'Flag bearing unions': CJI Surya Kant criticises trade union practices hurting industry growth

The Supreme Court on Thursday (January 29) made observations on the role of trade unions in India’s industrial slowdown, with Chief Justice Surya Kant saying that aggressive unionism had contributed to the shutdown of many industrial establishments across the country. Questioning whether trade unions had aided or obstructed economic progress, the Chief Justice said several legacy industries collapsed due to confrontational union practices, calling them “flag-bearing unions.” He observed that a culture of work resistance and forceful leadership had undermined industrial growth.

While recognising that labour exploitation remains a reality, the Chief Justice suggested that constructive reforms, such as skill enhancement and heightened awareness of individual labour rights, should have been emphasised rather than disruptive collective actions. These remarks came from a bench comprising CJI Surya Kant and Justice Joymalya Bagchi during the hearing of a public interest litigation filed by Penn Thozhilargal Sangam and other trade unions. The plea sought welfare safeguards for domestic workers, including their coverage under minimum wage laws.

At the beginning of the hearing, the Chief Justice expressed hesitation in taking up the petition, warning that regulating household employment could trigger extensive litigation against individual families. Senior Advocate Raju Ramachandran, representing the petitioners, pointed out that countries such as Singapore require domestic workers to be registered and guarantee minimum pay, along with weekly rest days. Responding to this, the Chief Justice warned that welfare measures, though well-meaning, could sometimes backfire. He noted that imposing minimum wages without accounting for market demand might deter households from hiring domestic help, potentially leaving workers worse off.

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When Ramachandran argued that collective bargaining had proven effective and clarified that the petitioners were registered unions, the Chief Justice reiterated his concerns about trade unions. This prompted the senior counsel to request restraint in making broad generalisations. The Court then turned its attention to employment agencies, which the Chief Justice described as the primary source of exploitation. Citing an example, he revealed that when the Supreme Court hired workers through an agency at ₹40,000 per person, the workers received only ₹19,000.

He further observed that agency-driven employment weakens the trust-based relationship traditionally shared between households and domestic workers, potentially leading to wider social consequences. The Chief Justice also cautioned that enforcing minimum wages through union pressure could expose households to prolonged legal disputes.

In reply, Ramachandran argued that paying meagre wages amounted to bonded labour, relying on the Supreme Court’s judgment in Bandhua Mukti Morcha. He contended that excluding domestic workers from minimum wage protections violated Articles 21 and 23 of the Constitution. Ultimately, the bench declined to entertain the petition, holding that the reliefs sought effectively amounted to directing the legislature, an action beyond judicial authority. The plea was disposed of with a suggestion that state governments independently assess and address the grievances raised by domestic workers’ unions.