PARADIGM SHIFT IN THE LABOUR POLICY IN INDIA

SUBJECT: Labour law

CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

SUBMITTED TO:-DR. SC ROY SUBMITTED BY:-Aman kumar singh

(Professor of law) ROLL NO. 1307

4th SEMESTER

TABLE OF CONTENTS
CHANAKYA NATIONAL LAW UNIVERSITY 1
I. TABLE OF CONTENTS...................................................................................... 2

II. ACKNOWLEDGEMENT.................................................................................... 3

III. DECLARATION .................................................................................................... 4

VI. RESEARCH METHODOLOGY......................................................................... 5

V. INTRODUCTION................................................................................................. 6

VI. BACKGROUND………………………………………………………….. 7

VII. ISSUE WITH CURRENT LABOUR POLICY………………………………. 11

VIII. SUGGESTION REQUIRED IN THE EXITSTING LAWS ……………12

XI. CONCLUSION…………………………………………………………………… 18

X. BIBLIOGRAPHY………………………………………………………………… 19

ACKNOWLEDGEMENT

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Intuition and concepts constitute ... the elements of all our knowledge, so that neither
concepts without an intuition in some way corresponding to them, nor intuition without
concepts, can yield knowledge. In a similar way the credit of developing this project goes to
many others who helped me in building both my concepts and intuitions.

I feel highly elated to present the Doctrinal Research on “PARADIGM SHIFT IN THE LABOUR
POLICY IN INDIA” which owes its very existence to a number of people without thanking
whom, I would fail to do proper justice to its original propounder.

I am indebted to my faculty of law of labour law, Mr. SC Roy for providing me with a
challenging & interesting project. I owe the credit of developing this project to him. Without
his guidance realization of this project would not have been possible. Thus I extend a sincere
heart-felt thanks, the ever helping Legal Language faculty of Chanakya National Law
University.

I would also like to thank my batch mates for the discussions that we had with them. All
these have resulted in the enrichment of my knowledge and their inputs have helped me to
incorporate relevant issues into my project.

---- Aman kumar singh

DECLARATION

CHANAKYA NATIONAL LAW UNIVERSITY 3

I hereby declare that the work reported in the BBA LL.B (Hons.) Project Report entitled
“PARADIGM SHIFT IN THE LABOUR POLICY IN INDIA ” submitted at Chanakya National Law
University, Patna is an authentic record of my work carried out under the supervision of Mr.
SC ROY. I have not submitted this work elsewhere for any other degree or diploma. I am fully
responsible for the contents of my Project Report.

NAME -Aman kumar singh

ROLL NO.-1307

RESEARCH METHODOLGY

Aims and Objectives:

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The aim of the project is to present a detailed study of the Mrs. SUSHMITA SINGH
through different writings.

Scope and Limitations:

Though this is an immense project and pages can be written over the topic but because of
certain restrictions and limitations I was not able to deal with the topic in great detail.

Method of Writing:

The method of writing followed in the course of this research paper is primarily descriptive.

Mode of Citation:

The researcher has followed a uniform mode of citation throughout the course of this research
paper.

Research Technique:

The research methodology used is basically Doctrinal in nature.

Sources of Data:

The following secondary sources of data have been used in the project-

1. Websites

2. Books

INTRODUCTION
Labour policy reforms in India are due for a long time, as the context in which they were
framed has changed drastically. The Laws framed mainly to cater the manufacturing sector,
do not address the problems of the service sector, which today, accounts for 55 per cent of
our GDP. The outdated and inflexible nature of labour laws protects a handful of say 6-7
percent of the workforce, seriously hampering employment generation capacity of the
organised sector and most of the 10-12 million youth joining labour force every year, are

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forced to join informal economy, where the working conditions are pathetic and earnings are
alsoabysmally.
Multiplicity of labour laws – 44 central and about 100 state laws – present operational
problems in implementation and compliances that need to be looked into. Besides, using
different terminologies like – employee, workman, worker to denote a worker or wages, basic
wages, salary referring to the compensation, yet covering different components in each
legislation, have made compliance very cumbersome multiplying litigations. In the market
economy of today, average self-life of a product is less than 6 months. Companies are under
pressure to innovate, redesign and technologically upgrade the products to suit consumers’
choices which is not possible without restructuring and rightsizing. Chapter V-B of the
Industrial Disputes Act, 1947 enacted during emergency puts all these processes under
Government purview which has promoted industrial sickness. Due to these serious policy
flaws, India is losing investments to its neighboring countries.

CHAPTER-2

BACKGROUND
India’s growth story has remained incomplete as it did not match with the required
employment growth. During the period, 2000 to 2009 the Indian economy grew at an average
rate of 8 per cent but employment growth was rather sluggish as demonstrated by the
following table.
Year Annual GDP

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Growth Rate
Employment
Growth Rate
Unemployment
Rate
1999-00 8.00 1.25 7.31
2004-05 7.05 2.62 8.28
2009-10 8.59 0.92 6.53

This is for a variety of reasons but most important is India’s obsession with an archaic labour
policy that is keeping investors away, hindering employment growth and making Indian
enterprises uncompetitive. To circumvent the rigorous labour policies, companies are either
shifting their manufacturing bases to foreign countries or turning capital intensive, reducing
their manpower needs. Besides swelling unemployment, these measures are also pushing
people to the informal sector.
India is a labour surplus country with 47 million unemployed below the age of 24 years and
12-13 million youths joining the labour market every year. To avoid the growing
unemployment, India strongly needs labour intensive and labour friendly industries.
Most of the labour laws were enacted 40-70 years back, to address the then needs of
regulating the manufacturing sector. Today, service sector has taken the lead with 55% share
in the GDP. Labour Laws need to be reoriented to address the emerging needs of the service
sector and the new technology intensive manufacturing sector.
Besides, in a dynamic economic context, laws need to be reviewed from time to time to bring
them in tune with the changing needs of the economy, such as higher levels of productivity,
competitiveness and investment promotion.Viewed from this perspective, FICCI feels that
the following changes in labour laws are overdue and must be brought in to ensure
employment led growth.

.Chapter-3

ISSUE WITH CURRENT LABOUR POLICY

1. Labour to be shifted to ‘State List’

Labour being in the concurrent list of the constitution, both central and state government
legislate on it. But the State Governments have limited space to enact labour laws to address
their own requirements - promoting investment and employment generation.

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To give more economic independence to the State Governments and promote federalism,
FICCI strongly pleads for shifting labour to the State list, from existing concurrent list of the
constitution.

2. Multiplicity of Labour Laws

Currently, there are 44 labour laws under the purview of Central Government and more than
100 under State Governments, which deal with a host of labour issues. Unfortunately, these
labour laws protect only 7-8 percent of the organised sector workers employed at the cost of
93 per cent unorganised sector workers. The entire gamut of the labour laws should therefore
be simplified, clubbed together wherever possible and made less cumbersome to make the
environment more employment friendly.

a. Simplification of archaic laws

We must create single window system under the common headlines/sets. Initially we can start
with reducing these to four sets of labour laws as following-
(i) Laws governing terms and conditions of employment, which may
consolidate:
(a) Industrial Disputes Act, 1947
(b) Industrial Employment (Standing Orders) Act, 1946
(c) Trade Unions Act. 1926

(ii) Laws governing wages, which may consolidate:

(a) Minimum Wages Act, 1948
(b) Payment of Wages Act, 1936
(c) Payment of Bonus Act, 1965

(iii) Laws governing welfare which may consolidate:

(a) Factories Act, 1948
(b) Shops and Establishments Act
(c) Maternity Benefits Act, 1961
(d) Employees’ Compensation Act, 1952 and
(e) Contract Labour (Regulation & Abolition) Act, 1970
(iv) Laws governing social security, which may consolidate:
(a) Employees Provident Funds and Miscellaneous Provisions
Act, 1952
(b) Employees State Insurance Act, 1948
(c) Payment of Gratuity Act, 1972

b. A uniform definition of terms like ‘industry’ and ‘worker’ is necessary across statutes. For
better interpretation and understanding, industry should be termed as ‘enterprise’ and
workman should be termed as ‘employee’.
c. Multiplicity of labour laws has promoted multiple inspections, returns and registers. To
avoid these, a single Labour Authority dealing with all aspect of labour, self-certification and
a single consolidated return should be put in place. We are given to understand that the
Labour Ministry has initiated developing a single web portal to address the issue of self-
certification and return, FICCI would like to appreciate the Ministry on this initiative.

d. Reduction/ reforms in dispute settlement mechanisms between labour and employers.

There are more than 4 levels of dispute settlement which are available after arbitration. These
should be reduced to maximum one or two levels on a priority basis.

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e. So far the applicability of labour laws is concerned the MSME sector is treated at par with
large scale enterprises with similar rigorous provisions in the legislations. Whereas, MSME
enterprises should be subjected to few simple and less cumbersome labour laws which make
compliance easier. FICCI would like to suggest that a separate set of simple labour laws
should apply to enterprises employing less than 50 employees to promote micro and small
enterprises with a self-contained code covering laws on employment relations, wages and
social security. These enterprises termed as ‘smaller enterprises’ should be exempted from
the application of the Industrial Disputes Act, 1947 and the Industrial Employment (Standing
Orders) Act, 1946 as recommended by the 2nd National Commission on labour

CHAPTER-3

Suggestions required in the existing laws

A. Industrial Disputes Act, 1947

i. Title and objective of the legislation

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The existing title Industrial Disputes Act, presupposes existence of disputes and limits the
scope of the legislation to resolving disputes only. To amplify its scope and promote
employer-employee relationship, the legislation should be renamed as ‘Employment
Relations Act’.
ii. Definition of ‘industry’
The definition of ‘industry’ under Section 2(j) had been amended in 1982, but could not be
enforced due to absence of a parallel machinery to investigate and settle the disputes in the
excluded category of the establishments. Parliament in its own wisdom thought it prudent to
save certain institutions like hospitals, education and research institutions from the vagaries
of industrial unrest like strikes and lockouts, and kept them out of preview of Section 2(j).
The amended definition of ‘industry’ should, therefore, be enforced forthwith.
iii. Definition of ‘workman’
Section 2(s) defining ‘workman’ needs to be amended. Excessive protection given to the
employees in the higher salary brackets in the organised sector like Airlines, Bank, Insurance,
etc., has not helped to make these employees accountable to the establishment and the society
at large. On the contrary, it has tended to erode the overall discipline. It is, therefore,
suggested that employees receiving a salary beyond `20,000/-, should be taken out of the
ambit of the definition of ‘workman’. Further, Supervisors, Managers and people
holding administrative positions irrespective of the salary limits, should be taken out from the
purview of the definition of ‘workman’.
iv. Notice of change
Section 9-A requires an employer to give 21 days’ notice to the Union before stipulating any
change in the service conditions. This includes, inter-alia changing of shifts, reducing or
increasing the staff strength as necessitated by the business needs or installing new
machines. This operates as a serious bottleneck, in industries, to address exigencies, such as
power shortage or rescheduling work to meet emergency demands. Therefore, to respond to
the market conditions and make full utilization of resources available, Section 9A
needs to be dropped. In this context, the 2nd National Commission on Labour has
recommended that no notice would be required with regard to rationalization, standardisation
dealt with by item No. 10 & 11 in Fourth Schedule. This may be implemented.
v. Strikes and Lock-outs
India is perhaps the only country, where the requirement of strike notice is absent barring
public utility service. This does not give adequate time to the parties to take pre-emptive steps
and avert the situation through negotiations. A reasonable period of notice of
strike is, therefore, essential. Section 23 of the ID Act to be amended to provide that a 14
days notice of strike should be compulsory. Further, to democratize the functioning of trade
unions, the Strike Ballot should be supported by at least 75% of the workers working in
the enterprise. Go-slow and work to rule are the most pernicious forms, even worse
than strike. The economic loss caused by go-slow is far graver than strike. It has not yet been
prohibited in our legislation. It should be recognized as a ‘strike’.
vi. Closure of units under NIMZ
The Government has proposed to insert a new Section 25 FFF (1C) & (1D) to extend the
existing provisions for closure of undertakings engaged in mining operation to manufacturing
unit setup in National Investment and Manufacturing Zone (NIMZ). In this context, a
tripartite discussion has already been held. While, FICCI wholeheartedly supports the
initiative, we further submit as under:-
a) The proposed new Section 25 FFF (1C) sub-clause (a), replace the words ‘same zone’ with
‘same zone or any other zone or in any other manufacturing unit outside the manufacturing
zone owned by the same employer’. The condition of same zone in case of closure of the unit
would be difficult to meet in most cases.

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b) The words ‘same employer’ should be clarified to include the group company also in the
proposed sub clause (a) of Section 25 FFF (1C).
c) One more sub-Clause needs to be inserted in the proposed new Section 25FFF (1C) - “The
workman is provided an alternative employment by the employer with the help of Special
Purpose Vehicle (SPV) in the National Investment and Manufacturing
Zones (NIMZ) with any other employer in the same NIMZ and on the same terms and
conditions from the date of closure of the Unit.”
d) In the light of b) & c) above, accordingly sub-clause D of the proposed Section 25 FFF
(1C) should be modified as follows “in case the workman employed in the manufacturing
sector under the NIMZ does not get an alternative employment in the same zone or any other
such zone or manufacturing unit outside the manufacturing zone owned by the same
employer or by any other employer in any other manufacturing zone or unit, the employer
will be liable to pay compensation at the rate of 20 days wages for every completed years of
continuous service or any part thereof in excess of six months”
e) The following sub-clause could be inserted after 25 FFF (1C)- "Provided that the prior
payment of compensation to the workman shall be a condition precedent to the closure of any
undertaking". This will help both the industry and labour as industry would be bound to pay
before effecting the closure and once the workmen accept the compensation the disputes
would be avoided.
f) In fact, Government could consider extending such benefits to other units also in NIMZ
which are not engaged in manufacturing.
g) While closing down the manufacturing unit or a part of it, prior permission of the
appropriate Government should not be required.
vii. Lay-off, Retrenchment and Closure
Chapter V-B of the Industrial Disputes Act, 1947, which provides for
obtaining a prior permission of the Government for effecting rationalizing measures like lay-
off, retrenchment or closure where the industry employees more than 100 workers, hampers
industry’s initiative to be competitive and face global challenges. This chapter was
incorporated during emergency in 1976 to provide for government intervention even in the
rationalization measures where an establishment employed more than 300 workmen. This
limit was further brought down to 100 workmen by another amendment in 1982. As the
experience goes this has significantly contributed to industrial sickness. Therefore, removal
of Chapter V-B has been recommended by a number of Committees, including Inter
Ministerial Working Group on Industrial Restructuring (1992) and Industrial Sickness and
Corporate Restructuring (1993), which observed that Chapter V-B has proved detrimental to
workers’ interest, hence, should be deleted.
The Prime Minister’s Council on Trade and Industry under the convenorship of Mr.
Mangalam Birla in the year, 2000 had observed that certain global benchmark are necessary
for running the business in the arena of globalisation. It, therefore, recommended allowing for
right sizing by paying compensation. It further recommended seeking prior permission for
closure only in the case where the establishment employs more than 1000 employees.
FICCI, however feels that Government should consider implementing the proposed
recommendation in stages and to begin with the threshold limit of 100 employees be raised to
300 employees. The issue of compensation may however be discussed. This has also been
recommended by the 2nd National Commission on Labour.
viii. Time Limit for raising disputes and filling claims
To discourage the filing of fictitious claims, a one year time limit should be fixed for raising
any disputes or filing of claims before the Authority for recovery of dues by a workman
under Section 33-C (2) and no belated claims should be entertained by any authority or the
court.

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ix. Voluntary Arbitration must be Promoted to Discourage Litigation Section 10A, providing
for Voluntary Arbitration, has failed in its objective. Arbitration should be promoted as an
alternative dispute resolution machinery to discourage litigation. A panel of expert
arbitrators to be drawn up for the purpose.
x. Publication of Awards
According to Section 17 of the existing Industrial Disputes Act, only a published award
becomes enforceable on the expiry of 30 days from date of its publication. The requirement
of publishing Award is a mere formality, consuming time and resources. The same can be
communicated to the parties like a Judgment of the Civil Court, which should become
enforceable on the expiry of 30 days after the Judgment, to give adequate time to parties to
file Appeal, if it is necessary.
xi. Payment of wages during pending proceedings in higher courts Payment of full wages to
the workmen pending proceedings in the higher court, under Section 17B of the Industrial
Disputes Act is an iniquitous provision as much as the back wages paid to the employee
is not recoverable, even if the award of the Labour Court/Industrial Tribunal is quashed by
the higher courts. In this context, FICCI fully supports the recommendation of the 2nd
National Commission on Labour to leave the issue on the concerned high courts or supreme
courts to decide the issue on merits of each case.
B. Contract Labour (Regulation and Abolition) Act, 1970
i. Contracting out job work, services or employing contract employees, provides flexibility,
leads to efficient idealization of resources and improves overall competitiveness. Successful
organisations and big trading companies float subsidiary companies to look after the
peripheral and non-core activities of the organisation to achieve efficiency, cost effectiveness
and optimization of profits and productivity to maintain a competitive edge in the global
arena. It is at the same time promoting employment.
ii. Applicability
The provisions of the Act should not apply to enterprises employing upto 50 workers to
provide relief to a sizeable number of MSME units.
iii. Deletion of Section 10
Due to abolition of Contract Labour from one operation to the other, industry is finding it
difficult to engage extra hands to discharge shorttermn contract including export
commitments; as a result, employment generation is also suffering. Section 10 of the Contract
Labour (Regulation & Abolition) Act, 1970 should, therefore, be deleted to
provide flexibility to engage contract workers.
iv. Mode of Payment – Rule 69
The current provision in Rule 69 of the Contract Labour (Regulation and Abolition) Central
Rules, 1971 provides for payment of ‘all the wages in current coin or currency or in both’,
should be suitably amended to enable making all the payments to contract workers through
cheque/bank accounts. In this regard, the Government should relax the current KYC norms
for enabling contract workers to open bank account. Another option could be that the
registered address of the contractor may be accepted as address proof. With more than 30
million contract workers, this will help in promoting and fulfilling Government’s vision of
‘financial inclusion’. In this context, the Maharashtra government has mandated that all the
payment to contract workers should be made through bank accounts.
v. Contractors be treated as a separate establishment
Most of the problems in the existing contract labour legislation arise because of workers
being exploited in the hands of unscrupulous Contractors, despite welfare initiatives taken by
the Principal Employers. A provision be laid down in the Act underlying certain eligibility
criteria (annual turnover or total number of workers) to be fulfilled by the contractors before

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obtaining a license from the licensing officer. The contractor who has met all the criteria and
obtained license under the Act be treated as a separate establishment and shall be fully
accountable as Principal Employer for any type of compliance/liability.
C. Factories Act, 1948
FICCI has examined the proposed amendments to the Factories Act, 1948 at length and also
participated in the deliberations, raising issues and concerns touching upon industry. FICCI
would like to thank the Government for appreciating some of the concerns raised by us
during discussions and also taking some of our submissions on record. However, FICCI is of
view that some of the important points raised during the discussions were not taken into
consideration. The Government may like to reconsider the following:
i. Applicability
The Factories Act, 1948 applies to a manufacturing unit employing 10 workers if the work is
being done with the aid of power, or employing 20 workers without the aid of power.
This limit was fixed more than 60 years back, and since then many safe and hazard free
technologies/processes have been developed and are being used. Yet, even smaller units
employing as low as 10 workers are subjected to the same elaborate and harsh provisions of
the Factories Act, 1948.
In order to escape the rigorous provisions of the legislation, many times the small
manufacturing units employ less than the threshold limit and employment is directly affected.
FICCI therefore recommends that the definition of factory under section 2(m) of the Factories
Act be amended to cover a manufacturing unit employing 20 workers if working with
the aid of power or employing 40 workers if working without power.
ii. Definition of ‘Occupier’ Section 2 (n) ‘Occupier’ shall be a person who has ultimate
control over the affairs of the factory but restricting the definition of ‘Occupier’ only
to a ‘Director’ in the case of Private sector with multiple factories, who may not be stationed
at the site of the factory all the times, puts unreasonable restrictions. Rather the definition of
“occupier” need to be extended to any managerial person vested with the ultimate control of
the factory by a resolution of the Board of Directors.
iii. Annual Leave with Wages (Section 79)
The proposal for reducing the qualifying period of worked days from 240 to 90 days for
availing annual leave with wages will promote unnecessary absenteeism among the regular
workers. However, the proposal can be made applicable for the baadli/casual worker by
mentioning it in a specific clause. In case of regular workers the existing 240 days may
continue.
D. The Shops and Establishments Act
i. Applicability: This Act applies to every shop and commercial establishment. It does not
make any differentiation between a convenience shop, small establishment or the Head
Quarters of a large company. The same rules apply to all. The rules do not cognize for the
size, complexity of business, the market environment or the superior terms and conditions /
benefits provided in large establishments. A threshold limit in terms of manpower employed
is necessary to save entrepreneurial initiative. Therefore, establishments employing less
than 10 persons should not be covered by the Shops and Establishments Act.
ii. State level norms: Most establishments have branches in different states. This being a State
legislation, each State is empowered to make their own rules. For example, the leave
provisions vary from state to state, making it complicated for establishments having branches
in different states. Compliance with different set of rules is not possible since the terms and
conditions are same for a category of employees, and the employees re-transferable from one
state to another. It is therefore suggested that establishments may be given the flexibility of
following the rules of any one given state, preferably the State where the head-quarters exist.

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iii. Exemption: Provision related to exemption of those working in managerial,
administrative, supervisory or confidential capacity varies from state to state. In some states,
some of them are exempted, in some states exemption needs to be taken, and in some states
there is no provision for exemption. It is suggested that all managerial / supervisory /
administrative staff and those in similar roles be automatically exempted. The other
suggestion is to exclude all those drawing wages above Rs.15,000/-.
iv. Daily closing of shops: As per the Act, every shop has to remain closed on every Sunday,
provided the authorities prescribe some other day of the week as the day for closing. The Act
does not cognize for today’s consumer dynamics, which in many cases mandates 24 hours
operations on all days of the year. The employer should have the flexibility to run the
establishment on a continuous basis, as long as the provisions of working hours applicable for
employees are complied with.
v. Engagement of women: Given the changing nature of employment, especially in the
service sector like Hotels, Hospitals, IT / ITES, Airports, etc. women should be permitted to
work in shifts including night shifts, subject to prescribed safe-guards being followed.
E. Payment of Bonus Act, 1965
Bonus should be strictly linked to productivity and profitability. Therefore, section 10 and 11
of the Payment of Bonus Act, 1965 should be deleted so that there is no upper or lower
ceiling for payment of bonus
F. Industrial Employment (Standing Orders) Act, 1946
i. Introduction of Fixed Term Employment
Fixed term employment is needed to execute time bound projects and short term contracts
where the manpower employed could be dispensed with on the completion of the project.
Recognising this fact, the NDA Government in 2003 had amended Industrial Employment
(Standing Orders) Act, 1946 to introduce ‘fixed term employment’ as one of the categories of
employees in the Schedule. This was however repealed in 2007. The category of ‘fixed term
employment’ may be reintroduced in the Schedule.
G. Employees’ State Insurance Act, 1948
i. Applicability and Coverage
During the previous Government’s regime, the ESIC in its meeting held on September 19,
2013, proposed for enhancement of the salary limit for coverage of employees under the ESI
Act from existing limit of Rs. 15000/- to Rs. 25000/- per month, and it was approved by the
corporation despite objections raised by the employers’ representatives. This extra burden,
due to enhancing the coverage, would negatively impact the viability of the enterprises and
would even lead to a negative effect on employment generation. Moreover, the ESI
dispensaries are lacking in important medicines, doctors, paramedical staff and other
important infrastructure, hampering regular and satisfactory services to the employees.
FICCI therefore, feels that the Government should scrap the proposal.
H. Trade Unions Act, 1926
i. Multiplicity of Trade Unions Multiplicity of Trade Unions promote inter and intra union
rivalry, hence, a bane to promote bi-partism. There are countries like Japan and Australia
where ‘one enterprise one union’ is a benchmark. On the contrary, in India, we have multiple
unions in one enterprise, promoting inter and intra union rivalry adversely affecting
production, productivity, industrial relations.
To reduce this multiplicity, only trade unions having membership of at least 25% of the total
work force in an enterprise should be registered. Section 4 of the Trade Unions Act, 1926
should therefore be amended accordingly.
ii. Recognised Bargaining Agent
Absence of a Recognised Bargaining Agent weakens the process of collective bargaining,
opening scope for litigations. The Trade Unions Act should, therefore, provide for

CHANAKYA NATIONAL LAW UNIVERSITY 14

recognition of the Bargaining Agent. A union with 51% membership should be recognized as
the Sole Bargaining Agent. In case, no single union has 51%, the top 2-3 unions with more
than 25% membership may come together to form Joint Bargaining Council. A union with
less than 25% membership should not have a right to challenge a collective agreement nor
raise a collective dispute. A new provision in the Trade Unions Act should therefore be
inserted suitably.
iii. Trade Union Executive
The number of outsiders in the Trade Union Executive should be restricted to a maximum of
two persons as against 50 percent in the legislation and out of the two top positions of
'President' and 'General Secretary' at least one post should be held by the internal employee.
Section 22 of the Trade Unions Act should be amended accordingly.
iv. Registration – Trade Union
Registration of a Trade Union should be compulsory and the registration is liable for
automatic cancellation if the Union fails to hold elections every year, and also does not
submit return in time to the
Registrar of Trade Unions.
v. Politics and Trade Unionism
Adequate arrangement should be done including amending Section 16

CONCLUSION

From the above article we can conclude that a void agreement does not have legal
enforceability while an illegal agreement whose formation is prohibited by the law. A void
agreement turns into void when an agreement gives up its enforceability by the law but an
CHANAKYA NATIONAL LAW UNIVERSITY 15
illegal agreement turns into void from the start of the agreement. A void agreement is not
prohibited, its scope is wider but an illegal agreement is prohibited and its scope is narrow.

In void agreement, parties involve can’t be liable for punishment, money got can be claimed,
object is not illegal while in illegal agreement , parties involve are liable for punishment,
money can’t be claimed, object is illegal. Collateral agreement related to void agreement can
be valid or can be void however collateral agreements related to an illegal agreement are void
from the beginning of the agreement so they can’t enforceable. \

BIBLIOGRAPHY

BOOKS:

CHANAKYA NATIONAL LAW UNIVERSITY 16

Industrial Relations and Labour Laws- S.C. Srivastava

Websites

http://lawquestinternational.com/article/labour-law-changes-india

http://www.thehindu.com/business/Industry/government-aims-to-move-five-more-
reforms-to-labour-laws/article7955265.ece

CHANAKYA NATIONAL LAW UNIVERSITY 17