Trade Union Recognition Under The Industrial Relations Code,2020, Needs Introspection
According to the International Labour Organization , collective bargaining can be defined as “the key means through which employers and their organizations and trade unions can establish fair wages and working conditions.” Though the Indian Constitution doesn’t explicitly provide for a fundamental right of collective bargaining, the Supreme Court held in All India Bank Employees...
According to the International Labour Organization , collective bargaining can be defined as “the key means through which employers and their organizations and trade unions can establish fair wages and working conditions.” Though the Indian Constitution doesn’t explicitly provide for a fundamental right of collective bargaining, the Supreme Court held in All India Bank Employees vs National Industrial Tribunal that the right to form a union comes under the ambit of the right to form an association under Article 19(1)(c). . If collective bargaining rights is the end, then the formation of trade unions is means and these unions play a significant role in addressing labour concerns. However, the recent the provisions of the new Industrial Relations Code, 2020 as well as the Draft Rules for the Recognition of Negotiation Unionsor Councils notified in 2021 has raised some serious questions which could undermine this fundamental right.
Adding to the existing burden with multiplicity of unions and, no prior statutory recognition mechanism for a bargaining council, the new Code increases the threshold for a negotiating union to be recognised. There not only exists some arithmetic anomalies but also important constitutional challenges with regards to the same.
This article tries to sum up and diagnose the problem of the new recognition mechanism under the Code contextualizing it to the recent Writ Petition filed by the Southern Railways Mazdoor Sangh in the Madras HC.
Recognition In The Trade Union Act, 1926
While there exists a statutory framework for registration under the Act, there is no legal sanction provided for recognition of a union framework as held in the case of WorkmenOf The Kampli Co-operative Sugar Ltd vs Management Of The Kampli Co-operativeSugar Factory. Though the amendment of 1947 provided for such a framework by the insertion of Sections 28C to 28I, the letter of the law never was enforced with the compulsory recognition despite repeated attempts in 1950, 1978 and 1988. Even the First National Labour Commission Report of 1969 made recommendations to the Central Government to make recognition compulsory for specific undertakings. However, barring exceptions like the trade union recognition legislations of Maharashtra and West Bengal, there is a dearth for a uniform central legislative framework for the same.
Moreover, as held by the Supreme Court in BharatPetroleum Corporation Ltd. v. Maharashtra General. Kamgar Union & Ors., mere registration of a union doesn’t imply recognition. Further, as held in Kalindiand Others v. Tata Locomotive and Engineering Co. Ltd, a trade union could only be recognised provided that there exists a standing order on the part of the industry. The recognition of unions are either done by union monopolism (wherein the industry would recognise one union per industrial establishment) or through a bargaining council consisting of multiple unions being recognised through the methods of verification of membership, check-off method and the election by secret ballot method.
Thus overall, the Trade Unions Act, 1926 didn’t efficaciously provide for a recognition mechanism via a legal framework but has informally evolved through norms and conventions of the employers and the unions.
The Industrial Relations Code, 2020 And Its Implications On Trade Union Recognition
The Industrial Relations Code is a comprehensive code which encapsulates three important labour central legislations, including the Trade Unions Act, 1926. Section 14(1) of the Act provides for a single represented negotiating union or council to represent employees’ interests and concerns in industrial establishments. In case there are more than one union as provided in Section 14(3) of the Code, only when a union secures the support of 51% of the total muster roll strength of that industrial establishment, will that union be designated as a negotiating union. However, as a fall-back option, Section 14(4) has been provided, which lays down the framework for a negotiating council which merely requires 20% of the total muster roll strength supporting a particular union to be designated so in case of there being multiple unions present for a particular industrial establishment.
The Union Government, on May 4th, 2021, provided for the Industrial Relations(Central) Recognition of Negotiating Union or Negotiating Council andAdjudication of Disputes of Trade Unions Rules, 2021. These Draft Rules cover five basic aspects as elucidated by Dr K.R Shyam Sundar such, “(i) criteria for recognition of a union in a single-union context; (ii) the method for determining the negotiating agent/council and its procedures; (iii) scope of collective bargaining; (iv) facilities to be provided to the negotiating agent/council, and (v) the trade union disputes.”
While the new code does provide for legal sanction for the recognition of trade unions, there are glaring lacunae that must be looked into. Firstly, with regards to recognition of single union based industrial establishments under Section 14(2), the threshold is merely 30% as provided for under Rule 4 of the Draft Recognition Rules. A 30% muster is too small a sample for recognition when it comes a single industry-based union when the threshold in case of recognition of the negotiating union in case of multiple unions is 51%.
Secondly, there is again a lack of specification on the method of the recognition of the union or the council. Rule 5 of the Draft Recognition Rules provides for the secret ballot method as the new mode of recognition of a negotiating union or council. There are some inherent issues with the secret ballot election system as provided in the current framework. As seen in Rules 5 and 6 of The Draft Rules, they are silent on what are the eligibility criteria that must be used to select the union members for the muster roll strength and the electoral roll call preparation. There also is a criticism on the neutrality of verification officers as Rule 5(1)(a) provides for the verification officer to be appointed by the employer himself to oversee the recognition process and this goes against the precedent of FoodCorporation of India Staff Union vs. Food Corporation of India and Others (hereinafter “Food Corporation of India”) which explicitly called for the Government to appoint a neutral third party returning officer to carry out electoral work for union recognition.
Thirdly, it also raises the issue of the high threshold of 51% with regards to multi-union based industries placed under Section 14(3) as it poses important practical concerns as well as constitutional challenges. If fact, compare it to the Maharashtra Legislation Recognition Mechanism where the threshold is merely 30% for just applying for recognition. In the Writ Petition Southern Mazdoor Railway Sangh vs Union of India, the contention while challenging the constitutional validity of Section 14(3) and Section 14(4) with respect to railway unions placed before the Madras High Court is that it is unreasonable to expect 51% of the muster roll strength to be present for a secret ballot election. Also, if a situation is taken wherein the exact 51% or 20% of the muster roll strength is present for the election, again expecting 100% of the muster to vote for one union is not a realistic situation. Another situation can arise especially in industries employing large numbers of employees like the Indian Railways wherein less than 51% or 20% of the muster are present and voting in the secret ballot election which doesn’t satisfy the threshold. The petitioners in fact have through past records of recognition elections of railway unions have shown why the expected arithmetic of the current threshold limits is unachievable and hence given the uncertainty and unreasonableness this provision poses on the muster; it is violative of Article 14. Situations wherein there are deadlocks regarding the threshold requirements could undermine collective bargaining interests of the labourers.
While there are genuine concerns if the current trade union recognition principles are valid, it should be noted that the implantation phase of the Industrial Relations Code, 2020 is still in a nascent stage. Some suggestions that the author would like to make would be the following. First, a re-consideration is required for the 30% threshold provided for in Rule 4 with regards to a single union-based industry under Section 14(2) to a higher threshold for greater involvement of the employees in the recognition process. Second, the government must consider forming a regulatory mechanism involving State actors in the current verification regime with regards to the secret ballot method of recognition. Merely placing this process in the hands of the employer might have an adverse effect on the union members’ interests and will not satisfy the element of neutrality that Food Corporation of India had laid down. Lastly, with regards to multiple union-based recognition under Section 14(3) and Section 14(4), a blanket threshold for all industries might not be feasible and thus the author’s suggestion would be to evolve different thresholds encompassing different criteria depending upon the nature and needs of the industry for the ease of compliance. Introducing these aspects and filling these gaps would provide more stimulus to the enforcement of this new recognition mechanism.
Views are personal.