Can Third-Party Contract Workers Form a Union and What Happens If They Do?

Hello Friends, I wanted to have information. The laborers in any factory who are working as third-party contract laborers, can they form a union? If they form a union and the company is against it, what actions can be taken by the company in such a scenario?

They can. In our previous organization, where close to 1,000 contract laborers were working, a union affiliated with CITU was started. Although we were able to suppress it, CITU began attracting the contract workers and made it function with the minimum stipulated number of office bearers, bringing people from outside to hold demonstrations. This is very dangerous for management once they even conceive the idea and start it.

Regards,
Ganesh Ramachandran

Union Formation by Contract Workers

A major Public Sector Undertaking, Neyveli Lignite Corporation Limited, in Neyveli, Tamil Nadu, engages contract labor, and the contract workers have formed several unions. Recently, they went on strike, and the management negotiated with them. The workmen engaged through a contractor can form a union, and this union could be registered under the Trade Unions Act if the conditions specified under the Trade Unions Act are fulfilled. Any action the company takes against the formation of the union would amount to an unfair labor practice.

Regards,

I endorse the views of Mr. Harikrishnan. Forming a union is the right of the workers, whether they are contract workmen or regular employees. If they are the workmen of your contractor and have not completed 240 days, and you have not exercised your direct supervision and control over them, you can cancel the contract itself with the contractor. Once there is no existence of the contractor himself, there is no question of his workmen working in your organization.

You need to handle this meticulously, gather all information with respect to this exercise, and launch this.

Regards,
Balaji

To address your query, there are a few points that we need to note:

1. Whether the contract is a genuine contract or a "sham"?

2. If the contract is a sham, the next question is how many days these workmen were employed by the principal employer in his factory?

3. Once the "supervision and control" aspect is established, you (your organization) will be construed to be his employer.

4. Once the Employee–Employer relationship between you and the contractor labor is established, and you check a person out who has put in 240 days of work, it will be construed as retrenchment. Therefore, [sec 2 (oo)] of the I.D. Act will apply to you.

5. Following are the excerpts from the ID Act:

6. Once they prove that they have worked with the contractor for a minimum of 240 days, the court may hold and an order may be passed for reinstatement (with or without back wages).

***

Industrial Disputes Act, 1947

25B. Definition of Continuous Service

For the purposes of this Chapter:

(1) A workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman.

(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer:

(a) For a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than:

(i) One hundred and ninety days in the case of a workman employed below ground in a mine; and

(ii) Two hundred and forty days, in any other case;

(b) For a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than:

(i) Ninety-five days, in the case of a workman employed below ground in a mine; and

(ii) One hundred and twenty days, in any other case.

While they can always form a union, does the employer have to recognize it? Does he have to provide facilities like space for a union office and time off to union officials? I think that will not apply to contract workers.

Clarification on Union Formation and Employer Obligations

About Mr. Balaji's points, I think two things got mixed up. Please clarify:

The company cannot stop union formation if it is proved that the contract is a sham and that the company had control and supervision of the workers. If both of these are not proved, then they can't be stopped from canceling the contract and removing all the workmen. They can give the contract to a different contractor.

Reality vs. Legality in Union Matters

However, reality may be different from legality. If the union is strong and capable of resorting to violence, stoppage of work, preventing others from entering, or preventing trucks from moving in or out, then all the legal aspects can take a hike. So don't be blinded by the moral side of whether you are right. As Mr. Ganesh said above, you have to be careful. It's a dangerous idea when it starts.

The Debate on Contract Laborers

Why is there so much debate on this issue? Look at this from a different angle and perspective. Don't you think that contract laborers are not considered human beings? Does the principal employer or contractor have the moral right to exploit them in all respects? If contract laborers form a union, what is wrong with it? Treat them as human beings, and all problems will be solved.

Regards,
Avinash Kanoray

I completely agree. The number of days worked, whether 240 or not, is not so much material for Prohibition and Abolition of Contract Labours under CL(R&A) Act. What is material is direct supervision and control by the Principal Employer, or whether the contract is a sham or camouflage and the real primary control is with the Principal Employer.

Yes, after that, other relevant facts and circumstances have to be taken into consideration, like the number of days, etc. However, it will be treated as secondary evidence, not primary evidence. Once it is proved, in that case, the appropriate government can direct the absorption of such workers by the Principal Employer.

The Contractor's Worker has the right to make a Union; there is nothing in Law or Trade Union Act which bars them.

In fact, I would suggest that there should be a union for contractual workers also because such workers are always seen as inferior to regular workers, even paid less than regular workers, for a similar kind of work.

Being a union, they should be able to bargain better.

Regards

Political Influence on Contract Labor Unions

It is observed that most of the contract workers who form unions are promoted by political parties, and at times, the benefits end up with the leaders of these parties. It is high time that the government enacts provisions to stop the interference of political parties and moves forward with the abolition of contract labor in our country because this category is the most exploited in both the organized and unorganized sectors.

Unfortunately, the government is the largest employer of contract labor, and the postal department is a classic example of how people have lost faith in the postal system of this country due to contract labor.