception of trade unions took place. During
this period of the growth of Indian Capitalist
enterprises, the working and living conditions of the
labour were poor and their working hours were long.
Capitalists were only interested in their productivity
and profitability. In addition to long working hours,
their wages were low and general economic conditions
were poor in industries. In order to regulate the
working hours and other service conditions of the
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Indian textile labourers, the Indian Factories Act was
enacted in 1881. As a result, employment of child
labour was prohibited. Mr. N M Lokhande organized
people like Rickshawalas etc., prepared a study report
on their working conditions and submitted it to the
Factory Labour Commission. The Indian Factory Act of
1881 was amended in 1891 due to his efforts. Guided
by educated philanthropists and social workers like
Mr. Lokhande, the growth of trade union movement
was slow in this phase. Many strikes took place in the
two decades following 1880 in all industrial cities.
These strikes taught workers to understand the power
of united action even though there was no union in
real terms. Small associations like Bombay Mill-Hands
Association came up.

The second phase:


It falls between 1900 and 1947. this phase
was characterized by the development of organized
trade unions and political movements of the working
class. It also witnessed the emergence of militant
trade unionism. The First World War (1914-1918) and
the Russian revolution of 1917 gave a new turn to the
Indian trade union movement and organized efforts on
part of the workers to form trade unions. In 1918, B P
Wadia organized trade union movements with Textile
mills in Madras. He served strike notice to them and
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workers appealed to Madras High Court because
under ‘Common Law’, strike is a breach of law. In
1919, Mahatma Gandhi suggested to let individual
struggle be a Mass movement. In 1920, the First
National Trade union organization (The All India Trade
Union Congress (AITUC)) was established. Many of the
leaders of this organization were leaders of the
national Movement. In 1926, Trade union law came up
with the efforts of Mr. N N Joshi that became operative
from 1927.
The third phase:
It began with the emergence of independent India (in
1947), and the Government sought the cooperation of
the unions for planned economic development. The
working class movement was also politicized along the
lines of political parties. For instance Indian national
trade Union Congress (INTUC) is the trade union arm
of the Congress Party. The AITUC is the trade union
arm of the Communist Party of India. Besides workers,
white-collar employees, supervisors and managers are
also organized by the trade unions, as for example in
the Banking, Insurance and Petroleum industries.

LABOUR LAWS:

Law—“Law is a rule or a system of rules recognized


by a country or a community as regulating the actions
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of its members and enforced by the imposition of
penalties.”

Factors responsible for development of


Labour laws:

 Exploitation of the workmen by the capitalists


 Social pressure and pressure from trade unions
 Government policies based on Government
philosophy which in turn was based on the
political ideologies
 Constitution of India (Directive Principles of state
policy)
 Supreme Court’s recommendations on the cases
that came up in the courts
 Recommendations of various commissions and
committees set up by government from time to
time
 Conventions and recommendations of
International labor organization (ILO)
 Awareness about environment

Common features of all laws:

 Short title and commencement


 Preamble i.e. purpose of the law
 Definitions
 Substantive provisions
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 Penalty provisions
 Records/ Registers/ Returns
 Inspectorate/ Enforcement authority

Categories of Labour Laws

 Regulatory legislations to oversee the conditions of work at


workplace
E.g. Machinery arrangement, spittoons, working hours,
leave with wages etc.
 Legislations related to wages
E.g. Payment of Wages Act, 1936, Minimum Wages Act,
1948
 Legislations related to social security
E.g. ESI Act, 1948, Employees Provident Fund Act, 1952
 Legislations related to Industrial Relations (IR)
E.g. Industrial disputes Act, 1947, Industrial
Employments (Standing Orders) Act, 1946, Trade Union
Act, 1926
 Legislations related to service conditions.
E.g. Regulations of environment Act (for Dock workers),
Conditions of Service Act (for Sales Promotion
employees)
 Miscellaneous
E.g. Apprentices Act, 1961, Environment protection Act,
1986

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ADVANTAGES AND DISADVANTAGES OF TRADE
UNIONS:

• Advantages of Trades Unions.

1. Increase wages for its members.


Industries with trade unions tend to have
higher wages than non-
unionized industries.

2. Counterbalance Monopsonies.

In the face of Monopsony employers, Trades


Unions can increase wages and increase
employment. Monopsony employers are those
who have market power in setting wages and
employing workers. Traditionally, monopsonies
occur when there is only 1 firm in a town, or type
of employment. However, in modern economies,
many employers have a degree of market power
(monopsony).

3. Represent Workers
Trades Unions can also protect workers
from exploitation, and help to uphold health and
safety legislation. Trades unions can give
representation to workers facing legal action

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4. Productivity deals.
Trades Unions can help to negotiate
productivity deals. This means they help the firm
to increase output; this enables the firm to be
able to afford higher wages. Trades unions can be
important for implementing new working practices
which improve productivity.

5. Important for Service Sector.


Modern economies have seen a fall in
trade union power. This is because of a decline in
manufacturing and rise in service sector
employment. Service sector jobs tend to more
likely to be part time and temporary; unions are
needed to protect workers in these kinds of jobs.

• Disadvantages of trade union:

1. Create Unemployment.
If labour markets are competitive, higher
wages will cause unemployment. Trades unions
can cause wages to go above equilibrium through
the threat of strikes etc. However when the wage
is above the equilibrium it will cause a fall in
employment.

2. Ignore non Members


Trades unions only consider the needs
of its members; they often ignore the plight of
those excluded from the labour markets, e.g. the
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unemployed.

3. Lost Productivity.
If unions go on strike and work
unproductively (work to rule) it can lead to lost
sales and output. Therefore their company may
go out of business and be unable to employ
workers at all.

4. Wage Inflation.
If unions become too powerful they can
bargain for higher wages, above the rate of
inflation. If this occurs it may contribute to
general inflation. Powerful trades unions were a
significant cause of the UK's inflation rate of 27%
in 1979.

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