A Brief Note on Trade Unions

A trade union is an organisation made up of members (a membership-based organisation) and its membership must be made up mainly of workers. Trade unionism is a collection of labourers who voluntarily form an association which have a common aim to protect their rights. Trade unionism fully demands two things: a democratic spirit and education. Illiteracy cannot be fully responsible but the lack of knowledge is the most serious obstacle of all. Few trade unions can afford to conduct generous work, and the majority find it hard to encourage the employee that a contribution is worthwhile except when an argument is coming up or in process. Most trade unions are independent of any employer. However, trade unions try to develop close working relationships with employers. This can sometimes take the form of a partnership agreement between the employer and the trade union which identifies their common interests and objectives.

History and Development

In India, there was a need to collaborate and form a union to fight against atrocities of the trade industries. If we see the pre-independence era, how trade unions were formed or developed in India, we see that in 1890, the first group of mill workers gathered together against the policies of the mill in the name of “Bombay Millhands Association”. The word ‘trade union’ did not have the same meaning as we use it today. The situation got worse after the First World War because the cost of living gradually increased. At that time people were disappointed by the British rule and the workers began to go on strike due to continuous economic unrest, political discomfort and country-wide agitation. India was showing the upsurge in the trade union movement due to the number of successful strikes. 

In the post-independence era, Indians gained a lot of consciousness towards their rights and freedom. Industry is a composition of capital and labour. Both have their own equal value and depend on each other otherwise the industry shall collapse. In 1920, the Non-Cooperation Movement by Mahatma Gandhi supported the working class people which resulted in the formation of a number of trade unions across the country. The International Labour Organisation (ILO) was established in 1919 in Washington with an aim to provide dignity to workers employed in the trade industries. The All India Trade Union Congress (AITUC) on 30th October, 1920 was established as a central organisation of trade unions, which was supported by famous leaders like Sri Jawahar Lal Nehru, Motilal Nehru, Sardar Vallabh Bhai Patel, C.R. Das, etc.


Meaning of Trade Union

‘Trade Union’, under Section 2(h) of the Trade Unions Act, 1926, is defined as an organization formed by the employees on a continuous basis for the purpose of securing, diverse range of benefits. It is a collective effort of all the members in a group. A trade union promotes effort, protects one’s rights and improves working conditions of the people employed in an organization. Trade union, also called labour union, association of workers in a particular trade, industry, or company created for the purpose of securing improvements in pay, benefits, working conditions, or social and political status through collective bargaining. 

Types of Trade Unions

Trade Unions in India are registered and file annual returns under the Trade Union Act (1926). Statistics on Trade Unions are collected annually by the Labour Bureau of the Ministry of Labour, Government of India. Congress associated, the Indian National Trade Union Congress (INTUC) is assumed as the biggest of the seven central trade unions, with a membership of 33.3 million. The different types of Trade Unions are:

  1. Craft Union: It is the collection of those workers who are working for the specialised skills. It is not necessary that the workers should belong to the same industry or factory. For example- union of carpenters, union of electricians, union of plumbers, etc.
  2. Industrial Union: Here, the union is formed on the basis of industry. This means that workers of particular industry can form a group irrespective of their craft. For example- workers of steel factory, workers of cement industry, etc.
  3. General Union: This union is formed by the workers of a particular region or city. There is no categorization on the basis of craft and industry. For example: Kanpur Labour Union, where workers joined the union from different crafts and industries.
  4. Federation : It is the parent  union under which the craft unions, industrial unions and general unions are affiliated. These are national level apex bodies.

Objectives of Trade Unions

A trade union is a formal form of association of workers that promotes the harmonious relationship between employer and employees. The primary objective of trade unions is to promote and protect the interests of its members. Besides a trade union has also to accomplish certain social responsibilities. The objectives of Trade Unions are:

  1. To provide regular employment: The trade unions aim to negotiate with the management of the employers to generate regular employment for its members.
  2. Rationalizing personal policy: Along with job security and incentives, the trade unions also aim to negotiate on several policies like promotion, transfer, retrenchment of the employees of the employer.
  3. Consulting with workers: Any policy related to the employees must first be consulted with the workers before its implementation. This may include the schedule of working, work hours, adoption of any new techniques, etc. This function is too performed by the trade unions.
  4. Recognition and participation: The main aim of trade unions is to encourage the management that workers are not inferior, rather they are equally important for the industry.

Functions of Trade Unions

The purpose of these unions is to look into the grievances of wagers and present a collective voice in front of the management. Regulation of relations, settlement of grievances, raising new demands on behalf of workers, collective bargaining and negotiations are the other key principle functions that these trade unions perform.

  1. Collective Bargaining: The trade unions perform a continuous interaction and negotiation in the respect to the demands of workers with the management of the industry.
  2. Advice the management on policies and practices: Suggestions are made by the trade unions for the betterment of both the units i.e. the management and the workers, in order to ensure that both the parties are benefitted. 
  3. Taking up the individual and collective grievances within the organisation: Trade unions have the responsibility to take issues of each and every person, provided it is a genuine problem, and to get it solved by the help of management.
  4. Welfare and recreational activities for the workers: Trade unions create a friendly environment, so that workers feel a sense of belongingness amongst each other and feel comfortable to share joy and sorrow.
  5. Organizing demonstrations and strikes to put pressure on the management to make the demands work: In extreme cases where the management is not willing to accept the demands of the workers, trade unions may do something severe to make them understand and accept such demands for the betterment of the workers.
  6. Securing legislative protection for the workers from the government: Trade unions have the duty to keep a check on all legislative action in favour of them so that they can avail maximum benefit out of it for the betterment of the workers.

Why do employees join Trade Unions?

Human beings are rational creatures. They usually act upon rationally in different spheres of their lives. Similarly, workers join a union with a rational approach whether joining a union will be benefi­cial or not. This can simply be decided by making a cost-benefit analysis in this regard. The excess of benefits over costs, i.e., profit or reward, justifies workers’ joining a trade union. The reasons for joining Trade Unions are:

  1. For protecting their interest in the organization: Employers can easily break or manipulate the will of one but not the group. To prevent themselves from exploitation from the hands of employers, the employees join the trade unions.
  2. Economic interest: Trade unions mostly raise movements in the areas of employment and non-employment which can help in job security, salary, etc., but it also helps in providing financial assistance to those who have genuine needs.
  3. Sense of participation and belongingness: An employee cannot achieve its demands by himself in an industry. He must participate in the process to have a better say in the decision making.
  4. Platform to exhibit leadership and self expression: If anyone has the quality to lead a group or has the desire to manage the group or has the quality of a good orator , then such a person must join the trade union.

Criticism of Trade Unions

Critics of trade unions argue they can be disruptive to firms, discouraging investment and improved working practices. Furthermore, powerful unions can lead to macroeconomic problems such as wage inflation and lost productivity due to strike action. The criticism of Trade Unions are:

  1. Narrow perspective: The Trade unions have limited goals. Rather than understanding larger benefits in the long term they believe in achieving short term goals which may be detrimental in the long term.
  2. Personal interest in trade union: We can see a slight shift from industrial dispute to individual dispute. This means some officials put their individual personal agendas in demand instead of fighting for the rights and interest of their employees.
  3. Over usage of strikes may lead to loss of recognition: Overdoing of anything is considered bad. Same goes with the concept of ‘strikes’ which may lead to the management refusing the demands of the workers and may lead to job losses and can also lead to the removal of the recognition of the trade union.
  4. Resistance to change: Trade unions are generally very resistive in nature. Often, they go on strike even for a small cause. They have a pessimistic view rather than an optimistic approach towards achieving their objectives. 

Rights of Trade Unions

Enactment of the Trade Unions Act was a landmark in the history of the labour movement. The Act gave legal status to the registered trade union which conferred their rights and liabilities and immunity from civil suits and criminal presentation. The trade unions have secured some rights for the fulfilment of their objectives:

  1. provides a right to the trade union to create a general fund to the registered trade union.[1]
  2. gives a right to registered trade unions to form political funds.[2]
  3. gives a right to any member of a trade union to inquire or inspect the books himself or through an agent.[3]
  4. gives the right of minor membership to a person. A minor who is under 18 years of age but above the age of 15 years can join the trade union but cannot hold an office until he becomes a major. [4] 

 As a legal person some rights are granted:

  1. Right to have continuous succession
  2. Common seal in its own name.
  3. Right to acquire, hold and dispose of both movable and immovable property in its own name.
  4. Right to contract in its own name.
  5. Can sue and can be sued.
  1. provides a right to registered trade unions to change their name with a minimum two-third majority. [5] 
  2.  gives right to amalgamation where two or more than two trade unions can amalgamate into one, with or without the dissolution of funds. [6]


Trade unionism in India suffers from a variety of problems, such as politicization of the unions, multiplicity of unions inter and intra-union rivalry, small size and low membership, financial weakness,and lack of welfare facilities for the members, weak bargaining power, reliance on litigation and strikes, and dependence on outside leadership. Trade unions, either of similar industry or of the diverse industry may form an organization in order to recover Trade Union Unity. The surfacing of trade unions has been an advantage for labourers who are not capable to represent their demands in person. It also acts as a defense to workers from which they can pressurize their employers and industries to fulfill their genuine demands. During critical situations unions in heterogeneous industries may choose to take rigorous actions without losing their eccentricity. The Trade Union Act was enacted to protect certain rights and liabilities and protect the workers from exploitation. The Trade Unions Act, 1926 provides for registration of trade unions with a view to form lawful organisation of labour to enable collective bargaining. The factors that make a trade union strong and healthy are unflinching adherence to the union’s constitution and rules, regular payment of dues, fully representative character of the union, cooperation with sister unions and a sound leadership. A methodological organization with an enlightened labour force is an essential.



[1] The Trade Unions Act, 1926, s. 15. 

[2] The Trade Unions Act, 1926, s. 16.

[3] The Trade Unions Act, 1926, s.20.

[4] The Trade Unions Act, 1926, s.21.

[5] The Trade Unions Act, 1926, s. 23. 

[6] The Trade Unions Act, 1926, s. 24.






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