Christ University School of Law
Labour Law
An analysis of Amalgamation and Dissolution of Trade Unions
Vishvas Deo BBA-LLB 0916125
Contents Trade Union Act, 1926 ± An Overview Trade Unions - A Necessity and its Realization in India Amalgamation of Trade Union The Institutional factors The Ballot-Minimum standards to be b e met Conclusion Dissolution of Trade Union Conclusion
Trade Unions Act, 1926 Trade union is a vo luntary organization of workers pertaining to a particular trade, industry or a company and formed to promote and protect their interests and welfare by co llective action. They are the most suitable organisations for balancing and improving the relations between the employer and the employees. They T hey are formed not only on ly to cater to the workers' demand, but also for inculcating in them the sense of o f discipline and responsibility. responsibility. They T hey aim to:
Secure
fair wages for workers and improve their opportunities for promotion and
training.
Safeguard
security of tenure and improve their conditions of service.
Improve working and living conditions of o f workers.
Provide
Facilitate
Help
them educational, cultural and recreat ional facilities. facilities. technological advancement by broadening the understanding of the workers.
them in improving levels of production, pro duction, productivity, discipline and high standard
of living.
Promote
individual and collective welfare and t hus correlate the workers' interests with
that of their industry. In India, the first organised trade union u nion was formed in 1918 and since t hen they have spread in almost all the industrial centres of the countr y. The legislation regulating these trade unions is the Indian Trade Unions Act, 1926 . The Act deals with the registrati reg istration on of trade unions, their rights, their liabilities and responsibilities as well as ensures that their funds are utilised properly. It gives legal and corporate corpor ate status to the registered trade unions. It also seeks to protect them from civil or criminal prosecution so that they cou ld carry on their legitimate activities for the benefit of the working class. The Act is applicable not only to the t he union of workers but also to the association of employers. It extends to whole of India. Also, certain Acts, namely, the Societies Registration Act, 1860 ; the Co-operative Societies Act, 1912 ; and the Companies Act, 1956 shall not apply to any registered reg istered trade union, and that the registration of any such t rade
union under any such Act shall be void. However,
the Trade Unions Act 1926 has been amended from time to time t ime and the most
important being the Trade Unions (Amendment) Act, 2001 . This Act has been enacted in order to bring more transparency and to provide greater support to trade unionism in India. Hence,
trade union legislation ensures their orderly growth, reduce their multiplicity and promote
internal democracy in the industrial organisation and the economy. The trade unions have thus acquired an important place in the economic, political and social set up of the country.
Trade Unions - A Necessity and its Realization in India
Trade Unions are the product of large scale industrialisation industrialisation and concentration of industries. industries. Before the advent of industrialisation there were personal contracts between the employers and the workers (as the industries industries were run in the homes and with the tools of the employer). employer). So
there was no no need to have any machinery for determining their relationship. But under the
modem factory system this personal contact lost its weight due to setting up of large scale industrial units, with concentration in towns to wns and with the t he heavy use of machinery. The lure of employers, to reduce the cost of production, in order to withstand withstand in the competitive market market and to maximize their profits profits enabled them to use more and more more technologically advanced devices of production and sophisticated machines which, in turn, have contributed in further drying up the dampness of the personal relationship. Simultaneously it had given rise to a new class of workers who were dependent on wages only for their livelihood and had come from different parts of the country, for seeking employment in these industries.
Amalgamation of Trade Union Under section 24. Of the Trade unions Act, 1926
Amalgamation of Trade Union - Any two or more registered Trade Unions may become
amalgamated together as one Trade Union with or without dissolution or division of the funds of such Trade Unions or either or any of them, provided that the votes of at least one-half of the members of each or every such Trade Union entitled to vote are recorded, and that at least sixty percent of the votes recorded are in favor of the proposal.
The meaning of the term µto amalgamate¶ is to merely merge and perform functions as earlier however now with symbiotic relations and a s ingle identity. Here
under section 24. of the Trade unions Act, 1926 it is expressly prescribed that two or more
registered trade unions may amalgamate to form one single trade union.
Firstly,
it allows for amalgamation with or without dissolution,
That is the newly organized trade union may be identified as one entity after the dissolution of either one, or in the likelihood of the functions being varied in nature as compared to the amalgamated trade union, it may continue to exist.
To better illustrate; in the mining industry, there may exist two trade unions, one for the mine workers, and the second for those operating the heavy machinery, in order to effectively seek redressal with the management the two trade unions amalgamate, however the mine workers union may still exist to address matters of their sole interest which is varied in nature as compared to the co mmunity mmunity interest of the a malgamated trade union.
Secondly, it allows for amalgamation with or without division of funds, Here
under the Act, it is specified that the newly organized union may as they think fit (in its
own discretion) may amalgamate the funds of the individual unions or otherwise. By doing so there will be no hierarchical setup amongst the two unions. Thirdly, the votes of at least one-half of the members of each or every such Trade Union entitled to vote are recorded, and that at least sixty percent of the votes recorded are in favor of the proposal.
Here,
after proposal for amalgamation is forwarded in every such trade union, the vote of atleast
half the total members of the said union is recorded by means of ballot, to continue with the process of amalgamation at least 60% of those members who cast their vote must be in favour of the amalgamation. The Act merely provides for the mode of amalgamation, the procedure is subjected to encumbrances of both the t he union workers and the employers.
The Institutional factors
Despite the apparently chaotic nature of union mergers and the lack of any discernible organisational principles behind them, there are certain institutional factors which influence their development Unions, like most institutions, are basically conservative in outlook. They are reluctant to lose their individual character and consequently they will usually choose to merge in such a way as to enable them to retain their original identity and protect their special interests, as wellas the vested interests of full-time union officials.' The union structure which is best adapted to resolve these problems is one with a trade group structure. Any small union merging with it is able to join the appropriate trade group and feel that its particular trade interests are receiving detailed consideration, whilst a largerunion can merge and form the basis of a new trade t rade group.
The Ballot-Minimum standards to be met
The Act lays down minimum standards which are designed to ensure that every member has a reasonable opportunity to vote and with knowledge of the relevant terms. The two aspects merit separate consideration. (i) Every member has a reasonable opportunity to vote The Act specifically states that every member is entitled to vote, and both the Registrar and the courts have stated that this includes all classes of members irrespective of their voting rights under the union. (ii) Ensuring knowledge of the terms Each union carrying out a ballot must take " all reasonable steps to secure that not less than seven days before voting on the resolution begins, every member is supplied with a notice in writing approved for the purpose by the Registrar." This will either be the relevant instrument of merger or a sufficiently detailed account o f it Conclusion
A number of tentative conclusions may be drawn from this study. First, in the vast majority of cases the ballot does little more than formally to put the decision-making into the hands of the members.
Secondly,
it is interesting that unions have rarely made use of the opportunity to
substitute their own provisions for those of the statute. Whether this is intentional because they are content with the statutory norms or whether it arises through default is not clear. But h is perhaps surprising that over half of those few unions who did attempt to adopt their own provisions were unsuccessful because they failed to comply with the statute. It may be that the unions are too ready to rely upon the Registrar to detect defects in their rules.
Dissolution
of Trade Union
Under section 27. Of the Trade unions Act, 1926 Dissolution
of trade union - (1) When a registered Trade Union is dissolved, notice for the
dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution, be sent to the Registrar and shall be registered by him if he is satisfied the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such regulation. (2) Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution and funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the member in such manner as may be prescribed
.
The need for dissolution dissolution of trade union may arise in two instances; (i)
Winding up of the unit, that is if it the union was factory specific and not industry specific.
(ii) However
If there is a proposal for amalgamation of o f two or more unions. in both these instances the acquired assets and liabilities are still existent, similar to the
winding up of companies incorporated under the Companies Act, 1956 the similar procedure is adopted for the dissolution of the trade union. Here
representation of the union is by those seven members and the secretary of the union who
endorsed the dissolution of the trade union. In the likelihood when the trade union in the rules adopted has not provided for the instance of dissolution and the distribution of funds etc. the registrar within his discretionary authority may award the funds.
Conclusion
As earlier stated the need for dissolution of trade union may arise in two instances; (i)
Winding up of the unit, that is if it the union was factory specific and not industry specific.
(ii)
If there is a proposal for amalgamation of o f two or more unions.
The procedure to be followed is prescribed Under section 27. Of the Trade unions Act, 1926, the authority here is to a great extent unilateral on the registrar to facilitate the procedure of dissolution.
