Trade Union Recognition (Central) Rules, 2021 – A Critical Analysis and Some Recommendations – Part II

In the second of a two-part article series analysing the recently published Industrial Relations (Central) Recognition of Negotiating Union or Negotiating Council and Adjudication of Disputes of Trade Unions Rules, 2021, DR. K.R. SHYAM SUNDAR points out that by choosing the employer as the regulating authority for conducting a secret ballot for trade union elections, and limiting the matters to be covered in collective bargaining, the rules further whittle away the bargaining power of trade unions, disempower unions, and magnify some of the faults of the Industrial Relations Code, 2020.

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In the first part of this article series, the recently published Industrial Relations (Central) Recognition of Negotiating Union or Negotiating Council and Adjudication of Disputes of Trade Unions Rules, 2021 (Draft Recognition Rules) had been analysed. Issues with the criteria for recognition of a union in a single-union context and the method for determining the negotiating agent/council and its procedures were pointed out, and suggestions to improve the same were made. This part shall carry on with the analysis of the rules.

Who Should be the Regulatory Authority?

The Union Government has completely relied on the employer as the authority to initiate and conduct secret ballot procedures.  According to the Rules on Union Recognition, the employers shall (a) appoint the "verification officer"; (b) bear all expenses and make arrangements in connection with the verification; (c) receive the application for recognition from the trade union(s); (d) prepare the voter list. Thus, the employer regulates the entire verification process in various ways.

This is ironic, to say the least. In the extant neo-liberal times wherein employers save the progressive ones at best avoid unions and at worst bust unions, vesting the employer with the responsibility to conduct union recognition procedure is a fiendish, if not infernal, strategy.    

Regulations in West Bengal and Kerala appoint the Registrar as the regulatory authority to initiate and coordinate the entire recognition processes, including the appointment of the Returning Officer.  Additionally, the  Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU&PULPA) has empowered the Industrial Court to deal with matters relating to the recognition of trade unions.

The Supreme Court, in its judgment in the case of Food Corporation of India Staff Union v. Food Corporation of India and Others (1995 (1) SCR 96), held that it is the Chief Labour Commissioner who must appoint the returning officer, who shall be a government official, to conduct the election with the assistance of the company (in this case, Food Corporation of India).  The employer does not figure in any of the aforementioned regulations nor the judgment.

In fact, the West Bengal Regulations vest the Registrar with wide powers.  The existing laws, such as the Trade Unions Act, 1926 (TUA) and the Industrial Relations Code, 2020 (IRC) extend merely administrative and not quasi-judicial powers to the Registrar. The latter is little more than a crowned bureaucrat who could at best register or deregister a trade union.  The civil courts in the TUA and the Industrial Tribunal in the IRC adjudicate trade union disputes.

The secret ballot process also involves various officials like an assistant returning officer, a presiding officer, a polling officer, polling agents, counting agents, and so on. In the Draft Recognition Rules, the employer and the verification officer together perform the functions of these officials. The verification officer eventually submits the verification process results to the employer. On that basis, the employer recognizes a trade union as a negotiating union or a negotiating council, as the case may be, for the prescribed tenure in the IRC.

Thus, the Draft Recognition Rules miss a lot of details, misallocate the duties and responsibilities to the employer, and over-burden the verification officer.  This is neither efficient nor just nor equitable.

Also read: Draft Rules on Trade Union Recognition and Activities are arbitrary and unreasonably restrictive

Scope of Collective Bargaining Whittled

Since the IRC states that the Rules would prescribe the "matters" to be covered in collective bargaining, Rule 3 of the Draft Recognition Rules specifies the same. This very clause is contestable, though it has become law.

It is contestable because of three reasons. One, this legal intervention is incompatible with the very dominant orthodoxy of 'neo-liberalism' which advocates the least State regulation and which the governments in the post-reform period, irrespective of the parties in power, have embraced.

Two, the dynamics of globalization are such that it would be futile to regulate the "scope of collective bargaining" and those should be left to the parties concerned.  By delimiting the scope of collective bargaining, the Draft Recognition Rules do not provide any radical relief to either party.  

Three, the trade unions or the employers adopt "industrial sanctions" to induce or coerce (as the case may be) the other party to accept "issues" for collective bargaining, and may even resort to legal action in that regard. For example, in 1998, the trade union in Philips India Ltd. tried in vain to negotiate with its management on the issue of the sale of its plant to Videocon, and later, on the issue of reduction of the workforce (the matter ultimately reached the Supreme Court in the case of Sunil Kumar Ghosh and Others vs K. Ram Chandran and Others, (2011) 14 SCC 320). Of course, it is a contestable issue whether the company policy decisions are "proper issues for negotiation".  But the same should be left to the institutional processes and not be constrained by law.

Incomplete Exercise

There are several other deficiencies manifest in the Draft Recognition Rules. For one, the Union government could have used this opportunity to frame rules on all the pending clauses in the IRC. It could have provided the arithmetic of representatives in the negotiating council as per one for every 20 percent and calculating "for the remainder after calculating the membership on each twenty percent." (vide section 14(4) of the IRC).

Secondly, in the negotiations by the negotiating council "a majority of the representatives" is required to reach a collective agreement under the Code.  The Draft Recognition Rules should have defined what constitutes a majority: 51% or 66% or some other figure?

Thirdly, while the TUA, a central law, concretely mentions the objects for which the general and the political funds should be spent, the IRC does not.  To have homogenous regulations, the Union government should have included them at least in its rules.

Fourthly, the Draft Recognition Rules have not provided regulations regarding recognition of central trade unions by the Union government. This smacks of ad-hocism.  Perhaps, the Union government will come out with another set of rules to provide for recognition of trade unions by it while the state governments would do so at their level.

Since the IRC does not contain clauses relating to the "rights, privileges, responsibilities and liabilities" of the recognized unions and the council nor did it mention that the rules would prescribe these, as in the case of facilities to be provided to them (see section 14(7) of the IRC), the Draft Recognition Rules do not specify the rights, privileges, responsibilities and liabilities of the recognized unions. On the other hand, these are naturally defined in the corresponding legislations by Maharashtra, Kerala and West Bengal.  This is a grave slip and a huge void.  Perhaps one must wait for the next session of the Parliament for these clauses to be inserted in the IRC.

To sum up, we see another exercise by the State, though very late in the day, which is not comprehensive due to the faults in the source (the IRC), and lack of attention to details. Ad-hoism, a lack of active coordination by the Union government with state governments and union territories, and the absence of social dialogue cause inordinate delay in the implementation of even the deficient Codes.

The legal void is perhaps suitable to the industrial firms given the economic slow-down (in the form of, for instance, non-determination of the statutory national floor-level minimum wages and minimum wages at the state levels). At any rate, the governments are fighting far more urgent battles relating to COVID-19 management. One expects that the State would adopt expansionary fiscal policies to provide far-reaching measures such as direct benefit transfers to millions of informal workers who are untouched by its labour codes. The State and other social partners must do at least these in a competent and comprehensive manner.

(Dr. K R Shyam Sundar is Professor, HRM Area, XLRI, Xavier School of Management, Jamshedpur. The views expressed are personal.)