Trade Union Act 1926

CA NJS
The Trade Union Act 1926
CA. Narinder Jit Singh
Under Supervision of Prof. Dr. Somnath Ghosh

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Factors Influencing Labour Legislations
A. Early Exploitative Industrial Society:
1. Tea District Emigrant Labour Act, 1832
2. Workmen’s Breach of Contract Act, 1859
3. Assam Labour Emigration Acts – (1861-1901)
B. Act not exploitative but for serving other interest
1. Factory Act 1881 – resulted from complaints of Lancashire textile
magnates, against competition by the cotton textiles produced in the Indian
mills because the labour employed by them was extremely cheap. The main
idea behind this legislation was to increase the cost of production of Indian
textiles by reducing the hours of work and improving other working conditions.
C. Early Administrators and the civil servants drawn from England
D. Industrial Revolution, the French Revolution, Russian Revolution and
revolutionary thinking of few people influenced the process and pace of labour
Jurisprudence.

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Principles of Labour Legislations
1. Principle of Protection
2. Principle of Social Justice
3. Principle of Regulation
4. Principle of Welfare
5. Principle of Social Security
6. Principle of Economic Development
7. Principle of International Obligation

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Classification of Labour Legislations – Not Hard & Fast
1. Regulative
a. The Trade Union Act 1926
b. The Industrial Disputes Act, 1947
c. Industrial Employment (Standing Orders) Act, 1946
2. Protective
a. Factories Act, 1948
b. The Mines Act, 1952
c. The Plantations Labour Act, 1951
d. The Motor Transport Workers Act, 1961
e. Shops and Establishments Acts etc.
3. Wage- Related
a. The Payment of Wages Act, 1936
b. The Minimum Wages Act, 1948
c. The Payment of Bonus Act, 1965
d. The Equal Remuneration Act, 1976

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4. Social Security
a. The Employee’s Compensation Act, 1923
b. The Employee’s State Insurance Act, 1948
c. The Coal Mines PF Act, 1948
d. The Employees PF and Miscellaneous Provisions Act, 1952
e. The Maternity Benefit Act, 1961
f. Payment of Gratuity Act, 1972
5. Welfare both inside and outside the work place
a. Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
b. The Mica Mines Welfare Fund Act, 1946
c. The Cine Workers Welfare Fund Act, 1981
d. Beedi Worker Welfare Fund Act, 1976
e. The Contract Labour (Regulation and Abolition) Act, 1970
f. Child Labour (Prohibition and Regulation) Act, 1986
g. Apprentices Act, 1961 etc.
Classification of Labour Legislations – Not Hard & Fast

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History of Trade Union – Limited Understanding
Though the labour organizations came into existence in India in the last decade of the 19th
century, it was only after the outbreak of First World war in 1914 that they appeared in
the form of modern trade unions.
In absence of any special legislation protecting their status, they received the set-back
under the common law as their British counterparts did much earlier.
The interpretation given to section 120 (B) of the Indian Penal Code dealing with criminal
conspiracy, raised considerable doubts regarding legality of trade unions.
Punishment of criminal conspiracy Section 120 B of Indian Panel Code:
1. Whoever is a party to a criminal conspiracy to commit an offence punishable with death, *[imprisonment for life] or rigorous
imprisonment for a term of two years or upwards shall, where no express provision is made in this Code fro the punishment of
such a conspiracy, be punished in the same abetted such offence.
2. Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall
be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.
Even under Section 27 of Indian Contract Act which Provided, “ every agreement by which
any one is restrained from exercising a lawful profession, trade or business of any kind is
to that extent void”, trade union activities could be restrained.

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History of Trade Union – Limited Understanding
Case Law
High Court of Madras – 1921
M/s Binny and Company (Managing Agents of Bukingham Mills) Vs the Madras Labour
Union
The Court Basing its decision on the Common Law of England, considered trade unions as
illegal conspiracy and issued injunctions on the leaders of the Madras Labour Union
restraining them from instigating workmen to break their contracts with their employer,
and ordered their imprisonment.
Though The case was withdrawn, the attitude of the courts towards trade unions became
obvious. The decision aroused considerable resentment amongst the unionists.
The same year, the Legislative Assembly adopted a resolution moved by N. M. Joshi, the
then general secretary of the AITUC, urging immediate steps for registration of trade
unions and protection of the legitimate trade union activities.

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Objective of The Trade Union Act 1926
To provide Trade Union and
its Members protection in
certain respect of civil and
criminal liability.
Control of expenditure of its
fund for the specified limited
purpose .

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Various Amendments
• The Indian Trade Union (Amendment) Act, 1928
• The Government of India Adaptation of Indian Laws Order, 1937
• The repealing and Amending Act, 1942
• The Indian Independence (Adaptation of Central Acts and Ordinances)
Order, 1948
• The Adaptation of Laws Order, 1950
• The Part B States (Laws) Act, 1951
• The Indian Trade Unions (Amendment) Act, 1960
• The Indian Trade Unions (Amendment) Act, 1964
• The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970
• The Trade Unions (Amendment) Act, 2001

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Trade Union Section 2 (h)
“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, between employer 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.

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Trade Union Section 2 (h)
1. Trade Union is an association either of employees or
employers or of independent workers.
2. Any combination, whether temporary or permanent
3. formed primarily for the purpose of regulating the
relations
4. or for imposing restrictive conditions on the conduct
of any trade or business
5. includes any federation of two or more trade unions

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1. Non-Gazetted Government Offers’ Union V. Registrar of Trade
Unions,
A Vital consideration would be the content or significance of
the word ‘workmen’ as occurring in section 2(h) and that this
would primarily signify only manual labourer or workers of that
class. Thus, the civil servants of the association could not be
considered as workmen at all.
2. Bank of India Employees’ Association V. Reserve Bank of India,
Primary purpose of a trade union is collective bargaining.
3. Rangaswami v. Registrar of Trade Union
Only persons engaged in trade or business can form trade
unions.
Case Laws

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Trade Dispute Section 2 (g)
“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 labour, 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.

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Mode of Registrations Section 4 (1)
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:
Provided that no Trade union of workmen shall be
registered unless at least ten percent or one hundred of
the workmen, which ever is less, engaged or employed in
the establishment or industry with which it is connected
are members of such Trade union on the date of making
of application for registration:
Provided further that 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.

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Application for registration Section 5
(1) 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:-
(a) the names, occupations and address of the members making application;
(b) the name of the Trade Union and the address of its head office; and
(c) the titles, names, ages, addresses and occupations of the 3[office-bearers] of the
Trade Union.
(2) 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.

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Provisions to be contained in the rules of a Trade Union Section 6
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 office-
bearers required under section 22 to form the executive of the Trade Union;

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(ee) the payment of a subscription by members of the Trade Union
which shall be not less than twenty-five naye paise per month per
member;
(f) 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:
(g) the manner in which the rules shall be amended, varied or rescinded;
(h) the manner in which the members of the executive and the other
office-bearers of the Trade union shall be appointed and removed;
(i) 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
(j) the manner in which the Trade Union may be dissolved.
Provisions to be contained in the rules of a Trade Union Section 6

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Bokajan Cement Corpn. Employees’ Union vs. Cement
Corporation of India Ltd., AIR 2004 SC
There is no provision in the Act on the constitution
of the trade union providing for automatic cessation of
membership on cessation of employment. Section 6 (e) only
provides that the rules of a trade union have, inter alia, to
provide for the admission of those who are actually
engaged or employed in industry as ordinary members so as
to entitle a trade union to seek registration under the Act.
Section 6 (e) does not provide that on cessation of
employment an employee would cease to be a member.
Case Laws

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Power to call for further particulars and to require alterations of names Section 7
(1) The Registrar may 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.
(2) 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 tile Union until such alteration has been made.
Registration Section 8
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.

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O.N.G.C. Workmen's Association v. State of West Bengal,
(1988) 57 FLR 522 (Cal).
(i) The Registrar is not a quasi-judicial authority and
cannot, therefore, decide any disputed question of fact
or law;
R.N. Singh v. State of Bihar, 1998 LLR 645
(ii) Provisions of this section relate to only registration
of a trade union, It is only a Civil Court which has
jurisdiction to decide that dispute since under the Trade
Unions Act here is no provision permitting or
empowering the Registrar to refer internal disputes
relating to office-bearer for adjudication to any other
forum.
Case Laws

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Certificate of registration Section 9
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.
Case Laws
IFFCO, Phulpur Karamchari Sangh v. Registrar of Trade Unions, (1992) II, LLJ 239 (All).
(i) The certificate of registration continues to hold good until it is cancelled;
Food Corporation of India Staff Union v Food Corporation of India, 1995 LLR 309 (SC) 3 JJ.
(ii) The registration gives a stamp of due formation of the Trade Union and assures the
mind of the employer that the Trade Union is an authenticated body. The names and
occupation of whose office-bearers also become known;
Minimum Requirement about membership of a Trade Union Section 9 (A)
• A registered Trade union of workmen shall at all times continue to have not less than ten
percent or one hundred of the workmen, which ever is less, subject to a minimum of
seven, engaged or employed in an establishment or industry with which it is connected, as
its members.

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Cancellation of registration Section 10
A certificate of registration of a Trade Union may be withdrawn or cancelled by the
Registrar-
(a) on the application of the Trade Union to be verified in such manner as may be
prescribed;
(b) 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 wilfully 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:
Provided that not less than two months previous notice in writing specifying the ground on
which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to
the Trade Union before the certificate is withdrawn or cancelled otherwise than on the
application of the Trade Union.

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Case Laws
Phillips Workers Union v. Registrar of Trade Unions, (1989) 58 FLR 58 (Cal).
(i) Registration of a trade union, once registered, cannot be cancelled save and except
under section 10;
Nagda Rashtra Sevak Karamchari Congress v. Industrial Court, 1997 (77) FLR 139.
(ii) The Order of cancellation of registration of Trade Union passed by the Registrar without
hearing the Union is violative of principles of natural justice and illegal, hence liable to be
quashed;
Appeal Section 11
Registered Office Section 12

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lncorporation of registered Trade Union Section 13
Every registered Trade Union shall be a body corporate by the name under which it is
registered, and shall have perpetual succession and a common seal with power to acquire
and hold both movable and immovable property and to contract, and shall by the said
name sue and be sued.
Case Laws
Saloman V. Saloman & Co. Ltd. 1897 AC 22.
“Body corporate” means a succession or collection of persons having in the estimation of
the law its own existence and rights and duties distinct from those of the individual persons
who form it from time to time.

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Certain Acts not to apply to registered Trade Unions Section 14
The following Acts namely- .
(a) The Societies Registration Act, 1860 (21 of 1860)
(b) The Co-operative Societies Act, 1912 (2 of 1912)
(C) The Companies Act. 1956 (1 of 1956)
shall not apply to any registered Trade Union, and the registration of any such Trade Union
under any such Act shall be void

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Objects on which general funds may be spent Section 15
The general funds of a registered Trade Union shall not be spent on any other objects than the
following -namely:--
(a) the payment of salaries, allowances and expenses to office-bearers of the Trade Union;
(b) the payment of expenses for the administration of the Trade Union, including audit of
the accounts of the general funds of the Trade Union;
(c) the prosecution or defense of any legal proceeding to which the Trade Union or any
member thereof is a party, when such prosecution or defense 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;
(d) the conduct of trade disputes on behalf of the Trade Union or any member thereof;
(e) the compensation of members for loss arising out of trade disputes;
(f) allowances to members or their dependents on account of death, old age, sickness,
accidents or unemployment of such members;
(g) 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;
RIGHTS AND LIABILITIES OF
REGISTERED TRADE UNIONS

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(h) the provision of education, social or religious benefits for members (including the
payment of the expenses of funeral or religious ceremonies for deceased members) or for
the dependents of members;
(i) the upkeep of a periodical published mainly for the purpose of discussing questions
affecting employers or workmen as such;
j) 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; and
(k) subject to any conditions contained in the notification, any other object notified by the
appropriate Government in the Official Gazette.
Objects on which general funds may be spent Section 15

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Constitution of a separate fund for political purposes Section 16
(1) 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).
(2) The objects referred to in sub-section (1) are:-
(a) 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
(b) the holding of any meeting or the distribution of any literature or documents in support of any such
candidate or prospective candidate; or
(c) the maintenance of any person who is a member of any legislative body constituted under the
Constitution or for any local authority; or
(d) the registration of electors or the selection of a candidate for any legislative body constituted under
1 the Constitution or for any local authority; or
(e) the holding of political meetings of any kind, or the distribution of political literature or political
documents of any kind.
(3) No member shall be compelled to contribute to the fund constituted under sub-section (1); and a
member who does not contribute to the said fund shall not be excluded from any benefits of the Trade
Union, or placed in any respect either directly or indirectly under any disability or at any disadvantage
as compared with other members of the Trade Union (except in relation to the control or management
of the said fund) by reason of his not contributing to the said fund; and contribution to the said fund
shall not be made a condition for admission to the Trade Union.

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Criminal conspiracy in trade disputes Section 17
No office-bearer or member of a Registered Trade Union shall be liable to punishment
under sub-section (2) of section 120B of the Indian Penal Code, 1860 (45 of 1860) 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.
Case Laws
R.S. Ruikar v. Emperor, AIR 1935
Trade Unions have the rights to declare strikes and to do certain acts in furtherance of
trade disputes. They are not liable civilly for such acts or criminally for conspiracy in the
furtherance of such acts as trade unions act permits, but there is nothing in the Act which
apart from immunity from criminal conspiracy allows immunity from any criminal offences.
Indeed any agreement to commit an offence would under section 17, Trade unions act,
make them liable for criminal conspiracy.

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Immunity from civil suit in certain cases Section 18
(I) 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.
(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any
civil court in respect of any tortious 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.

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West India Stell Co. Ltd V. Azeez, 1990 LLR 142 (Ker)
Immunity to a trade union leader (such as the President} is not available when he is
discharged after holding an enquiry into his misconduct;
A workman, even if he is a trade union leader, inside the factory, is bound to obey the
reasonable instructions given to him by the superiors and to carry out his duties duly
assigned to him;
Ahmedabad Textile Research Association v, ATIRA Employees' Union, 1995 LLR 91 (Guj) DB.
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 otherwise as also acts
done in furtherance of a trade dispute
Rohtas Industries Staff Union v. State of Bihar, AIR 1963 Pat 1970
It is manifest in the present case that the striking workmen are not prevented from taking
recourse to the protection of section 18 of the trade unions act mainly because the strike
was illegal under section 24 (1) of the industrial disputes act .
Case Laws

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Case Laws
Standard Chartered Bank v. Hindustan Engg. & General Mazdoor Union, 2002 LLR 254 (Del)
Immunity is provided to the registered trade union from being sued by way of civil suit
under section 18. In respect of any act done in contemplation on 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.
UP Rajya Setu Nigam Sanyukt Karmchari Sangh v. U P State Bridge Corporation, Lucknow 2000
The act has not provided that period of illegal strike would be treated as period of
unauthorized absence or relationship of “employer and employee” would cease.
Ahemdabad Textile Research Association v. ATRA Employees’ Union 1995 LLR 91 (GUR)
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 otherwise as also
acts done in furtherance of a trade dispute.

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Notwithstanding anything contained in any other law for the time being in force, an
agreement between the members of a registered Trade Union shall not be void or voidable
merely by reason of the fact that any of the objects of the agreement are in restraint of
trade:
Provided that nothing in this section shall enable any Civil Court to entertain any legal
proceeding instituted for the express purpose of enforcing or recovering damages for the
breach of any agreement concerning the conditions on which any members of a Trade
Union shall or shall not sell their goods, transact business, work, employ or be employed
Enforceability of agreements - Section 19
Case Laws
Workmen of Kampli Co-op, Sugar Factory Ltd, v. Management of Kampli Co-op Sugar Factory
Ltd" (1995) 1, LLJ 727 (Karn)
The recognition of a trade union is not regulated by any statutory provision. The trade
union cannot enforce the right of recognition against the management by a writ petition.
An agreement ought to have been entered into between the trade union and the
management for granting recognition

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20. Right to inspect books of Trade Union
21. Rights of minors to membership of Trade Unions
21A. Disqualifications of office-bearers of Trade Unions
22. Proportion of officers to be connected with the industry
23. Change of name
24. Amalgamation of Trade Unions
25. Notice of change of name or amalgamation
26. Effects of change of name and of amalgamation
Other Provisions
The Banis Co-op. Thrift & Agricultural Credit Society Ltd. v. State of Punjab. 1979
" Amalgamation" means and implies at least two societies which can be merged with each
other. The mere change of name of a particular society cannot be held to mean or to result
in amalgamation
Rattan Kumar Dey v. Union of India, (1991) 63 FLR 463 (Gau.)
On merger or association the Trade Union and its office-bearers do not lose their identity
Case Laws

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Disqualifications of office-bearers of Trade Unions Section 21A
(1) A person shall be disqualified for being chosen as, and for being member of the
executive or any other office – bearer of a registered Trade Union if –
(i) He has not attained the age of eighteen years
(ii) He has been convicted by a court in india of any offence involving moral turpitude
and sentenced to imprisonment, unless a period of five years has elasped since
his release.
Proportion of office-bearers to be connected with the industry Section 22
(1) Not less than on-half of the total number of the office-bearers of every registered Trade
Union in an unrecognized sector shall be persons actually engaged or employed in an
industry with which the Trade union is connected:
Provided….. (Govt. Exemption)
(2) Save as otherwise provided in sub-section (1), all office bearers of a registered Trade
Union, except not more than one-third of the total number of the office-bearers or five,
whichever is less, shall be persons actually engaged or employed in the establishment
or industry with which the Trade Union is connected. (For the purpose of this
subsection retired and retrenched not to be construed as outsider)
(3) No member of the Council of Ministers or a person holding an office of Profit shall be
executive or other office bearer of a registered trade union (Shortened)

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Dissolution Section 24
(1) When a registered Trade Union is dissolved, notice of the dissolution signed by seven
members and by the Secretary of the Trade Union shall, within fourteen days of the
dissolution be sent to the Registrar, and shall be registered by him if he is satisfied that the
dissolution has been effected in accordance with the rules of the Trade Union, and the
dissolution shall have effect from the date of such registration.
(2) Where the dissolution of a registered Trade Union has been registered and the rules of
the Trade Union do not provide for the distribution of funds of the Trade Union on
dissolution, the Registrar shall divide the funds amongst the members in such manner as
may be prescribed.
28. Returns
29. Power to make regulations
30. Publication of regulations
31. Failure to submit returns
32. Supplying false information regarding Trade Unions
33. Cognizance of offences

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Delhi Hindustani Mercantile Association v. Delhi Administration, 1990 LLR 234 Del.
In case of delay in filing an amendment to the constitution of the Trade Union, the Registrar
can impose a fine under section 31 instead of refusing to incorporate such amendment
Case Laws

Trade Union Act 1926

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