Can Trade Unions Be Formed During Factory Construction? Seeking Clarity on Legalities and Extensions

Dear Members,

Ours is a new steel project under construction, and a license under the Factories Act is being obtained. We have fully operational unions at our projects nearby the proposed steel plant. They have formed two unions (with 150 workmen each) at the construction site of the new plant and are extending the same registration of TU without new registration.

In this regard, please clarify the following:

1. Whether Trade Unions can be formed/allowed during the construction period of the factory?
2. Whether the Certificate of Trade Union at different projects can be extended to the new project at a different place? If so, how to extend?
3. Whether TUs in the mining sector can enlarge their activities to the Steel Industry?
4. Whether there is any case law in this regard?

Regards,
kadalirao

Trade Union Formation and Extension During Construction

This is a serious issue. In order to form a trade union, there should be at least seven persons employed in the establishment. Since the establishment is yet to start, how it is possible to get seven employees is not known to me. Now, the question of extending the trade union already existing to a unit coming up is possible with an amendment in the bylaws of the Trade Union which is existing in your establishment. With the help of employees engaged for the construction of the factory, a trade union cannot be formed as these employees will cease to be employees once the work is completed. It is advisable to make a representation before the Registrar of Trade Unions.

Regards,
Madhu.T.K

Thank you, Mr. Madhu, for your prompt reply. It is further to inform you that ours is an already established establishment with numerous projects and offices throughout India. We are currently diversifying our activities to include a "steel plant" alongside our core activity, mining. As a result, about 300 individuals who lost land have been directly appointed in lower cadre positions as workmen to fulfill one of the conditions related to their land loss. Additionally, some officers from different existing projects have been relocated to the new site. The workmen are now looking to form two Trade Unions. Construction activities are being carried out by contractors who provide manpower, whether regular employees or contract labor.

I would appreciate your comments on the situation.

Yours sincerely,
Kadalirao

An existing union can extend its activities. Since the matter is complicated, I advise you to seek legal opinion as well. In the meantime, let us wait for advice from other members. I hope Mr. V. Harikrishnan will be able to share his expertise on this subject. Please help.

Regards,
Madhu.T.K

From your posts in this thread, I presume that (please correct me if my presumption is wrong) during the construction of the project, certain workmen who were recruited to be employed in the steel plant have formed a Trade Union. Furthermore, a trade union of workmen in mines is extending its reach to the workmen employed in the steel plant as well.

Response to Your Questions

Your question No. 1: Regular workmen of the factory/establishment employed by the employer during the construction of the factory can form a union to negotiate with the employer. Workers employed by the contractor are not covered by my answer. The Trade Union Act does not prohibit such formation of trade unions at the time of the construction of the factory/project.

Your question No. 2: The bylaws of the trade union as registered with the Registrar of Trade Unions and subsequently amended, if any, according to the provisions of the Trade Unions Act, will have to be read to answer this question. Usually, the bylaws will specify who could become members of the union. The specification may be with reference to employment in a particular factory/factories/establishment(s) or a geographical area. Therefore, if the existing bylaws of the existing union provide for the inclusion of workmen employed in different projects of your company as the members of the union, then it can be done. If the bylaws are silent on this or do not contain such a provision, then the workmen employed in any projects/establishments/factories except those specified in the bylaws cannot become members, and the union cannot represent them. However, the bylaws can be amended to incorporate such a provision.

Your question No. 3: The answer is the same as the answer to your question number 2. If the existing bylaws permit the union to operate in the steel sector, they could do so. If the bylaws are silent, they cannot operate in the steel sector. However, the bylaws can be amended to include the steel sector.

Your question No. 4: I am not aware of any case law on this point.

The bylaws of a trade union are like the standing orders. Whatever the union, it cannot act beyond the areas covered by the bylaws nor can it act contrary to the provisions of the bylaws. My suggestion to you is whenever a union is formed or even in the case of existing unions, keep handy a copy of the bylaws registered with the Registrar of Trade Unions. This will be useful.

With regards,