Supreme Court Dismisses Appeal on Trade Union Membership: All Escorts Employees Union vs. State of Haryana (2017)

Date of the Judgment: 14 September 2017

Citation: 2017 INSC 773

Judges: A.K. Sikri, J. and Ashok Bhushan, J.

Can a trade union represent workers from multiple, distinct industries? The Supreme Court of India recently addressed this question in a case involving the All Escorts Employees Union. The core issue was whether a trade union could amend its constitution to include workers from a company that was previously part of the Escorts Group but had since become a separate entity. The Supreme Court, in a two-judge bench comprising Justice A.K. Sikri and Justice Ashok Bhushan, dismissed the appeal, leaving the question of law open.

Case Background

The All Escorts Employees Union was formed in 1968 and is a registered trade union representing employees of the Escorts Group of Industries. This group included Escorts Ltd., Escorts Yamaha Ltd., Escorts JCB Ltd., Escorts Class Ltd., and Escorts Hospital. Initially, all workers from these industries were members of the Union.

In 2001, Escorts Yamaha Ltd. was taken over by Yamaha Motor Company, Japan, and renamed Yamaha Motor India Private Limited (‘Yamaha’). Following this, workers at Yamaha ceased to be members of the Union due to the original constitution of the Union. The Union then amended its constitution to include workers of any erstwhile Escorts concern in Haryana, which was not approved by the Registrar, Trade Union, Haryana.

Timeline

Course of Proceedings

The Registrar of Trade Unions did not approve the amendment to Clause 4 of the Union’s constitution. The appellant-Union challenged this decision in the High Court of Punjab & Haryana, which also dismissed the writ petition. The High Court reasoned that there must be a direct connection between the industry and its workers for a trade union to represent them. The High Court emphasized that a trade union should not be for collective bargaining in a trade dispute where the Trade Union is not connected at all with the industry.

Legal Framework

The case revolves around the interpretation of the Trade Unions Act, 1926. Key provisions include:

• Section 2(g) defines “trade dispute” as “any dispute between employers and workmen, or between workmen and workmen, or between employers and employers which is connected with the employment or non-employment, or the terms of employment or the conditions of labour, of any person.”
• Section 2(h) defines “trade union” as “any combination, whether temporary or permanent, formed 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.”
• Section 6(e) of the Act mandates that a Trade Union’s constitution/bye-laws/rules should include “the admission of ordinary members who shall be persons actually engaged or employed in an industry with which the Trade Union is connected.”

The Act aims to regulate the relationship between workmen and employers and to promote peaceful industrial relations. The High Court interpreted these provisions to mean that a trade union must have a direct connection with the industry where its members are employed.

Arguments

Appellant-Union’s Arguments:

• The appellant-Union argued that the Registrar, Trade Union’s power under Section 8 of the Trade Unions Act, 1926 is administrative and not quasi-judicial.
• The Union contended that the definition of “Trade Dispute” in Section 2(g) and “Trade Union” in Section 2(h) of the Act does not limit membership to workers of a particular industry.
• The appellant-Union submitted that the right to form a trade union is protected under Article 19(1)(c) of the Constitution of India.
• The appellant-Union argued that the amendment to its constitution broadened the scope of its membership clause, allowing workers of Yamaha to join, and that the choice to join or not lies with the workers.
• The Union emphasized that workers of Yamaha continued to be members even after the formation of Yamaha, and the Union had entered into settlements with Yamaha.

Respondents’ Arguments:

• The respondents argued that the purpose of a trade union is to maintain harmony in relations between persons involved in industrial activity.
• They contended that a trade union is a tool for collective bargaining and not to disrupt the entire industry.
• The respondents highlighted the 2001 amendment to the Act, which requires that persons applying for registration of a trade union must be workmen engaged or employed in the establishment or an industry.
• They argued that the right to negotiate and protection from civil and criminal liability is available only to those working with a particular establishment or industry.
• The respondents submitted that allowing a union to include members from different industries would lead to unnecessary interference in the normal functioning of the units.
• They argued that the right to form an association is not the same as the right of an individual to form such associations, and therefore, Article 19(1)(c) cannot be invoked.

Yamaha’s Arguments:

• Yamaha argued that after separation from Escorts, it had informed its workmen that it could not grant recognition to the appellant-Union.
• Yamaha contended that there was no commonality of interest between the workers of Escorts and Yamaha.
• Yamaha submitted that the workers of its Surajpur Plant had formed a separate union, “Yamaha Motor Employees Union,” which was duly registered.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether a Trade Union can have a membership of the workmen from other industries?

Treatment of the Issue by the Court

Authorities

The Court considered the following legal provisions:

• Section 2(g) of the Trade Unions Act, 1926: Definition of “trade dispute.”
• Section 2(h) of the Trade Unions Act, 1926: Definition of “trade union.”
• Section 6(e) of the Trade Unions Act, 1926: Mandates that ordinary members of a trade union should be persons engaged or employed in an industry with which the union is connected.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Section 2(g) of the Trade Unions Act, 1926: The Court referred to this definition to highlight that trade unions of workmen while regulating their relations between the employers would normally have negotiations representing its workmen before the employer and in case those negotiations do not result in amicable settlement or resolution of disputes, such Trade Unions would raise trade dispute with its employer.
• Section 2(h) of the Trade Unions Act, 1926: The Court referred to this definition to highlight that such a Union is formed primarily for the purpose of regulating the relations between workmen and employers.
• Section 6(e) of the Trade Unions Act, 1926: The Court observed that this provision implicitly confines the membership to those who are the workmen of the industry where they are employed.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the workers of Yamaha had formed their own separate union, which was duly registered. This development rendered the issue of amending Clause 4 of the appellant-Union’s constitution a non-issue. The Court also noted that the appellant-Union had already amended its constitution in 2007, which was approved by the Registrar, further diminishing the relevance of the original dispute. The Court emphasized the importance of a direct connection between a trade union and the industry where its members are employed, as reflected in Section 6(e) of the Trade Unions Act, 1926. The Court did not delve into the merits of the legal question raised by the appellant-Union, as the factual matrix of the case had changed.

Fact:Law Ratio

Logical Reasoning:

The Court did not explicitly answer the question of law, stating, “In view of the aforesaid, it is not necessary to deal with the issue raised in these appeals as the issue does not survive.” The Court also noted, “At this juncture, it becomes pertinent to note that the workers of Yamaha have formed their own separate Union, known as Yamaha Motor Employees Union.” and “In any case, Clause 4 was amended in the year 2007 and that amendment has been approved by the Registrar, Trade Union. Therefore, issue of amendment in Clause 4, as carried out in June, 2001, becomes a non-issue.”

Key Takeaways

• The Supreme Court did not address the core legal question of whether a trade union can have members from different industries, leaving the issue open for future consideration.
• The formation of a separate union by the workers of Yamaha was a key factor in the Court’s decision.
• The Court emphasized the importance of a direct connection between a trade union and the industry where its members are employed, as per Section 6(e) of the Trade Unions Act, 1926.
• The Court highlighted that any change in the factual matrix of the case may render the issue moot.

Directions

No specific directions were given by the Supreme Court.

Development of Law

The ratio decidendi of the case is that the Supreme Court did not decide on the question of law as to whether a Trade Union can have a membership of the workmen from other industries. The court dismissed the appeal on the basis of the factual matrix of the case, which is the formation of the separate union by the workers of Yamaha. There is no change in the previous position of law.

Conclusion

The Supreme Court dismissed the appeals filed by the All Escorts Employees Union, leaving open the question of whether a trade union can have members from different industries. The Court’s decision was primarily based on the fact that the workers of Yamaha had formed their own separate union, and that the appellant-Union had already amended its constitution in 2007, which was approved by the Registrar. Therefore, the issue of the amendment of Clause 4 in 2001 became a non-issue.

Category

• Parent Category: Labour Law
  • Child Category: Trade Unions Act, 1926
  • Child Category: Section 2(g), Trade Unions Act, 1926
  • Child Category: Section 2(h), Trade Unions Act, 1926
  • Child Category: Section 6(e), Trade Unions Act, 1926

FAQ

Q: Can a trade union include members from different companies?
A: The Supreme Court did not definitively answer this question in this case. The Court dismissed the appeal based on the specific facts of the case, leaving the legal issue open for future consideration.

Q: What is the significance of Section 6(e) of the Trade Unions Act, 1926?
A: Section 6(e) mandates that ordinary members of a trade union should be persons engaged or employed in an industry with which the union is connected. This provision was highlighted by the Court as an important aspect of trade union membership.

Q: What should a trade union do if its members are from different industries?
A: This case suggests that trade unions should ensure that their membership aligns with the industries they represent. If workers from a particular industry form a separate union, it may be necessary to adjust the membership of the original union.

Q: What does it mean that the Supreme Court left the question of law open?
A: It means that the Supreme Court did not provide a conclusive answer to the legal question of whether a trade union can have members from different industries. This issue may be revisited in future cases.