1 CHAPTER – 1 INTRODUCTION 1.1 Emergence of wage earners Trade unions are voluntary organizations of workers formed to promote and protect the interest of workers through collective action. Trade unions are a product of industrial society. The main elements in the development of these unions in every country have been more or less the same. The setting up of large scale industrial units and the wide spread use of machinery, opening of new lines of production, changes in living and working environments of workers and concentration of industries in large urban centres have all created a new class of ‘wage-earners’. 1.2 Emergence of large scale industries in India The industrial working class in India constitutes relatively a small section of the total population. India is still a predominantly rural and agricultural country despite the growth of industries over the last century. Before the 1850's the only industry in the modern sense was coal-mining. However, in the decade between 1850 and 1860 a number of developments took place which led to the preliminary stage of India's 'industrial revolution.' A start was made at building railways around Bombay and Calcutta, in 1854 Calcutta was linked by rail to the coal-mining centre, Raniganj. In the same year a Scottish entrepreneur established the first jute mill in Bengal and in Bombay, a member of the Parsi trading community setup the first cotton textile mill. During the next sixty years 'industrialization' was confined to these industries. The cotton textile industry expanded in Bombay and spread out to other centres such as Ahmedabad, Sholapur, Nagpur and Kanpur. In 1914 there were 234 cotton mills working in India employing around
21
Embed
INTRODUCTION - Shodhgangashodhganga.inflibnet.ac.in/bitstream/10603/8118/9/09_chapter 1.pdf · INTRODUCTION 1.1 Emergence of wage earners ... trade union and to represent their grievances
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
CHAPTER – 1
INTRODUCTION
1.1 Emergence of wage earners
Trade unions are voluntary organizations of workers formed to
promote and protect the interest of workers through collective action.
Trade unions are a product of industrial society. The main elements in the
development of these unions in every country have been more or less the
same. The setting up of large scale industrial units and the wide spread use
of machinery, opening of new lines of production, changes in living and
working environments of workers and concentration of industries in large
urban centres have all created a new class of ‘wage-earners’.
1.2 Emergence of large scale industries in India
The industrial working class in India constitutes relatively a small
section of the total population. India is still a predominantly rural and
agricultural country despite the growth of industries over the last century.
Before the 1850's the only industry in the modern sense was coal-mining.
However, in the decade between 1850 and 1860 a number of developments
took place which led to the preliminary stage of India's 'industrial
revolution.' A start was made at building railways around Bombay and
Calcutta, in 1854 Calcutta was linked by rail to the coal-mining centre,
Raniganj. In the same year a Scottish entrepreneur established the first jute
mill in Bengal and in Bombay, a member of the Parsi trading community
setup the first cotton textile mill.
During the next sixty years 'industrialization' was confined to these
industries. The cotton textile industry expanded in Bombay and spread out
to other centres such as Ahmedabad, Sholapur, Nagpur and Kanpur. In
1914 there were 234 cotton mills working in India employing around
2
260,000 operatives. In Bengal the jute industry also developed and by 1912
there were more than 60 mills employing about 2,00,000 workers1.
1.3 Emergence of Trade unions
The first quarter of the twentieth century saw the birth of the trade
union movement in India. Though the germs of the movement were to be
found in the last quarter of the 19th
century, S.S.Bangalee, M.Lokhande and
others succeeded in forming trade unions2. However it was not until the
close of the first World war that the modern trade union movement really
took permanent form in Indian soil.
Low wages, long hours of work and deplorable working conditions
were common factors. The workers were too weak to safeguard their
interests and resist exploitation by the employers. The bargaining power of
the individual worker vis-à-vis the employer was minimal. Collective
action was practically unknown. Competition in the labour market added
new problems to the worker’s plight because of its tendency to determine
low wages and thus undermine the living standards of the workers.
To combat the evils of industrial competition and to ameliorate their
conditions through improved bargaining power and status, the workers
organized themselves into trade unions.
Trade unions play a significant role in the industrial relations. In
India, the trade unions were created by political leaders of the freedom
movement. It is the trade unions that determine the living standards of the
employees and the economy of the country. Thus the trade unions played a
significant role not only for workers but also to the community as a whole.
1 V.B. Karnick Indian Trade Unions A survey, Manaktalas Pub. Bombay (1967) pp.7-8.
2 Ruddar Dutt, K.P.M.Sundara, Indian Economy, S.Chand. Pub. (2005)
3
In India most of the trade unions were established by political leaders as
they needed the support of the workers and the masses.
1.4 Trade unions and political affiliations
The relations between the trade unions and their political
affiliations, in the light of economic reforms, is a worthwhile discussion as
our "trade unions were born in politics and they will have to, it appears,
live and grow in politics”3, as expressed by Karnick. It involves two
important aspects:
(a) Trade union involvement in politics;
(b) Political involvement in Trade unions.
As far as the former aspect is concerned, it is desirable and
indispensable to the labour force, since it has to secure favourable
legislation and economic policies. For instance, in England, Trade unions
themselves created their own labour party. But the problem arises with the
latter aspect, i.e., political involvement in trade unions, as it is still a
controversial issue.
The main object of the trade unions was to work for the social,
economic and cultural upliftment of the workers. According to Gandhiji, a
trade union is not only to settle industrial disputes, but to cover all aspects
of work, both inside the factory and at home. Labour unions as Gandhiji
said, should aim to raise the moral and intellectual height of labour and
thus by sheer merit make labour master of the means production instead of
being the slave that it is4.
3V.B.Karnic, Trade unions and politics, Bombay university press (1968) p.15
4V.B.Karnick, Indian Labour – Problems and Prospects (1974) p.140
4
Trade unions themselves established a political party in Britan i.e.,
Labour party. In the U.S.A the trade unions are economical unions. They
concentrate on the economical needs and advancement of the employees
rather than other aspects. They do not have political affiliations to the
parties. They do not want to identify themselves as political unions
apparently. In Russia and some other countries like Ghana, the trade unions
are subordinate to the government. They have to act according to the
instructions of the Government.
N.Pattabi Raman, a scholar on Trade unions in India stated that the
outside political leadership has been the labour benefactor as well as
exploiter5. By the above statement, we can understand that if the leader is
like N.M. Joshi, who devoted all his time for the cause of the labour, the
union will be benefited. However if the leader is selfish, the union will be
exploited. This study, therefore includes the origin of the trade unions and
their nexus with the political leaders. Another considered opinion on this
aspect is as follows.
“It must be realised that outsiders are necessary to a certain extent
due to the present illiteracy of the workers, but it is considered desirable to
decrease the ratio with the advent of literacy among the workers as there is
always likelihood of the workers being exploited by irresponsible labour
leaders for political gain”.6
However, there is nothing unique in this phenomenon. In almost
every country, outsider leaders have helped and guided the trade union
movement. Particularly in its early stages, even in U.K.-"0ne will be
impressed by the contribution that was made by outsiders like Robert
5 N. Pattabi Raman, Political involvement of Trade Unions, Asian Pub. New Delhi (1966) p.163.
6 Report of the Plantation enquiry Commission (1976), P.139.
5
Owen, Francis Harrison and others to the cause of labour and trade
unionism. But the leadership gradually passed on to the workers
themselves”.7
In developing countries like India, Sri Lanka and Indonesia where
these countries have recently achieved freedom from colonial domination,
the trade unions were nourished along with the freedom movements. The
leaders of the freedom movements were the leaders of trade unions. Hence,
the existence of political federations continued in India. But there is a little
change in the present trend. The trade unions are making efforts to keep
political parties away from industrial relations.
1.5 Why political involvement is necessitated in Indian Trade
Unions?
The history of the trade union movement indicates the close and
direct link between the political parties as well as contributions made by
political leaders to the growth of the unions. This close link is partly
explained by the fact that the Indian trade union movement was nursed and
developed by the political leaders of the country as a part of the national
movement for independence8.
The dominant personalities in the political movement and trade
union movement on many occasions were same. There was no trade union
untouched by the political colour of national independence. This tendency
was natural and inevitable, moreover this is not a unique phenomenon.
Wherever colonial countries had been struggling for national
independence, the trade unions have been an integral part of the national
7A.S. Mathur and J.S. Mathur, Trade Union movement in India, Chaitanya Allahabad Pub. (1962)
p. 250. 8G.P.Sinha& PRN Sinha, Indian trade unions and political parties and the problem of leadership
in industrial relations and labour legislations (1977) p.178.
6
movement. In these circumstances, it was not possible for trade unions to
remain independent, without participating in the freedom movement.
The unions desire association with the political parties and the
political parties need association with the trade unions to secure the support
of workers whose votes along with those of their family members account
for a sizeable democratic force to reckon with. So, it is a reciprocal
tendency and an important factor for mutual benefit. Moreover, there is a
belief that as a consequence of their affiliation with political parties, trade
unions are better benefited, either through legislation or through higher
bargaining power by exerting political pressure.
Indian workers are not in a position to create their own unions
because of their lack of literacy and economically poor standards of living.
On the other hand due to sophisticated lifestyles of the modern world, they
usually stick to the religious traditions and sentiments e.g. most of the
workers think or attribute their position to the “Karma or the theory of
Rebirth”9.
The workers were poor and illiterate and were in constant dread of
being thrown out of employment. The outsider with his influence in the
local area was therefore, requested by the workers to assist in forming a
trade union and to represent their grievances to their employer. The
workers assumed that their condition was a punishment for their sins which
were done in their previous life.
Our society has been a hierarchical society. The superiority of the
employer is paramount and the workers are never regarded as equals at the
9Ruder Dutt, Indian Economy, 51
st Edition, S.Chand Pub. New Delhi (2005) p.724.
7
bargaining table. Hence, some means of high status are required to
represent the grievances of the workmen to the employer.
The problem of the fear of victimisation is widely prevalent,
particularly with regard to Indian conditions. Hence, the workers required
outside help to channelize their aspirations.
Continuous dominance of the trade union movement by outsiders
due to the inability of the trade unions to develop internal leadership is
apparent. The trade union finances are too inadequate to pay for full time
leaders. Hence, they have to depend on outside leaders.
Compulsory adjudication has necessitated that the union leadership
must be adept in law because of the volume of complex legal provisions
under which trade unions in India operate. This puts heavy burden on the
union leadership. The legal skills necessary for resolving disputes through
the legal process is unlikely to be found among inside leaders10
. Thus
unions were and are led by non-workers who are usually persons with
political connections.
1.6 Trade unions and Indian conditions
a) Dominance of outsiders
Outside leadership has been playing a vital role in the Indian trade
union movement due to the inability of insiders to meet the needs and
demands of the movement, in view of the low education standards and
poor command over the English language which is still the principal
language of legislation. There is a criticism that outside leadership
undermined the proposals of the trade unions and weakened their authority.
10
R.Chatterji, Union Politics and the State, South Asian Pub. New Delhi (1980) p.194.
8
Personal benefits and prejudices, sometimes, weighed more than the
interests of unions and adjudication of industrial disputes.
b) Political unionism
In India, trade unions were established by political leaders of
freedom movement. Political parties have taken a lot of interest in
organizing trade unions since the Nineteen Twenties in order to secure
mass support for the freedom movement. Most of the trade union leaders
were also the political leaders or at least had political loyalties. These
leaders were more interested in their political elevation than the genuine
welfare of the workers.
c) Multiple unions
Multiple unionism both at the plant and industry levels poses a
serious threat to industrial peace and harmony in India. Every political
party wants to establish a trade union in order to get a foothold among
workers and thereby secure a large bloc of votes. In doing this, they
unleashed divisive tendencies in the union structure by setting up rival
unions at the plant, industry, regional and national levels which resulted in
multiplicity of unions.
In a country like India the problem of multiplicity of unions prevails
in the entire industrial scene because of the multiparty system.
d) Union rivalry
The system of multiple unionism resulted in inter union rivalry in
different industries. The inter union rivalry breaks the very purpose of the
trade unions by weakening the strength of collective bargaining.
9
The state of rivalry between two groups of the same union is said to
be intra-union rivalry. Inter-union and intra-union rivalry have been a
potent cause of industrial disputes in the country. They are responsible for
the weak bargaining power of trade unions in collective bargaining. These
rivalries are also responsible for the slow growth of the trade union
movement in the country.
e) Finances
Most of the unions in India suffer from inadequate funds. Sound
financial position is an essential ingredient for the effective functioning of
trade unions. Because of inadequate funds most of the trade unions are
unable to engage full time trade union leaders to replace the outside leaders
who do not understand the workers’ problems as they do not live the life of
a worker.
f) Absence of paid office bearers
Weak finances do not permit unions to engage the services of full
time, paid office bearers and union activists. Outside leaders who work on
part-time basis, neither have the time nor the energy to take up the union
activities sincerely and diligently.
g) Illiteracy
Most of the workers in India are unable to understand the
implications of modern trade unionism. Their illiteracy coupled with
ignorance and indifference account for the predominance of outside
leadership.
1.7 Trade unions methods to promote their interests
The precise methods used by trade unions to further their aims vary
considerably from country to country even from union to union within the
10
same country. Nevertheless, their principal methods fall broadly into two
categories - industrial and political. Industrial methods include negotiations
with the employer and all that belongs to collective bargaining, grievance
procedure, picketing, strike action, arbitration and so on. Political methods
on the other hand cover all types of union participation in party politics.
When they use political methods they bring their power and influences to
bear on the parties or the government. In practice the distinction may be
difficult to draw at the margins, especially as industry and politics have
become increasingly interwoven.
When they have choice, trade unions inevitably prefer to rely on
industrial rather than political methods to achieve their aim. This does not
mean that they necessarily dispose political action. On the contrary they are
ready to resort to it as a second string to their bow. It means that they are
prepared to use political methods to get support and to supplement their
industrial methods. Thus labour unions employ two general methods in
promoting and protecting their interests.
1.8 Aim of the present study
The present study aims at studying how the unions, particularly
political unions are functioning in the wake of the introduction of
economic reforms from 1991, which implies privatization, globalization
and liberalization.
Even before the introduction of economic reforms, the problem of
political parties’ involvement has always been a controversial issue. One
set of scholars like Karnick and Murthy say that political involvement is
necessary, essential and inevitable for the development of trade unions.
Otherwise trade unions will indulge not only in industrial action i.e.,
strikes, dharnas and picketing but also resort to violence. Another set of
11
people like Dr.Siddique say political involvement not only retards the
internal leadership but also creates a measure of indiscipline, intimidation,
assault and violence in the industrial atmosphere and also creates confusion
about the future of trade union movement.
Prof.B.Benerjee in his article Trade Unions and Politics explains the
term political trade unionism as follows.
"Political trade unionism refers to the pre-occupation of trade unions
with political activities, consequently neglecting legitimate activities of
industry for which trade unions were formed”11
.
1.9 Welfare state and economic reforms
India after independence adopted the philosophy of welfare state.
Article 38(1) of the Indian Constitutions provides that “the state shall strive
promote the welfare of people by securing and protecting as effectively as
it may, a social order in which justice, social, economic and political, shall
inform all the institutions of the national life”. This article, which
contained in the Directive Principles of State Policy reaffirms what has
already been said in the preamble. Article 39 provides:
(a) Equal right of men and women to adequate means of livelihood
(b) Distribution of ownership and control of the material resources of the
community to the common good.
(c) To ensure that the economic system should not result in concentration
of wealth and means of production to the common detriment.
(d) Equal pay for equal work for both men and women etc.
Thus the Directive Principles of the Indian Constitutions resulted in
enacting a series of labour legislations such as Minimum Wage Act, Bonus 11
Prof.B.Benerjee, Trade unions and politics, law quarterly Journal, June (1980) p.1l7.
12
Act, Factories Act and Contract Labour (Regulation and Abolition) Act etc.
These acts aimed at to provide protection and justice to the working class
which was weak and defenceless. Hence the state assumed an
interventionist role in industrial relations and it continues to hold the same
position even after many changes have taken place in the industrial system.
Now the situation has changed. Our indigenous industries are being
replaced by multinational corporations. Introduction of economic reforms
caused severe effects with regard to employment opportunities apart from
job losses which resulted in reduction in membership of trade unions.
All over the world, the workers’ response to the technological and
organizational changes is undergoing a change. Indian workers cannot be
an exception.
Various changes taking place in different economies are affecting
the strength and strategy of the trade unions. Growing unemployment in
developed as well as developing countries and the declining hold of
communism and socialism adversely affect the role of the trade unions.
International legislative changes such as resolutions of World trade
organization etc. reduce the immunities of the trade unions by opening up
opportunities for legal actions by employers, and by attempting to regulate
internal organizational matters of the unions. These changes often look
more like long term shifts and not just temporary experiments. These
changes have increased employees’ fears about job security. Technological
change brings both fear and hopes; fears for established skills and job
opportunity and hopes for longer term growth and productivity
improvement.
13
Opinions vary about the effect of technological change on industrial
relations. Some holding pessimistic view say that the new technology is yet
another weapon in the armoury of employers seeking to degrade work,
while some others think optimistically that it will reduce the demeaning
unpleasant jobs.
In developing countries like India, where the labour movement has
to encounter a substantial portion of small enterprises, the unions are linked
to political parties and the political parties are competing for trade union
support. As a result, pluralism of trade unions has assumed a complex
nature.
The package of economic reforms includes both stabilization and
structural adjustment. Structural adjustment policy aims at promoting
market led growth through privatization, trade liberalization, deregulation,
disinvestment of public sector undertaking and so on. The main objectives
are to promote economic efficiency through deregulation and integration of
the Indian economy with the global economy. Privatization and
introduction of multinational corporations one way or other suppress the
freedom of the workers because they reduce the work force and replace
workers with technological inventions.
The key elements of Economic reforms are
(a) Liberalization
(b) Privatization
(c) Globalization
Liberalization denotes one of the government policies associated
with economic reforms which reduces regulations of economic activity and
limits the intervention of the state on business activity and allowing for
14
unfiltered operation of market forces in determining the economic process.
An important feature of liberalization is the removal of the licence system.
Now there is no need to wait upon ministers and departments for licences.
Another feature of liberalization is the easing of import restrictions and
removal of Monopolies and Restrictive Trade Practices (MRTP) Act which
would enable the private sector to grow in size in the place of the public
sector.
Privatization in a narrow sense means replacing public sectors with
private ownership or even without changing ownership, induction of
private management and control in the public sector enterprises.
Globalization implies growing interdependence in the world
economy where by resources flow from one region to another, goods and
services also move relatively fully from one region to another. The aim of
globalization is to see the entire world as one economic unit.
1.10 Effects of economic reforms on trade unions
(a) Structural adjustment which advocates technical upgradation
ultimately leads to large scale unemployment and workers on a large
scale will be retrenched and no trade union can enable them to find
new jobs. The trade unions would thus lose their credibility to some
extent.
(b) Private industries particularly multinational industries, according to
their different structures and strategies, like technical knowledge,
productivity, quality would prefer to have company unions posing a
challenge to the trade union movement.
(c) More unions will be freed from political dominance. The big trade
unions in their efforts to survive will seek more and more an efficient
inter dependent system of functioning.
15
(d) Trade unions will be seeking protection more through contractual
obligations than from Industrial Disputes Act. The grand idea of
participation in management will die its natural death. The
managements of new modem industries would keep the workers’
organizations at arm’s length. The workers in general would turn a
deaf ear to the voice of the trade unions and trade unions will have no
alternative but to have one center of labour thus ending, all the
multiplicity of unions12
.
The above changing trends and atmosphere compel the trade unions
to unite themselves for their self-existence. The combined effect of the