Article (January-2018)


Recognition of a Trade Union by the Employer

Deepanjan Dey

Designation : -   General Manager-HRM

Organization : -  Tata Steel BSL Ltd., Angul, Odisha


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In a multi - union situation the management has to decide with whom it will negotiate. Is recognizing a union an unfettered prerogative of the management? After all the union in question should be the true representative of the workmen. The Trade Unions Act provides for registration of the union but is salient on recognition of the union. In this connection reference may be made to the case between Puducherry Shasun Chemicals and Drugs Niruvana Thozhilalargal Muneerta Sangam V. Labour Officer, (2010 LLR 498 (Mad HC)) whereby the Madras High Court had inter-alia ruled that the Trade Union Act "excepting for providing registration of the union do not oblige any employer to recognise any particular union and no procedure has been prescribed for grant of any recognition". Further, in this instant case it was also ruled that "the grant of recognition of the union cannot be brought under section 2(k) of the Industrial Disputes Act and it cannot be the subject matter of the industrial dispute". Here it may be noteworthy to mention that the Labour Code on Industrial Relations Bill, 2015 which intends to replace the Trade Union Act is also silent on recognition of the union. Few State Governments have enacted special statute or rules and has provided a mechanism for recognition. Broadly speaking these enactments are as follows :
  • Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
  • West Bengal has inserted an amendment by way of chapter III A to Trade Union Act under the heading "Recognition of Trade Unions as bargaining agents."
  • Kerala Recognition of Trade Unions Act, 2010.
  • Orissa Verification of Membership and Recognition of Trade Union Rules, 1994.
The MRTU & PULP Act has provision for making application to Industrial Court for recognition and the court will decide the matter after proper enquiry. Other amendments and enactments provide that a union shall be recognized by the employer as the sole bargaining agent of a group of workers if it receives a specified percentage (usually 50% majority) of these workers' votes via secret ballot, organized by the registrar. However, in case any union failing to receive the eligible percentage for sole bargaining agent every trade union receiving a smaller minimum percentage of votes (at least fifteen or ten percent, depending on the type of industry) shall also be recognized as constituents of a joint bargaining council. In the joint bargaining council the union securing maximum percentage of vote will be deemed as Principal bargaining agent.
Few industries and establishments are also following the criteria evolved for recognition of unions in the Code of Discipline in the 16th Labour Conference in the year 1958. Though this Code of Discipline has no statutory force but Courts have recognized their importance in securing industrial peace. In The Hind Mazdoor Kisan Panchayatt Vasavadatta Cement Workers Union Vs. The Commissioner of Labour & Registrar of Trade Union in Karnataka (2001 LIC 3260 (Karn), it was contended that the code of discipline has no statutory force. This case pertains to a dispute of holding election for recognition of sole bargaining agent. The Court was of the opinion that though the code has no statutory force but this needs to be followed by both the employer and employees to secure industrial peace. The Court observed : "The code of discipline was accepted by all employers' and workers' organisations at the 16th Session of the Indian Labour Conference held at Nainital in May 1958. No doubt, the code of discipline has no statutory force. But, this code of discipline has to be observed, applied and followed both by the employer and the employees in order to have industrial peace."
In establishment/s where Code of Disciple is not followed and in absence of any prescribed law or rule for recognition it is left to the discretion of the management to recognize the sole bargaining agent of the workmen. This management prerogative has been challenged by the rival unions if the decision of the management appears to be unfair or arbitrary.  The rights of the trade union to get recognized and the extent to which an employer will be obliged to recognize a trade union has been answered by the judiciary from time to time which we shall deal succinctly herein below.
The Kerala High Court in T.C.C. Thozhilali Union vs T.C.C. Ltd. (1982 (1) LLJ 425) has opined two important aspects. (i) recognition is a matter of volition on the part of the employer; (ii) a trade union has neither common law right nor statutory right which enables and entitles it to compel an employer to give recognition to it as the bargaining agent of its members; this view of the Kerala High court finds concurrence from the Apex Court in its judgment in Delhi Police Non Gazetted Karmachari Sangh Vs Union of India 1987 (1) LLJ 121 whereby it held that there is no fundamental right for a trade union to be recognized. In Board Of Trustees, Port Of Calcutta  vs Haldia-Calcutta Port And Dock Shramik Union ((1994) IILLJ 575 Cal) the Division bench of Calcutta High Court was of the opinion that neither a registered trade union automatically can get a right for recognition from the authorities nor there is any statutory rights whereby any union can compel the management to recognize it. Further, the court observed that a union has to establish a reasonable standard whereby it can be said that they can be said to represent a substantial section of the work force.
However, in I.A.T.A. union Hyderabad V. Chairman and M.D Indian Airlines (1995 (1) LLJ 578 = 1994 (2) LLN 493) the Court was of the opinion that with regard to limited recognition, though it may be said that it is not fundamental right or a statutory right but fair play requires that such recognition should be conceded wherein the petitioner union seeks not a general recognition to negotiate as a majority union on behalf of all workmen but only a limited recognition to discuss the grievances of its own members. A similar view was also taken by the Andhra Pradesh High Court in Chairman and Managing Director Indian Airlines Ltd., New Delhi V. Indian Air lines Technical Assistants and Union (1997 (75) FLR 489 = 1996 (2) LLN 986) whereby it observed as follows :
"The Trade Union Act confers certain rights on the registered union to ventilate the grievance of the members of its union. The management is obliged to hear them and resolve its disputes as far as possible without resorting to the conciliation and adjudicatory process. 
Though the management is not obliged to recognise the (2nd) respondent union, but at the same time it cannot refuse to hear the grievances voiced by it in respect of service conditions of its members. The learned Single Judge has categorically stated that the appellant management being a State is expected to conduct itself in a fair and reasonable manner in the interest of Industrial peace and harmony. Therefore, recognising the union for the limited purpose of negotiation and settlement in respect of its members cannot be construed as recognition under the Code of Discipline. On the other hand, it improves the labour - management relations and paves the way for achieving optimum output. There is no provision under the Industrial Disputes Act or Trade Unions Act, prohibiting the management from negotiating, discussing or entering into settlement with the unrecognised union. It is only in cases where the demand of unrecognised union is already seized of by the recognised union ; such a demand would not be maintainable."
The aforesaid views of the High Court's in the above mentioned two cases finds concurrence in Apex Court Judgment in Chairman, State Bank Of India vs All Orissa State Bank Officers (AIR 2003 SC 4201 = 2003 III LLJ 751 SC = 2003 LLR 1016 = 2003 III LLN 784 (SC)) wherein the apex court has observed that that "there is no common law right of a trade union to represent its members, whether for purposes of collective bargaining or individual grievances of members. This is an inroad made into the common law by special statutes". In this judgment the apex court was reviewing the right of a minority and/or non recognized union to represent its employees in grievances of individual members and representing them in domestic or departmental enquiries. The Court was of the opinion that on general principles of equity, justice and fair play the minority trade union should also be afforded an opportunity of ventilating individual grievances of its members. 
Hence, from our above discussion it appears by and large where the special enactment for recognition is not applicable the management may use its discretion to decide the sole bargaining agent for its establishment/s. However, for limited purpose of ventilating the grievances of its members as few of the judgments has indicated the management cannot shun away a union even if it is not recognized. Further, the right of the management to recognize a union is not unfettered. In this connection the observation of the division bench of the Madras High Court in Mrf United Workers Union vs Government Of Tamil Nadu 2009 (4) LLN 967 may be appropriate to refer. In this instant case the Court observed that the "the question as to who should be the representative of the workmen is an aspect which has to be decided by the workmen themselves. It cannot be left to the management that it will recognize a particular union which it considers to be representative of the workmen. The Trade Unions Act, 1926, which is an Act to provide for the registration of trade union, is there on the statute book for the last over 80 years. It is no longer permissible nor possible for any management to disregard a trade union registered under the Act, and having a large following. If it does so, it would be at its own peril."
Hence, to avoid ambiguities and for transparency the management has the option for opting election or check off system for recognition of a union in case of multiple unions in an establishment. However, which method should be adopted or best suited has to be left to facts and circumstances as the judiciary has determined each case based on its own merits. In Food Corporation of India Staff Union vs Food Corporation Of India AIR 1995 SC 1344 = 1995 (71) FLR 278 the apex Court had inter-alia observed : "........The 'check off system' which once prevailed in this domain has lost its appeals ; and so, efforts are on to find out which other system can foot the bill. The method of secret ballot is being gradually accepted. All concerned would, however, like to see that this method is so adapted and adjusted that it reflects the correct position as regards membership of the different trade unions operating in one and the same industry, establishment or undertaking." 
Relying upon the Food Corporation Of India Staff case (supra) the Madras High Court in Madras Fertilizers Ambedkar employees union vs. chairman & managing director Madras Fertilizer 1999 (81) FLR 437 (Mad) upheld the election conducted by the management to conduct the election to ascertain the relative strength of the unions to select a representative body and this Act of the management cannot be said to be for ulterior motive. The Court inter-alia observed : "It cannot be said that the respondent/management in this case acted illegally in adopting the same procedure as prescribed by the Hon'ble Supreme Court....."
However, in Visakhapatnam Port And Dock Workers Union vs Board Of Trustees, Visakhapatnam Port Trust (1999 (82) FLR 929 = 1999 (2) LLJ 1123) while dealing with the ratio of the Food Corporation Of India Staff case (supra) the single bench of Andhra Pradesh High court observed that though certain remarks were made in this judgment on the Check Off System, but ultimately, the Supreme Court has not gone into the functioning of the Check Off System and declared it as an illegal one. It was held that the Supreme Court disposed off the appeal on the basis of consensus arrived at between the parties who agreed that the majority trade union will be decided by secret ballot system. On similar lines the Division Bench of Madras High court in Mrf United Workers Union vs Government Of Tamil Nadu (supra) held that the ratio of the Food Corporation case (supra) will not be applicable unless election for recognition is decided by consent. 
The Court was also of the opinion that the check of method of verification is a better option as this will show the following of a particular union over a longer period of time. Similar view was also expressed in Tuticorin Port Trust Democratic Staff Union V. Secretary to Government of India, Ministry of State Transport, New Delhi 1994 (4) LLN 491 wherein it was observed that in the Food Corporation of India Staff Union case (supra)  the secret balloting system was put into effect on the basis of the agreed order. The court was of the opinion that because the check off system is not properly implemented, it cannot be said that the said system itself is bad. Hence, from the aforesaid rulings it appears that the best way for recognizing a Union in multi - Union situation is still the check - off system. However, election may be opted if majority of the unions functioning in the establishment agree to the secret ballot system.