Hi All, On what grounds can contract workers form a union? Regards, Raja
From India, Hyderabad
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Dear Koti,

Contract workers can form a union, and this right is derived from the Trade Unions Act, 1926. They are not excluded from the definition of "workers" under the Act, making them eligible to create or join a trade union.

While the Contract Labour (Regulation and Abolition) Act, 1970 governs the working conditions of contract labor, their right to form a union is protected under the Trade Unions Act, 1926. Contract labor is entitled to the same rights as any other workers when it comes to forming unions and protecting their interests.

As per the Trade Unions Act, 1926:

1. Right to Form a Union:

Under Section 2(h) of the Trade Unions Act, 1926, a "Trade Union" is defined as any combination of workers or employers whose primary purpose is regulating relations between workers and employers, or among workers themselves. The definition of "workers" includes contract labor, as there is no exclusion of any category of workers. This means contract workers can form or join trade unions.

2. Eligibility to Form a Union:

Under Section 4 of the Act, any seven or more members of a trade union can apply for the registration of the union. Contract workers can meet this requirement and register their own union or join an existing one.

3. Protection of Rights:

Section 10 of the Trade Unions Act, 1926, provides that registered trade unions are bodies corporate, giving them legal status and the right to sue or be sued. This ensures that even contract workers who form a union can enjoy legal protection. Once the trade union is registered, it has rights like collective bargaining, negotiating working conditions, wages, etc.

From India, Karimnagar
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  • CA
    CiteHR.AI
    (Fact Checked)-The user reply is mostly correct. Contract workers can indeed form a union under the Trade Unions Act, 1926, as they are not excluded from the definition of "workers". The information provided aligns with the relevant laws and regulations. (1 Acknowledge point)
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  • Very true, but a trade union is also an association of persons with common interests. Therefore, you cannot have contract workmen in the same trade union as regular workmen. A trade union of regular workmen cannot ask the employer to negotiate on matters concerning the contract workers. However, being workers, the contract laborers can form a separate union and present their charter of demands to their employer, i.e., the Contractor. The Contractor, in turn, can negotiate with the employer.
    From India, Kannur
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  • CA
    CiteHR.AI
    (Fact Checked)-The reply provided is correct regarding contract workers forming their own separate union and negotiating with their employer. No amendments needed. (1 Acknowledge point)
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  • I think there are enough cases where trade unions have negotiated directly with the company. The company has very little option if they are on strike and disrupting the business, especially if they are supported by local political parties who ensure that the company can simply replace striking contract workers.

    Mostly, the trade unions know the contractor is just a flimsy front and has no rights or decision-making power, so they will insist on going directly to the principal employer for negotiations.

    From India, Mumbai
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    I have one question here.

    Suppose "A" is the company and "B" is the contractor. A has awarded the contract to B for the deployment of manpower. The worker of the contractor has formed a union. This came to the notice of the company, and the company has terminated the contract of the contractor.

    Will the workers still have the right to bargain with the company?

    From India, Hyderabad
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  • CA
    CiteHR.AI
    (Fact Checked)-The termination of the contract between "A" and "B" due to workers forming a union does not eliminate workers' rights. Workers can still bargain with "A" as they have the right to form a union irrespective of the contract status. (1 Acknowledge point)
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  • That depends on circumstances. They can always raise an industrial dispute if they can show that management had control over workers and work processes, or that the job was a core function or perennial in nature. If they can prove it, they can force the company to actually absorb all the contract workers as direct employees and also pay restitution.
    From India, Mumbai
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    In principle, the workers of the contractor have no lien on employment with the principal employer, i.e., the company. Their contract of employment is with their employer, i.e., the contractor. Therefore, as soon as the contract with a company is terminated, the contractor will have to address the issue of either deploying the workers (of the contractor) in other plants or to retrench them. In this process, the principal employer has no obligation. The workers of the contractor also do not have any right to raise an industrial dispute against the principal employer, though they can raise it against their employer, i.e., the contractor, for non-employment, etc.

    However, in practice, in such scenarios, the union will raise a dispute against the principal employer only, knowing that it is just illegal. But a strike, being a manifestation of the right of workmen, will get support from the media and the public. They are not concerned with what is written in the law, but for them, those who work for the company are workers of the company only. If it is established that the same workers of the contractor were being controlled and supervised by the supervisors of the company, the contract would become a sham contract leading to make the strike a legal one.

    From India, Kannur
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    My doubt how can they shown that they are being supervised by the company. Any specific examples or case laws on this Please share
    From India, Hyderabad
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    That is very easy. There will be enough documentation, emails, actions, etc. Or, they will just call other workers as witnesses in court. Even your own managers and staff may find it unworthy to lie in court under oath.

    The oral evidence given by workers is likely to be believed by the courts. Circumstantial evidence will be there to support it, e.g., an email by a manager to the worker or to the contractor allowing leave for a worker.

    From India, Mumbai
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    Rajainakoti, is it the evidence that worries you or case studies that circumstances like this would make the contract sham?
    From India, Kannur
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    I am trying to understand various seniaros how contract labour can become an obligation to principal after forming union
    From India, Hyderabad
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    I am trying to understand various seniaros where people formed Unions. And on what basis unions are recognised
    From India, Hyderabad
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  • CA
    CiteHR.AI
    (Fact Checked)-The formation of unions by contract workers is based on the same grounds as regular employees, provided they meet the criteria set by labor laws and have a common interest in collective bargaining. (1 Acknowledge point)
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  • You have not clearly stated why the contract workers formed a union. If there is any nexus of control by the principal employer, then the union formed by the contract workers will ask you to negotiate with it. At the same time, if the contract is not a sham but genuine, ignore the union. Let the contractor deal with the union. If the workers are creating issues on your premises, not delivering the expected results, then terminate the contract itself. In such scenarios, the question of recognizing the union will not arise. On the other hand, if the contract itself is just a camouflage arrangement, then there is no other way; you should recognize them and negotiate with them.
    From India, Kannur
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