SATUTORY EMPLOYEE RELATIONS- MODULE 2

The Trade Union Act, 1926 is an important piece of legislation in India that regulates the
functioning of trade unions. The Act provides the legal framework for the registration and
regulation of trade unions, aiming to safeguard the interests of workers while ensuring their
right to organize and collectively bargain with employers.

Key Features of the Trade Union Act, 1926:

1. Registration of Trade Unions:

o The Act provides for the registration of trade unions, which is done through
the Registrar of Trade Unions.
o A trade union must have at least seven members to be eligible for registration.
o Once registered, a trade union is granted legal recognition and is entitled to
certain legal rights and protections.
2. Rights and Immunities:
o Registered trade unions enjoy legal status and are provided immunity from
civil suit for any actions taken by them in the course of achieving their
objectives (such as strikes or protests, provided they comply with the law).
o The Act provides immunity for trade unions from being sued for any lawful
activities related to collective bargaining.
3. Objectives of a Trade Union:
o The Act outlines that trade unions must work towards improving the working
conditions, wages, and welfare of their members.
o It also allows trade unions to engage in negotiations with employers on behalf
of their members.
4. Duties and Responsibilities of Registered Trade Unions:
o The Act lays down certain responsibilities for trade unions, such as
maintaining proper records, submitting annual returns to the Registrar, and
ensuring that the union is operating within its legal framework.
5. Dispute Resolution:
o The Act provides a mechanism for resolving disputes that arise between the
union and employers. However, in cases of industrial disputes, it often refers
to other laws such as the Industrial Disputes Act, 1947, for detailed
procedures.
6. Trade Union Funds:
o The Act prescribes that a registered trade union must maintain a fund from
which it can pay for the expenses related to its activities (such as strikes, legal
proceedings, etc.).
o The law also sets guidelines on how this fund should be managed and audited.

Importance of the Trade Union Act, 1926:

It plays a critical role in protecting workers' rights and facilitating the creation of
organized labor groups.

By providing legal recognition to trade unions, the Act enables workers to come
together to negotiate better conditions, pay, and benefits from employers.
 The Act ensures the transparency and accountability of trade unions, with clear
provisions for governance, management, and finances.

Overall, the Trade Union Act of 1926 has played an instrumental role in the labor movement
in India, helping to establish a more structured approach to workers' rights and the operations
of trade unions.

he registration process for a trade union under the Trade Union Act, 1926 involves several
steps to ensure that the union is legally recognized and can function within the legal
framework provided by the Act. Below is a detailed outline of the registration procedure
for a trade union:

Steps for Registration of a Trade Union:

1. Formation of a Trade Union:

 A trade union must be formed with a minimum of 7 members (this is the

requirement under the Act).
 The union should have a written constitution that outlines the objectives, rules, and
governance of the union.

2. Preparation of Documents

To register the trade union, the following documents must be prepared:

 Application for Registration: A formal application, in a prescribed form, must be

submitted to the Registrar of Trade Unions in the area where the union intends to
operate.
 List of Office-bearers: The names, addresses, and occupations of the union’s office-
bearers must be provided.
 Copy of the Constitution: The constitution or rules of the trade union, which
includes its objectives, membership criteria, and organizational structure.
 List of Members: A list of the initial members of the union, including their names,
addresses, and occupations.
 Signed Declaration: A declaration signed by the office-bearers stating that the union
is formed in accordance with the Trade Union Act.

3. Filing the Application with the Registrar:

 The application must be filed with the Registrar of Trade Unions in the jurisdiction
where the union is formed. This can be done in person or through a designated
submission process, depending on local regulations.
 The application form should be complete and include all necessary documents, as
listed above.
4. Verification and Scrutiny:

 The Registrar will scrutinize the application and verify the documents. They may seek
additional information or clarification from the applicants if necessary.
 If the Registrar is satisfied that all requirements are met, they will proceed with the
registration process.

5. Issuance of Registration Certificate:

 Once the Registrar is satisfied that the union has met all the legal requirements, a Certificate
of Registration is issued.
 The trade union becomes a legal entity with the rights and responsibilities outlined under
the Trade Union Act, 1926.

6. Post-Registration Compliance:

 After registration, the trade union must comply with various obligations under the
Act, including:
o Annual Returns: The union must submit annual returns (such as membership
lists and financial details) to the Registrar.
o Maintain Records: The union is required to maintain proper records of its
members, meetings, and financial transactions.
o Funds Management: The union must manage its funds transparently and may
need to get an audit of its accounts periodically.

7. Appeals (If Applicable):

 If the application is rejected by the Registrar, the union has the right to appeal the
decision to a higher authority as per the provisions of the Act.

The Industrial Disputes Act, 1947 is an important piece of legislation in India designed to
provide a legal framework for the resolution of industrial disputes and to safeguard the rights
of workers, employers, and trade unions in the industrial sector. It aims to ensure peaceful
coexistence between employers and employees while maintaining industrial harmony.

Key Features and Provisions of the Industrial Disputes Act, 1947:

1. Scope and Applicability:

 The Act applies to industrial establishments and industrial disputes in India,

covering factories, mines, and plantations, and also extends to certain other
establishments as prescribed by the government.
 The Act applies to both public and private sectors.
 The law applies to any industrial dispute between employers and workers that has
the potential to disrupt industrial peace.

2. Definitions:
  Industrial Dispute: A dispute between employers and employees, or between
employees themselves, that affects the industrial relations in the establishment. It can
be related to issues like wages, working conditions, lay-offs, retrenchment, etc.
 Workman: A workman refers to any person employed in an industry to do manual,
unskilled, skilled, technical, operational, clerical, or supervisory work.
 Employer: The employer refers to the owner, proprietor, or person in charge of the
establishment or industry.

3. Constitution of Works Committees:

 The Act provides for the constitution of works committees to promote cooperation
between employers and employees at the workplace.
 These committees serve as a forum for the discussion of industrial disputes and
grievances.

4. Industrial Tribunals and Authorities:

 The Act empowers the government to establish Industrial Tribunals, Labour

Courts, and National Tribunals to adjudicate and resolve industrial disputes.
 Labour Courts: These handle issues related to the enforcement of legal rights of
workers.
 Industrial Tribunals: These deal with disputes related to conditions of service, pay,
and employment termination.
 National Tribunals: These are set up for cases involving issues that affect workers in
more than one state.

5. Settlement of Industrial Disputes:

 The Act provides mechanisms for the settlement of industrial disputes through:
o Conciliation: Involvement of government-appointed conciliators to mediate
between the disputing parties.
o Arbitration: Disputes can be referred to arbitration by the government or by
mutual agreement.
o Adjudication: Disputes can be referred to a Labour Court, Tribunal, or
National Tribunal for adjudication and a binding decision.

6. Strikes and Lockouts:

 The Act lays down conditions under which strikes and lockouts can be legally
undertaken.
o Strike: A work stoppage by employees, usually due to a dispute with the
employer regarding terms and conditions of employment.
o Lockout: A situation where an employer prevents employees from working,
often in response to a strike.
 The Act provides guidelines for declaring a strike or lockout legal, including notice
periods, procedures for dispute resolution, and limitations on strikes in certain
situations.
o A notice of strike must be given 14 days before the strike, and similarly, a
notice of lockout must be provided.
7. Layoff, Retrenchment, and Closure:

 Layoff refers to the temporary non-employment of workers due to unforeseen

circumstances like a shortage of raw materials or power failure.
 Retrenchment refers to the termination of a worker’s service due to redundancy or
the closure of operations, subject to payment of compensation and following the legal
procedure.
 Closure refers to the permanent shutdown of an establishment.
 The Act outlines the procedures and compensation requirements related to layoffs,
retrenchment, and closures.

8. Compensation and Benefits:

 Workers who are retrenched, laid off, or whose services are terminated under specific
conditions are entitled to compensation as defined in the Act.
 The compensation includes severance pay based on the duration of employment.
 Additionally, the Act provides for the establishment of Trade Unions that represent
the interests of workers and help in collective bargaining.

9. Authorities and Penalties:

 The Act grants the government the power to set up various authorities, including
Conciliation Officers, Labour Courts, and Industrial Tribunals, to adjudicate disputes.
 Failure to comply with the provisions of the Act can result in penalties for employers,
including the payment of fines and compensation to workers.

10. Industrial Dispute Settlement Process:

 Conciliation: If a dispute arises, the first step is often conciliation, where a

government-appointed officer helps both parties reach an amicable settlement.
 Adjudication: If conciliation fails, the dispute may be referred to a Labour Court or
Tribunal for adjudication. These bodies have the power to make binding decisions.
 Arbitration: In some cases, the parties may agree to resolve the dispute through
arbitration, where an arbitrator's decision is final and binding.

Key Provisions of the Act:

 Section 2(k): Defines "industrial dispute" and lists the causes of disputes such as
wages, working hours, leave, and other employment conditions.
 Section 10: Empowerment of the government to refer disputes to Labour Courts and
Industrial Tribunals.
 Section 22-25: Specifies the conditions under which strikes and lockouts can be
legally declared.
 Section 25C-25E: Deals with layoffs, retrenchment, and compensation.

Significance of the Industrial Disputes Act, 1947:

 Protection of Worker Rights: It safeguards workers against arbitrary dismissal,

retrenchment, and unfair labor practices.
  Promotion of Industrial Harmony: By providing a structured mechanism for
resolving disputes, it helps maintain industrial peace.
 Legal Framework for Collective Bargaining: It ensures that trade unions and
employers engage in negotiations within the legal framework.
 Fair Dispute Resolution: The Act offers workers a formal and legal way to address
grievances without resorting to violence or illegal strikes

Systems Approach
John Dunlop gave the systems theory of industrial relations in the year
1958. He believed that
every human being belongs to a continuous but independent social
system culture which is
responsible for framing his or her actions, behaviour and role.
The industrial relations system was based on three sets of different
variables:
1. Actors: By actors here we mean that the individuals or parties
involved in the process of
developing sound industrial relations. This variable is denoted by ‘A’.
2. Contexts: The contexts refer to the setup in which the actors
perform the given tasks. It
includes the industry markets (M), technologies (T) and the power
distribution in the
organization and labour unions(P).
3. Ideology: The similar ideas, mentality or beliefs shared by the
actors helps to blend the
system. It can be expressed by the initial (I)

Unitary Approach
As the name suggests, the unitary approach can be seen as a method of
bringing together the teamwork, common objective, individual strategy and
mutual efforts of the individuals This theory believes that the conflicts are
non-permanent malformations, which are a result of
improper management in the organization.
Moreover, if everyone works towards the achievement of the common goals
by maintaining peace
and cooperation in the workplace, it will tend to benefit everyone associated
with the organization.
It also considered the organizational conflicts resulting in strikes to be useless
and destructive.
The other aims of the unitary approach are as follows:
• To create a productive, effective and harmonious work environment;
• to develops a trustworthy, open, fair and transparent work culture;
• to create a cordial work environment;
• to restrict the role of the tribunals and other government associations like
the trade unions
and initiates direct negotiation between the management and the employees

Pluralist Approach
The pluralist theory also called the ‘Oxford Approach’, was proposed by
Flanders in the year
1970. This approach explained that the management and the trade unions
are the different
and robust sub-groups which unanimously form an organization.
Collective bargaining was considered to be a useful technique for resolving
organizational
conflicts. Due to this, the management’s role has transformed from
imposition and control; to
influencing and coordinating with the workers.
Following are some of the highlights of this approach:
• The organization should appoint personnel experts and industrial relations
specialists to act
as mediators between the management and trade unions. They need
to look into the
matters of staffing, provide consultation to the managers and the unions, and
negotiate with
both the parties in case of conflicts.
• The organization should ensure that the trade unions get recognized
and the union leaders
or representatives can perform their duties freely.
• In the case of industrial disputes, the organization can avail the services of
the external
agent for settlement of such issues.
• The managers should resolve to a collective bargaining agreement
when there is a need for
negotiation and settlement with the trade unions.

Marxist Approach
Lenin came up with the concept of a Marxist approach in the year 1978,
where he emphasized the
social perspective of the organization.
This theory perceived that the industrial relations depend upon the
relationship between the
workers (i.e., employees or labour) and the owners (i.e., employer or capital).
There exists a class
conflict between both the groups to exercise a higher control or influence
over each other.
The assumptions of this approach are as follows:
• Industrial relations are a significant and never-ending source of conflicts
under capitalism
which cannot be avoided. However, cases of open disputes are quite unusual.
• Understanding the conceptions of capitalized society, capital accumulation
process and the
pertaining social relations, give a better overview of the industrial relations.
• The Marxist theory assumed that the survival of the employees without any
work is more
crucial than the survival of the employer without the labours.

Sociological Approach
Sociological Approach
The industries comprise of different human beings who need to communicate
with the individuals
of other organizations.
Due to the difference in their attitude, skills, perception, personality,
interests, likes and dislikes,
needs, they are usually involved in one or the other conflict. Even the social
mobility and other
aspects including transfer, default, group dynamics, stress, norms,
regulations and status of the
workers influence their output and the industrial relations.
This theory also emphasizes on the impact of various changes in the
work environment (i.e.,
economic, technical and political) on the interactions and relationship shared
by the employer,
employees, institutions and the government bodies

Gandhian Approach
The Gandhian approach to industrial relations was proposed by the father of
our nation, Mahatma
Gandhi or Mohandas Karamchand Gandhi, who was also a well-known labour
leader.
Following are the various features of the trusteeship or Gandhian theory:
1. Gandhi Ji was not against strikes; instead, he gave the following
conditions to carry out
a favourable strike:
• The workers or labours can go on a strike only if there is a specific
grievance.
• There should be complete non-violence while carrying out strikes.
• The ones who are not involved in the strikes should not be tormented.
2. Though Gandhi Ji was not against carrying out strikes, he believed that it
should be the last
option to which the labour should resort to, after the failure of all the
constitutional and
peaceful ways of resolving conflicts and negotiating with the employer.
3. The Gandhian approach illustrated that nature had provided us with
human capabilities and
different kinds of property. Thus, such nature’s gift belongs to the whole
society and
cannot be considered as of personal possession by anyone.
4. The objective of this theory is to adopt non-violent ways to bring in
economic parity and
material enhancement in a capitalist society.
5. Gandhi Ji perceived that every organization is a joint venture, and the
labour should be
treated as associates or co-partners with the shareholders. Moreover, the
workers should
have proper knowledge of all the business transactions as it is their right.

Human Relations Approach

The person behind the concept of the human relations approach is Keith
Davis. The organization
and the society comprise of human beings who vary in various aspects as
their behaviour,
emotions, attitude, mindset and personality. But, they have come together to
achieve common
organizational goals and objectives.
The concept of human relations approach underlines the need for making the
individuals familiar
with the work situations of the organization and uniting the efforts of the
workers. The purpose is
to meet the social, psychological and economic objectives.

Psychological Approach
The psychologists perceived the problem of the industrial relations as a result
of the varying
perception and mindset of the key participants, i.e., the employees and the
management.
The ‘thematic application test’ was conducted by Mason Harie to understand
the behaviour,
mindset and perception of the two significant workgroups, i.e., executive and
the union leaders, in
a particular situation.