Role of Trade Unions in National and International Context


Just 1 per cent of the world’s population owns 40 per cent of the world’s wealth, while 60 per cent have to share just 1. 9 per cent of it. Most workers have no employment security and billions earn less than a dollar a day. The pursuit of profit trumps the health of people and the future of the planet. Economic growth does not translate into common prosperity.

Billions of workers have no say in their working conditions; many are threatened, intimidated, fired and in the worst cases thrown into prison or killed by hired gunmen when they demand their basic human rights of freedom of association, collective bargaining and industrial democracy. Those who profit from this world disorder tell us that these are the inevitable side-effects of market dynamism, which in turn is the most effective mechanism to create growth and wealth. It would just be too depressing to imagine that this were true and that humankind could not improve on such a world.

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Change is necessary – indeed, it is inevitable, as the current system is unsustainable; but it remains difficult, as vested interests constitute a huge and dangerous obstacle on the path to more equitable solutions. The history of trade unions is a history of struggles for greater social justice and against dictatorship, both in societies and at the workplace. Often accused by their opponents of being unreasonable, unable to understand economics, and dinosaurs of the industrial past, there can be no doubt in retrospect that in most battles trade unions have been on the right side of history.

While business has unhesitatingly engaged with dictatorships around the world in its pursuit of profit, trade unions were and are at the forefront of bringing about democratic change in countries from South Africa, Brazil and the Republic of Korea to Poland and most recently Egypt. The right to strike, a minimum wage, the eight-hour working day, paid vacations, social security – all are milestones in the long struggle of trade unions for social justice.

Historical Development of Trade Union

As an organized movement, trade unionism originated in the 19th century in Great Britain, continental Europe, and the United States. In many countries it is synonymous with the term labour movement. Smaller associations of workers started appearing in Britain in the 18th century, but they remained sporadic and short-lived through most of the 19th century, in part because of the hostility they encountered from employers and government groups that resented this new form of political and economic activism. At that time unions and unionists were regularly prosecuted under various restraint-of-trade and conspiracy statutes in both Britain and the United States.

While union organizers in both countries faced similar obstacles, their approaches evolved quite differently: the British movement favoured political activism, which led to the formation of the Labour Party in 1906, while American unions pursued collective bargaining as a means of winning economic gains for their workers. British unionism received its legal foundation in the Trade-Union Act of 1871. In the United States the same effect was achieved, albeit more slowly and uncertainly, by a series of court decisions that whittled away at the use of injunctions, conspiracy laws, and other devices against unions.

In 1866 the formation of the National Labour Union (NLU) represented an early attempt to create a federation of American unions. Although the NLU disappeared in the 1870s, several of its member trade unions continued, representing such diverse occupations as shoemakers, spinners, coal miners, and railway workers. The founding of the American Federation of Labour (AFL) by several unions of skilled workers in 1886 marked the beginning of a continuous, large-scale labour movement in the United States. Its member groups comprised national trade or craft unions that organized local unions and negotiated wages, hours, and working conditions.

IV. History of Trade Union in India The seeds for the development of trade union in India were sown with the growth of industrialization. As the humanitarian movement came to India in the 19th century, worker groups made several attempts to improve their working conditions. The British introduced this movement in India to divide Indian employers and employees and beat local competition. Attempts were also made to eradicate child labour in India.

The British Government was finally compelled to pass a resolution against employing children between he ages of seven to twelve for more than nine hours a day.

Trade Union in India: Formation of First Union Association

Gradually, workers started showing resentment against minimal wages and pathetic employment conditions. The first incident of strike occurred in 1877, in Express Mills, Nagpur. This was followed by agitations and demonstrations in Bombay and Madras, which did not draw much government attention. Finally, the Indian Government was directed by the British Government to take proper measures to improve conditions of labour.

The Bombay Mill Hands Association was formed in 1890, which highlighted the terrible conditions and misery of workers caused by excessive work load, long working hours, low wages and horrible working conditions. However, the Association was far different from the modern trade unions in India; it was similar to a welfare association. Later, in the year 1900, two more organizations emerged: the Postal Union in Bombay and Printers Union in Calcutta, which were much closer to the modern trade unions.

Trade Union in India: Formation of the First Trade Union

The year 1920 is a landmark year in the history of trade unions. It witnessed the formation of the first trade union in India. The All India Trade Union was formed, comprising 107 trade unions. This was considered a powerful labour association, with a significant position in the nationalist movement.

Phases of Trade Union in India

First phase: During the period from 1950 to mid-1960s, the state had formulated a strategy based on planning and import substitution. During this era, public-sector employment and public-sector unionism rose phenomenally. Trade unions and bargaining structures were highly centralized.

The two main trade union federations during this period were

  1. The nationalist: Indian National Trade Union Congress
  2. The communist: All India Trade Union Congress. During this first phase, the labour regime was based on “state-dominated pluralism”.

Second phase: The second phase (mid-1960s to 1979) was a period of economic stagnation and political turmoil. The rate of employment was slowing down and there were massive inter-union rivalries as a result of increase in industrial conflict. There was a proliferation of unions that developed affiliations with more radical political organizations.

There was a dramatic increase in the number of disputes (strikes and lockouts. An “involute” pluralism dominated Indian labour relations during this phase.

Third phase: During the third phase (1980-1991), decentralized bargaining and independent trade unionism emerged as a response to the segmented and uneven economic development.

Fourth phase: During this phase (1991-2000) the Indian government introduced economic reforms which included privatization and liberalization measures and these came as a preparation for an initial IMF loan of $1. 75 billion to $2 billion to bail India out of a serious debt crunch.

Privatization, in its broader sense, stands for policies that reduce the role of the state and assign a larger role for the private sector that pursues the logic of the market in all economic decisions.

Trade Unions and Related Legislation in India

The Trade Unions Act, 1926

The Trade Unions Act was passed in 1926 under the title of the Indian Trade unions Act and was brought into effect from 1st June 1927 by a government. The act was amended in 1947, 1960 and 1962. Subsequently, the word ‘Indian’ was deleted from the amended Act of 1964, which came into force from 1st April 1965.

It was enacted to provide for the registration of the trade unions and in certain respects to define the law relating to registered trade unions. This Act may be called the Trade Unions Act, 1926. It extends to the whole of India. The Act was enacted with the object of providing for the registration of trade unions and verification of the membership of trade unions registered so that they might acquire a legal and corporate status. As soon as a trade union is registered, it is treated as an artificial person in the eyes of the law, capable of enjoying rights and discharging liabilities like a natural person.

In certain respects, the act attempts to define the law relating to registered trade unions. A trade union is not only a combination of workmen but also of employers; and the Act applies not only to the union of workers but also the association of employers.

Registration of Trade Unions

Any seven or more members of a Trade union may, by subscribing their names to the rules of the trade union and by otherwise complying with the provisions of this Act with respect to registration, apply for registration of the trade union under this Act.

Application for Registration

Every application for registration of a Trade union shall be made to the Registrar, and shall be accompanied by copy of the rules of the trade union and a statement of the following particulars namely;

  1. The names, occupations and addresses of the members making the application;
  2. The name of the trade union and the address of its Head Office
  3. The titles, names, ages, addresses and occupations of the office bearers of the trade union.

Functions of Trade Unions

There are three types of functions. They are

  • Intramural: Intramural functions are those activities which are at the betterment of needs of workers in relation to their employment such as ensuring adequate wages, securing better conditions of work, rest interval, continuity of employment etc.
  • Extramural: Extramural activities are those which perform to help the workers in times of need and improve their efficiency. They also include welfare measures and conduct recreational functions for the workers
  • Political: Most of the unions are politically affiliated or have strong support of leading political parties of the country.

Thus the trade unions use their franchise to capture the government which indirectly results in acquiring stronger hold of power through political influence for their trade union.

Objectives of Trade Unions

The objectives of the trade unions generally are:

  1. They strive for achieving higher wages and better conditions for the members.
  2. They not only minimize the helplessness of the individual workers by making them stand collectively and increasing their resistance power through collective bargaining but also protect their member against victimization or injustice of the employers.
  3. They provide the worker self-confidence and a feeling that they are not simply a log in the machine.
  4. They imbibe a spirit of sincerity and discipline in the workers.
  5. They also take up welfare measures for improving the morale of the workers.
  6. They demand an increasing share for workers in the management of industrial enterprises. They help in raising the status of workers as partners of Industry and as citizens of the society.

Reasons for Workers to Join Trade Unions

  1. Workers join unions because they are constrained by circumstances to do so, and because they want.
  2. To get economic security through steady employment and adequate income.
  3. To restrain the management from taking any action which is irrational, illogical, discriminatory or prejudicial to the interests of labour. Workers desire that the assignment of jobs, transfers, promotions, maintenance of discipline, lay off, retirement, rewards and punishment should be on the basis of a pre-determined policy and on the basis of what is fair and just.
  4. For better communication of their news, aims, ideas, feelings and frustrations to the management and to have an effective voice in discussion about their welfare.
  5. To secure protection from economic hazards beyond their control for example, illness, accident, death, disability, unemployment and old age.
  6. To get along with their fellow workers in a better way and to gain respect in the eyes of their peers.
  7. To get a job through the good offices of a trade union.


Unionization and employment

With time more output has been attained with less employment. This is due to the fact that employers are investing in more capital-intensive technologies and that there has been a considerable amount of labor shedding in the private and public-sector enterprises.

Unions can affect these by resisting technological change that increases the possibility of substituting between capital and labor and by limiting the availability of goods and services that compete with the output of unionized firms. In addition, union bargaining power varies indirectly with labor’s share in total costs: unions are more powerful in relatively more capital-intensive firms and industries, as the demand for labor is relatively inelastic compared to labor-intensive sectors. Employers in capital-intensive firms find it much easier to meet union wage demands compared to employers in labor-intensive firms.

Wages and working conditions

Wage determination in the organized economy varies significantly between the private and the public sector. In the private corporate sector, where collective bargaining largely takes place at enterprise level, unions that are willing to accept some risk have benefited from a form of gainsharing by agreeing to tie a significant part of the monthly pay to incentives.

The incentive structures are designed to generate cooperative behaviour at the departmental, plant and firm level. Risk-averse unions, usually more concerned with employment growth than with members’ wages, have resisted management attempts to impose such systems. Another area of concern is that why countries with relatively abundant and cheap labour find it difficult to compete in international markets, except in those sectors that have (relatively) lower labour standards?

This kind of participation in global trade, where inferior labour standards are the “comparative advantage” is unlikely to lead to social progress. Since it is not enough to wait for sustained economic growth to upgrade domestic labour standards, the unions need to forcefully generate demands, both from above and below, for improvements in working conditions.

Industrial conflict

Even though union density is very low by international standards, India loses more days every year as a result of strikes and lockouts than almost any other country.This raises the question of whether conflict reflects union power or union weakness. It certainly indicates that the basic premise of industrial pluralism, the regulation of conflict, has not been achieved. The answer to this question depends on whether workers resist strikes or whether employers are on the offensive during lockouts. There is an imperative need for industrial relations reform in dispute settlement as the average consumer and voter has increasingly come to be a key actor and end-user of the industrial relations system.

There are significant differences between the main trade union federations on the issues of secret strike ballot, prior notice to striking and the period of notification, lay-off provisions, the role of voluntary arbitration, multiple union situations, etc. The country as a whole would gain if the union movement could arrive at a consensus

Labour management relations

Since the mid-1980s the practice of human resources management has significantly altered traditional union-management relations in the advanced sectors of production, notably in multinationals and other private firms.

Since the economic reforms of 1991, some public sector firms have also incorporated modern HRM practices into their otherwise traditional labor management relationship. Some of the essential characteristics of these HRM practices are: attempts at direct communication between managers and employees; individualized and/or contingency pay systems; modular organization of production through work teams with team leaders who often form part of the management structure; carefully designed and fairly implemented performance appraisal systems; and so on.

While many would argue that modern HRM practices undercut union effectiveness at enterprise level, there is no clear evidence of this in India. Unions have a strong presence in the firms where modern HRM practices are implemented successfully, and it is only with cooperative union-management behavior that this has been possible. In the skill-intensive service sectors such as information technology, HRM practices continue to pose a challenge and possibly create permanent barriers to union entry and organization.

Changing public perception of trade unions

Trade unions in India today face the challenge of convincing the public that they can act on behalf of all employees, unionized or not. This requires the formation of strategic alliances with community bodies, social movements, and other non-governmental organizations. Trade unions will have to come to accept that the credibility of political par ties is at a very low level. There is considerable scope for the trade union movement to capitalize on potential alliances, and a concrete beginning can be made by first forging alliances among themselves. However, this could entail a weakening of links with their political parties.

Future role of Trade Unions Internationally

Four years after the Great Recession, a catastrophe has been avoided, but few real lessons have been drawn and nothing has been fixed. Indeed, in many cases the crisis is being used as another opportunity to subordinate individual workers, governments and entire societies to the sway of unaccountable global capital markets.

After a short revival of corporatist social dialogue in some countries, more workers are being pushed into precarious employment, and austerity packages are making working people, their families and pensioners pay for the crisis. Trade unions are at a crossroads, and the status quo is no longer an option. Labour market fragmentation, the international integration of product markets and production systems, and a single employer model of employment law have combined to make it more difficult for unions to maintain a strong presence.

Unions have adapted nonetheless, and will need to rely more on international regulatory instruments, strategies based around supply chains and procurement, and alliances with civil society organisations as part of their future attempts to protect and improve wages and labour standards across the workforce. Unions may continue to have difficulty appealing to new groups of workers unless they continue to adapt to the ever-shifting contours of the labour market, particularly in light of challenges such as hostility from employers in unorganised enterprises and industries, and emerging institutions such as occupational licensing.

The likely negative impact of public sector restructuring on union membership further underlines this imperative. It cannot be denied that, while more workers than ever before now enjoy political freedom, aggressive resistance to industrial democracy and collective bargaining on the part of employers has also grown over recent decades. Governments in many countries, influenced by aggressive lobbying from business, have tilted the balance of power between capital and labour even more steeply in favour of the privileged few.

But the current globalization regime, driven by uncontrolled global capital markets and free trade, has been instrumental in putting pressure on workers throughout the world and responsible for the greatest economic crisis for a century. Trade unions’ responses to this situation have to stretch from the local to the global. In this process trade unions will themselves have to change in order to be the successful agents of change towards a new social and economic evelopment paradigm. These are challenging tasks, but the message from Tahrir Square to the world is also clear: change is possible, and it is done by ordinary people, when they come together in unity.

Future role of Trade Unions in India

Traditionally, the function of trade unions in India was limited largely to collective bargaining for economic considerations. However, over time, trade unions have begun to play various other roles as well.

Besides aiming to improve the terms and conditions of employment, trade unions now play a critical role in employee welfare activities, such as through organization of cooperative credit societies, cultural programs, and banking and medical facilities and by creating awareness through education of members and publication of periodicals and newsletters. Trade unions provide a forum to help facilitate better industrial relations and improve productivity.

Trade Unions Failure in India- Maruti Manesar

In India, trade unions might be likened to a curate’s egg that is in parts good and in parts bad. Though projected as the champions of the rights of the proletariat, many unions have over time mutated into politicized and disruptive forces. Yet, their necessity in a global economy driven by profit-oriented capitalist enterprises cannot be denied. Workers need protection from exploitation but the past track of unions does not invite confidence in this regard.

The recent lockout at the Manesar plant of India’s largest automobile manufacturer, Maruti Suzuki India Limited, once again put the spotlight on the running saga of poor worker-management relations where unions have not been able to act as proper mediators. It climaxed with the death of a senior executive, Awanish Kumar Dev, the HR manager of the plant, in mob-violence. This was just one example of the ever-changing power equation between the management and the workers; with each being engaged in a tug of war to save their respective interests.

But it was also about a crisis of trust on both sides that prevented easy resolution of the conflict. Respect is the cornerstone of professional relations and builds trust. When management and workers lack these, relevant issues like minimum wages, social benefits and better working conditions for workers and better productivity of the industrial unit are seen as contradictory and not complementary concerns.

Trade Unions Failure in Turkey- 2008 crisis

Up to 2008 Turkey achieved high economic growth rates, thanks to the SAPs implemented following the crisis of 2001, and the higher profit rates enjoyed by capital deferred the next crisis.

However, the working classes did not share in the benefits of this growth; indeed, the very policies that fuelled the growth eroded their job security and social guarantees, reduced real wages and caused further increases in unemployment and poverty. Then, after a period in which capital accumulation increased through more intensive exploitation of the workers, yet another officially declared crisis took place in September 2008. This crisis, unlike the crises experienced by Turkey locally from 1979 onwards, affected the entire capitalist system.

The crisis of 2008 has created an opportunity for capital to demand ever more loudly arrangements to favour the supply side of the economy. In response, many arrangements have been made in order to meet the demands in particular for a flexible labour market. A large number of workers have been laid off purely on the excuse of the crisis in many countries as policies of flexible work and lower wages have become commonplace through the use of the increasing pressure of unemployment.

Union structures throughout the world, having compromised with governments and capital for many years, are now less combative in challenging capital and less willing to develop political agendas and alternative approaches in the face of the crisis. This in turn weakens the unions’ capability to represent the working classes as well as their effectiveness in intervening in the process of capitalist development. In parallel to the global union movement, the union movement in Turkey has failed effectively to resist the processes of marketization and the slide into increasingly precarious work.

The unions’ recommendations of how to deal with the crisis have come very close to supporting the economic policies prepared in line with the interests of capital; thus, far from preventing the transfer of the costs of the crisis to labour, they are contributing to the imposition of those costs on labour. However, as in many other countries, the struggle by labour has continued despite the unions and, as a result, public protests for which the unions had to claim responsibility have been carried out.

In some cases a more militant attitude began to emerge among sections of the working class disillusioned with the unions because of their compromising attitudes. Following the 2008 crisis, provoked by measures such as lay-offs, unpaid wages, increased flexibility of working conditions and pressures against unionization, workers began to carry out factory occupations and strikes in their workplaces that were not organized by the unions and indeed contravened the legal regulations on the collective bargaining process.

In some cases, unions supported actions that developed independently of them. Despite these efforts the absence of an effective union leadership and of firmly class-oriented union policies doomed most of these actions to failure; and meanwhile the Government continued to introduce new legal measures to spread flexible, insecure working conditions in an effort to lower labour costs.

Today, there are numerous struggles across the world against the working standards created by global capitalism, lack of social rights and the inadequacy of democracy – in European countries, in Latin America, and recently in North Africa and the Middle East. These demonstrate, alongside the inadequacy of the compromising line taken by unions since the 1970s, the need for a class-oriented union movement. XIV. Conclusion Putting aside the arguments about whether capitalism has overcome its crisis, for workers the crisis continues and deepens.

In this process, whether the workers will finally be able to overcome their crisis by getting out of the vicious circle of unemployment and poverty depends on the power they are able to generate through class struggle; and in this class struggle, a decisive element will be whether the unions continue their compromising approaches or take a leading role in heading a “push” by the working class.


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  5. www. britannica. com

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Role of Trade Unions in National and International Context. (2016, Nov 27). Retrieved from