Deadlocks and Disputes

In India, the concept of “class or group actions” is reflected in the mechanism of collective bargaining, which, though not finding a conspicuous mention in Indian labour law, is very much kept in view while dealing with questions of labour standards.

Class or group actions are available in labour or employment lawsuits, as is evident in the Trade Unions Act, 1926, which is one of the essential constituents in the realm of industrial disputes in the country. Section 2(h) of that Act provides the following definition of “trade union:”

“Trade Union” means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions;

Provided that Trade Unions Act, 1926 shall not affect—

(i)     Any agreement between partners as to their own business;

(ii)    Any agreement between an employer and those employed by him as to such employment; or

(iii)   Any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft.

Recognizing the function of trade unions to represent the interests of their members in the dispute resolution process, the Karnataka High Court held that a registered trade union had the locus standi to institute a suit on behalf of the workers who were its members (Workmen of Karnataka State Road Transp. v. State of Karnataka, 2007(5) Kar LJ 393) By standing as a party in labour and employment lawsuits, trade unions thereby play an important role in class/group actions.

Apart from the Trade Unions Act, the general law in India is that where one or more persons may sue or defend on behalf of a number of persons having the same interest or cause of action in the same suit. This is subject to the only caveat that the representative party(ies) obtain(s) permission of the court. This is the concept of a representative action, legislatively recognized by Order 1, Rule 8 of the Civil Procedure Code, 1908 (CPC).

The legislature in India also has enacted the Industrial Disputes Act, 1947, which specifically addresses labour and employment cases. The Industrial Disputes Act defines the phrase “industrial dispute” to mean, inter alia, a dispute arising between the employer and the “workmen.” Arguably, this definition could be read to mean that an industrial dispute must be taken to a tribunal or labour court only by a trade union. However, the definition has been construed by the Supreme Court of India to mean that an industrial dispute may be maintained by “any person” aggrieved by the action of management, even a single workman.

A group of employees is therefore competent to file a common suit under the employment laws, without the involvement of a trade union, and separate actions need not be filed individually. However, a common action brought by a group of employees would not be maintainable unless each and every member of the group either represents him- or herself in court or executes a power of attorney/authority letter in favor of a co-litigant or a counsel.