Interim Report - Report No 278, June 1991

Case No 1517 (India) - Complaint date: 09-DEC-89 - Closed

1. 309. In communications dated 9 and 11 December 1989 the Federation of Medical and Sales Representatives' Associations of India (FMRAI) presented allegations of violations of trade union rights against the Government of India. It presented further allegations by a communication dated 19 April 1990. The Government sent its observations on these allegations by communications dated 1 November 1990 and 13 February 1991.
2. 310. India has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), or the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 311. For some years the FMRAI has been conducting a campaign against what it considers to be unfair and corrupt practices by state-owned pharmaceutical companies in India. It now alleges that one of these companies, Indian Drugs and Pharmaceuticals Ltd. (IDPL), had launched an attack on the Federation and its members and leaders in retaliation for its anti-corruption activities.
2. 312. This attack has allegedly included: (i) discriminatory transfers of union leaders and activists; (ii) a lock-out of union members in Calcutta; (iii) unilaterally declaring a lawful strike to be illegal; (iv) penalising workers who participated in strike action; (v) victimising and harassing union members and leaders; (vi) denying union leaders to right to take leave for purposes of their trade union activities; (vii) unilaterally suspending meetings of an in-company grievance committee; and (viii) unilaterally withdrawing recognition from the Federation and instead according recognition to a newly established "puppet organisation".
3. 313. The complainant alleges that by means of an exchange of letters in August and September 1987 it had concluded an agreement with management of IDPL relating to the transfer of medical representatives. In June 1989, in gross violation of this agreement, management ordered the transfer of 20 active members of the Federation to different parts of the country. The complainant considers that this action was in retaliation for its anti-corruption activities, even though some time later management had issued statements to the press to the effect that the transfers had been effected because of "poor performance or irregular practices" on the part of the workers concerned.
4. 314. On 30 July 1989 an All India Meeting of the Convenors of IDPL field workers adopted a resolution which, among other things, strongly condemned the transfer of 20 union activists and management attempts to "float" a rival union. It also called for the removal of the Chairman and Managing Director of IDPL. This resolution was sent to the central Government on 7 August 1989. According to the complainant IDPL management retaliated by locking out workers at its Calcutta office on 20 August 1989.
5. 315. Prior to this lock-out, the Federation had served notice of a national strike for 21 August 1989. This notice was served under the terms of the Industrial Disputes Act, 1947. Management then sought conciliation under the auspices of the Assistant Labour Commissioner at Gurgoan in Haryana State. This was in breach of a prior agreement that Bihar State was the appropriate jurisdiction for disputes relating to medical representatives employed by IDPL. This was because the registered office of FMRAI is at Patna in Bihar. Management then issued an illegal notice declaring that the strike notice served by the complainant was illegal.
6. 316. The strike went ahead on 21 August 1989. IDPL responded by deducting eight days' pay from individuals who participated in the strike. Similar deductions were made in respect of a further one-day strike on 5 October 1989. FMRAI obtained an order from the High Court of Orissa to stay these deductions in respect of five named employees.
7. 317. The complainant cites a number of alleged instances of victimisation and harassment of union officials and activists. These included: (i) the issue of charge-sheets against certain of the 20 transferred employees who refused to accept their transfers. Some of these workers were subsequently dismissed; (ii) the issue of charge-sheets against activists who participated in the strike of 5 October 1989; (iii) the summoning of leading members of the union to meetings with representatives of management. At these meetings they were threatened with dire consequences if they did not dissociate themselves from FMRAI. A letter of dissociation by one official who succumbed to these pressures was widely circulated within IDPL by management; (iv) union activists were subject to discrimination in relation to promotion to more responsible positions within the company; and (v) leading members of the union were restricted to working at headquarters under false pretexts.
8. 318. The complainant alleges that in 1985 it had reached agreement with management in relation to special leave for trade union work. This "agreement" is embodied in an exchange of letters in April 1985. In the later part of 1989 these entitlements were unilaterally withdrawn by management. Officials who had subsequently taken unauthorised leave to deal with union business had had pay deducted for the period of their absence.
9. 319. In 1982 the complainant reached agreement with management relating to the establishment and functioning of central and regional grievance committees. In September 1989 management unilaterally terminated these arrangements.
10. 320. For some years prior to 1989 FMRAI had been the only recognised union for medical and sales representatives employed by IDPL, and had signed wage agreements with the company in 1985 and 1987. A new agreement was due to be negotiated in 1989. On 19 July 1989 the Deputy Managing Director of IDPL wrote to the complainant asking that it forward its "charter of demands" to the company by 17 August 1989 "in order to set in motion the process of Wage Negotiations and Wage Revision". The union duly forwarded its charter of demands on 16 August. However, on 12 October 1989, in response to a letter from the complainant dated 3-4 October (but which has not been made available to the Committee), the company indicated that it had "received communications from a very large number of its medical representatives, constituting a majority, that they have dissociated themselves from FMRAI and have joined another union, the IDPL Field Workers' Union". Accordingly, the company had signed an agreement with the IDPL Field Workers' Union, and had "derecognised" FMRAI. The complainant states that there is no provision for "derecognition" in the Industrial Disputes Act, 1947, and that the company "did not give any opportunity to FMRAI bilaterally or in the presence of any competent authority to verify the majority question".
11. 321. The complainant furnishes a substantial body of material relating to alleged unfair and corrupt practices by IDPL, including details as to allegedly unethical incentive schemes which had been implemented by the company.

B. The Government's reply

1. 322. By its communications of 1 November 1990 and 13 February 1991 the Government has provided its reply to the allegations of the complainant.
2. 323. As regards the alleged discriminatory transfer of union activists, the Government explains that the Industrial Disputes Act, 1947 contains a formula which would have permitted the complainant to nominate up to five workers as "protected workmen". They would then have been entitled to certain defined measures of protection. FMRAI had not in fact made any nominations under this provision, with the consequence that it was not possible for the management to know which employee was a union functionary. It follows that none of the transferred employees could be deemed to be protected workmen under the Act. Furthermore, it was not correct that FMRAI had reached an agreement with IDPL management regarding transfer. The exchange of letters cited by the union did not constitute an "agreement". The Government points out that FMRAI had in fact accepted that this was the case in the course of proceedings in the High Court of Andhra Pradesh. A copy of this decision was furnished by the Government.
3. 324. The Government denies that IDPL ever stated to FMRAI that the transfers were due to inefficiency or malpractice. Furthermore, if there were such allegations the matter could be dealt with through internal disciplinary procedures in the course of which the employees concerned would have an opportunity to state their case.
4. 325. The lock-out at the Calcutta office of IDPL which was declared on 20 August 1989 was a response to the prevailing law and order situation, and serious threats of violence. For instance, just a few days prior to the declaration there was an assault on the Calcutta office in the course of which the Divisional Manager was beaten-up and some items of furniture were destroyed. The lawfulness of the lock-out is borne out by the fact that the Government of West Bengal did not declare it to be illegal. On the other hand, the company had gone to the High Court to obtain an order requiring the local police to provide protection for its stocks and assets.
5. 326. As concerns the strike notice served by FMRAI the company had, in the manner prescribed by the Industrial Disputes Act, 1947, referred the matter to government conciliation machinery in the form of the Assistant Labour Commissioner at Gurgoan, which is where the registered office of IDPL is located. It is true that management had written a letter in 1985 relating to the raising of a dispute in Patna, but that is not necessarily relevant in the present context. FMRAI did not at any time suggest to management or the public authorities that the proceedings should be transferred to Patna, or that they could not attend proceedings in Gurgoan because of the cost involved. They did not in fact attend the conciliation proceedings. Strike action is illegal whilst conciliation proceedings are pending.
6. 327. The deduction of eight days' pay in respect of participation in the illegal strikes was necessary in order to maintain discipline amongst the employees of the company, and was in accordance with the Wages Act. The question of whether such deductions are in fact lawful can be raised with the relevant authorities.
7. 328. The issue of charge-sheets was the normal procedure to be followed in cases of alleged breaches of company rules in relation to matters like falsification of reports, false claims for travel leave, leaving a work-station without permission, running another business in company time, etc. Even "protected workmen" could not claim immunity from disciplinary action in respect of such matters.
8. 329. It is not true that management had intimidated officials and activists of FMRAI. On the contrary, it is FMRAI which is using such tactics to coerce management under continuous threats and physical assault. This is evident from the union's own circulars to its members. All employees of IDPL have the right to join the union of their choice, and neither management nor FMRAI have the right to interfere in this process.
9. 330. Promotions take place from time to time, depending on vacancies. No promotions take place on an arbitrary basis, and indeed on a number of occasions FMRAI has sought legal redress where there was some suggestion of arbitrariness in the promotion process.
10. 331. The Government states that it does not fully understand the allegation that leading members of the union were restricted to working at headquarters under false pretexts. In the first place the FMRAI had not nominated any functionaries as protected workmen, and in any event it is incorrect that anyone was restricted or restrained.
11. 332. It is true that in the past some workers had been allowed extra leave on an informal basis to attend to union affairs, even though strictly speaking they had no legal entitlement to such leave. However, this facility had been withdrawn because FMRAI no longer represented the majority of medical representatives employed by the company, and the newly recognised union had not expressed any need for such a facility. For the same reason the FMRAI is no longer involved in the activities of the grievance committees. They are, however, still in operation with the participation of the Field Workers' Union.
12. 333. It is not true that the company has "derecognised" FMRAI. Rather the majority of medical representatives have chosen to join another registered union, whilst only a small fraction remain members of FMRAI. In these circumstances the company must, perforce, deal with the new body. The Government adds that there is documentary evidence as to the majority status of the Field Workers' Union, and as to the fact that the FMRAI has repeatedly refused to come to the discussion table for any negotiations. The Government has not made this evidence available to the Committee.

C. The Committee's conclusions

1. 334. This complaint relates to alleged anti-union discrimination on the part of the management of Indian Drugs and Pharmaceuticals Ltd. This discrimination is said to have been in retaliation for the complainant's attempts to expose unfair and corrupt practices by a number of state-owned pharmaceutical companies in India, including IDPL.
2. 335. The Committee must state from the outset that it is not competent to express any view as to whether IDPL or any other company has engaged in unfair or corrupt practices. Accordingly, it has not examined the complainant's allegations relating to unethical incentive schemes, etc. Instead it has confined itself to those allegations which appear to bear upon the exercise of the rights guaranteed by the principles of freedom of association.
3. 336. Article 1(1) of Convention No. 98 stipulates that "workers shall enjoy adequate protection against acts of anti-union discrimination in respect of their employment", whilst Article 1(2) makes clear that this protection should extend to acts calculated to "cause the dismissal of or otherwise prejudice a worker by reason of union membership or because of participation in union activities outside working hours or, with the consent of the employer, within working hours". The Committee has always taken the view that this principle requires that workers have protection against "all acts of anti-union discrimination in respect of their employment such as dismissal, demotion, transfer or other prejudicial measures". (Digest of decisions and principles of the Freedom of Association Committee, 3rd edition, 1985, para. 556. See also paras. 544 and 560.)
4. 337. In the present case the complainant alleges that in June 1989 management of IDPL transferred 20 active members of FMRAI in gross violation of an agreement relating to the transfer of medical representatives. The complainant further alleges that an unspecified number of its members who had refused to accept transfer were subsequently subjected to disciplinary proceedings and dismissed. According to the complainant these transfers were an act of retaliation for the FMRAI's anti-corruption activities. The Government acknowledges that 22 employees were indeed transferred in June 1989 (the complainant refers to "20 transfers", but the list of transferees it submitted to the Committee in fact contained 22 names). However, it denies that they constituted acts of anti-union discrimination. In doing so it points out that FMRAI had not availed itself of the opportunity to nominate up to five of its officials as "protected workmen" as it was entitled to do within the terms of the Industrial Disputes Act, 1947. It was, therefore, impossible for management to know to whom the statutory protections were applicable. Furthermore, states the Government, there was no agreement between FMRAI and management regarding transfers - and it furnishes a copy of a decision of the High Court of Andhra Pradesh to that effect.
5. 338. The Committee is satisfied that if it were shown that 20 (or 22) union activists were transferred by reason of their trade union activities, this would indeed constitute a breach of the principles of freedom of association. The question of whether the workers had been nominated as "protected workmen" under the 1947 Act would be irrelevant for these purposes - provided it was shown that the transfers had indeed constituted anti-union discrimination. However, in the present case the complainant has furnished no convincing evidence in support of its allegations: (i) it has not given any indication as to the positions within the union, if any, held by the transferees; (ii) it has failed to provide adequate information as to the number of workers who refused to accept transfer and the number who were subjected to disciplinary action or who were dismissed in consequence; and (iii) it has failed to provide any substantive evidence tending to show that the transfers constituted acts of anti-union discrimination. The Committee, therefore, asks the complainant to provide all information to which it has access in relation to these matters as soon as possible.
6. 339. The complainant further alleges that management of IDPL instituted a lock-out at its Calcutta office on 20 August 1989 in retaliation for a resolution adopted by a union meeting on 30 July 1989, and transmitted to the central Government on 7 August 1989. The Government responds that this was not the case, but rather that the lock-out was a response to the prevailing law and order situation, as evidenced by an assault on the Calcutta office in the course of which an official of IDPL was beaten and some items of furniture were destroyed. The Committee considers that it has not been provided with sufficient information to permit it to reach any conclusions in relation to this matter. Accordingly, it asks both the Government and the complainant to provide more detailed information as to the circumstances of this lock-out.
7. 340. As regards the one-day strikes on 21 August and 5 October 1989, the Committee notes that within the terms of the Industrial Disputes Act, 1947 it is illegal to take strike action whilst conciliation proceedings are still pending. The Committee has always taken the view that legislation which requires recourse to compulsory conciliation procedures before calling a strike cannot in itself be regarded as an infringement of freedom of association. (Digest, para. 378.) This is, however, subject to the proviso that the conditions which must be fulfilled in order to render a strike lawful should be reasonable and in any event not such as to place a substantial limitation on the means of action open to trade union organisations. (Digest, para. 377.) The Committee has not been presented with any evidence to suggest that the conciliation requirements in the present case were either unreasonable or of such a nature as to place a substantial limitation upon the right to strike. The complainant's allegations relating to the locus for conciliation proceedings do not appear to have any bearing upon the application of the principles of freedom of association in this instance.
8. 341. The Committee does, however, have some concerns at the fact that some individuals who participated in the strike had eight days' pay deducted in respect of each day they were on strike. The complainant has furnished a copy of an order from the High Court of Orissa to stay the proposed deductions in respect of five named employees. It is not clear whether this was an interim order, and if so whether or not it was subsequently affirmed. It is also unclear whether this order related only to the circumstances of the five named individuals, or whether it was a "test case" of more general application. The Government does not comment upon the decision of the High Court of Orissa, but indicates: (i) that the deductions were necessary in order to maintain discipline; and (ii) that they were in accordance with the Wages Act. In these circumstances, the Committee must ask the Government to provide further information as to the outcome of the court proceedings which were brought to challenge the deductions of eight days' pay from workers who participated in strike action in August and October 1989, and as to the provisions of the Wages Act on the basis of which these deductions were said to be justified.
9. 342. The complainant has made a number of allegations relating to the alleged victimisation of its members and officials - for example, by the issue of charge-sheets; attempts to pressurise activists into dissociating themselves from the union; restricting leading members of the union to working at headquarters and the operation of discriminatory promotion practices. The complainant has not furnished any substantive evidence in support of these allegations. It did supply a copy of a letter of dissociation signed by one former official, but did not offer any evidence to show that it was obtained under duress. In the circumstances, the Committee considers that these allegations do not require further examination.
10. 343. The final series of allegations centre around the alleged "derecognition" of the complainant by management of IDPL, and the subsequent refusal of special leave for trade union purposes and the exclusion of officials of FMRAI from participation in the functioning of in-house grievance committees. The Government denies that the company has "derecognised" the complainant. Rather, the majority of medical representatives employed by IDPL have chosen to join another union, whilst only a very small minority have remained loyal to FMRAI. In these circumstances the company had no choice but to deal with the union to which the majority of its employees wish to belong. The Government states that there is documentary evidence to show that the majority of employees do indeed belong to the Field Workers' Union, and as to the fact that FMRAI has repeatedly refused to engage in negotiations with the company. The Government has not, however, made this evidence available to the Committee. It would appear that the complainant has also been denied access to the evidence relating to membership of the new union. The Committee, therefore, asks the Government to make this evidence available so as to enable it to arrive at its conclusions in this case.
11. 344. The Committee has always taken the view that nothing in Article 4 of Convention No. 98 places a duty on governments to enforce collective bargaining by compulsory means with a given organisation. It has considered that such intervention would clearly alter the nature of bargaining. (Digest, op. cit., para. 614.) On the other hand, it has also taken the view that employers, including governmental authorities in the capacity of employers, should recognise for collective bargaining purposes the organisations representative of the workers employed by them. (Digest, para. 617.) The Committee has further considered that (Digest, para 244):
    • In order to encourage the harmonious development of collective bargaining and to avoid disputes, it should always be the practice to follow, where they exist, the procedures laid down for the designation of the most representative unions for collective bargaining purposes when it is not clear by which unions the workers wish to be represented. In the absence of such procedures, the authorities, where appropriate, should examine the possibility of laying down objective rules in this respect.
12. 345. The Industrial Disputes Act, 1947, does not make any provision for either the "recognition" or "derecognition" of trade unions for these purposes. In the opinion of the Committee, the present case furnishes a very clear illustration of the wisdom of adopting such provision. Even if it were the case that the majority of medical representatives employed by IDPL no longer wish to be members of FMRAI and they have freely chosen to join the newly established Field Workers' Union, the fact remains that, in the absence of any objective procedure to verify this, it is open to a "derecognised" organisation such as FMRAI to allege that it has not in fact lost its majority status, or that it has done so only because of the adoption of unfair tactics by the employer. Accordingly, the Committee suggests that the Government should give serious consideration to the adoption of legislation which lays down objective procedures for determining the representative status of trade unions, and which provides adequate safeguards for the position of minority and competing organisations. (See Digest, paras. 234-244.)

The Committee's recommendations

1. 346. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a)That the complainant is asked to provide, as soon as possible, all information to which it has access in relation to: (i) the positions within the union which were held by the workers transferred by management of IDPL in June 1989; (ii) the number of workers who refused to accept transfer and the number who were subjected to disciplinary action or who were dismissed in consequence; (iii) any evidence which shows that the transfers constituted acts of anti-union discrimination; and (iv) as to the circumstances of the lock-out at the Calcutta office of IDPL in August 1989.
   • (b)That the Government is asked to provide, as soon as possible, further information relating to: (i) the circumstances of the lock-out at the Calcutta office of IDPL in August 1989; (ii) the outcome of the court proceedings which were brought to challenge the deductions of eight days' pay from workers who participated in strike action in August and October 1989; (iii) the provisions of the Wages Act which allegedly justified these deductions of pay; and (iv) the evidence which shows that the majority of workers at IDPL belong to the Field Workers' Union.
   • (c)That the Government should give serious consideration to the adoption of legislation which lays down objective procedures for determining the representative status of trade unions and which provides adquate safeguards for the position of minority and competing unions.