An interpretation of Industrial Relations Code 2020

Sanjay Kumar Bhat

alcreasi304@gmail.com

The Industrial Relations Code, 2020 consolidates the legal framework governing Trade Unions, industrial establishments and undertakings, standing orders and industrial disputes. A significant question under the Code is whether self-employed persons working in the unorganised sector, such as independent auto-rickshaw drivers, street vendors, hawkers and certain gig or platform workers, can form and register Trade Unions even when they do not have a conventional employer.

The central issue requires a distinction between the right to form a collective association or union and the statutory right to obtain registration as a Trade Union under the Industrial Relations Code. The two rights are related but are not necessarily identical.

Existence of Trade Unions in the Unorganised Sector under the Industrial Relations Code, 2020.

One of the strongest indications that the Code covers the unorganised sector is found in Section 23. It expressly refers to "every registered Trade Union in an unorganised sector" and provides that at least one-half of the office-bearers of such a union must be persons actually engaged or employed in the establishment or industry with which the Trade Union is connected, subject to the statutory power of exemption.

This provision demonstrates that the legislature contemplated the existence of registered Trade Unions in the unorganised sector. Therefore, the Code cannot be interpreted as applying only to workers employed in factories, companies or other conventional organised-sector establishments.

However, Section 23 does not itself create an independent right to registration. It operates on the assumption that the organisation has already obtained registration. Consequently, the conditions prescribed for registration under Sections 6 and 7 must be considered separately.

Self-Employed Persons as "Workers"

Section 2(zr), for the purposes of Chapter III dealing with Trade Unions, incorporates the concept of an unorganised worker under the Unorganised Workers' Social Security Act, 2008. The definition of an unorganised worker includes a self-employed worker-a person who is not employed by an employer but engages in an occupation in the unorganised sector.

This is significant because it means that the Code does not exclude a person merely because he or she does not have an employer. Self-employed unorganised workers are brought within the definition of "worker" for the purposes of Trade Union provisions.

Thus, the absence of a conventional employer does not automatically mean that such persons fall outside the scope of Chapter III.

Meaning of "Trade Union"

The definition of "Trade Union" in Section 2(zl) is also relevant. It covers a combination formed primarily for regulating relations between:

" workers and employers; " workers and workers; or " employers and employers.

The reference to relations between workers and workers is particularly important. It indicates that a Trade Union under the Code is not necessarily dependent upon an employer being the opposing or corresponding party.

Therefore, the statutory concept of a Trade Union can have a worker-to-worker dimension. This supports the argument that self-employed workers may collectively organise to protect and promote their common occupational interests.

Recognition as a Worker Does Not Automatically Guarantee Registration

The more difficult issue arises when a self-employed group seeks formal registration as a Trade Union.

Section 6 prescribes the conditions for registration. In the case of a Trade Union of workers, at least 10 per cent of the workers or 100 workers, whichever is less, engaged or employed in the industrial establishment or industry with which the Trade Union is connected, must be members, subject to the statutory minimum.

Section 7 further requires the rules of the Trade Union to provide for the admission of ordinary members who are actually engaged or employed in the industrial establishment, undertaking or industry with which the Trade Union is connected.

Therefore, registration cannot be obtained merely because a group of persons wishes to form a union. There must be the required membership and, importantly, a statutory connection with an industrial establishment, undertaking or industry.

This requirement creates the principal difficulty for a completely self-employed group.

The Definition of "Industry"

Section 2(p) defines "industry" in terms of a systematic activity carried on by cooperation between an employer and worker for the production, supply or distribution of goods or services to satisfy human wants or wishes.

The definition therefore contains an important structural element: cooperation between an employer and worker.

This creates a potential tension. On one hand, the Code recognises self-employed persons as workers for Trade Union purposes. On the other hand, the registration provisions refer to persons being engaged or employed in an industrial establishment, undertaking or industry, while the definition of "industry" itself refers to cooperation between an employer and worker.

The Code does not expressly resolve how these provisions should operate where a group consists entirely of independent self-employed persons and there is no identifiable employer.

Importance of the Word "Engaged"

There is nevertheless a textual argument supporting registration.

Sections 6 and 7 use the expression "engaged or employed", rather than merely "employed". The word "employed" naturally suggests an employer-worker relationship, whereas "engaged" can potentially cover a person who is engaged in an occupation without being employed by another person.

A self-employed person could therefore argue that although he or she is not employed by an employer, the person is nevertheless engaged in the relevant occupation.

Section 23 provides further support because it also uses the expression "engaged or employed" while dealing with Trade Unions in the unorganised sector.

This is arguably the strongest textual basis for bringing self-employed workers within the registration framework.

However, this argument does not completely overcome the difficulty relating to "industry". Sections 6 and 7 require the members to be engaged or employed in the industrial establishment, undertaking or industry with which the Trade Union is connected. The question therefore remains whether an occupation carried on entirely by independent self-employed persons, without an employer, can constitute the relevant industry for registration purposes.

The Code does not expressly provide the answer.

Example of Independent Auto-Rickshaw Drivers

The issue can be illustrated through independent auto-rickshaw drivers who own or control their vehicles, work for themselves, determine their working hours and receive income directly from passengers.

If such persons fall within the statutory category of self-employed unorganised workers, there is a strong basis for treating them as "workers" for Chapter III. They can therefore form a collective organisation to protect their common occupational interests.

However, if they seek registration as a Trade Union, they must still satisfy Sections 6 and 7. The Registrar would need to determine whether the proposed union is connected with an identifiable industrial establishment, undertaking or industry within the meaning of the Code.

Consequently, it would be unsafe to state that all self-employed auto-rickshaw drivers automatically have a statutory right to Trade Union registration.

At the same time, it would equally be incorrect to state that they are excluded simply because they have no employer.

Overall Conclusion

The Industrial Relations Code creates a nuanced legal position. It would be incorrect to adopt the proposition that "no employer means no worker and therefore no Trade Union." The Code recognises self-employed unorganised workers within the concept of "worker" for Chapter III and expressly contemplates Trade Unions in the unorganised sector.

However, recognition as a worker does not automatically provide an unconditional right to registration. Sections 6 and 7 impose specific registration requirements concerning membership and the connection of the Trade Union with an industrial establishment, undertaking or industry.

The principal unresolved issue is therefore the relationship between the recognition of self-employed workers and the statutory definition of "industry", which refers to systematic activity involving cooperation between an employer and worker.

Accordingly, the safest conclusion is that self-employed unorganised workers are not excluded from forming a Trade Union merely because they have no employer. However, their statutory right to obtain registration under the Industrial Relations Code is not unconditional. Sections 6 and 7 impose specific registration requirements.

In my view, until the issue is clarified through appropriate rules, administrative interpretation or judicial determination, the question of registration for a completely independent group of self-employed workers remains legally open.

(The author is Assistant Labour Commissioner, Reasi)