What are trade unions or labor unions? What are the new reforms introduced in the labor domain?
In a globalized world, it is equally important to protect the interests of workers along with that of industrialists.
At a time when the Government of India is trying to bring many labor reforms, it is important to know the history of labor unions, popularly known as trade unions.
What are labor unions or trade unions?
A trade union can be defined as an organized association of workers in a trade or profession, formed to further their rights and interests. In India, Trade Unions in India are registered under the Trade Union Act (1926).
Trade unions are interested in the economic and social welfare of the workers. Labor unions may also have political interests in the larger society.
Growth of labor unions in India: 6-phases
The growth of the Trade union movement in India was an organic process. It started towards the tail end of the nineteenth century and continues to date. It closely follows the development of Industry in India.
In India, now there are more than 16,000 trade unions with a collective membership of around 1 crore (10 million) laborers.
The growth of labor unions in India can be roughly classified into six phases.
Pre-1918: The genesis of the labor movement in India
After the setting up of textile and jute mills coupled with the laying of railways in the 1850s, worker atrocities started to come to light.
Though the origin of labor movements was traced to the 1860s, the first labor agitation in the history of India occurred in Bombay, in 1875. It was organized under the leadership of S.S Bengalee. It concentrated on the plight of workers, especially women and children. This led to the appointment of the first Factory Commission, in 1875. Consequently, the first Factories Act was passed in 1881.
In 1890, M.N Lokhande established the Bombay Mill Hands Association. This was the first organized labor union in India.
Following this, different organizations were established across India.
Features of the labor movements in this era:
- Leadership was provided by social reformers and not by the workers themselves.
- The movements in this era mainly concentrated on the welfare of workers rather than asserting their rights.
- They were organized, but there was no pan-India presence.
- A strong intellectual foundation or agenda was missing.
- Their demands revolved around issues like that of women and children workers.
1918-1924: The early trade union phase
This period marked the birth of the true trade union movement in India. It was organized along the lines of unions in the industrialized world.
The deteriorated living conditions caused by the First World War and the exposure to the outside world resulted in heightened class consciousness amongst the workers. This provided fertile ground for the development of the movement. This period is known as the early trade union period.
Important unions: Ahmedabad Textile Labour Association (1917) led by Smt. Anasuyaben Sarabhai, All India Postal and RMS Association, Madras Labour Union led by B.P Wadia etc.
AITUC, the oldest trade union federation in India was set up in 1920. It was founded by Lala Lajpat Rai, and Joseph Baptista, N.M. Joshi, and Diwan Chaman Lall. Lajpat Rai was elected the first president of AITUC.
Factors that influenced the growth of the movement:
- Spiraling prices during the War and the mass entrenchment of workers that followed it led to low living standards. Also, the wretched working conditions added to their woes. Hence, they sought collective bargaining power through unionization.
- The development of Home Rule, the emergence of Gandhian leadership, and the socio-political conditions led to the nationalist leadership taking an interest in the worker’s plight. Workers, in turn, were looking for professional leadership and guidance.
- Russian Revolution and other international developments (like the setting up of the International Labour Organisation in 1919) boosted their morale.
1925-1934: Period of left-wing trade unionism
This era was marked by increasing militancy and a revolutionary approach. It also saw multiple split-ups in the movement. Leaders like N.M. Joshi and V.V. Giri were instrumental in moderating the movement and further integrating it with the nationalist mainstream.
AITUC split up multiple times paving the way for the formation of organizations like the National Trade Union Federation (NTUF) and the All India Red Trade Union Congress (AIRTUC). However, the need for unity was felt and they all merged with the AITUC in the next phase.
The government was also receptive to the trade union movement. Legislations like the Trade Unions Act, of 1926 and the Trade Disputes Act, of 1929 gave a fillip to its growth. It bestowed many rights to the unions in return for certain obligations. This period was marked by the dominance of the left. Hence, it may be referred to as the period of left-wing trade unionism.
1935-1938: The Congress interregnum
This phase was marked by greater unity between different unions. Indian National Congress was in power in most of the provinces by 1937. This led to more and more unions coming forward and getting involved with the nationalist movement. In 1935, AIRTUC merged with AITUC. Different legislations were passed by provincial governments that gave more power and recognition to the trade unions.
The approach of Congress ministries was that of promoting worker interests while protecting industrial peace. Reconciliation of labor with capital was seen as an aim, with ministries working towards securing wage rise and better living conditions. However, many ministries treated strikes as law and order issues. They used colonial machinery to suppress it. This led to considerable resentment from the unions.
1939-1946: Period of labor activism
The Second World War lowered the standard of living for the workers further and this led to the strengthening of the movement. The question of the war effort created a rift between the Communists and the Congress. This, coupled with other issues, led to a further split in the movement. However, the movement as a whole got stronger due to the compounding issues. This included mass entrenchment post-war and the massive price rise that accompanied it.
Legislations like the Industrial Employment Act, of 1946 and the Bombay Industrial Relations Act, of 1946 contributed to strengthening the trade union movement. In general, the movements got more vocal and involved in the national movement.
1947-present: Post-independence trade unionism
It was marked by the proliferation of unions. INTUC was formed in May 1947 under the aegis of Sardar Vallabhbhai Patel. Since then, the AITUC has come to be dominated by the Communists. Hind Mazdoor Sabha was formed in 1948 under the banner of the Praja Socialist Party. Later on, it came under the influence of Socialists. Bharatiya Mazdoor Sangh was founded in 1955 and is currently affiliated with the BJP.
Post-independence, trade unions became increasingly tied with party politics. The rise of regional parties has led to a proliferation in their numbers with each party opting to create its trade union. However, their influence has been somewhat reduced after the liberalization post-1991. Issues like labor code reforms and minimum wage remain a political hot potato due to the opposition from the trade union leadership.
Post-independence, India has also witnessed different unions coming together to address a common issue. These include the crippling railway strike of 1974 and the Great Bombay textile strike, of 1982. However, such strikes are seen to get less public support post-1991. There is also an increased focus on informal labor. This is due to the particularly vulnerable situation of unorganized labor. All major trade unions have registered an increase in their membership from the unorganized sector.
Problems faced by the Labour movement post-Independence
- Uneven growth: They are concentrated in the metropolises, largely catering to the organized sector. Rural Agricultural labor and small-scale labor are grossly underrepresented.
- Low membership: Trade union membership is growing, but the vast majority of India’s labor is not part of any trade unions. This reduces their collective bargaining power.
- Weak financial position: Membership fees are set too low (25 paise) by the Trade Union Act, of 1926. They are particularly disadvantaged against corporate lobbying groups that are flush with cash.
- Political leadership: Careerist politicians and vested political agendas mean that worker interests are sidelined. Since the leadership may not be from the labor force, they are held captive to party politics. This leads to further exploitation.
- The multiplicity of unions: Bargaining power is diluted and it is easy for employers to divert the attention of the labor.
- Inter-union rivalry: There are conflicts of interest and party politics between the unions.
- The problem of recognition: Employers are under no obligation to give them recognition. This means that docile unions get recognition and genuine ones may be sidelined.
- Diverse nature of labor: Most unions don’t have properly differentiated organizational structures to cater to different classes of labor. E.g.: Differences between agricultural, formal, and informal labor.
- Lack of public support: Especially post-1991, trade unionism is looked down upon as an impediment to growth and development. This has led to a general ebbing of the movement across the country.
Major Labour Unions and their Political Affiliation
- All India Trade Union Congress – Communist Party of India.
- Indian National Trade Union Congress – Indian National Congress.
- Bhartiya Mazdoor Sangh – Bharatiya Janata Party.
- Centre for Indian Trade Unions – CPI(M).
- Hind Mazdoor Sabha – Samajwadi Party.
- Self-Employed Women’s Association – Unaffiliated.
The Significance of Trade Unions in a Capitalist Society
India’s decisive shift towards market-led growth post-1991 has raised a lot of questions about the role of labor unions. Often, they are seen as an impediment to industrialization and investment. However, their role is indispensable in balancing workers’ interests with those of investors. They also keep a check on the sustainability of business practices, including ethics.
Hence, they play an important role in getting support for worker interests from the larger society. They also mobilize opinions in favor of labor. They are also instrumental in organizing democratic protests and avoiding movements getting overly militaristic. Democratic trade unionism is also a must in avoiding workers coming under the influence of radical and anti-national elements. This is particularly important in the environment of rising socio-economic inequality post-liberalisation.
Ease of Doing Business vs. Competitiveness of the Labour Market
The Government of India is focused on attracting investments by making the nation business-friendly.
India had moved 14 places to 63rd among 190 nations in the World Bank’s Ease of Doing Business Rank 2020. However, it failed to achieve the government’s target of being at 50th place.
The competitiveness of its labour market is a major area of worry where India is currently ranked 103 out of 141 countries by the World Economic Forum.
There are numerous labor laws in India – more than 40. As part of labor reform initiatives, the labor ministry has decided to amalgamate 44 labor laws into four labor codes — on wages, industrial relations, social security and safety, health, and working conditions.
These are a slew of legislation aimed at reforming and simplifying the labor law regime in the country. According to the government, all major labor unions were consulted in the process.
The plan is to replace 44 labor laws that deal with different issues with four comprehensive bills. With this, we will have just four simplified laws in place of these laws.
The New Labour Codes – The Proposed 4 Bills
The new 4 codes will deal with wages, social security, industrial safety and welfare, and industrial relations.
Labour Code on wages
Code on wages will subsume legislations like The Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, and the Equal Remuneration Act. It aims to provide a national floor for minimum wage. It also has provisions to consider regional variations like geography, economy, etc.
Labour Code on Occupational Safety, Health, and Working Conditions
The code on Industrial safety and welfare will replace legislations like the Factories Act, the Mines Act, and the Dock Workers (Safety, Health and Welfare) Act. This will put in place a uniform regime across the nation to ensure industrial safety.
Labour Code on Industrial Relations
The Labour Code on Industrial Relations will combine the Trade Unions Act, of 1926, the Industrial Employment (Standing Orders) Act, of 1946, and the Industrial Disputes Act, of 1947. The focus here is to set the stage for the way labor unions can protect labor interests. It also seeks to abolish deadlocks and promote worker welfare while promoting investment.
Labour Code on Social Security
The code on social security will merge important legislations like the Employees’ Provident Fund and Miscellaneous Provisions Act, the Employees’ State Insurance Corporation Act, the Maternity Benefits Act, the Building and Other Construction Workers Act, and the Employees’ Compensation Act
Note: The Labour Code on Wages was approved by Parliament in August while the Labour Code on Occupational Safety, Health and Working Conditions has been referred to the standing committee on labour.
A vibrant and responsible trade union environment is the requisite for inclusive growth in any economy. It checks the growing inequality and falling living conditions of the working class.
Recent years have seen an erosion of the powers of most labor unions. Though labor reforms are the need of the hour, every reform should strike a perfect balance between labor welfare and investment-led development.
Article by: Hashin Jithu, curated by ClearIAS Team