TRADE UNIONS ACT, 1926

Trade Union Movement in India is not a new idea. From the Marxian to the
Gandhian, move violently to non violence, howlingness to achievement Trade Union Movement
has been gradually developed till date. It is mentionable that, in industrially developed countries,
there are every Trade Unionism in the fields of Agriculture, Industry, Bus and Lorry, Handy
Workers and Labours, and EduProfessionals etc. Their Trade Unionism had made a great impact
on the social, political and economic life, while in India; Trade Unionism can be seen only in the
field of Industrial area. As long as history of human society various conflicts between workers
group and employers group have been lasting in the form of strike, gherao, lock out, pen down etc
against exploitation. To make people strengthen in a democratic way to asset their demands over
their contribution to an organization, people associate themselves in a group and constitute a
Union for common welfare. Thus Trade Union is an instrument of defence formed by employees
against exploitations to protect themselves from economic as well as social interests. This is a
complex institution with a numerous facts like social, economic, political and psychological.
Trade Union provides services as an agent of workers and working classes at large. In this epistle
thought on Trade Union Movement in India, a brief discussion is made on stipulations in relation
to Trade Unionism.

The need for Trade Unionism:

The need for Trade Unionism since the human set up has been felt necessary in the
following ways-

a) To provide job security to the workers group working in different industries.

b) To safe guard workers common interest.
c) To bring the situation in participation of decision making.
d) To communicate better industrial relation among workers, employers and system groups.
e) To bring an industrial relation with win-win- situation through collective bargaining with
the union leaders’ representativeness.

Gandhiji comments, Trade Union movement as a reformist and economic organization and
considers capital and lobour are equally parts and parcels of an organization.(Known as
Sorvodya)

History of Trade Union Movement in India:

In India, Trade Union movement has been considered as the product of industrial
development since the First World War 1914-18. Before the time Indian workers were poor and
did not have strong union to effort legal fight against any exploiters. At that time they used to
follow the guidelines of Government of India’s Factory Act 1881 which was not perfect to protect
the interests of employees. The system of collective bargaining was totally absent. In several
industries, the workers went on strikes every now and then to secure wage increase. In that mean
time, Labour leader Narayan Meghaji Lokkande led a labour movement and formed “Bombay
Mill Hands Association” and succeeded a weekly holiday system for Bombay Mill Owners
Association.

In 1918 Trade Union Movement in India became more organized and formed varieties of
unions e.g. Indian Collie or Employees Association, Indian Seamen’s’ Union, Railway Men’s
Union, Port Trust Employees Union etc. Meanwhile Gandhiji formed The Textile Labour
Association in 1920 for fulfilling the demands of spinners and weavers society. More over the
different labour unions and their representatives from all over India met in Bombay in 1920 and
established the All India Trade Union Congress (AITUC) led by Lala Lajpat Rai.

With the days passed, Trade Union Movement in India gradually strengthened and became
national figure in leading of periodic strikes, Gherao, picketing and boycotts etc in contrary of
different work fields for prevention and settlement of industrial disorders. The historic
background of Bombay Mill Case of 1920 over which Madras High Court witnessed Madras
Labour Union forbidding by an interim injunction against The Laborers’ strike which was
pondered about some necessary legislation for protecting the sustained Trade Union in India.

As a result Mr. N.M. Joshi, the then General Secretary of All India Trade Union Congress
moved a resolution in the Central Legislative Assembly in 1921 recommending the Government
to introduce legislation for the registration and protection of Trade Union’s existence in India.
The resolution was strongly protested by Bombay Mills Owners and it took a long bed rest on the
table of the Central Legislative Assembly.

While in the year of 1924, many communist leaders were arrested and prosecuted against
aggressive and lengthy strikes. From the period numbers of Indian working classes including
Peasants Party united and demanded Indian government through the AITUC to pass an act to
protect the interest of all India workers group which results The Trade Union Act 1926 in India.
More over different situations in different times formed many Unions and Federations, which of
some are All India Trade Union Congress 1920, Red Trade Union Congress 1931, National
Federation of
Labour 1933 Red Trade Union Congress merged with AITUC in 1935 and Indian Federation of
Labour 1941 etc.
 The importance of the formation of an organized trade union was realized by nationalist
leaders like Mahatma Gandhi who to improve the employer and worker relationship gave the
concept of trusteeship which envisaged the cooperation of the workers and employers.
According to the concept, the people who are financially sound should hold the property not
only to make such use of the property which will be beneficial for themselves but should make
such use the property which is for the welfare of the workers who are financially not well placed
in the society and each worker should think of himself as being a trustee of other workers and
strive to safeguard the interest of the other workers.

Many commissions also emphasized the formation of trade unions in India for eg. The
Royal Commission on labour or Whitley commission on labour which was set up in the year
1929-30 recommended that the problems created by modern industrialization in India are
similar to the problems it created elsewhere in the world and the only solution left is the
formation of strong trade unions to alleviate the labours from their miserable condition and
exploitation.

The Eighteenth Session of the All-India Trade Union Congress led by Suresh
Chandra Banerjee, President of the Congress, was held at Bombay on 28 and 29
September 1940; The session constituted a landmark in the history of the Indian Trade
Union Movement is that it witnessed the restoration of complete unity in Indian Trade
Union from the merging of the National Trades Union Federation in the All-India Trade Union
Congress.

A Tripartite Labour Conference was convened in 1942 to provide common platform for
discussion between employees and employers. Indian National Trade Union Congress (INTUC)
was formed in 1947 to settle the industrial disputes in democratic and peaceful methods.
Moreover, the Indian Federation of Labour formed in 1949, Hind Mazdoor Sabha in 1948 and
United Trade Union Congress formed in 1949 in the national level and recognized by the
government of India as to serve national and International conference. Trade Union Movement
does not delimit its operation within Bombay vicinity nor Delhi only. With the passage of time
the movement spreads all across the country and convenient groups welcome the organism of
Trade Union Movement from different parts of India. In state of Assam, the garden men’s forum,
Assam Chah Mazdoor Sangha, claims for their minimum wages from their employers according
to the rules of The Plantation Labour Act, 1951, which regulates the wages of tea-garden workers,
their duty hours and the amenities, states that the management is supposed to provide housing,
drinking water, education, health care, child care facilities, accident cover and protective
equipment.
ILO Conventions relating to trade Unions and Constitutional Provision:

International Labour Organisation (ILO) is the most important organisation in the world
level and it has been working for the benefit of the workers throughout the world. It was
established in the year 1919. It is a tripartiate body consisting of representatives of the
Government, Employer, workers. It functions in a democratic way by taking interest for the
protection of working class throughout the world.

It is also working at the international level as a ‘saviour of workers’ ‘protector of poor’

and it is a beacon light for the change of social justice and social security. The I.L.O examines
each and every problem of the workers pertaining to each member country and discusses
thoroughly in the tripartiate body of all the countries. The I.L.O passes many Conventions and
Recommendations on different subjects like Social Security, Basic Human Rights, Welfare
Measures and Collective Bargaining. On the basis of Conventions and Recommendations of
I.L.O. every country incorporates its recommendations and suggestions in its respective laws.

The idea of protecting the interest of the labour against the exploitation of capitalists owes
its origin to the philanthropic ideology of early thinkers and philosophers, and famous among
them is “Robert Owen” who being himself an employer took interest in regulating hazardous
working conditions of the workers and also in human conditions under which the workers were
being crushed underneath the giant wheels of production.

Aims of the International Labour Organisation:

The principle aim of the I.L.O is the welfare of labour as reaffirmed by the Philadelphia
Conference of 1944 under the Philadelphia Declaration, on which the
I.L.O. is based

1. Labour is not a commodity;

2. Freedom of expression and of association are essential to sustained progress;
3. Poverty anywhere constitutes danger to prosperity everywhere; and
4. The war against want requires to be carried on with unrelenting vigour within each
nation, and by continuous and concerted international effort in which the
representatives of workers and employers, employing equal status with those of
governments, join with them in free discussion and democratic decision with a
view to the promotion of the common welfare.
International Labour Standards on Freedom of Association:
 The principle of freedom of association is at the core of the ILO's values: it is enshrined in
the ILO Constitution (1919), the ILO Declaration of Philadelphia (1944), and the ILO Declaration
on Fundamental Principles and Rights at Work (1998). It is also a right proclaimed in the
Universal Declaration of Human Rights (1948). The right to organize and form employers' and
workers' organizations is the prerequisite for sound collective bargaining and social dialogue.
Nevertheless, there continue to be challenges in applying these principles: in some countries
certain categories of workers (for example public servants, seafarers, workers in export
processing zones) are denied the right of association, workers' and employers' organizations are
illegally suspended or interfered with, and in some extreme cases trade unionists are arrested or
killed. ILO standards, in conjunction with the work of the Committee on Freedom of Association
and other supervisory mechanisms, pave the way for resolving these difficulties and ensuring that
this fundamental human right is respected the world over.

1. Freedom of Association and Protection of the Right to Organize Convention, 1948:

This Convention provides that workers and employers shall have the right to establish and
join organizations of their own choosing without previous authorization. The public authorities
are to refrain from any interference which would restrict the right to form organization or impede
its lawful exercise. These organizations shall not be liable to be dissolved or suspended by
administrative authority. It also provides protection against act of anti-union discrimination in
respect of their employment. This convention has been ratified by Albania, Argentina, Austria,
Belgium, Brazil, Byelorussia, Cuba, Denmark, Dominican Republic, Finland and France. Federal
Republic of Germany and India have not ratified this particular convention.
As regards the Trade Unions Act, 1926, it limits the number of outsiders in the executive
of a trade union. Further there is restriction on outsiders in the federations of Government
servants who cannot affiliate themselves with any central federations of workers. Also, the
Government in public interest can forego any association or trade union and detain or arrest a
trade union leader under the Essential Services Act, 1967 , the Preventive Detention Act, 1950,
the Maintenance of Internal Security Act, 1971 Likewise the Code of discipline in industry,
although non-legal and nonstatutory, one regulates the organization of constitution of India itself,
while guaranteeing freedom in public interest and public good. These laws and practice on trade
unions do not conform to the requirements of the convention.

2. Right to Organize and Collective Bargaining Convention, 1949

This fundamental convention provides that workers shall enjoy adequate protection
against acts of anti-union discrimination, including requirements that a worker not join a union or
relinquish trade union membership for employment, or dismissal of a worker because of union
membership or participation in union activities. Workers' and employers' organizations shall
enjoy adequate protection against any acts of interference by each other, in particular the
establishment of workers' organizations under the domination of employers or employers'
organizations, or the support of workers' organizations by financial or other means, with the
object of placing such organizations under the control of employers or employers' organizations.
The convention also enshrines the right to collective bargaining.
3. Workers' Representatives Convention, 1971
Workers' representatives in an undertaking shall enjoy effective protection against any act
prejudicial to them, including dismissal, based on their status or activities as a workers'
representative or on union membership or participation in union activities, in so far as they act in
conformity with existing laws or collective agreements or other jointly agreed arrangements.
Facilities in the undertaking shall be afforded to workers' representatives as may be appropriate in
order to enable them to carry out their functions promptly and efficiently.

4. Rural Workers' Organizations Convention, 1975

All categories of rural workers, whether they are wage earners or selfemployed, shall have
the right to establish and, subject only to the rules of the organization concerned, to join
organizations, of their own choosing without previous authorization. The principles of freedom of
association shall be fully respected; rural workers' organizations shall be independent and
voluntary in character and shall remain free from all interference, coercion or repression. National
policy shall facilitate the establishment and growth, on a voluntary basis, of strong and
independent organizations of rural workers as an effective means of ensuring the participation of
these workers in economic and social development.

Freedom of Association and Constitution of India:

Article 19(1)(c) of the Constitution of India, 1950 which envisages fundamental right to
freedom of speech and expression also guarantees the country’s citizens the right “to form
associations or unions” including trade unions. The right guaranteed in Article 19(1) (c) also
includes the right to join an association or union. This right carries with it the right of the State to
impose reasonable restrictions. Furthermore, it has been established that the right to form
associations or unions does not in any manner encompass the guarantee that a trade union so
formed shall be enabled to engage in collective bargaining or achieve the purpose for which it
was formed. The right to recognition of the trade union by the employer was not brought within
the purview of the right under Article 19(1)(c) and thus, such recognition denied by the employer
will not be considered as a violation of Article 19(1)(c). The various freedoms that are recognized
under the fundamental right, Article 19(1)(c), are
 1. The right of the members of the union to meet,
2. The right of the members to move from place to place, 3. The right to
discuss their problems and propagate their views, and
4. The right of the members to hold property.

Objectives of Trade Union Act:

Trade union is a voluntary organization of workers relating to a specific trade, industry or
a company and formed to help and protect their interests and welfare by collective action. Trade
unions are the most suitable organizations for balancing and improving the relations between the
employees and the employer. They are formed not only to cater to the workers' demand, but also
for imparting discipline and inculcating in them the sense of responsibility. They aim to:-
1. Secure fair wages for workers and improve their opportunities for promotion and training.
2. Safeguard security of tenure and improve their conditions of service.
3. Improve working and living conditions of workers.
4. Provide them educational, cultural and recreational facilities.
5. Facilitate technological advancement by broadening the understanding of the workers.
6. Help them in improving levels of production, productivity, discipline and high standard of
living.
7. Promote individual and collective welfare and thus correlate the workers' interests with
that of their industry.
8. to take participation in management for decision-making in connection to workers and to
take disciplinary action against the worker who commits indisciplinary action.

Definition of Trade Union:

Sec 2 (h) states that "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.
Important elements of Trade Union:
1. There must be combination of workmen and employers;
2. There must be trade or business; and
3. The main object of the Union must be to regulate relations of employers and
employees or to impose restrictive conditions on the conduct of any trade or
business.
 In Rangaswami V. S Registrar of Trade Unions, in the Raj Bhavan at Guindy, a number of
persons are employed in various capacities such as household, staff, peons, chauffers, tailors,
carpenters, maistries, gardeners, sweepers etc. There are also gardeners and maistries employed at
the Raj Bhavan at Ootacamund. Those persons are employed for doing domestic and other
services and for the maintenance of the Governor's household and to attend to the needs of the
Governor, the members of his family, staff and State guests. When employees applied for the
registration of trade union, the registrar had rejected their application on the ground that, Raj
Bhavan not comes under the meaning of trade and business. The petition has been field seeking to
set aside the order of the Registrar of Trade Unions, Madras refusing to register the union of
employees of the Madras Raj Bhavan as a trade union under the Trade Unions Act.

Supreme Court rejecting the petition, held that, even apart from the circumstance that a
large section of employees at Raj Bhavan are Government servants who could not form
themselves into a trade union, it cannot be stated that the workers are employed in a trade or
business carried on by the employer. The services rendered by them are purely of a personal
nature. The union of such workers would not come within the scope of the Act, so as to entitle it
to registration there under.

The term "trade union" as defined under the Act contemplates the existence of the
employer and he employee engaged in the conduct of a trade or business. The definition of the
term "workmen" in Sec. 2 (g) would prima facie indicate that it was intended only for interpreting
the term "trade dispute". But even assuming that that definition could be imported for
understanding the scope of the meaning of the term "trade union" in S. 2 (h), it is obvious that the
industry should be one as would amount to a trade or business, i.e., a commercial undertaking. So
much is plain from the definition of the term "trade union", itself. I say this because the definition
of "industry" in the Industrial Disputes Act is of wider significance. Section 2 (j) of the Industrial
Disputes Act which defines "industry" states its meaning as “any business, trade undertaking,
manufacture or calling of employers and includes any calling, services, employment, handicraft
or industrial occupation or avocation of workmen."

In Tamil Nadu NGO Union v. Registrar, Trade Unions, in this case Tamil Nadu NGO
Union, which was an association of sub magistrates of the judiciary, tahsildars, etc., was not a
trade union because these people were engaged in sovereign and regal functions of the State
which were its inalienable functions. In GTRTCS and Officer’s Association, Bangalore and
others vs Asst. Labor Commissioner and anothers, in this case the definition of workmen for the
purpose of Trade Unions is a lot wider than in other acts and that the emphasis is on the purpose
of the association rather than the type of workers and so it is a valid Trade Union.

Definition of Trade Dispute:

"trade dispute" means any dispute between employers and workmen, or between
workmen and workmen, or between employers and employers which is connected with the
employment or non-employment, or the terms of employment or the conditions of labor, of any
person, and "workmen" means all persons employed in trade or industry whether or not in the
employment of the employer with whom the trade dispute arises;

Procedures for the Registration of Trade Unions:

The main object of the Trade Unions Act, 1926 is to provide machinery for registration and
regulation of Trade Unions. Although registration of a trade union is not mandatory, it is
advisable to register the trade unions as the registered trade unions are entitled to get several
benefits, immunities and protection under the act. There are specific rights and privileges
conferred on the members of the registered trade unions. The members of the registered trade
unions are entitled to get protection, immunity and certain exceptions from some civil and
criminal liabilities. A trade union can only be registered under the Trade Unions Act, 1926.

Trade union Act, 1926 not provides compulsory registration. However, there are certain
disadvantages of non registration. Therefore it is better to register the trade union. The following
is the procedure for registration of trade union.

Appointment of Registrar:
Section 3 of the Trade Union Act, 1926 empowers the appropriate
Government to appoint a person to be a registrar of Trade Unions. The appropriate Government is
also empowered to appoint additional and Deputy Registrars as it thinks fit for the purpose of
exercising and discharging the powers and duties of the Registrar. However, such person will
work under the superintendence and direction of the Registrar. He may exercise such powers and
functions of Registrar with local limit as may be specified for this purpose.
Mode of registration:

Sec 4 of the Act states that, any seven or more members of a Trade Union may, by
subscribing their names to the rules of the Trade Union and by otherwise complying with the
provisions of this Act with respect to registration, apply for registration of the Trade Union under
this Act. However, no Trade Union of workmen shall be registered unless at least ten per cent. or
one hundred of the workmen, whichever is less, engaged or employed in the establishment or
industry with which it is connected are the members of such Trade Union on the date of making
of application for registration.

No Trade Union of workmen shall be registered unless it has on the date of making
application not less than seven persons as its members, who are workmen engaged or employed
in the establishment or industry with which it is connected.

Where an application has been made under sub-section (1) of Sec 4 for the registration of
a Trade Union, such application shall not be deemed to have become invalid merely by reason of
the fact that, at any time after the date of the application, but before the registration of the Trade
Union, some of the applicants, but not exceeding half of the total number of persons who made
the application, have ceased to be members of the Trade Union or have given notice in writing to
the Registrar dissociating themselves from the applications.

The Supreme Court in Tirumala Tirupati Devasthanam held that, any group of employees
may be registered as a trade union under the Act for the purpose of regulating the relations
between them and their employer or between themselves. It would be apparent from this
definition that any group of employees which comes together primarily for the purpose of
regulating the relations between them and their employer or between them and other workmen
may be registered as a trade union under the Act.

Application for registration:

Application for registration must be submitted in the prescribed format. Sec 5 provides that, every
application for registration of a Trade Union shall be made to the Registrar, and shall be
accompanied by a copy of the rules of the Trade Union and a statement of the following
particulars, namely:
1. the names, occupations and addresses of the members making the application;
2. in the case of a Trade Union of workmen, the names, occupations and addresses of the
place of work of the members of the Trade Union making the application;
3. the name of the Trade Union and the address of its head office; and
4. the titles, names, ages, addresses and occupations of the 4 office-bearers of the Trade
Union.

Where a Trade Union has been in existence for more than one year before the making of
an application for its registration, there shall be delivered to the Registrar, together with the
application, a general statement of the assets and liabilities of the Trade Union prepared in such
form and containing such particulars as may be prescribed.
Provisions to be contained in the rules of a Trade Union:
Every application must accompany the rules of trade union that has been provided under
Sec 6 of the Act. A Trade Union shall not be entitled to registration under this Act, unless the
executive thereof is constituted in accordance with the provisions of this Act, and the rules
thereof provide for the following matters, namely:
a) the name of the Trade Union;
b) the whole of the objects for which the Trade Union has been established;
c) the whole of the purposes for which the general funds of the Trade Union shall be
applicable, all of which purposes shall be purposes to which such funds are lawfully
applicable under this Act;
d) the maintenance of a list of the members of the Trade Union and adequate facilities for the
inspection thereof by the office-bearers and members of Trade
Union;
e) the admission of ordinary members who shall be persons actually engaged or employed in
an industry with which the Trade Union is connected, and also the admission of the
number of honorary or temporary members as officebearers required under section 22 to
form the executive of the Trade Union;
f) the payment of a minimum subscription by members of the Trade Union which shall not
be less than—
i. one rupee per annum for rural workers;
ii. three rupees per annum for workers in other unorganized sectors; and
iii. twelve rupees per annum for workers in any other case;
g) the conditions under which any member shall be entitled to any benefit assured by the
rules and under which any fine or forfeiture may be imposed on the members;
h) the manner in which the rules shall be amended, varied or rescinded;
i) the manner in which the members of the executive and the other office-bearers of the
Trade Union shall be elected and removed;
j) the duration of period being not more than three years, for which the members of the
executive and other office-bearers of the Trade Union shall be elected;
k) the safe custody of the funds of the Trade Union, an annual audit, in such manner as may
be prescribed, of the accounts thereof, and adequate facilities for the inspection of the
account books by the office-bearers and members of the Trade Union; and
l) the manner in which the Trade Union may be dissolved.

Power to call for further particulars and to require alteration of name:

 Under Sec 7 of the Act, the Registrar has power to call for further information for the
purpose of satisfying himself that any application complies with the provisions of section 5, or
that the Trade Union is entitled to registration under section 6, and may refuse to register the
Trade Union until such information is supplied.

It further states that, if the name under which a Trade Union is proposed to be registered is
identical with that by which any other existing Trade Union has been registered or, in the opinion
of the Registrar, so nearly resembles such name as to be likely to deceive the public or the
members of either Trade Union, the Registrar shall require the persons applying for registration to
alter the name of the Trade Union stated in the application, and shall refuse to register the Union
until such alteration has been made.

Registration:
As per sec 8 of the Act, the Registrar, on being satisfied that the Trade Union has
complied with all the requirements of this Act in regard to registration, shall register the Trade
Union by entering in a register, to be maintained in such form as may be prescribed, the
particulars relating to the Trade Union contained in the statement accompanying the application
for registration.

Certificate of registration:

Sec 9 of the Act empowers the Registrar, on registering a Trade Union under section 8,
shall issue a certificate of registration in the prescribed form which shall be conclusive evidence
that the Trade Union has been duly registered under this Act.

Minimum requirement about membership of a Trade Union:

Sec 9-A provides that, a registered Trade Union of workmen shall at all times continue to
have not less than ten percent or one hundred of the workmen, whichever is less, subject to a
minimum of seven, engaged or employed in an establishment or industry with which it is
connected, as its members.

Cancellation of registration:

A certificate of registration of a Trade Union may be withdrawn or cancelled under Sec 10

of the Act, by the Registrar

1. on the application of the Trade Union to be verified in such manner as may be prescribed;
 2. if the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or
that the Trade Union has ceased to exist or has willfully and after notice from the
Registrar contravened any provision of this Act or allowed any rule to continue in force
which is inconsistent with any such provision, or has rescinded any rule providing for any
matter provision for which is required by section 6;
3. if the Registrar is satisfied that a registered Trade Union of workmen ceases to have the
requisite number of members:
Registrar to the Trade Union shall give a previous notice of two months in writing
specifying the ground on which he proposed to withdraw or cancel the certificate of registration
otherwise than on the application of the Trade Union.

Appeal:
Any person aggrieved by any refusal of the Registrar to register a Trade Union or by the
withdrawal or cancellation of a certificate of registration may, within such period as may be
prescribed, appeal under Sec 11 of the Act,
a) where the head office of the Trade Union is situated within the limits of a
Presidency town to the High Court, or
b) where the head office is situated in an area, falling within the jurisdiction of a
Labour Court or an Industrial Tribunal, to that Court or Tribunal, as the case may
be;
c) where the head office is situated in any area, to such Court, not inferior to the
Court of an additional or assistant Judge of a principal Civil Court of original
jurisdiction, as the appropriate Government may appoint in this behalf for that
area.

The appellate Court may dismiss the appeal, or pass an order directing the Registrar to
register the Union and to issue a certificate of registration under the provisions of section 9 or
setting aside the order or withdrawal or cancellation of the certificate, as the case may be, and the
Registrar shall comply with such order.
Advantages of registration of trade Union:
A trade union enjoys the following advantages after registration under sec 13, namely
a) A trade union after registration becomes a body corporate
b) It gets perpetual succession and common seal
c) It can acquire and hold both movable and immovable property
d) It can enter into a contract

e) It can sue and be sued in its registered name

Objects on which general funds may be spent:

Sec 15 provides the objects on which general fund may be spent. The general funds of a
registered Trade Union shall not be spent on any other objects than the following, namely:—
1. the payment of salaries, allowances and expenses to office-bearers of the Trade Union;
2. the payment of expenses for the administration of the Trade Union, including audit of the
accounts of the general funds of the Trade Union;
3. the prosecution or defence of any legal proceeding to which the Trade Union or any
member thereof is a party, when such prosecution or defence is undertaken for the
purpose of securing or protecting any rights of the Trade Union as such or any rights
arising out of the relations of any member with his employer or with a person whom the
member employs;
4. the conduct of trade disputes on behalf of the Trade Union or any member thereof;
5. the compensation of members for loss arising out of trade disputes;
6. allowances to members or their dependants on account of death, old age, sickness,
accidents or unemployment of such members;
7. the issue of, or the undertaking of liability under, policies of assurance on the lives of
members, or under policies insuring members against sickness, accident or
unemployment;
8. the provision of educational, social or religious benefits for members (including the
payment of the expenses of funeral or religious ceremonies for deceased members) or for
the dependants of members;
9. the upkeep of a periodical published mainly for the purpose of discussing questions
affecting employers or workmen as such;
10. the payment, in furtherance of any of the objects on which the general funds of the Trade
Union may be spent, of contributions to any cause intended to benefit workmen in
general, provided that the expenditure in respect of such contributions in any financial
year shall not at any time during that year be in excess of one-fourth of the combined
total of the gross income which has up to that time accrued to the general funds of the
Trade Union during that year and of the balance at the credit of those funds at the
commencement of that year.
Constitution of a separate fund for political purposes:
 A registered Trade Union may constitute a separate fund, from contributions separately
levied for or made to that fund, from which payments may be made, for the promotion of the
civic and political interests of its members, in furtherance of any of the objects specified in sub-
section (2).

Sub Sec (2) of sec 16 provides the following object on which political fund may be spent,
namely

1. the payment of any expenses incurred, either directly or indirectly, by a candidate or

prospective candidate for election as a member of any legislative body constituted under
the Constitution or of any local authority, before, during, or after the election in
connection with his candidature or election; or
2. the holding of any meeting or the distribution of any literature or documents in support of
any such candidate or prospective candidate; or
3. the maintenance of any person who is a member of any legislative body constituted under
the Constitution or for any local authority; or
4. the registration of electors or the selection of a candidate for any legislative body
constituted under the Constitution or for any local authority; or
5. the holding of political meetings of any kind, or the distribution of political literature or
political documents of any kind.

Contribution to political fund is not compulsory:

The subscription to a trade union for political funds is only voluntary. Sec 16 (3) provides
that, If a member does not contribute to the political fund, he will be under no disadvantage or
disability but in respect of control and management of this fund. He cannot be excluded in any
way from the benefits of the trade union nor can any condition be imposed for his admission to
the trade union.

Immunities/Privileges of a Registered Trade Union:

In the case of Buckinghum and Carnatic Mills, the employers were awarded damages and
the unions were held responsible for illegal conspiracies. The Trade Unions Act, 1926 has made
provisions for the members and office-bearers of a registered trade union from criminal and civil
conspiracies during the strikes and causing any financial loss to the employer.

Workmen's Right to sell his labour at his own price, and the employer's right to determine
the terms and conditions on which he would get the work done, have seldom been absolute. In
former days. statutes fixing wages prohibited labour to claim more. In modem times, minimum
standard legislations prohibit employers to pay less.

The repeal of mediaeval statutes opened the theoretical possibility of free bargaining
between workmen and employers (subject, of course, to the provisions of the minimum standard
statutes). If the terms of employment were not satisfactory, the worker could withdraw his labour
until the employer paid more. Ifthe terms were too onerous, the employer could suspend the work
until the workmen accepted less. But, in practice, mechanization of industries which took away
the importance of their craftsmanship, surplus labour market which made alternative cheap labour
available, the statutes penalizing breach of contract under which workmen except on pain of
imprisonment, agitated for better terms. and the overall economic superiority of employers
heavily tilted the bargaining power in favour ofthe employer and the workmen became helpless
participants.

Under the circumstances, it was natural for the working class to combine together to
retrieve their lost position. But the Act of combination invited the application of the concept of
conspiracy to labour management relations and although the law did not make any distinction
between employers and workmen as such. the element of combination made labourers the worst
sufferers. Further, in an era which was fast moving from status to contract, the workmen's
"protest" also invited the application of the common law doctrine of restraint of trade. By the time
law courts refined the "objectives" and the "means" tests to protect protest movement from
conspiracy and disentangled labour management relations from the concept of restraint of trade,
the community itself had intervened to protect labour from the hazards of the aforesaid common
law doctrines. But, the passage of time and resulting experience made it equally clear that the
community could not altogether ignore strikes and lock-outs. Quite apart from the economic
aspects, and law and order which in themselves were important, the health and welfare of the
people depended on the smooth running of industries.
Until 1926, unions of workers indulging in strike and causing financial loss to
management were liable for illegal conspiracies. For instance in Buckingham and Carnatic Mills
the unions were held liable for illegal conspiracies and employers were awarded damages. It was
only in 1926 that the Trade Unions Act, 1926 immunizes trade union activity, from restraint of
trade and conspiracy. But these provisions are of pre constitutional era. These statutory provisions
must now be considered in the light of the Constitutional guarantees of the right to freedom of
speech and expression, to assemble peaceably, to form associations and unions, to practice any
profession and to carry on any occupation, trade or business, and grants protection against
economic exploitation.
 Let’s examine the nature and scope of the immunity afforded to the members and office-
bearers of registered trade union from civil and criminal conspiracies and restraint of trade under
the Trade Unions Act, 1926.

1. Immunity From Criminal Conspiracy

Section 17 of the Trade Unions Act, 1926 seeks to insulate trade unions activity from
liability for criminal conspiracy. It states that, no office-bearer or member of a registered Trade
Union shall be liable to punishment under sub-section (2) of Section 120-B of the Indian Penal
Code in respect of any agreement made between the members for the purpose of furthering any
such object of the Trade Union as is specified in Section 15, unless the agreement is an agreement
to commit an offence.
The immunity is, however, available only:
(i) to office-bearers and members of registered trade unions;
(ii) for agreement;
(iii) which further any such trade union object as is specified in section 15 of the Act;
and
(iv) which are not agreements to commit offences.
The last of the limitations on the scope of the immunity granted by section 17 of the Trade
Unions Act, 1926 raises an issue relating to the very nature of the immunity. Section 120-A of the
Indian Penal Code defines criminal conspiracy to mean: (i) an agreement between two or more
persons to commit an offence, t.e., in general," an act which is punishable under the Indian Penal
Code or any other law for the time being in force; and (ii) an overt act done in pursuance of an
agreement between two or more persons to do an illegal act or to do a legal act by illegal means.
The Indian Penal Code defines the word "illegal" to include, inter alia, everything which is
prohibited by law, or which furnishes ground for a civil action.

Since workman's use of instruments of economic coercion in an industrial dispute involve

breach of contract and 'frequently injury to the property right of the employer both of which are
actionable, use of the instruments of economic coercion amounts to an illegal act within the
meaning of section 120-A read with section 43 of the Indian Penal Code. However, section 18 of
the Trade Unions Act, inter alia. provides: No suit or other legal proceeding shall be maintainable
in any. Civil Court against any registered Trade Union or any office bearer or member thereof in
respect of any act 'done in contemplation or furtherance of a trade dispute to which a member of
the Trade Union is a party on the ground only that such act induces some other person to break a
contract of employment, or that it is in interference with the trade, business or employment of
some other person or with the right of some other person to dispose of his capital or of his labour
as he wills.

Thus, under Section 17 the breach of contract and injury to employers property right cease
to be actionable and. therefore, does not amount to criminal conspiracy" as defined in section
120-A read with section 43 of the Indian Penal Code. A question, therefore, arises as, what is the
criminal liability in respect of which Section 17 of the Trade Unions Act, 1926 grants immunity?
In considering the matter it is relevant to note that section 17 does not grant charter of liberty to
commit an offence, which is punishable with death, life imprisonment or rigorous imprisonment
for a term of two years or more. In fact as the last words of the section 17 of the Trade Union Act,
1926 indicate that it does not insulate agreement to commit any offence whatsoever. Perhaps the
immunity is confined to agreement between two or more persons to do or cause to be done, acts
which are prohibited by law but which neither amounts to an offence nor furnishes ground for
civil action.

Breach of contract does give rise to a civil cause of action, therefore, under section 43 of
the Indian Penal Code an agreement to commit breach of contract through withdrawal of labour
as an instrument of economic coercion in an industrial dispute, is a criminal conspiracy. Further,
so long as any law declares withdrawal of labour in breach of contract to be an offence of a
member of the consenting party takes any step to encourage, abet, instigate, persuade, incite or in
any manner act in furtherance of the objective, the crime of criminal conspiracy would have been
committed. Finally, since criminal conspiracy is a substantive offence punishable under section
120-B of the Indian Penal Code it is doubtful if Section 17 grants immunity at all.

The word "illegal" is applicable to everything which is an offence or which is prohibited

by law, or which furnishes ground for a civil action, and a person is said to be "legally' bound to
do, whatever it is illegal for him to omit. Reading section 18 of the Trade Unions Act with section
43 of the Indian Penal Code it would appear that withdrawal of labour as an instrument of
economic coercion in an industrial dispute in breach of contract is not illegal. Accordingly, an
agreement between two or more workmen, members of a registered trade union to withdraw
labour as an instrument of economic coercion in an industrial dispute is not an agreement "to do
or cause to be done an illegal act" and amounts to a criminal conspiracy within the meaning of
section 120-A of the Indian Penal Code. Accordingly, withdrawal of labour in breach of contract
does not give rise to a cause of action in civil courts.

The Calcutta High Court in Jay Engineering Works Ltd. v. Staff while interpreting the
provisions of section 17 of the Trade Unions Act, 1926 held that, no protection is available to the
members of a trade union for any agreement to commit an offence. When a group of workers,
large or small, combined to do an act for the purpose of one common aim or object it must be
held that there is an agreement among the workers to do the act and if the act committed is an
offence, it must similarly be held that there is an agreement to commit an offence.

2. Immunity From Civil Actions

Section 18 of the Trade Unions Act, 1926, grants immunity to registered trade unions from
civil suits
i. No suit or other legal proceeding shall be maintainable in any civil court against any
registered trade union or any officebearer or member thereof in respect of any act done in
contemplation or furtherance of a trade dispute to which a member of the trade union is a
party on the ground only that such act induces some other person to break a contract of
employment, or that it is in interference with the trade business or employment ofsome
other person or with the right ofsome other person to dispose of his capital or his labour
as he wills.
ii. A registered trade union shall not be liable in any suit or other legal proceeding in any
civil court in respect of any tortuous act done in contemplation or furtherance of a trade
dispute by an agent of the trade union if it is proved that such person acted without the
knowledge of, or contrary to express instructions given by the executive of the trade
unions
The above section does not afford immunity to the members or office bearers of a trade
'union for an act of deliberate trespass.? The immunity also cannot be availed of by them for
unlawful or tortuous act. IO Further such immunity is denied if they indulge in an illegal strike or
gherao. Moreover the immunities enjoyed by the union do not impose any public duty on the part
of the union.

In Rohtas Industries Staff Union v. State of Bihar, certain workmen went on an illegal and
unjustified strike at the instance of the union. A question arose whether the employers have any
right of civil action for damages against the strikers. The arbitrator held that the workers who
participated in an illegal and unjustified strike, were jointly and severely liable to pay damages.
On a writ petition the Patna High Court quashed the award of the arbitrator and held that
employers had no right of civil action for damages against the employees participating in an
illegal strike within the meaning of section 24 of the Industrial Disputes Act, 1947. From this
decision it is evident that section 18 grants civil immunity in case of strike by the members of the
trade union. On appeal, the Supreme Court affirmed the judgment of the high court on the ground
that the claim for compensation and the award thereof in arbitration proceedings were invalid and
such compensation for loss of business was not a dispute or difference between the employers and
the workmen which was connected with the employment or non-employment or terms of
employment or with the condition of labour of any person. The Supreme Court found itself not
obliged to decide the question as to whether the Patna High Court was right in relying on section
I8 of the Act to rebuff the claim for compensation because the learned judges of

In Jay Engineering Works v, Staff the Calcutta High Court was invited to consider the
question whether the protection under sections 17 and 18 of the Trade Unions Act can be availed
of where workers resort to gherao. The net result of the decision set out above is that Sections 17
and 18 of the Indian Trade Unions Act grant certain exemption to members of a trade union but
there is no exemption against either an agreement to commit an offence or intimidation,
molestation or violence, where they amount to an offence. Members of a trade union may resort
to a peaceful strike, that is to say, cessation of work with the common object of enforcing their
claims. Such strikes must be peaceful and not violent and there is no exemption where an offence
is committed. Therefore, a concerted movement by workmen by gathering together either outside
the industrial establishment or inside within the working hours is permissible when it is peaceful
and not violate the provisions of law. But when such a gathering is unlawful or commits an
offence then the exemption is lost. Thus, where it resorts to unlawful confinement of person’s
criminal trespass or where it becomes violent and indulges in criminal force or criminal assault or
mischief to person or property or molestation or intimidation, the exemption can no longer be
claimed.

The Calcutta High Court once again in Reserve Bank of India v. Ashis held that in oder to
secure immunity from civil liability under section 18 inducement or procurement in breach of
employment in furtherance of trade dispute must be by lawful means and not by means which
would be illegal or wrong under any other provisions of the law. The Madras High Court in Sri
Ram Vilas Service Ltd. v. Simpson Group Company Union held that it was not within the
purview of the high court to prevent or interfere with the legitimate rights of the labour to pursue
their agitation by means of a strike so long as it did not indulge in acts unlawful and tortious.

In Indian Newspapers (Bom) Pvt. Ltd. v. T.M. Nagarajan the Delhi High Court held that
when there are allegations of violence made by the management in the plaint supported by
documents then prima facie a suit would be maintainable and the protection of section 18 of the
Trade Unions Act, 1926 would not be available. The fact whether any act of violence was
committed or not would be decided in the suit.
 In Ahmedabad Textile Research Association v. ATIRA Employees Union a Division
Bench of the Gujarat High Court held that it is not within the purview of the civil court to prevent
or interfere with the legitimate rights of the workmen to pursue their demands by means of strike
or agitation or other lawful activities so long as they do not indulge in acts unlawful, tortious and
violent. The court further held that any agitation by the workmen must be peaceful and not
violent. Any concerned movement by workmen to achieve their objectives is certainly
permissible even inside the industrial establishment.

3. Enforceability of Agreements:

Section 19 grants protection to the agreements (between the members of a registered trade
union) whose objects are in restraint of trade notwithstanding anything contained in any other law
for the time being in force declaring such agreements to be void or voidable.

Problems of trade Union:

Following are some of the problems that are faced by trade unions in India, namely
1. Multiplicity of unions: Unlike the developed countries of the world (like U.K. and
U.S.A) the number of unions is relatively large in India. A number of unions exist in one
industrial unit. The rival unions sometimes do more harm to the workers than good.
2. Absence of union structure: The structure of the trade union may be a craft union,
industrial union or the general union. A craft union is a union of workers representing
particular skills such as electricians. When all the workers of an industry become
members of the union, it is known as industrial union. A general union on the other hand
covers various types of workers working in the different industries. In India, there is an
absence of craft union. National commission on labour has recommended the formation of
industrial unions and industrial federations.
3. Limited membership: The membership of the trade unions in India is very less. A trade
union cannot become strong unless it can enroll large number of workers as its members.
4. Scarcity of finances: The main problem faced by trade unions in India is the paucity of
financial resources. Fragmentation necessarily keeps the finances of the union very low.
The membership fees paid by the members are very nominal. For this reason it is not
possible for the union to take up welfare activities for its members.
5. Small size: On account of the limited membership, the size of the unions in India is very
small. About 70 to 80% of the unions have less than 500 members.
6. Lack of unity: The major weakness of the trade union movement in India is the lack of
unity among the various unions existing in India at present. The labour leaders have their
 own political affiliations. They use labour force for achieving their political gains rather
than concentrating on the welfare of the workers.
7. Lack of trained workers: The workers in India are uneducated and untrained. The
politicians, who are least concerned with the welfare of the workers, become their leaders.
Backwardness of the workers and their fear of victimisation keep them away from union
activities.
8. Political dominance: It is very unfortunate for the workers that all trade unions in India
are being controlled by political parties. In order to achieve their political ends, they
exaggerate workers’ demands and try to disturb the industrial peace of the country.
9. Hostile attitude of employers:The employers have their own unions to oppose the
working class. According to M. M. Joshi “They first try to scoff at it, then try to put it
down; lastly if the movement persists to exist, they recognise it”. In order to intimidate the
workers, employers use many foul means which go to the extent of harassing the leaders
by black-listing them or threatening them through hired goondas.

Certain other reasons which also make the union movement weak are
a) recruitment of workers through the middlemen who do not allow these persons to
become members of the union
b) workers in India come from different castes and linguistic groups it affects their
unity
c) unions least care for the welfare activities of their members.
The weak position of the Trade Unions in the country stands in the way of the healthy
growth of the device of collective bargaining for the achievement of workers’ aims. It is one of
the principal reasons that adjudication rather than negotiation has to be applied for the settlement
of industrial disputes.
It is incumbent on the part of all concerned with the welfare of the workers to make the
trade unions strong and effective for the purposes for which they are formed. A strong union is
good for the workers, the management, as well as for the community.

Amalgamation of Trade Unions:

Sec 24 provides that, any two or more registered Trade Unions may become amalgamated
together as one Trade Union with or without dissolution or division of the funds of such Trade
Unions or either or any of them, provided that the votes of at least one-half of the members of
each or every such Trade Union entitled to vote are recorded, and that at least sixty per cent. of
the votes recorded are in favour of the proposal.
Notice of change of name or amalgamation:
Sec 25 provides that, notice in writing of every change of name and of every
amalgamation signed, in the case of a change of name, by the Secretary and by seven members of
the Trade Union changing its name, and in the case of an amalgamation, by the Secretary and by
seven members of each and every Trade Union which is a party thereto, shall be sent to the
Registrar and where the head office of the amalgamated Trade Union is situated in a different
State, to the Registrar of such State.

Recognition of Trade Union:

There is no specific provision for the recognition of the trade unions under the Trade
Unions Act, 1926. Hence, recognition is a matter of discretion in the hands of the employer.
Provisions for the recognition of trade unions were included in the Trade Union (Amendment)
Act, 1947, but the act has not been implemented. The Trade Union Bill, 1950 also provided for
recognition of trade union (based on the largest membership among the existing trade unions), but
the bill lapsed due to dissolution of parliament.
Recognition of Central Trade Unions
The Central Government gives recognition to Trade Union as Central Trade Union for the
purpose of representing in the International Labour Organizations and International Conferences,
if such trade union fulfils the following conditions:
a) The Union has a minimum of five lakhs membership as on March, 1997.
b) The Union must have members from at least four states,
c) The Union must have a membership at least in four industries.

The Central Chief Labour Commissioner is authorized to verify the fulfillment of above
conditions. Collective Bargaining:
The term “Collective Bargaining” was used by Beatrice Webb in 1897 for the first time in
his famous book “Industrial Democracy”. Collective Bargaining means negotiation between the
employer and workers to reach agreement on working conditions and other conflicting interests of
both sides (employer and workers).

In simple words, collective bargaining means bargaining between an employer or group of

employers and a bonafide labour union. There are few advantages and disadvantages of collective
bargaining. Advantages:

1. Collective Bargaining imposes an obligation on both parties to the dispute and creates
a specific code of conduct for parties to the process.
2. The parties to the dispute undertake not to resort to strikes or lock-outs, and thus
collective bargaining ensures peace and industrial harmony. Disadvantages:

1. Increase in wages, and extra expenses to provide other amenities to workmen and
improvement of working conditions can cause higher cost of production.
2. Political interference in the labour unions during the collective bargaining process
increases the chance for adverse effects.