Funds, Members, Office Bearers

and Outsiders in TUs & their Rights

Prof. K.R. Shyam Sundar
XLRI

Subscriptions
s. 6 (ee) of Rules specifies the minimum subscription
by members:
1) one rupee per annum for rural workers;
2) three rupees for workers in the other
unorganized workers
3) 12 rupees for workers in other cases
Problems:
minimum is too minimum?
Poor finance?
Collection mechanism?
Subscription = membership = entitlements
(privileges)
Who should prescribe subscriptions organization or
the government?

TU security v. Avoidance
Closed shop = pre-entry requirement
of a UM
Union Shop = post-entry requirement
of a UM
Agency Shop
For: Effective check to free-riding and
financial strength provision/stronger
B.P. for recognized trade unions
Against: infringes on the freedom of
choice of worker to belong to a TU or
not; right of employment is conflicted
The TU may not be democratic
FNCL was not favourable to both
closed and open shop or union shop
as there is in-built compulsion
Check-off
SBI case:
http://www.livemint.com/Compan
ies/JpVRVcWYPg6HM8D0fMJP7J/S
BI-makes-Uturn-goes-soft-ontrade-unions.html

Union avoidance
strategy to alter
employee perceptions,
beliefs, actions, and
intentions.
These are via
persuasion, coercion, or
manipulation.
Discretionary actions
against union
supporters
Eliminate all sources of
agitation
Strategic hiring
flexible labour

Check-off
TU Act does not provide for check-off
facilities in India, but in vogue in the
UK & the USA (via CBA)
Should the check-off facility be given
only to recognised TUS?
Should the check-off facility be
granted to the recognised TU for
deduction of settlement
proceeds/arrears of all workers?

LEGAL BASIS:
PWA s. 7(2)(kkk) permits
deduction of subscriptions from
willing members of TU and employer
is BOUND to deduct and remit the
same into the a/c of the TU
concerned deductions made with
the written authorization of the
employed person, for payment of
fees payable by him for membership
of any TU regd under the TU Act,

Check-off Facility
Balmer Lawrie Workers Union v. Balmer
Lawrie & Co. Ltd (1985, Lab IC 242), the SC
observed that: check-off system authorizing
deduction of UM deductions as part of the
settlement between the union and the
employer cannot be said to discriminate
against another union
Check off facility can be extended to nonrecognized unions also (State Bank Staff
Union v. SBI, 1991 Lab IC 197), see also:
Coimbatore Periyar District Dravida Panjalai
Thozhilalar Sangham v. NTC, 2011, 4 LLJ, 857

S. 15 - Rules regarding the Spending of General Funds

The GF of a registered TU SHALL NOT be spent on any
other objects than the following:
salaries, allowances & expenses to office-bearers
Expenses for admn of the TU incl audit of a/c of GF
prosecution or defence of any legal proceeding to which
TU is a party which is for purpose of securing or
protecting any rights of TU as such or any rights arising
out of employment relations
Conduct of trade disputes on behalf of TU or any member
thereof
Compensation of members for loss arising out of trade
disputes
(f) Allowances to members or their dependents on a/c
of death, old age, sickness, accidents or unemployment
of such members (refer Bokajan case)

 the issue of or the undertaking of

liability under, policies of assurance
on the lives of members or under
policies insuring members against
sickness, accident or unemployment
the provision of educational, social
or religious benefits for members or
for the dependents of members
expenses of funeral or religious
ceremonies for deceased members
the upkeep of a periodical published
mainly for the purpose of
discussing ?s affecting employers or

 payment from contributions to any

cause that benefits workmen in
general provided that such
expenses in respect of such
contributions SHALL not be in excess
of 1/4th of combined total of gross
income accrued up to that time to GF
Any other object to be notified by the
appropriate govt. in the official
gazette

Political Funds
A regd TU may constitute a separate fund from CONTRIBUTIONS
for or made, to a fund for promotion of CIVIL & POLITICAL
INTERESTS OF ITS MEMBERS to promote the following objects:
a) payment of expenses incurred directly or indirectly by
candidate for election for a legislative body
b) holding of any meeting or distribution of literature or
documents in support of a candidate
c) The maintenance of any person who is a member of any
legislative body ????
d) the registration of electors or the selection of a candidate for
any legislative body
e) holding of political meetings of any kind/distribution of political
literature/document
NO COMPULSION BY A MEMBER & NON-CONTRIBUTION SHOULD
NOT MEAN EXCLUSION FROM AANY BENEFITS OF TU/or no
disadvantage for those members
GENERAL FUNDS CANNOT BE USED FOR POLITICAL PURPOSES

Members, Office Bearers and Outsiders

in TUs & their Rights

Rights of Minors in TUs?

S. 21 - any person who has attained the
age of 15 years may be a member of a
regd. TU subject to any Rules of the
TU
They enjoy all the rights of a member
(immunity, etc.) +
The accounts books of a regd. TU and its
membership list can be inspected by
office bearers and members as
prescribed by the Rules of the TU (s. 20)
unless 18, a person cannot become an
office-bearer of a TU

1964 Amendment
Till 1964 the TU leaders with criminal
record were not debarred and they
represented workers in several laws,
viz. PWA, ECA
To stop this abuse the 1964
amendment was brought in to
disqualify any person convicted of
moral turpitude from becoming or
continuing as a member of EC or as
office-bearer of regd TU unless 5
years have elapsed since his release

Disqualifications of office-bearers
Conditions for
disqualification:
convicted for any
offence involving
moral turpitude
& sentenced to
imprisonment and
after 5 years since
release
not a minor (18+)

The Registrar has

decide the ? of legality
and validity of officebearers to enter their
names BUT THE
SCOPE OF ENQUIRY IS
LIMITED ( R. Murugesan
v. Union Territory of
Pondicherry, 1976, 2
LLJ 435)
This is necessary for
admn of the act
(Sanjeeva Reddi v.
Registrar of T, 1969, 1
LLJ 11)

Meaning of Moral Turpitude

Turpitude very immoral behaviour
(Oxford Advanced Learners
Dictionary)
M.T. can hardly be defined but there
exists some understanding of it
Though not defined it means
anything done contrary to justice,
honesty, modesty or good morals. It
implies depravity and weakness of
character and disposition

Outsiders in the TU EC

S. 22: one-third of the total office bearers or

five, whichever is less shall be outsider
persons
No member of the Council of Ministers/office
of profit shall be member of the EC
ALL members of EC tenure = 3 years (S.6
(hh)]
http://
www.thehindu.com/todays-paper/tp-opinion/offic
e-of-profit-and-disqualification/article314700
8.ece
(for office of profit, etc.)
Why Outsiders (Pros/Cons)

Why Outsiders?
Difficulties in emergence of strong
internal leadership as work exhausting
Complex legal framework
negotiational skills lacking
Politics cannot be kept away from TUs
in a democracy
ILO convention right to choose their
own leadership
Total effect of them is not as bad as to
effect a ban on their role (FNCL)

?s
Concept of an outsider?
Political leaders? Lawyers?
Missionaries? Professors?
Complete ban on non-employees?
Curtailment of % of outsiders?
How many unions can the outsider
hold positions? FNCL No ceiling;
some legislative efforts limited it to 4;
SNCL recommended the need for a
ceiling

Strategy To Deal with OUTSIDERS

Strategy

Total
Ban
FNCL
not
favoura
ble

Partial
Exclusio
n

Nurture
Insiders

Make outsiders redundant

by forces within rather
than a legal ban
Intensify workers
education
Capacity building
Limit the % of outsiders
Treat all-ex-employees as
insiders
Create a convention that
no TU office-bearer will
concurrently hold office in
a political party

Union Work during Office hours - Extended Rights do not become Legal Rights

Secretary of TNEB Accounts Subordinate Union v.

TNEB, 1984, 2 LLJ, 478
Initially 2 workers allowed to do TU work during
office hours
after 4 years the mgt refused this facility
dispute referred for adjudication
LC termed it as managerial concession & not a
part of the service condition
HC it is not a legal right and withdrawal of any
concession does not change the service
conditions (see also Indian Bank Employees
Union v. Indian Bank, 1994, 2 LLJ 497)
No immunity to office-bearers from punishment
for remaining absent from their duty

Contd.
Even if the concession has been granted, it
cannot be converted into matter of right
In case there is a settlement to the effect,
then it is permissible
Union meetings cannot be held at the
premises of the employer and even in other
properties (say a Maidan)
If done despite prohibition, it will be deemed
to be a subversive of discipline (Railway
Board, New Delhi v. Niranjan Singh, AIR,
1969, SC 966; BEST Workers Union v. General
Manager, BEST Undertaking, 1953, ICR 257)

?????

Whether the TU members/leaders

have the right to attend CON/ADJ
meetings on special leave with pay?
Whether the TU members/leaders
have the right to attend various
meetings on special leave with pay?

Whether the TU members/leaders have the

right to attend various meetings on special
In the case of
leave with emergency
pay?
meetings,

Workers in the company have allowed

workmen to attend conciliation
meetings this is ok as this will
expedite settlement
But allowing workmen to avail S.L.
raises some issues:
Adverse effects on production
How many times to allow, how many
workers, if there are multiple unions,
then how many unions, etc.
indefinite extensions
The court asked as to why the
meetings of trade unions be planned
outside the working hours of the estb?
It was answered that it would not be
always possible as there would be
emergencies
But emergencies do not occur
frequently

the representatives
can sacrifice one of
their earned leave
The meetings of the
federation and the
annual conventions of
the INTUC too can be
attended by the
unions delegates by
availing themselves of
their earn leave
Indian Oxygen Ltd.
v. their Workmen,
SC, 1969, 1 LLJ

Transfer of Office-bearers
The power of the employer to transfer its employees (incl
office-bearers) relates to general conditions of service and
such transfers are effected for admin convenience; the court
does not sit in appeal nor calls for details of admn exigencies
The employee under transfer cannot claim any
immunity from transfer merely by reason of his being
office-bearer of the trade union
The fact that the office-bearer organized protests. Etc. is not
a ground from which intention to victimize the leader can be
inferred
Only in cases where the transfer order is found to be mala
fide or colourable exercise of power, would it become illegal
Transferring an employee because he is
troublesome/troublemaker would be in the interest of admn
and such transfers cannot be characterized as punishment
(Shri R K Sharma vs Union Of India Through Its ... on 12
February, 2013, CAT)

 As the management cannot resort to

victimization and ULP so as to get rid
of the TU leaders, the TU leaders
must maintain discipline
a TU leader does not enjoy immunity
from proceeded against in case of a
misconduct
TU leadership does not provide
excuses for indulging in violence
( Usha Breco Mazdoor Sangh v. M/S
Usha Breco Ltd. 2008, LLR 619)

Privileges & Rights of

Registered TUs
Prof. K.R. Shyam Sundar
XLRI

Common Law Doctrine

It was a requirement for promoting
industrialization in England in the 19 th Century
It was a part of laissez-faire philosophy
Torts are civil wrongs recognized by law as
grounds for a lawsuit. These wrongs result in an
injury or harm constituting the basis for a claim
by the injured party.
The law of torts was used frequently to protect
and serve the economic interests of the trading
and business community
So combinations were seen as willfully
committing an act to cause damage to the
trading and business interests

Criminal conspiracy in trade disputes (Sec 17)

S. 17 - No office-bearer or member
of a Registered Trade Union
shall be liable to punishment
under sub-section (2) of section
120B of the Indian Penal Code
1860 (45 of 1860)
in respect of any agreement made
between the members
for the purpose of furthering any
such object of the Trade Union
as is specified in section 15,

unless the agreement is

an agreement to commit
an offence.

S. 120-A of IPC: An agreement

between 2 or more persons to
do an illegal act or by illegal
means
What is an offence? S. 40 of
the IPC: denotes a thing made
punishable by this Code
120-B prescribes punishment
of criminal conspiracy
(1) whoever is a party to a criminal
conspiracy to commit an offence
punishable.
(2) whoever is a party to a criminal
conspiracy other than a criminal
conspiracy to commit an offence
punishable

Immunity from civil suit in certain cases (Sec 18)

(1) No suit or other legal proceeding shall be maintainable in
any Civil Court
against any registered Trade Union or any office-bearer or
member thereof
in respect of any act done in contemplation or furtherance
of a trade dispute
to which a member of the Trade Union is a party
on the ground only
that such act induces some other person to break a contract of
employment,
or that it is in interference with the trade, business or
employment of some other person
or with the right of some other person to dispose of his capital
or of his labour as he wills.

 18 (2) A registered Trade Union shall

not be liable in any suit or other legal
proceeding in any Civil Court
in respect of any tortious act done
in contemplation or furtherance of a
trade dispute by an agent of the
Trade Union
if it is proved that such person acted
without the knowledge of, or contrary
to express instructions given by, the
executive of the Trade Union.

Criminal Conspiracy and TU

Immunity

Workers instruments of economic coercion in an ID = breach

of contract & injury to property right of employer?
An agreement between two or more members to withdraw
labour as an instrument of economic coercion in an ID is not
an agreement TO DO OR CAUSE TO BE DONE AN
ILLEGAL ACT
It means rejection of common law doctrines of restraint
of trade and criminal conspiracy with respect to IR
Allows active participation of outside leaders
Immunity is partial and restricted by the phrase
unless..offence
Immunity under S. 18 is not absolute (unlawful, tortious or
violent acts & which fall outside the umbrella of protection u. s.
18 (CBI v. Central Bank Officers Association, Gujarat 1998, HC)

Case Laws on S. 17/18:

Any violation of law does not give
protection from punishments
Unlawful confinement of
persons/criminal
trespass/violence/criminal
force/assault or mischief to
persons or property NO
PROTECTION
(Jay Engineering Works v. Staff, AIR
1968, Cal. 407)
(Standard Chartered Bank v.
Hindustan Engg. & General
Mazdoor Union, 2002 LLR 254 (Del).
(Ahmedabad Textile Research
Association v. ATRA Employees
Union, 1995 LLR 91 (Guj) DB.)
TU does NOT ENJOY IMMUNITY
FROM ILLEGAL ACTS (Surpion &
Group Staff Union v. AMCO
Batteries, 1991)

(Central bank of India v.

Central bank Officers
Association, Gujarat, 1998
I CLR 597, Guj, H.C.)
West India Steel Co. Ltd. v.
Azeez, 1990 LLR 142
(Ker).
(Usha Breco Mazdoor Sangh v.
Mgt of M/S Usha Breco Ltd.
2008, LLR, SC)
(Mining and Allied Machinery
Corporation Ltd., v.
Superintendent of Police,
St.Thomas Mount, Madras
(1987)
Selvaraj v. Mgt Brakes India
Ltd., 1991

Rohtas Industries Ltd. v. Rohtas Industries

Staff Union, SC 1976 Protection during
Illegal Strike

The main ? Was whether employers can be

awarded compensation for loss of profit due to
illegal strike under ID Act?
The strike was deemed as illegal and it was
owing to inter-union rivalries between two unions
The arbitrators verdicted : (a) no salary for illegal
strike period, (b) compensation to company for
participating in illegal strike, INR 80,000, (c) 1/8th
of costs of arbitration
The trade union challenged the award and the
HC quashed the compensation part of the award
The company approached SC

Rohtas Industries Ltd. v. Rohtas Industries Staff Union (contd)

The object of the union is never or rarely to destroy

or damage the industry.
The inevitable by-product of combination for
cessation of work may be loss to the management
but the obvious intendment of such a CB strategy is
to force the employer to accept the demand of the
workers for betterment of their lot or redressal of
injustice, NOT TO INFLICT DAMAGE ON THE BOSS
The real purpose of the combination is the
crucial test between innocence and injury
The strike may be illegal but if the object is to
bring the employer to terms with the
employees or to bully the rival TU into
submission, there cannot be an actionable
combination in tort

Shadhol Pipe Works v. Zila Laghu Udyog

Kamgar Sangh, 2005
A regd TU gave went on a legal strike from 9/7/1989
During which they obstructed the movement of goods out of
and workers inside the factory
The employers obtained permanent injunction in restraining
the union from inciting acts of intimidation, etc.
The company demanded a compensation of INR 22,500 for
loss of production
The civil court has no jurisdiction to entertain a civil suit
regarding the legality of the strike but can pass
restraining orders on others
Being a regd TU, the TU in the company enjoys immunity
arising from s. 18 THEY SHALL NOT BE HELD LIABLE FOR
ANY TORTUOUS ACTION DONE IN CONTEMPLATION OR
FURTHERANCE OF THE TRADE DISPUTE
The claim for RECOVERY OF DAMAGES by the company is
therefore REJECTED

Demonstrations, dharnas, etc.

Demonstrations and dharnas may cause
inconvenience to the management. But
they are weapons, as strike is, in the
armoury of the labour to pressurise the
management to accede to their demands.
Such demonstrations and dharnas, when
they do not turn unlawful, violent and
tortuous, cannot be curbed by orders of
Civil Court and would come within the
purview of Section 18 of the Act (ATRA V.
ATRA Employees Union 1993, Gujarat HC)

 A workman indulging in commission of a

criminal offence should not be spared only
because he happens to be a union leader
A union leader does not enjoy immunity
from being proceeded with in case of
misconduct (Usha Breco Mazdoor Sangh v.
Mgt of M/S Usha Breco Ltd. 2008, LLR, SC)
Getting police protection in the context of
violent activities to factory is legal (KCP
Ltd. v. Inspector of Police, Tiruvottiyur, I LLJ
365)
Immunity not available if unlawful activities
are committed

Picketing
Peaceful picketing is allowed and
injunctions preventing assembly of
persons do not interfere with union
rights (Orchid Employees Union v.
Orchid Chemicals & pharmaceuticals
Ltd., 2008, LLR 519) (see also Indian
Bank v. Federation of Indian Bank
Employees Union, 1982, 1, LLJ 123)

1. Picketing described as Marching to and fro before the

premises of an establishment involved in a dispute,
generally accompanies by the carrying and display of a sign
or banner, etc. Picketing may be accompanied by a polite
request asking workers not to assist in the running of that
establishment or customers not to patronize that
establishment (D Ganesh v Shate (1961)]
2. Peaceful picketing are protected.
3. Picketing ceases to be peaceful the moment it results in a
private or public nuisance.
4. Any show or threat of violence or ANY FORM OR FORCE &
any other unlawful threat likely to create fear in the mind of
a reasonable man will render picketing unlawful.
Pickets cannot force people to listen to them. They cannot
obstruct the passage of customers goods vehicles etc.
Thus the right to picket is closely limited by the equal
right of others to go about their lawful affairs free form
obstruction molestation or intimidation (Simpson &
Group Co. Workers Union v Amco batteries(1992)

S. 19. Enforceability of agreements

An agreement
between the
members of a regd
TU shall not be
void or voidable
merely by reason
of the fact that any
of the objects of
the agreement are
in restraint of trade
This section
INVALIDATES THE
S.27 OF THE

S. 27 of the Indian
Contract Act deals
with restraint of
trade agreements:
every agreement
by which any one
is restrained from
exercising a lawful
profession, trade or
business of any
kind, is to THAT
EXTENT VOID.

Watch it!!!!
On the Threshold: Class Struggle in
Delhi,
https://
www.youtube.com/watch?v=2F7eYpzD
8c8