Provisional Study of TRADE UNION ACT, 1926

Submitted By

SAURABH AGRAWAL

19FLICDDN01113

BBA.LL.B. (Hons.) III Year

Submitted To

Mr. SURYA SAXENA

(ASSISTANT PROFESSOR)

ICFAI LAW SCHOOL,

THE ICFAI UNIVERSITY, DEHRADUN

2021
 ACKNOWLEDGEMENT

I would especially like to thank my mentor Mr. SURYA SAXENA, without whose constant
support and guidance this project would have been a distant reality.

This work is an outcome of an unparalleled infrastructural support that I have received from
ICFAI Law School, ICFAI University, and Dehradun.

It would never have been possible to complete this study without an untiring support from my
family, especially my parents.

Name: SAURABH AGRAWAL

Roll no: 19 FLICDDN01113
Batch: 2019-2024
TABLE OF CONTENTS

Sr. No. TOPIC PAGE

NO.
1 INTRODUCTION 4

2 HISTORY 5

3 OBJECTIVE AND NEED OF TRADE UNION ACT 6-7

3 PROVISIONS UNDER THE TRADE UNION ACT, 1926 7-13

4 CONCLUSION 14

5 BIBLOGRAPHY 15
INTRODUCTION

Trade union as defined in Black’s Law Dictionary is “A combination or association of men

employed in the same trade, (usually a manual or mechanical trade,) united for the purpose of
regulating the customs and standards of their trade, fixing prices or hours of labor, influencing
the relations of employer and employed, enlarging or maintaining their rights and privileges, and
other similar objects.”1 In India the Trade Union movement is generally divided on political lines.
According to provisional statistics from the Ministry of Labour, trade unions had a combined
membership of 24,601,589 in 2002. As of 2008, there are 12 Central Trade Union Organisations
(CTUO) recognized by the Ministry of Labour2.

On the recommendation of Royal Commission of Labor, the then British Govt. enacted the
Indian Trade Union Act in the year 1926. Indian Trade Unions Act, 1926 deals with the
registration of trade unions, their rights, their liabilities and responsibilities as well as ensures
that their funds are utilized properly. It gives legal and corporate status to the registered trade
unions. It also seeks to protect them from civil or criminal prosecution so that they could carry
on their legitimate activities for the benefit of the working class. .

The Act extends to the whole of India and applies to all kinds of unions of workers and
associations of employers, which aim at regularizinglabor management relations. A Trade Union
is a combination whether temporary or permanent, formed for regulating the relations not only
between workmen and employers but also between workmen and workmen or between
employers and employers. The greatest strength or asset of a trade union is its power of
collective bargaining.

1
Black's Law Dictionary: 2nd Edition Henry Campbell Black
2
http://mospi.nic.in/statistical-year-book-india/2017/210
HISTORY

Growth of Trade union movement in India was an organic process. It started towards the later
half of the nineteenth century and continues to date. It closely follows the development of
Industry in India.

The growth of labour unions in India can be roughly classified into six phases

1. PRE 1918 The genesis of the labour movement in India: Following the setting up of
textile and jute mills along with the laying of railways in the 1850s, worker atrocities
started to become common. So, the origin was labour movements can be traced back to
1860s. In 1890, M.N. Lokhande established BOMBAY MILL HANDS ASSOCIATION.
This was the first organized labour union in India.

2. 1918-1924 EARLY TRADE UNION PHASE: The period marked the birth of Trade
Union Movement in India.AITUC, the oldest trade union federation in India was set up
in 1920. It was founded by Lala Lajpat Rai, Joseph Baptista, N.M Joshi and Diwan
Chaman Lall. Lajpat Rai was elected the first president of AITUC.

3. 1925-1934 PERIOD OF LEFT WING TRADE UNION: This era was marked by
increasing militancy and a revolutionary approach. AITUC split up multiple times paving
way for the formation of organisations like National Trade Union Federation (NTUF) and
All India Red Trade Union Congress (AIRTUC). The government was also receptive to
the trade union movement. Legislations like the Trade Unions Act, 1926 and the Trade
Disputes Act, 1929 gave a fillip to its growth.

4. 1935-1938 THE CONGRESS INTERREGNUM: This phase was marked by greater unity
between different unions. Indian National Congress was in power in most of the
provinces by 1937. This led to more and more unions coming forward and getting
involved with the nationalist movement. In 1935, AIRTUC merged with AITUC.
 5. 1939-1946 PERIOD OF LABOUR ACTIVISM :The Second World War lowered
standard of living for the workers further and this led to the strengthening of the
movement. This, coupled with other issues, led to further split in the movement.

6. 1947-PRESENT (POST-INDEPENDENCE TRADE UNIONISM : NTUC was formed

in May 1947 under the aegis of Sardar Vallabhbhai Patel. Since then, the AITUC has
come to be dominated by the Communists. Later, it came under the influence of
Socialists. Bharatiya Mazdoor Sangh was founded in 1955 and is currently affiliated to
the BJP. Post-independence, trade unions became increasingly tied with party politics.
Post-independence, India has also witnessed different unions coming together to address
a common issue. These include the crippling railway strike of 1974 and the Great
Bombay textile strike, 1982.

MAJOR LABOUR UNIONS AND THEIR POLITICAL AFFILIATION

1. All India Trade Union Congress – Communist Party of India.

2. Indian National Trade Union Congress – Indian National Congress.
3. Bhartiya Mazdoor Sangh – Bharatiya Janata Party.
4. Centre for Indian Trade Unions – CPI(M).
5. Hind Mazdoor Sabha – Samajwadi Party.
6. Self Employed Women’s Association – Unaffiliated

OBJECTIVE AND NEED OF TRADE UNION ACT

The primary function of the Trade Unions Act was to protect the interests of workers against
discrimination and unfair labor practice and also provide them a blanket cover to stand up for
their interests through the formation of trade unions. Through this article, the rights and
regulations of the Trade unions Act have been covered including the scope and objectives of the
act. The objective of the Trade Unions Act of 1926 was to:

 Ensure Security of Workers: This ensured continued employment of workers, prevent

retrenchment, lay off or lock-outs. Controlled application of “fire”or dismissal or
discharge and VRS.
  Obtain Better Economic Returns: This ensured wages hike at periodic intervals, bonus at
higher rate, other admissible allowances, subsidized canteen and transport facilities.
 Secure Power To Influence Management: This ensured workers a participation in
management, decision making, role of union in policy decisions affecting workers, and
staff members.
 Secure Power To Influence Government: This ensured influence on government to pass
labour legislation which improves working conditions, safety, welfare, security and
retirement benefits of workers and their dependents, seek redressal of grievances as and
when needed.

PROVISIONS UNDER THE TRADE UNION ACT, 1926

In 1926, the then British government adopted the Indian Trade Union Act, based on the
recommendations of the Royal Commission of Labor. It is divided into 33 sections and
organized into five chapters.

Section 2 (h) defines trade union as "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

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.

The primary OBJECTIVE of a trade union must be to regulate employer-employee relations or

to impose restrictive limits on the conduct of any trade or company.
A trade union can be registered by the Registrar of the Trade Union. Members of a trade union
who wish to register their organization must first fill out the specified form (Form-A), sign it,
and submit it with the required payments.

Case Law: Registrar Trade Union vs. M. Mariswami Karnatak high Court3.

It observed “if the said section is analyzed, it will be clear that any combination whether
temporary or permanent will be a Trade Union, if it is formed primarily for the said purposes.”

Registration of trade unions:

Registration of a trade union is not compulsory but is desirable since a registered trade union
enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment
(or seven employers) can form a trade union and apply to the Registrar for it registration.

Mode of registration : Section 4 provides 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.
No Trade Union of Workmen shall be registered unless at least ten percent of the workmen
engaged or employed in the establishment or industry with which it is associated, or one hundred
workmen, whichever is less, are members of such Trade Union on the date of application for
registration.

Application for registration : Sec 5 stipulates 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:

– The names, occupations and address of the members making application;

– 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
1974
– The name of the Trade Union and the address of its head office; and

– The titles, names, ages, addresses and occupations of the office

-Bearers of the Trade Union.

When a Trade Union has been in existence for more than one year before filing an application
for registration, the Registrar must receive a general statement of the Trade Union's assets and
liabilities, prepared in such form and containing such particulars as may be prescribed, along
with the application.

Registration Sec 8.-The Register, 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.

IFFCO, Phulpur Karmchari Sangh v. Registrar of Trade Unions and others4, that once the trade
union is registered by the Registrar of Trade Unions under Section 8 of the Trade Unions Act,
1926, certificate of Registration continues to hold good until it is cancelled. The action of the
Registrar of Trade Unions registering the change of names of office bearers of a union does not
amount to registration of trade union.

Chemosyn (P) Ltd. & others v. Kerala Medical and Sales Rerepresentatives Association5, it was
held that a Trade Union registered under the Act is not a statutory body. It is not created by
statute or incorporated in accordance with the provisions of a statute. The activities of the Trade
Union are not closely related to Governmental functions and are not of public importance.
Therefore a Trade Union is not amenable to writ jurisdiction as it is not covered by "other
authorities in Article 12 of the Constitution.

O.N.G.C. Workmen's Association v. State of West Bengal and others6, it was held that the
Registrar of Trade Union has no quasi-judicial authority to hold 6 any inquiry by allowing
parties to examine witnesses and to decide the dispute as to who are the real office-bearers.
Where two rival groups claim to be office bearers of a Union the scope of inquiry is limited and

4
1992 II LLJ 239 ALL.
5
1988 II LLJ 43 KERALA
6
1988 II LLJ 335 CAL.
an order passed by the Registrar in this regard is administrative in nature. To decide a dispute of
this nature an inquiry may be held by the Registrar in presence of both parties.

Advantages of Registration :Although it is not legally necessary for a Union to be registered,

registration does provide it with certain advantages. Some of the advantages gained by
registration as given in Section 13 are as under:

 A Trade Union becomes a body corporate by name under which it is registered and it a
legal entity distinct from its members of which it is composed.
 It gives perpetual succession and common seal.
 It can acquire and hold both movable and immovable property.
 It can enter into a contract.
 It can sue and be sued in its registered name.

Certificate of Registration Sec 9: The Registrar, on being satisfied that the Trade Union has
complied with all the requirements of the 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. 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 the Act.

Section 9A: Minimum requirement related to the membership of a Trade Union

Section 10: Cancellation of Registration-The registrar, according to S.10 of the Act has the
power to withdraw or cancel the registration certificate of any union in any of the following
conditions:

 On an application made by the trade union seeking to be verified in such manner as

may be prescribed;

 If the registrar is satisfied with the fact that the trade union has obtained the certificate
by means of fraud or deceit;

 If the trade union has ceased to exist;

Appeal

The Registrar's decisions are subject to a limited right of appeal under Section 11 of the Act.
Anyone who is aggrieved by the Registrar's refusal to register a Trade Union, or by the
Registrar's withdrawal or revocation of the certificate of registration, has the right to appeal. The
appeal must be filed within 60 days of the Registrar's order against which the appeal is being
lodged.

Rights and Liabilities of Registered Trade Unions:

 Objects on Which General Funds May Be Spent: The general funds of a registered trade
union shall not be spent on any other objects than the payment of salaries, allowances and
expenses to the office bearers of the trade unions; expenses for the administration of the
trade union; the presentation or defiance of any legal proceeding to which the trade union
of any member thereof is a party; the conduct of trade disputes and compensation of
members for loss arising out of trade disputes; provision of education, social or religious
benefits for members; upkeep of a periodical published.

 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 such as the payment of any expenses
incurred, either directly or indirectly; the holding of any meeting or the distribution of
any literature/documents in support of any such candidate; the registration of electors of
the selection of a candidate for any legislative body constituted under or for any local
authority; the registration of electors or the selection of a candidate for any legislative
body constituted under/or for any local authority; holding of political meetings of any
kind.
 Criminal Conspiracy in Trade Disputes: 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, 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 its
unless the agreement is an agreement to commit an offence.

 Immunity from Civil Suit in Certain Cases: 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 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. A registered trade union
shall not be liable in any suit or other legal proceeding in any civil court in respect of any
fortuitous 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.

 Enforceability of Agreements: 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 to the subjects of the
agreement are in restraint of the trade.

 Right to Inspect Books of Trade Unions: The account books of a registered trade union
and the list of members thereof shall be open to inspection by an office bearer or member
of the trade union at such times as may be provided for in the rules of the trade union.

 Right of Minors to Membership of Trade Unions: Any person who has attained the age
of 18 years may be a member of a registered trade union subject to any rules of the trade
union to the contrary, and may subject as aforesaid, enjoy all the rights of a member and
 execute all instruments and give all acquittances necessary to be executed or given under
the rules.

Change of name Sec 23 -Any registered Trade Union may. With the constant of not

less than two-thirds of the total number of its members and subject to the provisions of

section 25, change its name.

Amalgamation of Trade Union.Sec 24 -Any two or more registered Trade Unions any

become amalgamated together as one Trade Unions one Trade Union with or without

dissolution or division of the funds of such Trade Unions or either of then. 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.

Effects of Change of Name and of Amalgamation: The change in the name of a registered trade
union shall not affect any rights or obligations of the trade union or render defective any legal
proceeding by or against the trade union. An amalgamation of 2 or more registered trade unions
shall not prejudice any right of any of such trade unions or any right of a creditor of any of them.
CONCLUSION

Trade unions are important organs for the democratic development of any country and as in india
as we see most of the political parties rose to that stature coming from a trade union backgrounds
only as it puts up the needs and demands of the workers by collective bargaining. Collective
bargaining is an important aspect of the employer-employee relationship. Therefore, the demand
for mandatory recognition of trade union which has not been provided under the Trade Union
Act 1926 has been raised time and again by the workers.

With all that being said India still has a lot of scope of development in that field with the
upcoming digital industrial revolution and cyber space becoming the new industry with India
having the highest participation in it and with the infrastructural development that’s coming to
the country with programs such as make in India and others . India definitely can see the type of
development and rewrite the history with par level developments as the USA did in past century.

It is essential that there should be organization of labor. This is an era of organization.

Capital organizes and therefore labor must organize. - Theodore Roosevelt
BIBLOGRAPHY / WEBLIOGRAPHY

STATUES

1. THE CONSTITUTION OF INDIA, 1949

2. TRADE UNION ACT,1926
3. INDIAN PENAL CODE ,1860

BOOKS

1. B.P. Guha: Wage Movement in Indian Industries.

2. LABOUR AND INDUSTRIAL LAW : SN MISRA

WEBSITE

1. https://www.geektonight.com/trade-unions-act-1926/
2. https://www.clearias.com/trade-unions-history-labour-unions-in-india/
3. https://www.linkedin.com/pulse/all-trade-unions-nagesh-rao/
4. https://blog.ipleaders.in/trade-unions-act-1926/
5. http://www.helplinelaw.com/employment-criminal-and-labour/TDUA/trade-unions-act-
1926.html
6. http://mospi.nic.in/statistical-year-book-india/2017/210
7. https://www.amity.edu/gwalior/ajm/pdf/state_of_trade_unionism_in_india_today.pdf