13 - Workers and Competition Law in India

Summary

The Indian Competition Act aims at promoting economic development through market freedom by curbing anti-competitive agreements, abuse of dominant market position, and combinations of businesses that have adverse effect on market entry and competitiveness. These practices are curbed because they are market-distorting, thereby stunting the freedom of trade and business, a justiciable constitutional right. By the same logic, worker associations, negotiating collective bargaining and using strike as a bargaining leverage, may be restricted. However, the right to association is also a justiciable right under the constitution. The Supreme Court resolves the trade off between two co-equal justiciable rights by creating a distinction between social function and economic function of worker associations. When worker associations act as collective bargaining agents promoting the principle of solidarity (a constitutional ideal), they are exempted from the operation of the competition law, but when they act as associations of enterprises with a business interest (i.e., profit motive) of their own, their associations become anti-competitive “combinations.” This chapter argues that although such a trade off might exonerate trade unions in industrial relationships from the scope of the competition law, it may impede worker associations of informal workers, the majority of whom are self-employed workers participating in market exchanges. However, since associations of informal workers primarily negotiate with the government, their “political negotiation” may be exempted from the operation of the competition law by governmental discretion permitted under the law.