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Trade union can't include staff of separated firm


When one unit of a group of companies separates itself to form an independent firm, the trade union of the original group can not keep the employees of the new firm on its rolls. The bye-laws of the union can not be amended to allow erstwhile employees of the group to continue as members, even if they pay subscription fees, the Supreme Court stated in its judgment, All Escorts Employees’ Union vs State of Haryana. The Escorts group originally included Escorts Ltd, Escorts Yamaha Ltd (a joint venture), Escorts JCB Ltd, Escorts Class Ltd and Escorts Hospital. In 2001, the two-wheeler manufacturer Yamaha segregated and formed a separate company, which was an Indian subsidiary of the Japanese parent. Escorts stopped making twowheelers. The trade union tried to attract the erstwhile employees of the Yamaha unit by changing the bye-laws. The registrar of the trade union did not allow it. The Punjab and Haryana High Court upheld the registrar’s decision. The union came up on appeal to the Supreme Court arguing that its membership was open to any one who wanted to join it and every worker has a con stitutional right to do so. The court rejected the arguments of the union and stated that various provisions of the Trade Union Act implicitly con fined the membership to those who are work men of the industry where they are employed. More over, in this particular case, Yamaha employees have formed their own union which was registered in Kanpur, Uttar Pradesh. 

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