Trade Union Recognition: Single Negotiating Union Concept under the Industrial Relations Code, 2020

Introduction

The framework of industrial relations in India stands at a transformative juncture with the introduction of the Industrial Relations Code, 2020, which brings forth the concept of a single negotiating union for industrial establishments. This landmark legislation consolidates three major pre-existing labour laws and introduces statutory mechanisms for union recognition that were previously governed largely by voluntary codes and state-specific legislation. The single negotiating union concept represents a fundamental shift in how workers’ collective bargaining rights are structured and exercised in Indian workplaces, moving from a fragmented system of multiple competing unions to a more streamlined approach aimed at reducing industrial conflicts and facilitating effective dialogue between management and labour.

The recognition of trade unions has been a contentious issue in Indian labour jurisprudence for decades. While the Trade Unions Act, 1926 provided for the registration of unions, it remained conspicuously silent on the critical matter of recognition, leaving employers with no statutory obligation to engage with registered unions. This gap created an imbalanced power dynamic where workers’ constitutional right to form associations under Article 19(1)(c) of the Constitution of India could be exercised in theory but rendered ineffective in practice without employer recognition. The Industrial Relations Code, 2020 seeks to address this historical deficit by introducing clear provisions for the recognition of negotiating unions and negotiating councils, thereby providing workers with not just the right to organize but also the right to meaningful collective bargaining.

Historical Context and Evolution of Trade Union Recognition

The journey toward statutory recognition of trade unions in India has been long and arduous. Trade unionism in the country emerged during the late nineteenth century with the establishment of the Bombay Mill-Hands Association in 1890, followed by the formation of the All India Trade Union Congress in 1920.[1] The Trade Unions Act, 1926 was enacted to provide legal recognition and protection to trade unions, marking the first formal legislative framework for labour organization in India. However, this Act focused primarily on registration procedures and did not address the crucial question of recognition by employers.

The deficiency in the Trade Unions Act, 1926 regarding recognition was acknowledged early on. The Indian Trade Unions (Amendment) Act, 1947 attempted to introduce provisions for mandatory recognition of trade unions by inserting Chapter III-A into the principal Act. This amendment required unions to be representative of all workers employed in an industry to qualify for recognition. However, this Amendment Act was never brought into force, leaving the issue of recognition unresolved at the central level.[2]

In the absence of central legislation, various states took the initiative to enact their own recognition laws. Maharashtra pioneered this effort with the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, which provided detailed mechanisms for union recognition and defined unfair labour practices by both employers and unions.[3] Other states including Madhya Pradesh, West Bengal, Kerala, and Rajasthan followed suit with their own legislative frameworks. These state laws varied in their criteria for recognition, creating a patchwork of different standards across the country.

At the national level, recognition of trade unions has been primarily governed by the voluntary Code of Discipline, which was ratified by representatives of employers and central trade union organizations at the sixteenth session of the Indian Labour Conference held at Nainital in May 1958.[4] The Code of Discipline established criteria for union recognition based on membership strength and functioning period, providing guidelines that could be mutually adopted by employers and unions. While influential, the voluntary nature of this code meant that its enforcement remained inconsistent and subject to the goodwill of management.

The Industrial Relations Code, 2020: A Statutory Framework

The Industrial Relations Code, 2020, which received presidential assent on September 28, 2020, represents a watershed moment in Indian labour law. This Code consolidates and amends three central labour laws: the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946; and the Industrial Disputes Act, 1947. The Code introduces several transformative provisions, with the concept of negotiating unions and negotiating councils being among the most significant innovations.[5]

Definition and Scope of Negotiating Union

Section 14 of the Industrial Relations Code, 2020 provides the statutory basis for the recognition of negotiating unions and negotiating councils. A negotiating union is defined as a registered trade union that has been recognized as having the statutory right to negotiate with the employer of an industrial establishment on prescribed matters. These matters, as outlined in the Draft Industrial Relations (Central) Recognition of Negotiating Union or Negotiating Council and Adjudication of Disputes of Trade Unions Rules, 2021, include classification of worker grades, wages and allowances, leave entitlements, hours of work, disciplinary procedures, and safety, health and working conditions.[6]

The scope of negotiation under the Code is comprehensive and encompasses the fundamental aspects of the employment relationship. This statutory recognition of negotiating rights marks a departure from the previous system where such rights existed only through voluntary agreements or state-specific legislation. By providing a clear legal framework, the Code aims to strengthen collective bargaining mechanisms and reduce ambiguity in employer-union relations.

Single Union Recognition Criteria

Section 14(2) of the Industrial Relations Code, 2020 addresses the situation where only one registered trade union exists in an industrial establishment. In such cases, the employer must recognize this union as the sole negotiating union if it meets the prescribed criteria. The Draft Recognition Rules specify that a single union must have at least thirty percent of the total workers employed in the industrial establishment as its members to qualify for recognition.[7]

This thirty percent threshold has been a subject of considerable debate. Critics argue that allowing a union with only thirty percent membership to represent the entire workforce is insufficiently democratic and creates a representational deficit for the remaining seventy percent of workers. The threshold is borrowed from the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, where thirty percent serves as the eligibility threshold for applying for recognition rather than the threshold for actual recognition. Some commentators have argued for increasing this threshold to fifty-one percent to ensure institutional legitimacy and bring it into alignment with the criteria applicable in multiple-union scenarios.

Multiple Union Scenario and Negotiating Council

The more complex situation arises when multiple trade unions operate within a single industrial establishment. Section 14(3) of the Code provides that where more than one registered trade union functions in an establishment, the union having the support of fifty-one percent or more of the workers on the muster roll shall be recognized as the sole negotiating union. This fifty-one percent threshold ensures that the recognized union genuinely represents the majority of workers and can claim a democratic mandate to negotiate on their behalf.[8]

The verification of membership is conducted through a prescribed manner as set out in the Draft Recognition Rules. The verification process involves multiple stages, including physical verification of union records, muster roll checking to confirm that members are actually on the establishment’s rolls, and potentially secret ballot elections. This rigorous verification mechanism aims to prevent fraudulent claims of membership and ensure that recognition is based on authentic worker support.

When no single union commands fifty-one percent support, Section 14(4) mandates the constitution of a negotiating council. This council comprises representatives of all registered trade unions that have the support of at least twenty percent of the total workers on the muster roll. The representation in the council is proportional, with one representative for each twenty percent of workers, and an additional representative for any remainder after calculating membership on each twenty percent basis. This proportional representation model ensures that minority unions retain a voice in collective bargaining while preventing excessive fragmentation that could paralyze negotiations.[9]

Tenure of Recognition

An important feature of the recognition system under the Industrial Relations Code is the specified tenure of recognition. Section 14(6) provides that any recognition made under subsections (2) or (3), or any negotiating council constituted under subsection (4), shall be valid for three years from the date of recognition or constitution. This period can be extended for up to five years in total through mutual agreement between the employer and the trade union. This fixed-tenure approach brings much-needed stability to industrial relations by preventing constant challenges to recognition and allowing recognized unions adequate time to deliver on their commitments to workers.[10]

The three-year validity period represents an increase from the two-year period that was prevalent under the voluntary Code of Discipline. This extension acknowledges the time and resources required to conduct membership verification exercises and provides unions with greater security of tenure. The option to extend recognition up to five years through mutual agreement introduces flexibility and rewards productive union-management relationships.

State-Level Recognition Frameworks

Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971

Maharashtra has been at the forefront of trade union recognition legislation in India. The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 was enacted following the report of the Committee on Unfair Labour Practices appointed by the Government of Maharashtra in 1968. This Act provides for the recognition of trade unions to facilitate collective bargaining, defines unfair labour practices, and establishes independent judicial machinery in the form of Labour Courts and Industrial Courts to implement its provisions.[3]

Under this Act, a trade union seeking recognition must apply to the Industrial Court if it has maintained a membership of not less than thirty percent of the total workers in the undertaking for a continuous period of six calendar months immediately preceding the application. The Industrial Court, after satisfying itself about the union’s compliance with statutory requirements, issues a certificate of recognition. Recognized unions enjoy several rights including the right to collectively bargain, display notice boards, hold discussions with management, inspect the undertaking, appear on behalf of workers in domestic inquiries, and participate in works committees.

The Maharashtra Act also comprehensively defines and prohibits unfair labour practices by both employers and trade unions. Schedule IV of the Act enumerates specific acts that constitute unfair labour practices, including discrimination against workers for union membership, refusal to bargain collectively, interference with union formation, and coercion of workers. The Act provides for complaints to be filed before Labour Courts, which can grant appropriate relief including reinstatement and compensation. This comprehensive framework has made Maharashtra a model that other states have sought to emulate.

Other State Legislations

Several other states have enacted their own recognition laws, though with varying degrees of comprehensiveness. The Kerala Recognition of Trade Unions Act, 2010 provides for the recognition of trade unions and establishes criteria similar to those in Maharashtra. West Bengal has the West Bengal Trade Union Rules, 1998, which require applications to be submitted for recognition based on membership criteria. Madhya Pradesh and Rajasthan have also enacted provisions for trade union recognition, though these frameworks have seen less consistent implementation than the Maharashtra model.

The multiplicity of state laws creates challenges for industrial establishments operating across multiple states, as they must navigate different recognition criteria, procedures, and union rights. This fragmentation was one of the key motivations for introducing uniform provisions at the central level through the Industrial Relations Code, 2020. However, as labour falls under the Concurrent List of the Constitution, both central and state governments retain the power to legislate on this subject, meaning that state laws will continue to coexist with the central Code.

Judicial Interpretation of Trade Union Recognition

The Indian judiciary has played a crucial role in shaping the legal landscape of trade union recognition through its interpretations of constitutional provisions and labour statutes. The courts have had to balance the fundamental right to form associations guaranteed under Article 19(1)(c) of the Constitution with the practical realities of industrial relations and the absence of comprehensive statutory recognition provisions.

In the landmark case of All India Bank Employees’ Association v. National Industrial Tribunal, the Supreme Court held that the rights of members of trade unions are encompassed within the fundamental right to freedom of speech and expression under Article 19(1)(c) of the Constitution. However, the Court clarified that this right does not automatically include a right to achieve all the objectives for which the trade union was formed, and that strikes by trade unions can be regulated or restricted through appropriate industrial legislation.[11]

The Supreme Court in Balmer Lawrie Workers’ Union, Bombay and Another v. Balmer Lawrie & Co. Ltd. and Others made the important observation that a recognized union represents all workers in an industrial undertaking or industry, not merely its own members. This principle establishes the representative character of recognized unions and imposes upon them a duty to act in the interests of all workers, creating a fiduciary-like relationship between the union and the entire workforce.[12]

In Kalindi and Others v. Tata Locomotive and Engineering Co. Ltd., the Supreme Court concluded that there is no inherent right to representation unless the employer explicitly recognizes such a right through its standing orders or through a voluntary agreement. This judgment emphasized the discretionary nature of recognition in the absence of statutory compulsion. The Court held that management has no legal obligation to establish unions, recognize them, or engage in collective bargaining unless required to do so by specific legislation or contractual commitments.[13]

The case of Food Corporation of India Staff Union vs. Food Corporation of India and Others established important guidelines for assessing the representative character of trade unions through the secret ballot system. The Supreme Court laid down elaborate norms and procedures to be followed when conducting verification of union membership through secret ballot, providing a framework that has been widely adopted for membership verification exercises. The Court emphasized the importance of ensuring that the verification process is fair, transparent, and conducted under neutral supervision to accurately reflect worker preferences.[14]

In B. Srinivasa Reddy vs. Karnataka Urban Water Supply and Drainage Board Employees Association, the Supreme Court reiterated that an unregistered trade union has no rights whatsoever under the Trade Unions Act, 1926. The Court clarified that even rights under the Industrial Disputes Act, 1947 are generally restricted to unions registered under the Trade Unions Act, as per the definition of trade union in Section 2(qq) of the Industrial Disputes Act. This judgment underscored the importance of registration as a prerequisite for claiming any statutory rights.

Advantages and Criticisms of the Single Negotiating Union Concept

The single negotiating union concept introduced by the Industrial Relations Code, 2020 has generated substantial debate among stakeholders in industrial relations. Proponents argue that this system brings several significant advantages to the collective bargaining process. First, it eliminates the problem of multiple unions with conflicting demands negotiating simultaneously with management, which often led to prolonged disputes and industrial unrest. A single recognized union can present a unified voice for workers, making negotiations more efficient and productive.

Second, the single negotiating union concept provides clarity and stability to industrial relations. Employers know exactly which union they need to engage with for collective bargaining purposes, reducing ambiguity and the potential for one union to undermine agreements reached with another. The fixed tenure of recognition for three to five years further enhances this stability by preventing constant challenges to recognition that could disrupt ongoing negotiations and implementation of agreements.

Third, the system encourages unions to build and maintain genuine grassroots membership rather than relying on political affiliations or employer sponsorship. Since recognition depends on verifiable membership support, unions must demonstrate that they actually represent workers’ interests and command their loyalty. This democratic element strengthens the legitimacy of recognized unions and ensures that they remain accountable to their membership.

However, critics raise several concerns about the single negotiating union model. The most significant criticism relates to the potential suppression of minority interests and reduction of workers’ choice. In diverse workforces where different categories of workers may have different interests and priorities, a single union may not adequately represent all sections. Workers who do not support the majority union may find their voices marginalized, particularly on issues specific to their category or department.

The thirty percent threshold for single union recognition has been particularly controversial. Critics argue that allowing a union with only minority support to represent the entire workforce violates democratic principles and creates a legitimacy deficit. While the Industrial Relations Code requires fifty-one percent support when multiple unions exist, the lower threshold for single-union scenarios creates an inconsistency that some view as unjustifiable.

There are also concerns about the potential for employer manipulation of the recognition process. Management might support a compliant or “pocket union” and use various means to ensure it achieves the required membership threshold, thereby excluding more militant unions that genuinely fight for workers’ rights. The verification process, while detailed, may still be vulnerable to manipulation through coercion, inducements, or fraudulent documentation.

Comparison with International Practices

Different countries have adopted varying approaches to trade union recognition and collective bargaining structures. The United States follows a system of exclusive representation where a union that wins a majority in a secret ballot election becomes the exclusive bargaining representative for all workers in the bargaining unit, even those who did not vote for it or who are not union members. This is similar to the single negotiating union concept, though the threshold for recognition is typically above fifty percent.

The United Kingdom has historically followed a voluntarist approach where union recognition depended primarily on employer willingness. However, the Employment Relations Act, 1999 introduced statutory recognition procedures that allow unions to apply to the Central Arbitration Committee for recognition if they have at least ten percent membership in the bargaining unit and there is likely to be majority support. This framework balances voluntary recognition with statutory intervention when necessary.

Many European countries operate under sectoral collective bargaining systems where unions negotiate industry-wide agreements that cover all workers in that sector, regardless of individual union membership. Germany’s system of works councils, which are separate from trade unions but work alongside them, provides another model where worker representation is institutionalized at the workplace level while unions focus on industry-level bargaining.

The Indian approach under the Industrial Relations Code, 2020 draws elements from various international models while attempting to address the specific challenges of the Indian context, including the prevalence of multiple competing unions, political affiliation of unions, and the need to balance flexibility for employers with protection for workers. Whether this hybrid approach will prove successful depends significantly on how effectively the rules are implemented and enforced.

Implementation Challenges and Future Outlook

The implementation of the Industrial Relations Code, 2020 faces several practical challenges that will determine its effectiveness in achieving its stated objectives of promoting industrial peace and protecting workers’ rights. While the Code was passed in September 2020, it has not yet been notified and brought into force as of the time of writing, pending the finalization of various state rules and achieving consensus among different stakeholders.

One major implementation challenge relates to the verification of union membership. The Draft Recognition Rules outline an elaborate verification process, but conducting such verification across thousands of industrial establishments will require significant administrative capacity and resources. The appointment and training of verification officers, development of electronic systems for secret ballot voting, and ensuring the neutrality and integrity of the process will all demand careful attention. Past experiences with membership verification have shown that these exercises can be time-consuming, expensive, and contentious.

The transition from the existing system to the new framework will also pose challenges. Many establishments currently have recognition arrangements under the Code of Discipline or state laws that may not automatically comply with the new criteria under the Industrial Relations Code. Determining how existing recognized unions will be treated, whether fresh verification will be required, and how to manage the transition period will require clear guidelines and potentially transitional provisions.

Resistance from trade unions is another significant challenge. Many established unions, particularly those with political affiliations or those representing specific categories of workers, view the single negotiating union concept as a threat to their existence and relevance. These unions argue that the new system will concentrate power in the hands of larger unions while marginalizing smaller unions that may represent vulnerable or minority groups within the workforce. Building consensus and addressing these concerns through dialogue and potentially through refinements to the rules will be important for smooth implementation.

Employer preparedness and willingness to engage with negotiating unions in good faith is equally critical. The Code imposes obligations on employers to recognize unions meeting the statutory criteria and to negotiate with them on prescribed matters. However, without corresponding provisions ensuring that employers bargain in good faith and implement negotiated agreements, recognition rights may remain hollow. The enforcement mechanisms under the Code, including penalties for non-compliance, will need to be effectively utilized to ensure that recognition translates into meaningful collective bargaining.

Looking ahead, the success of the Industrial Relations Code, 2020 in reforming India’s industrial relations landscape will depend on several factors. First, the rules must be finalized in a manner that addresses legitimate concerns while maintaining the core objectives of the Code. The Draft Recognition Rules are still at the proposal stage and may undergo modifications based on stakeholder feedback. Second, adequate infrastructure and administrative mechanisms must be established to implement the verification and recognition processes efficiently and fairly. Third, capacity building among employers, unions, and government officials regarding the new provisions and procedures will be essential. Finally, monitoring and evaluation mechanisms should be put in place to assess the impact of the Code and make necessary adjustments based on practical experience.

Conclusion

The introduction of the single negotiating union concept through the Industrial Relations Code, 2020 represents a significant evolution in India’s labour law framework. By providing statutory recognition to negotiating unions and establishing clear criteria for such recognition, the Code addresses a long-standing gap in Indian labour legislation. The system aims to streamline collective bargaining, reduce multiplicity of unions and conflicting demands, and provide stability to industrial relations while maintaining democratic principles through majority support requirements and proportional representation in negotiating councils.

However, the effectiveness of this reform will ultimately be determined by its implementation on the ground. Balancing the interests of different stakeholders including workers seeking genuine representation, unions concerned about their institutional survival, employers desiring industrial peace and flexibility, and the government’s developmental objectives requires careful navigation. The verification processes must be conducted fairly and transparently, minority interests must be adequately protected through the negotiating council mechanism, and enforcement mechanisms must ensure that recognition translates into effective collective bargaining.

As India’s economy continues to evolve with increasing informalization of labour, growth of the gig economy, and changing nature of work, the labour law framework will need to remain adaptable. The Industrial Relations Code, 2020 provides a foundation that can potentially address current challenges while remaining flexible enough to accommodate future developments. Whether this legislative initiative succeeds in achieving its ambitious goals of modernizing industrial relations while protecting workers’ rights will be evident only after the Code is fully implemented and has operated for a reasonable period. What is certain is that trade union recognition and collective bargaining will remain central to the discourse on labour rights and industrial relations in India for years to come.

References

[1] Wikipedia Contributors. (2025). Trade unions in India. Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Trade_unions_in_India 

[2] National Law Review. (2021). Proposed Developments in India’s Law on Labor Unions. Retrieved from https://natlawreview.com/article/proposed-developments-india-s-law-labor-unions 

[3] India Code. (1972). Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. Retrieved from https://www.indiacode.nic.in/handle/123456789/15922?view_type=browse 

[4] Ministry of Labour and Employment, Government of India. (1958). Code of Discipline. Retrieved from https://labour.gov.in/sites/default/files/code_of_discipline.pdf 

[5] Wikipedia Contributors. (2025). Industrial Relations Code, 2020. Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Industrial_Relations_Code,_2020 

[6] National Law Review. (2020). India’s New Labor Codes: Concept of Negotiating Union. Retrieved from https://natlawreview.com/article/india-s-new-labor-codes-concept-negotiating-union 

[7] The Leaflet. (2021). Trade Union Recognition (Central) Rules, 2021 – A Critical Analysis and Some Recommendations. Retrieved from https://theleaflet.in/trade-union-recognition-central-rules-2021-a-critical-analysis-and-some-recommendations-part-i/ 

[8] Indian Kanoon. (2020). Section 14 of the Industrial Relations Code, 2020. Retrieved from https://indiankanoon.org/doc/196989237/ 

[9] PRS Legislative Research. (2020). The Industrial Relations Code, 2020. Retrieved from https://prsindia.org/billtrack/the-industrial-relations-code-2020 

Published and Authorized by Prapti Bhatt