Welcome to lawpedia website

Tread unionism in india

 Tread unionism in india


The labour movement was the principal force that transformed misery and despair into hope and progress. Out of its bold struggles, economic and social reform gave birth to unemployment insurance, old-age pensions, government relief for the destitute and, above all, new wage levels that meant not mere survival but a tolerable life. The captains of industry did not lead this transformation; they resisted it until they were overcome. When in the thirties the wave of union organization crested over the nation, it carried to secure shores not only itself but the whole society.

Martin Luther King, Jr. 

Trade Unions, in general, emerged as a result of the Industrial Revolution which can be traced back to the 18th century when the Industrial Revolution began in Britain. The Industrial Revolution is characterized by the setting up of large-scale factories, new lines of mass production, mechanization and rapid economic development. It is natural that when a large number of factories are set, there is a need for labour. Hence, the demand for unskilled and skilled labour grew. At the time the industries were not properly organized and the employers concentrated on maximizing profits which led to exploitation of the labour class who were uneducated and poor. In other words, it led to the formation of two classes in the industrial sector:

Employer Class – Who were profit-oriented and did not really bother about the working conditions of the labour.

Labour Class – Who were uneducated and had no knowledge of their rights and were also in need of money.

Initially, the labourers felt that their need for money is greater and that their employers can easily replace them if they protested to the exploitative terms and wages imposed by their employers.

But slowly the labour class realized that if one individual labour protests against the exploitative terms of his employee, it will not have any impact on the industrial organization but if laborers form themselves into a group or “Union” then more impact will be exerted on their employer lords. Forming labourers into Unions also gave them the power to collectively bargain for themselves. Therefore, this thought led to the formation of Trade Unions. 

The observation of the 26th President of the United States is noteworthy to note here which goes as – “It is essential that there should be an organization of labour. This is an era of organization. Capital organizes and therefore labour must organize.” – Theodore Roosevelt

Trade Unionism in India

The British started colonizing the Indian sub-continent in the 1600s and started to set up factories and mills in India just like the Industrial Revolution in Britain. The main reason why the British found it apt to start industrialization in India was that India had an abundance of cheap and poor labour along with natural resources and land for setting up the industries. 

The cotton mill was established in 1851 in Bombay and first jute mill was established in 1855 in Bengal.

Just like in Britain, the conditions of labour in India was worse. The exploitative and pitiable working terms such as working hours, wages and expelling policies made the labours join hands and unite and protest. One of the first unrest among labourers can be dated back to the year 1877 when due to sudden reduction in wages the labourers of Empress Mill, Nagpur organized a strike. 

Since such unionism was a new phenomenon there existed no law to legalize and regulate these new labour unions. With growing discontent and unrest among the labour class and constant tiff with the employer class, few steps were taken to inquire and resolve the situation. 

Factories Commission, 1875 – Factories Commission, 1875 was the first commission set up which properly inquired into the conditions of the factories and came to the conclusion that some kind of legal limit was necessary and the Factories Act, 1881 was passed. 

Factories Commission, 1885 – The Second Commission was set up in 1885 and on the basis of the inquiry and second Factories Act in 1891 was passed. 

Royal Commission on Labor, 1892 – The Commission led to imposing of limitations on working hours in factories. 

Factories Commissions and Factories legislations caused no improvement in the working conditions of the labour class in India. In 1885 all workers of India had also signed a memorandum with their employers to provide them with basic minimum working conditions. However, the situation did not improve. 

The initial approach by labourers was humanistic in nature under the background of the setting up of Indian National Congress and non-violence movement initiated by Mahatma Gandhi. 

Post World War I period 

When World War I broke out there was the sudden diversion of all resources to cater to war needs and the employers were dependent on the labourers. It then the labourers realized that the employers need them as much as they need their employers. This gave them a “bargaining position”. 

Trade unions started to get formed in India but the process was slow due to the leadership of socialist reformers. Yet many Trade unions started to get formulated. The first major trade union formed was the Madras Labour Union in 1918 under the presidentship of Mr B.P. Wadia. This was followed by the formation of the All India Trade Union Congress in 1920.

With the formation of Trade Unions, the labourers started to organize strikes and protests to assert their demands such as lowering of working hours, minimum basic wages, 

The Buckingham Mill Case

The formation of Trade Unions and the organization of strikes and protests by the labourers were not welcomed by the employers. To put an end to the activities of the newly formed trade unions and further to bar formation of Trade Unions the employers sought legal recourse. 

One of the most important cases filed was against Mr B.P. Wadia who was the President of the Madras Labour Union that he conspired with workers and went on strike and was restraining trade. The Employers prayed for an injunction to stay the protests and activities done by the Trade Union.

Contentions raised by the Employers:

The strike is illegal because it amounts to a restraint of trade under Section 27 of the Indian Contract Act. 

The strike constituted criminal conspiracy under section 120A of the Indian Penal Code 1860. 

The strike also constituted civil conspiracy under civil law. 

The Hon’ble Madras High Court granted the injunction to stay the strike on three grounds:

There was a valid cause of action in favour of employers. 

There was a breach of law by the labourers. 

There were losses suffered by the employers due to the actions of the trade union. 

It is to be noted here that until this time there was no legislation which gave legal force/backing to trade unions. The Order of the Madras High Court was further blown to the truth that there was no law that legalized trade unionism in India. 

The growing need to have pro-labour legislation led to the passing of the Indian Trade Union Act 1926. The word “India” was later dropped and the legislation named Trade Union Act, 1926 came into force.

The Preamble of the “An Act to provide for the registration of Trade Unions and in certain respects to define the law relating to registered Trade Unions”.

Post World War I the cost of living increased and there was growing agitation against colonial rule. With the passing of the Trade Union Act emergence of “military trade unionism” was witnessed with a lot of strikes and protests by the Trade Unions. India also joined the International Labour Organization as a founding member. 

Period Post 1947

One major lacuna with the 1926 Act was that though it provided for voluntary registration of Trade Unions it did not provide for compulsory recognition of the Trade Unions by the employers and because it was not compulsory for the employers to recognize the Trade Unions, obviously did not recognize them. This again put a halt to the development of Trade unions. 

For example, whenever the members of Trade Unions or their lawyers went to negotiate with the employers, the employers simply refused to talk to them on the ground that they do not recognize such Trade union, though it is registered!

The Act was amended in 1947 which provided for compulsory recognition by the employers of the representative Unions. However, the amended act has not been brought to force yet.

Trade Unionism in India from 1950 to 1970

Independence of India was beneficial to Trade Unions in India in a huge way as the forefathers adopted the principles of equality for all, justice and freedom including the freedom of expression. The Constitution of India also recognized Freedom of Association as a Fundamental Right.

Planning was also adopted by India by the way of Five- year plans. The focus of the first two five-year plans was on industry and agriculture which led to setting up of large public sector industries. With the setting up of industries, the need for labour grew and trade unionism became active.

However, the trade unions saw their own troubles. Due to a lack in organization and proper leadership there was inter-union tensions and conflicts which was coupled with political interventions. The State took a paternalistic approach whereby it stated dictating the unions. Hence, during this period strikes and protests were low as compared to the coming years. 

Trade Unionism in India from 1970 to 1990

From the mid of 1960, the economic situation of India had started to deteriorate mainly because of famines and wars witnessed by India in its preceding years. The rate of inflation rose and prices of food and grains soared. Industries were also affected by the structural changes in the economy. There were more protests, strikes and lockouts organized by the trade unions during this period.

Nationwide Emergency imposed during PM Indira Gandhi’s regime from 1975 to 1977 suspended all the Fundamental Rights including the right to form associations and right to strike. 

Post-Emergency the government had attempted to bring into force an industrial relations bill which aimed at banning strikes and lockouts in essential industries and services. However, the bill was met with strong opposition from different participants, specifically the trade unions. As a result, the bill was not passed.

The trade unions had achieved a domineering stance by this time. They had aced in their bargaining powers and had become more organized and were able to meet their requirements by negotiations and strikes.

Trade Unionism in India from 1990 to 1999

In 1991 the Government decided to open the economy by introducing the “New Economic Policy” (NEP). With pressures of liberalization, privatization and globalization cracks and splits were also seen in Trade Unions in India because the Government’s labour-friendly approach changed to be more investor-friendly. Due to globalization, there was massive cutting in the workforce and trade unions were trying hard to save labourers jobs. With the advent of liberalization in 1991, the industrial relations policy began to change. Now, the policy was tilted towards employers. Employers opted for workforce reduction, introduced policies of voluntary retirement schemes and flexibility in the workplace also increased. The age-old policy of protectionism proved inadequate for the Indian industry to remain competitive as the lack of flexibility posed a serious threat to manufacturers because they had to compete in the international market. Thus, globalization brought major changes in industrial relations policy in India. The main characteristics of trade unionism after globalization became the small size of membership, lack of adequate finance, non-fulfilment of welfare schemes, control of political parties and other outside interference in the activities of trade unions.

Trade Unionism in the 21st Century 

With difficulties faced by NEP, the trade unions had to face a barrage of problems but the silver lining is the growth in the number of trade unions, better organization and functioning. As per data of Labour Bureau, there are around 11,556 registered labour unions in India with average membership at 1283 members per union. 

In 2001 the Act was amended. Major additions and amendments to the act are the following,

Amendment to Section 4.: The proviso to Section 4, added after the 2001 amendment, now prescribes minimum number workers who should be part of the Trade Union at the time of making the application for registration. The proviso reads as, 

“Provided that no Trade Union of workmen shall be registered unless at least ten per cent of one hundred of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making of an application for registration:

Provided further that no Trade Union of workmen shall be registered unless it has on the date of making application not less than seven persons as its members, who are workmen engaged or employed in the establishment or industry with which it is connected.”

Insertion of Section 9A: Minimum membership requirement was established by inserting Section 9A to the Act. The new Section 9A reads as,

“9A. The minimum requirement about membership of a Trade Union.-A registered Trade Union of workmen shall at all times continue to have not less than ten per cent or one hundred of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as its members.”

Proposed amendments 

The Ministry of Labour and Employment has been deliberating on inserting a provision for recognition of trade unions at the central and state level. Contemplation to incorporate such an amend has come in the wake of numerous representations by trade unions. Hence, on 20th July 2018, the Ministry has published a notification in the official gazette proposing the amendment and has invited comments from the stakeholders and participants on the draft amendment. 

If passed, a new Section 28A and Sub-section (2A) to Section 29 (2) will be inserted which will provide for compulsory recognition of Trade unions at both federal levels. 


Trade Unionism in India has come a long way. Initially from having no legal backing to illegalizing “strikes” by the unions to granting them registration procedure and compulsory recognition and now having full-fledged legislations and special courts, trade unions in India have attained remarkable status/standing in the labour movement. However, there are still few impediments that the trade unions face such as lack of financial resources and governmental support. Hence, there is still scope for the development of Trade Unionism in India.