Trade Unions

Trade unions emerged as a result of the perpetual conflict between the employer and the employee and the inability of the employee to obtain basic ‘worker’s rights’ such as a minimum wage, humane conditions of labour and so forth. In the early 20th century, the prevalent attitude of the State towards the economy was one of non interference or laissez-faire.

Many attempts have been made to define a trade union. Sydney and Webb’s define trade unions as “a continuous association of wage earners for the purpose of maintaining and improving the condition of their working lives”. A trade union has been defined by the Indian Trade Unions Act, 1926 under s. 2(h). It states that “any combination whether temporary or permanent, forced primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business and includes any federation of two or more trade unions.”

The greatest strength or asset of a trade union is its power of collective bargaining. While the individual worker has virtually no bargaining capacity, the trade union which sometimes claims hundreds of thousands of members, has vast bargaining capacity. Webb’s argued that in a freely competitive market, competition would drive the wage rate down. This would naturally adversely affect the workers. Trade unions exist to prevent such unhealthy practices from developing in an economy. The trade union is consequently an institution that is essential for the maintenance of some element of equality between the employers and the employees. The researcher in this project aims to analyze the trade union from a very specific point of view, namely, the rights and liabilities it enjoys in India and the purposes of granting immunity to it and its members in civil and criminal suits.

The origin of trade unions’ existence can be traced from the eighteenth century Europe. During this period, there was rapid expansion of industrial the society, which a large number of drew women, children, rural workers, and immigrants to the work force in larger numbers and in new roles. Subsequently, a need was felt by this pool of both skilled and unskilled workers to be more vocal about their demands, which laid the foundation for a sort of unionism.

Trade unions were not however accepted with open arms by large sections of society. Initially, many governments considered them unlawful organizations and sought to put a halt to their growth through the application of common law doctrines. During the 18th century the government in England imposed a ban on the grouping of workers in particular industries like the wool and the silk industries, but latter turned this ban into a general ban by implementing The Combination Act of 1799. This act was based on the assumption that combination of workers for demanding an increase in their wages is unlawful under the common law Doctrine of Conspiracy, which criminalised the privileged acts done by individual if done in combination. This act was further amended in 1800 with the same name which enlisted two more acts as an offence this are namely: entering into a contract for the purpose of improving employment conditions or calling or attending any meetings for the same purpose and attempting to persuade another person not to work or to refuse to work with another worker and if anyone was found guilty of committing any of the offences under The Combination Act they could face three months imprisonment.

Another such act which further suppressed the workers was The Masters and Servants Act 1823 which made an employee liable to a punishment of three months hard labour if he was absent from his service before the expiry of the contract of employment. However due to campaigns led by unions’ liberties as Francis Place and Joseph Hume led to the repealing of most of the provisions of the Act of 1800 through the Combination Laws Repeal Act 1824, and union combinations was merely deemed to be a criminal offence under the common law. The repealing of the Act of 1800 led to a wave of strike due to which, a second Act was passed in 1825 which further criminalised the act of as persuading a worker not to work or to join a strike, thus only allowing combination for determination of wages and work hours and taking away the most important weapon of strike from the trade unions.

The first major move which intended to change the restrictive labour laws of the early and mid-nineteen century was the Master and Servant Act of 1867, which made imprisonment of workers for breach of contract a measure of last retort which could be made available by the aggrieved party only in case of damage to person or property and misconduct and for any other offences committed by the workers they would let go with a fine. When it appeared that trade unions were on the verge of achieving a legal status, it received a major blow when the Queen’s Bench gave its judgement in the case of Hornby v Close, which held that trade unions were unlawful associations as their objects included the raising of wages and control of labour in the trades in which they worked; and such objects and activities amounted to restrain of trade. The next step for legalising trade union was taken up by the 1867 Royal commission under Sir William Erle, the majority of which declared to place the trade unions in legal footing, only if they agreed to give up the control of apprenticeships and the prohibition of piecework and sub-contracting, but the minority argued for providing a more complete immunisation of trade unions from the laws of conspiracy and restraint of trade.

The Trade Union Act of 1871 went on to partly meet the recommendations of the minority view of the 1867 Royal Commission. Section 2 and 3 of the Act stated that the purposes of the trade unions were not to be deemed unlawful in the criminal and civil law merely on the ground that they are restrain to trade. The provisions of the Trade Union Act of 1871 did not prove to be of much help in providing immunity to the workers from the act of criminal conspiracy as in the following year in 1872 came the case of R v Bunn in which the workers taking part in the London gas stokers’ strike were imprisoned for ‘aggravated’ breach of contract under section 14 of the 1867 Master and Servant Act and their leaders were convicted for criminal conspiracy. The decision in the case of R v Bunn marked the 1871 legislature as a failure, due to which Royal Commission was again set up in 1875.

The majority report of the 1875 commission recommended that the collective rights of the association should prevail over the common law doctrine of restraint of trade and that breach of contract of services should not give rise to criminal liability. This resulted in the enactment of the Employers and Workmen Act 1875 which removed the criminal jurisdiction for breach of the contract of employment. This also resulted in the repealing and replacement of the Criminal Law Amendment Act 1871 by the Conspiracy and Protection of Property Act 1875, which lifted the threat of criminal sanction from all but violent forms of behaviour associated with industrial action and provided that the common law doctrine of conspiracy should not render any act to be criminal merely because it is done by a combination of person in furtherance of a trade dispute if this act is not rendered to be a criminal act if done by a single individual.

With the trade unions being largely excluded from criminal liability, the employers turned to civil law to restrict their bargaining power, especially by the use of the law of torts. The court in the case of Lumley v Gye held that calling out workers on a strike involved the tort of inducing breach of contract. Although the House of Lords in the case of Allen v Flood that one cannot be held liable under torts unless there is a breach of contract by an individual independently and unlawfully. It again changed its position in the case of Quinn v Leathem when it held that when two or more persons combine without any justification to injure others they are liable for tortious conspiracy. The House of Lords further in the case of Taff Vale Railway Co v Amalgamated Society of Railway Servant held that the trade union could itself be sued for damages under its registered name. Then finally in the year 1906 the Trade Dispute act was passed which made the trade unions immune from any sort of tortious liability.

Industrial development in India took place on Western lines, which commenced from the middle of the 19th century. The first organised Trade Union in India, which was the Madras Labour Union, was formed in the year 1918. Subsequently, a large number of similarly, entrepreneurs also formed their organisations to protect their interests. In 1926, the Trade Unions Act was passed by the Indian Government. The Act gave legal status to the Registered Trade Unions.

Since, the Industrial development in India is to a large extent inspired from the English system, taking lessons from the problems faced by the trade unions in England, the Trade Union Act of 1926 provides for registration of trade unions. The object of registration is to encourage the growth of permanent and stable unions. Section 17 and 18 of the Act provides certain immunities to the trade union such as immunity from criminal conspiracy in trade disputes and from civil suits in certain cases, but these are made available only to the registered trade unions.

S. 17 of the Trade Unions Act lays down the grounds for providing the members of a trade union immunity from prosecution in criminal proceedings for any act performed by them while carrying out legitimate functions of the trade union. The section provides that no member of a registered trade union will be found liable under the provisions of s. 120B (2) IPC, 1860 in respect of any agreement made between the members for the purpose of furthering any object enumerated in s. 15 of the Trade Unions Act, 1926, unless the agreement in question is an agreement to commit an offence. Under the definition of s. 17, the ‘agreement’ must be an agreement to do something contained in s. 15 and it cannot be an agreement to commit an offence as defined under s. 40 IPC.

The rationale for this section is that in order to enforce their demands, trade unions have to resort to collective bargaining which is their greatest strength. Collective action undertaken by the trade union may take the form of strikes, picketing, and so forth. Even though the object of such collective action is to ensure that the employers take note of their grievances, under the strict definition of the law, the effect of such action is ‘interference with the trade or business of the employer or with the employment of other workers.’ This collective action would normally fall within the definition of criminal conspiracy under the IPC. It was this situation that necessitated a provision like s. 17 of the Trade Unions Act. Members of a trade union cannot be charged under criminal conspiracy for any action taken by them in furtherance of a trade dispute or alternatively, in furtherance of the objects laid down in s. 15 of the act. It must be stated clearly at this point, that this protection is not afforded to any agreements entered into by members of a trade union to perform illegal actions or offences as defined under s. 40 IPC. An agreement to commit an offence or illegal act, even if it is in furtherance of a trade dispute, would not fall within the protection granted by this section. In the case of R.S. Ruikar v. Emperor the court stated that although trade unions have the right to strike and commit actions in furtherance of trade disputes for which they cannot be held civilly or criminally liable, this exemption does not extend to situations where they can be afforded immunity from any criminal offence as defined under s. 40 IPC. In the landmark case of Jay Engineering Works v. State the court reiterated this view and stated that the exemptions granted under s. 17 of the act do not extend to:

“agreements to commit an offence or intimidation, molestation or violence, where they amount to an offence. Members of a trade union may resort to peaceful strike such as cessation of work with the object of enforcing their claims. Such strikes must be peaceful and never violent and there is no exemption where an offence is committed. Therefore, a movement by workmen by gathering together either outside or inside an industrial establishment within the working hours is permissible when it is peaceful and does not violate the provisions of law. However, when such a gathering is unlawful or commits an offence then such exemption is lost. Thus where the workmen resort to confinement of persons, criminal trespass or where it becomes violent or indulges in criminal force or assault or mischief to person or property, then the exemption granted under s. 17 of the act cannot be claimed.”

In this case the court defined gherao as a “physical blockade of a target either by encirclement or forcible occupation.” It declared that the objective of a gherao is to force the management in power to agree to the demands of the workers, without regard for the machinery provided for redressal of complaints as provided for by the law, and hence it took the view is that a gherao is illegal and the persons involved cannot be granted immunity from criminal prosecution.

S. 18 of the Trade Unions Act provides for exemption from prosecution in civil cases. It essentially states that immunity from civil proceedings is granted to the office bearers and members of a registered trade union for the offence of bringing about a breach of contract of employment between the employer and the employee. The trade union itself is also granted immunity from civil proceedings for the offence of inducing a person to break his contract of employment between the employer and the employee or of interfering with the trade, business or employment of some other person, provided that such inducement is in furtherance of a trade dispute. However the section clearly states that this inducement must be entirely legal and must be done by lawful means.

The meaning of this section is that if the inducement to break the contract of employment has been put forth legally, without threat of force or violence or malice, and if it is in furtherance of a trade dispute, then it is not actionable under civil law. Similarly, if there is no threat of violence or use of force and there is still interference in the trade, business or employment of some person, then immunity is granted provided it was done in furtherance of a trade dispute.

Sub-clause (2) of this section provides that the trade union will not be liable for any tortuous act done by its agent if it is able to prove that the agent acted without their knowledge or in contravention of his orders.

Unlike s. 17 which granted immunity to office-bearers and members of a trade union, this section affords immunity to office-bearers and members of a registered trade union as well as the trade union itself. This protection is given to these three categories of legal persons for any action done by them:

• in contemplation of a trade dispute to which a member of the trade union is a party
• In furtherance of a trade dispute to which a member of the trade union is a party

Furthermore, this immunity from prosecution in civil proceedings is extended only to those specific actions which are as follows:

• An act that induces some person to break his contract of employment
• An act that is in interference with:
• Trade
• Business
• Employment of some other person
• Right of some other person to dispose of his capital as he deems fit
• Right of some other person to dispose of his labour as he deems fit

It is very important to note that the immunity granted under this section is limited. The inducement given by the trade union or its members must only be an inducement to break a contract of employment. If it is an inducement to break any other contract such as a contract for sale of goods or carriage, then the protections given by this section will not apply. Furthermore, the inducement to break the contract of employment must be entirely legal and cannot contain an offence as defined under s. 40 IPC.

If a person is induced to break his contract of employment through violence of the threat of force, then such inducement will be illegal and will not enjoy the protection granted by this section. In the case of Western India Cine Employees v. Filmalaya Pvt. Ltd., the question that arose before the court was whether the collective action taken by the workers abstaining from work which caused loss to the employer, at the call of the trade union was protected under the provisions of s. 18? The court ruled in the affirmative and held that the trade union issued directions to its members. However these directions were issued in an entirely legal manner, no intimidation, coercion or violence was used. The court ruled that the trade union was carrying out its legitimate activities and enjoyed immunity under s. 18 of the Trade Unions Act.

Although ordinarily a person would be liable under tort law for inducing someone to break his contract of employment, s. 18(2) grants immunity to registered trade unions and all its members for doing the same, provided that the acts were done in furtherance of a trade dispute. Furthermore, the inducement to break the contract of employment itself must be entirely legal and cannot be done while committing an offence as defined under s. 40 IPC. The breach of contract of employment has not been strictly defined and what amounts to breach of contract varies from contract to contract depending on the provisions of each particular contract.

In P. Mukanandan v. Mohan Kandy Pavithran the striking workers who were members of two different trade unions appropriated to themselves the proceeds from the sale of toddy drawn by them from trees on the premises of the employer. The court held that the office bearers and members of a registered trade union were protected from legal proceedings related to strike of workmen. The strike conducted was completely legal and as a result, they were protected by s. 18 of the Trade Unions Act. In Rohtas Industries Staff Union v. State of Bihar the court held that even if a strike was illegal under the provisions of s. 24(1) of the Industrial Disputes Act, 1947 the striking workers were entitled to protection under s. 18 Trade Unions Act.

Conclusion

Since, the Industrial development in India is to a large extent inspired from the English system; taking lessons from the problems faced by the trade unions in England the Indian Trade Union Act 1926 provided certain immunities to the office bearers of the trade union under section 17 and 18 of the act from criminal and civil proceedings.

The effectiveness of the immunities granted under section 17 and 18 can be seen from the various cases decided by the Indian judiciary, such as the case of Standard Chartered Bank v Hindustan Engineering and General Mazdoor Union and others. In this case the Delhi High Court although found that the defendant union had no locus standi to hold the threatened demonstration in front of the plaintiff’s office, yet it allowed the defendant to hold demonstrations at a distance of 50 or 100 meters from the bank premises, and thus preserved and protected the legitimate right of the union. A similar stand was taken by the same court in the case of Vidya Sagar Institute of Mental Health And Neuro Services v Vidya Sagar Hospital Employees Union, in which the court allowed the members of the union to peacefully demonstrate outside the radius of 200 metres from the hospital premise so that their act won’t interfere in the normal functioning of the hospital. This view was also further upheld by the same court in the case of Superior Crafts v Centre of Indian Trade Unions and Others.

Thus it can be stated that the immunities granted under section 17 and 18 of the Indian Trade Union Act are efficacious.