Trade Union- An Introduction

Trade unions emerged as a result of the perpetual conflict between the employer
and the employee and the inability of the employee to obtain basic ‘worker’s
rights’ such as a minimum wage, humane conditions of labour and so forth. In the
early 20th century, the prevalent attitude of the State towards the economy was one
of non interference or laissez-faire.

Many attempts have been made to define a trade union. Sydney and Webb’s
define trade unions as “a continuous association of wage earners for the purpose
of maintaining and improving the condition of their working lives”. A trade union
has been defined by the Indian Trade Unions Act, 1926 under s. 2(h). It states that
“any combination whether temporary or permanent, forced primarily for the
purpose of regulating the relations between workmen and employers or between
workmen and workmen or between employers and employers, or for imposing
restrictive conditions on the conduct of any trade or business and includes any
federation of two or more trade unions.”

The greatest strength or asset of a trade union is its power of collective bargaining.
While the individual worker has virtually no bargaining capacity, the trade union
which sometimes claims hundreds of thousands of members, has vast bargaining
capacity. Webb’s argued that in a freely competitive market, competition would
drive the wage rate down. This would naturally adversely affect the workers. Trade
unions exist to prevent such unhealthy practices from developing in an economy.
The trade union is consequently an institution that is essential for the maintenance
of some element of equality between the employers and the employees. The
researcher in this project aims to analyze the trade union from a very specific point
of view, namely, the rights and liabilities it enjoys in India and the purposes of
granting immunity to it and its members in civil and criminal suits.
 HISTORY-ORIGIN

The origin of trade unions' existence can be traced from the eighteenth century
Europe. During this period, there was rapid expansion of industrial the society,
which a large number of drew women, children, rural workers, and immigrants to
the work force in larger numbers and in new roles. Subsequently, a need was felt
by this pool of both skilled and unskilled workers to be more vocal about their
demands, which laid the foundation for a sort of unionism.

Trade unions were not however accepted with open arms by large sections of
society. Initially, many governments considered them unlawful organizations and
sought to put a halt to their growth through the application of common law
doctrines. During the 18th century the government in England imposed a ban on
the grouping of workers in particular industries like the wool and the silk
industries, but latter turned this ban into a general ban by implementing The
Combination Act of 1799. This act was based on the assumption that combination
of workers for demanding an increase in their wages is unlawful under the
common law Doctrine of Conspiracy, which criminalized the privileged acts done
by individual if done in combination. This act was further amended in 1800 with
the same name which enlisted two more acts as an offence this are namely:
entering into a contract for the purpose of improving employment conditions or
calling or attending any meetings for the same purpose and attempting to persuade
another person not to work or to refuse to work with another worker and if anyone
was found guilty of committing any of the offences under The Combination Act
they could face three months imprisonment.

Another such act which further suppressed the workers was The Masters and
Servants Act 1823 which made an employee liable to a punishment of three months
hard labour if he was absent from his service before the expiry of the contract of
employment. However due to campaigns led by unions’ liberties as Francis Place
and Joseph Hume led to the repealing of most of the provisions of the Act of 1800
through the Combination Laws Repeal Act 1824, and union combinations was
merely deemed to be a criminal offence under the common law. The repealing of
the Act of 1800 led to a wave of strike due to which, a second Act was passed in
1825 which further criminalized the act of as persuading a worker not to work or to
join a strike, thus only allowing combination for determination of wages and work
hours and taking away the most important weapon of strike from the trade unions.

The first major move which intended to change the restrictive labour laws of the
early and mid-nineteen century was the Master and Servant Act of 1867, which
made imprisonment of workers for breach of contract a measure of last retort
which could be made available by the aggrieved party only in case of damage to
person or property and misconduct and for any other offences committed by the
workers they would let go with a fine. When it appeared that trade unions were on
the verge of achieving a legal status, it received a major blow when the Queen’s
Bench gave its judgment in the case of Hornby v Close1, which held that trade
unions were unlawful associations as their objects included the raising of wages
and control of labour in the trades in which they worked; and such objects and
activities amounted to restrain of trade. The next step for legalizing trade union
was taken up by the 1867 Royal commission under Sir William Erle, the majority
of which declared to place the trade unions in legal footing, only if they agreed to
give up the control of apprenticeships and the prohibition of piecework and sub-
contracting, but the minority argued for providing a more complete immunization
of trade unions from the laws of conspiracy and restraint of trade.

1
(1867) 2 LRQB 153
The Trade Union Act of 1871 went on to partly meet the recommendations of the
minority view of the 1867 Royal Commission. Section 2 and 3 of the Act stated
that the purposes of the trade unions were not to be deemed unlawful in the
criminal and civil law merely on the ground that they are restrain to trade. The
provisions of the Trade Union Act of 1871 did not prove to be of much help in
providing immunity to the workers from the act of criminal conspiracy as in the
following year in 1872 came the case of R v Bunn in which the workers taking part
in the London gas stokers’ strike were imprisoned for ‘aggravated’ breach of
contract under section 14 of the 1867 Master and Servant Act and their leaders
were convicted for criminal conspiracy. The decision in the case of R v Bunn
2
marked the 1871 legislature as a failure, due to which Royal Commission was
again set up in 1875.

The majority report of the 1875 commission recommended that the collective
rights of the association should prevail over the common law doctrine of restraint
of trade and that breach of contract of services should not give rise to criminal
liability. This resulted in the enactment of the Employers and Workmen Act 1875
which removed the criminal jurisdiction for breach of the contract of employment.
This also resulted in the repealing and replacement of the Criminal Law
Amendment Act 1871 by the Conspiracy and Protection of Property Act 1875,
which lifted the threat of criminal sanction from all but violent forms of behaviour
associated with industrial action and provided that the common law doctrine of
conspiracy should not render any act to be criminal merely because it is done by a
combination of person in furtherance of a trade dispute if this act is not rendered to
be a criminal act if done by a single individual.

2
(1872) 12 Cox CC
With the trade unions being largely excluded from criminal liability, the employers
turned to civil law to restrict their bargaining power, especially by the use of the
law of torts. The court in the case of Lumley v Gye 3held that calling out workers
on a strike involved the tort of inducing breach of contract. Although the House of
Lords in the case of Allen v Flood that one cannot be held liable under torts unless
there is a breach of contract by an individual independently and unlawfully. It
again changed its position in the case of Quinn v Leathem 4when it held that when
two or more persons combine without any justification to injure others they are
liable for tortious conspiracy. The House of Lords further in the case of Taff Vale
Railway Co v Amalgamated Society of Railway Servant5 held that the trade
union could itself be sued for damages under its registered name. Then finally in
the year 1906 the Trade Dispute act was passed which made the trade unions
immune from any sort of tortious liability.

Industrial development in India took place on Western lines, which commenced

from the middle of the 19th century. The first organized Trade Union in India,
which was the Madras Labour Union, was formed in the year 1918. Subsequently,
a large number of similarly, entrepreneurs also formed their organizations to
protect their interests. In 1926, the Trade Unions Act was passed by the Indian
Government. The Act gave legal status to the Registered Trade Unions.

Since, the Industrial development in India is to a large extent inspired from the
English system, taking lessons from the problems faced by the trade unions in
England, the Trade Union Act of 1926 provides for registration of trade unions.
The object of registration is to encourage the growth of permanent and stable
unions. Section 17 and 18 of the Act provides certain immunities to the trade union

3
1853] EWHC QB J73
4
[1901] AC 495
5
[1901] UKHL 1
such as immunity from criminal conspiracy in trade disputes and from civil suits in
certain cases, but these are made available only to the registered trade unions.

IMMUNITY FROM CRIMINAL LIABILITY

S. 17 of the Trade Unions Act lays down the grounds for providing the members of
a trade union immunity from prosecution in criminal proceedings for any act
performed by them while carrying out legitimate functions of the trade union. The
section provides that no member of a registered trade union will be found liable
under the provisions of s. 120B (2) IPC, 1860 in respect of any agreement made
between the members for the purpose of furthering any object enumerated in s.
15 of the Trade Unions Act, 1926, unless the agreement in question is an
agreement to commit an offence.

Section 17 of The Trade Union Act,1926 says:

“ 17. Criminal conspiracy in trade disputes.—

No 1[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.”

Section 120B of the Indian Penal Code,1860 says;

120B. Punishment of criminal conspiracy.--

(1) Whoever is a party to a criminal conspiracy to commit an offence

punishable with death, 2[ imprisonment for life] or rigorous imprisonment
for a term of two years or upwards, shall, where no express provision is
made in this Code for the punishment of such a conspiracy, be punished in
the same manner as if he had abetted such offence.
 (2) Whoever is a party to a criminal conspiracy other than a criminal
conspiracy to commit an offence punishable as aforesaid shall be punished
with imprisonment of either description for a term not exceeding six months,
or with fine or with both.] CHAPTER VI OF OFFENCES AGAINST THE

STATE CHAPTER VI OF OFFENCES AGAINST THE STATE “

Under the definition of s. 17, the ‘agreement’ must be an agreement to do

something contained in s. 15 and it cannot be an agreement to commit an offence
as defined under s. 40 IPC.

The rationale for this section is that in order to enforce their demands, trade unions
have to resort to collective bargaining which is their greatest strength. Collective
action undertaken by the trade union may take the form of strikes, picketing, and
so forth. Even though the object of such collective action is to ensure that the
employers take note of their grievances, under the strict definition of the law, the
effect of such action is ‘interference with the trade or business of the employer or
with the employment of other workers.’ This collective action would normally fall
within the definition of criminal conspiracy under the IPC. It was this situation that
necessitated a provision like s. 17 of the Trade Unions Act. Members of a trade
union cannot be charged under criminal conspiracy for any action taken by them in
furtherance of a trade dispute or alternatively, in furtherance of the objects laid
down in s. 15 of the act. It must be stated clearly at this point, that this protection is
not afforded to any agreements entered into by members of a trade union to
perform illegal actions or offences as defined under s. 40 IPC. An agreement to
commit an offence or illegal act, even if it is in furtherance of a trade dispute,
would not fall within the protection granted by this section. In the case of R.S.
Ruikar v. Emperor6 the court stated that although trade unions have the right to
6
AIR 1935 Nag 149
strike and commit actions in furtherance of trade disputes for which they cannot be
held civilly or criminally liable, this exemption does not extend to situations where
they can be afforded immunity from any criminal offence as defined under s. 40
IPC. In the landmark case of Jay Engineering Works v. State 7the court reiterated
this view and stated that the exemptions granted under s. 17 of the act do not
extend to:

“agreements to commit an offence or intimidation, molestation or violence, where

they amount to an offence. Members of a trade union may resort to peaceful strike
such as cessation of work with the object of enforcing their claims. Such strikes
must be peaceful and never violent and there is no exemption where an offence is
committed. Therefore, a movement by workmen by gathering together either
outside or inside an industrial establishment within the working hours is
permissible when it is peaceful and does not violate the provisions of law.
However, when such a gathering is unlawful or commits an offence then such
exemption is lost. Thus where the workmen resort to confinement of persons,
criminal trespass or where it becomes violent or indulges in criminal force or
assault or mischief to person or property, then the exemption granted under s. 17 of
the act cannot be claimed.”

In this case the court defined gherao as a “physical blockade of a target either by
encirclement or forcible occupation. ”It declared that the objective of a gherao is to
force the management in power to agree to the demands of the workers, without
regard for the machinery provided for redressal of complaints as provided for by
the law, and hence it took the view is that a gherao is illegal and the persons
involved cannot be granted immunity from criminal prosecution.

7
AIR 1968 Cal
IMMUNITY FROM CIVIL LIABILITY
S. 18 of the Trade Unions Act provides for exemption from prosecution in civil
cases. It essentially states that immunity from civil proceedings is granted to the
office bearers and members of a registered trade union for the offence of bringing
about a breach of contract of employment between the employer and the employee.
The trade union itself is also granted immunity from civil proceedings for the
offence of inducing a person to break his contract of employment between the
employer and the employee or of interfering with the trade, business or
employment of some other person, provided that such inducement is in furtherance
of a trade dispute. However the section clearly states that this inducement must be
entirely legal and must be done by lawful means.

Section 18 of the trade union act, 1926 says,

“18. Immunity from civil suit in certain cases.—

(1) No suit or other legal proceeding shall be maintainable in any Civil

Court against any registered Trade Union or any 1[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.

(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.
”

AVAILABILITY OF IMMUNITY TO A TRADE UNION LEADER

West India Steel Co. Ltd. v. Azeez8

Immunity to a trade union leader (such as the President) is not available when he is
discharged after holding an enquiry into his misconduct.

OBJECT

Standard Chartered Bank v. Hinudstan Engg. & General Mazdoor Union9

Immunity is provided to the registered trade union from being sued by way of civil
suit under section 18. In respect of any act done in contemplation on 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.

SCOPE

Rohtas Industries Staff Union v. State of Bihar10

8
1990 LLR 142 (Ker).
9
2002 LLR 254 (Del).
10
AIR 1963 Pat 1970.
It is manifest in the present case that the striking workmen are not prevented from
taking recourse to the protection of section 18 of the Trade Unions Act mainly
because the strike was illegal under section 24(1) of the Industrial Disputes Act.
The Act has not provided that period of illegal strike would be treated as period of
unauthorised absence or relationship of “employer and employee” would cease;
U.P. Rajya Setu Nigam Sanyukt Karmachari Sangh v. U.P. State Bridge
Corporation, Lucknow.11

It is not within the purview of the civil court to prevent or interfere with the
legitimate rights of the workmen to persue their demands by means of strike or
otherwise as also acts done in furtherance of a trade dispute; Ahmedabad Textile
Research Association v. ATRA Employees’ Union.12

The meaning of this section is that if the inducement to break the contract of
employment has been put forth legally, without threat of force or violence or
malice, and if it is in furtherance of a trade dispute, then it is not actionable under
civil law. [21] Similarly, if there is no threat of violence or use of force and there is
still interference in the trade, business or employment of some person, then
immunity is granted provided it was done in furtherance of a trade dispute.

Sub-clause (2) of this section provides that the trade union will not be liable for
any tortuous act done by its agent if it is able to prove that the agent acted without
their knowledge or in contravention of his orders.

COMPARISON BETWEEN CIVIL AND CRIMINAL IMMUNITY

IN TRADE DISPUTES

11
2000 LLR 151 (All).
12
1995 LLR 91 (Guj) DB.
Unlike s. 17 which granted immunity to office-bearers and members of a trade
union, this section affords immunity to office-bearers and members of a registered
trade union as well as the trade union itself. This protection is given to these three
categories of legal persons for any action done by them:

in contemplation of a trade dispute to which a member of the trade union is a party

In furtherance of a trade dispute to which a member of the trade union is a party

Furthermore, this immunity from prosecution in civil proceedings is extended only

to those specific actions which are as follows:

1. An act that induces some person to break his contract of employment

2. An act that is in interference with:
3. Trade
4. Business
5. Employment of some other person
6. Right of some other person to dispose of his capital as he deems fit
7. Right of some other person to dispose of his labour as he deems fit

It is very important to note that the immunity granted under this section is limited.
The inducement given by the trade union or its members must only be an
inducement to break a contract of employment. If it is an inducement to break any
other contract such as a contract for sale of goods or carriage, then the protections
given by this section will not apply. Furthermore, the inducement to break the
contract of employment must be entirely legal and cannot contain an offence as
defined under s. 40 IPC.

If a person is induced to break his contract of employment through violence of the

threat of force, then such inducement will be illegal and will not enjoy the
protection granted by this section. In the case of Western India Cine Employees
v. Filmalaya Pvt. Ltd13., the question that arose before the court was whether the
collective action taken by the workers abstaining from work which caused loss to
the employer, at the call of the trade union was protected under the provisions of s.
18? The court ruled in the affirmative and held that the trade union issued
directions to its members. However these directions were issued in an entirely legal
manner, no intimidation, coercion or violence was used. The court ruled that the
trade union was carrying out its legitimate activities and enjoyed immunity under s.
18 of the Trade Unions Act.

Although ordinarily a person would be liable under tort law for inducing someone
to break his contract of employment, s. 18(2) grants immunity to registered trade
unions and all its members for doing the same, provided that the acts were done in
furtherance of a trade dispute. Furthermore, the inducement to break the contract of
employment itself must be entirely legal and cannot be done while committing an
offence as defined under s. 40 IPC. The breach of contract of employment has not
been strictly defined and what amounts to breach of contract varies from contract
to contract depending on the provisions of each particular contract.

In P. Mukanandan v. Mohan Kandy Pavithran 14

The striking workers who were members of two different trade unions appropriated
to themselves the proceeds from the sale of toddy drawn by them from trees on the
premises of the employer. The court held that the office bearers and members of a
registered trade union were protected from legal proceedings related to strike of
workmen. The strike conducted was completely legal and as a result, they were
protected by s. 18 of the Trade Unions Act. In Rohtas Industries Staff Union v.
State of Bihar15 the court held that even if a strike was illegal under the provisions
13
1981 (2) LLJ 393
14
(1992) IILLJ 160 Ker
15
AIR 1963 Pat 1970.
of s. 24(1) of the Industrial Disputes Act, 1947 the striking workers were entitled to
protection under s. 18 Trade Unions Act.

CONCLUSION

Since, the Industrial development in India is to a large extent inspired from the
English system; taking lessons from the problems faced by the trade unions in
England the Indian Trade Union Act 1926 provided certain immunities to the office
bearers of the trade union under section 17 and 18 of the act from criminal and
civil proceedings.

The effectiveness of the immunities granted under section 17 and 18 can be seen
from the various cases decided by the Indian judiciary, such as the case of
Standard Chartered Bank v Hindustan Engineering and General Mazdoor
Union and others.16 In this case the Delhi High Court although found that the
defendant union had no locus standi to hold the threatened demonstration in front
of the plaintiff’s office, yet it allowed the defendant to hold demonstrations at a
distance of 50 or 100 meters from the bank premises, and thus preserved and
protected the legitimate right of the union. A similar stand was taken by the same
court in the case of Vidya Sagar Institute of Mental Health And Neuro Services
v Vidya Sagar Hospital Employees Union17, in which the court allowed the
members of the union to peacefully demonstrate outside the radius of 200 metres
from the hospital premise so that their act won’t interfere in the normal functioning
of the hospital. This view was also further upheld by the same court in the case of
Superior Crafts v Centre of Indian Trade Unions and Others.

Thus it can be stated that the immunities granted under section 17 and 18 of the
Indian Trade Union Act are efficacious.

16
95 (2002) DLT 182
17
2006 LLR 283 (Del HC),