THE TRADE UNIONS ACT

1926
TRADE UNIONS ACT 1926

 Till 1926 there was no legislation in India for

registration ,protection and regulation of trade unions.
 The T.U ACT –came in to force from 1st June 1927.
 First legislation in India to register, regulate and promote
trade unions in India.
 It is almost identical to the English Trade Union law.
 It was amended in 1964, by which the word ‘Indian’ was
omitted and the act was rechristened as “The Trade Unions
Act, 1926”.
OBJECT OF THE ACT

 To provide machinery for the registration, regulation and of

the rights and privileges of the trade unions.
 The term ‘trade union’ used protection in this Act is not
confined alone to the workers’ union, but also includes
employers’ association as well.
 What purposes the trade union may spend its general funds
and also give provisions for creating a separate fund for
political purposes.
 Protected from various civil and criminal liabilities and
enjoy immunities and privileges.
SCHEME OF THE ACT

 The Trade Unions Act, 1926 has 5 chapters and 33 sections.

 CHAPTER I- (Sections 1 and 2)
 Section 1 gives primary aspects viz. title, extent and
application of the act.
 Section 2 defines various terms under this act viz. Trade
Union, Workmen, Trade, Business etc.
 CHAPTER II –( Section 3 to 14)
 provisions for the registration of trade unions
CONTINUE…

 CHAPTER III –( Section 15 to 28)

 Rights and liabilities of the registered trade unions.
 CHAPTER IV –( Section 29 to 30)
 Conferring power on the appropriate government to make
regulations regarding the trade unions
 The Union Government of India enacted “The Trade Unions
Regulations, 1938”
 CHAPTER V –( Section 31 to 33)
 Gives provisions for the penalties and procedure
T.U MEANING AND
DEFINITION
 A Trade Union is commonly understood as an association of
wage earners or workers.
 Usually it is a voluntary association of workers in a
particular industry or craft.
 Trade Union is an association of wage earners for the
purpose of maintaining and improving their working
conditions.
 N.M. JOSHI( a well known Unionist)
“ A trade union is essentially an organization of employees not
of employers, not of co-partners, not of independent workers”
TRADE UNION- U/s(2h)

 “any combination whether temporary or

permanent, formed primarily:
 for the purpose of regulating relation between:
 Workmen and employers; or
 Workmen and workmen; or
 Employers and employees.
 imposing respective conditions on the conduct
of any trade or business and includes any
federation of two or more trade unions, is
called Trade Union.
Continue…

: Provided that this Act shall not affect-

 Any agreement between partners as to their own business.
 Any agreement between an employer and those employed by
him as to such employment; or
 Any agreement in consideration of the sales of the
goodwill of a business or of instruction in any

profession, trade or handicraft.

Important elements of Trade
Union
 There must be combination of workmen and employers;
 There must be trade or business;
 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.
 Trade union is a voluntary organization of workers
pertaining to a particular trade, industry or a company and
formed to promote and protect their interests and welfare by
collective action.
EXAMPLES T.U

 AICCTU- All India Central Council of Trade Union

 AITUC- All India Trade Union Congress
 AIUTUC- All India United Trade Union Congress
 BMS- Bharatiya Mazdoor Sabha
 SWFI- Steel Workers Federation of India
 SMEWFI- Steel, Metal and Engineering workers Federation
of India
WORKMEN : 2(g)(IDA-1947)

 In the traditional sense trade union is used to denote the

union of workmen.
 Workmen constitute the major part of s trade union.
 All persons employed in a trade or industry whether or not
in the employment of the employer with whom the trade
dispute arise.
 Workmen must be:
Person
Employed
In any trade or industry
To do work
Who can form Trade Union

 Only the persons engaged in trade or business can form

trade union
(Rangaswami vs Registrar of Trade Union) AIR 1962 Madras
231)
WHETHER CIVIL SERVANTS
CAN FORM THE TRADE
UNION?
Tamilnadu N.G.O’s Union vs. The Registrar of
Trade Unions (AIR 1962, Mad. 2341)

 The Madras High Court dismissed the appeal on the ground

that, to get the trade union registered under the Trade
Unions Act, 1926, the members of the union must be
workmen engaged in trade, business or industry and the
appellants in this case are not in that capacity, as they are
civil servants engaged in the tasks of the sovereign
government.
 2(h) this would be primarily signify only manual labourers
and that class
 A Civil Servants’ Union cannot be registered under the
Trade Unions Act, 1926.
REGISTRATIO
N PROCESS OF
T.U
REGISTRATION OF TRADE
UNION (Sec-3 to 10)
 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.
 Appropriate govt. to appoint the Registrar of Trade Unions
for each State.( section 3)
Mode of registration

1. Who may apply: (Section 4 )

Any seven or more members of a Trade Union may by
subscribing their names to the rules of the Trade Union.
 After 2001 Amendment
 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.
Application for registration: Sec-5

 Section 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:
a. the names, occupations and address of the members making
application;
aa. 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;
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c. the name of the Trade Union and the address of its head
office; and
d. the titles, names, ages, addresses and occupations of the
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 contained in the rules of a Trade
Union : Sec- 6

a. The name of the Trade Union;

b. The whole of the objects of its establishment
c. 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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f. the payment of a minimum subscription by members of the

Trade Union
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;
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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;
l. the manner in which the Trade Union may be dissolved
CONTINUE..

 Sec – 7 Power to call for further information

 Sec – 8 Registration
 Registrar on being satisfied, registers the Trade Union by
posting necessary entries in a Register, and issues certificate
to that effect under section 9 of the Act.
 Sec –9 Certificate of 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.
Cancellation or withdrawal of
Registration-(Sec-10)
Grounds for Cancellation:
a. the certificate has been obtained by fraud or mistake or
 b. that the Trade Union has ceased to exist or
 c. has willfully and after notice from the Registrar
contravened any provision of this Act or
 d. 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;
 E. If the Registrar is satisfied that a registered Trade Union
of workmen ceases to have the requisite number of
members.
APPEAL- SEC 11

 The aggrieved person can prefer an appeal against the

following order of the Registrar:

 1. refusing to register Trade Union; or

 2. withdrawing of the certificate issued after registration or
 3. cancelling the certificate of registration
Where the appeal is to be filed?

 a. High court ( head office of the TU situated Presidency

towns)
 aa. Labour Court or Industrial Tribunal
 b . Such court not inferior to the court of an additional or
Assistant or Principal civil court

LIMITATION
 60 days from the order of registrar ( Central Trade Union
Rules 1938 , Rule 10)
Case laws

 Mysore Iron and Steel Works Labourer’s Association v.

Commissioner of Labour and Registrar of Trade Unions
( 1972 Lab.I.C.799)
Registrar is not competent to pass an order cancelling the
registration without, in the first instance, giving a notice and
giving an opportunity to the Trade Union to show-cause
against the proposed action.
Case law

 Tata Electronic Companies Officers Gild vs Registrar of

Trade Union ( 1994 I L.L.J.125 Bom)
Cancellation of trade union will not be valid only on the ground
that the return was not timely present by the trade union that
too an account of misunderstanding. For cancellation shall
proved that the provisions of the Act are deliberately violated.
FUNDS OF TRADE UNION

1.GENERAL FUND : Sec - 15

2.POLITICAL FUND: Sec -16
1. Right to Constitute General
Fund: Sec- 15
 A registered trade union is entitled to maintain two kinds of
funds. They are –
 General Fund and Political Fund.
 According to Section 15 of the Act, a registered trade union
can create a general fund.
 Members of the registered trade union have to contribute to
the general fund. The fund can be spent for the purposes as
specifically stated in the Section 15 of the act.
Purposes for which the General Fund can be utilized:

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 an audit of accounts of the general
fund.
c. The expenses in connection with prosecution or defense
undertaken for the purpose of securing or protecting any
rights of the trade union.
d. The conduct of trade disputes on behalf of the union or
any member
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 E. Compensation of members for loss arising out of trade

dispute
 F. Allowances to members or their dependents on account of
death, old age, sickness, accidents or unemployment of
such members.
 G . The issue of the undertaking of liability under policies
of assurance on the lives of members or under policies
insuring members against sickness, accident or
employment.
 H. the provisions of education, social or religious benefits
2. Right to create a separate
political fund : Sec 16
 According to Section 16, the trade union must create a
separate political fund for the purpose of spending it for
political cause.
 Contributions to such political funds should be collected
separately.
 Contribution to the political fund cannot be compelled or
made as compulsory or condition to admit a person as
member of the trade union.
 However the control and management of the political fund
can be vested exclusively to those members who
contributed to the political fund.
The purposes for which the political fund
may be utilized. Those are: Sec-16 (2)

a. The payment of any expenses incurred by a candidate or

prospective candidate for election as a member of any
legislative body or any local authority. The expenses
includes the expenses incurred before, during and after the
election in connecting with such candidature;
b. Conducting any meeting or distribution of any literature or
documents in support of such candidate or prospective
candidate;
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c. Maintenance of any person who is a member of any

legislative body or local authority;
d. Registration of electors or the selection of a candidate for
any legislative body or local authority;
e. Conducting of political meetings or distribution of political
literature and documents to the members of the trade
union or to the general public.
PRIVILLEGES OR
IMMUNITIES FOR TRADE
UNION
Privileges and Immunities of
Registered Trade Unions
 The Trade Unions Act, 1926 confers certain privileges and
immunities to the members and office bearers of the
registered trade unions to enable them to carry out their
legitimate trade union activities without any fear or threat of
civil or criminal action/liability.
 It is the most important right without which the office
bearers of the registered trade unions may not be able to
discharge their duties efficiently.
What are the Privileges u/TU
ACT

 Immunity from Criminal liability SEC-17

 Immunity from Civil liability- Sec-18
 Immunity from Contractual liability- Sce-19
Immunity from Criminal
liability SEC-17
 It provides immunity from Criminal liability. According to this
provision, the office bearers and member of the registered trade unions
are immune from criminal liability for criminal conspiracy.
 According to section 17 – no office bearers or member of the registered
trade union shall be liable to punishment under Sec-120-B (2) of I.P.C 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 sec 15 ,
unless the agreement in an agreement to commit an offences.
IPC Section 120A. Definition of criminal
conspiracy.

 When two or more persons agree to do, or cause to be done,-

(1) an illegal act, or
(2) an act which is not illegal by illegal means, such an agreement is
designated a criminal conspiracy:

 Provided that no agreement except an agreement to commit an offence

shall amount to a criminal conspiracy unless some act besides the
agreement is done by one or more parties to such agreement in pursuance
thereof.
SEC- 120 B OF IPC

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 for the punishment of such a conspiracy, be punished in the
same manner as if he had 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.
HOW IT RELATES TO TRADE UNION?

It provides the grounds for providing the members of a trade

union immunity from prosecution in criminal proceedings for
any act performed by them while -
 carrying out legitimate functions of the trade union.
 Gathering either inside or outside the establishment during
the working hours is permissible, it is peaceful and does not
violate the law.
The immunity is available only:

1) To office bearers and members of registered trade union

2) The agreement between the members
3) Such agreement should have been made in furtherance of any object
mentioned under section 15 of the Act.
4) Such agreement should not to be an agreement to commit an offence.
 An agreement to commit an offence or illegal act, even if it is in
furtherance of a trade dispute, would not fall within the protection
granted by this section.
Immunity from civil liability-
Sec-18
 Section 18 provides immunity from civil liability.
 S. 18 of the Trade Unions Act provides for exemption from prosecution
in civil cases.
 It essentially states that immunity from civil proceedings is granted to
the office bearers and members of a registered trade union for the
breach of contract of employment between the employer and the
employee.
 Tortious liability
 Contractual liability,

A. IMMUNITY FROM CIVIL
LIABALITY – 18(1)
 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 interfere with 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.
Continue..

The trade union granted immunity from civil proceedings for the
offence of inducing a person to break his contract of employment
between the employer and the employee or of interfering with the
trade, business or employment of some other person, provided that
such inducement is in furtherance of a trade dispute.
conditions

 Induce some other person to break a contract of employment

 inducement must be entirely legal and must be done by lawful means.
 if the inducement to break the contract of employment has been put
forth legally, furtherance of a trade dispute, then it is not actionable
under civil law.
 Similarly, if there is no threat of violence or use of force and there is
still interference in the trade, business or employment of some person,
then immunity is granted provided it was done in furtherance of a trade
dispute.
B. IMMUNITY FROM
TORTIOUS LIABILITY: 18(2)
 A registered trade union is not liable for torts committed such by its
agents in furtherance of trade dispute, if such agent acted-
 a. without the knowledge of the executive committee of the trade
union or
 b. contrary to the express instruction of the executive committee.
Western India Cine Employees
v. Filmalaya Pvt. Ltd.

 The question that arose before the court was whether the
collective action taken by the workers abstaining from work
which caused loss to the employer, at the call of the trade union
was protected under the provisions of s. 18?
Decision

 The court ruled in the affirmative and held that the trade
union issued directions to its members.
 However these directions were issued in an entirely legal
manner, no intimidation, coercion or violence was used. The
court ruled that the trade union was carrying out its
legitimate activities and enjoyed immunity under s. 18 of
the Trade Unions Act.
Simpson & group companies workers
& staff union v. Amco Batteries Ltd.

 Whether creating physical obstruction or duress to officials , obstructing

the movement of cars etc. was justified or not.?
Decision

 It was held by Karnataka high court that physical

interference or duress with free movement of executives,
contractors, staff, suppliers and other public or physically
obstructing the free movement of cars, vehicles and lorries
carrying raw materials and products into and out of the
factory premises could not justified as a trade union right.
Immunity from Contractual liability- Sce-19

 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.
 An agreement between members of a registered trade union
is valid and binding on the members , though it is in
restraint of a trade.
Continue..

Sec 27 of Indian contract Act

“Every agreement by which any one is restrained from exercising a lawful
profession, trade, or business of any kind is to that extend void.”
 not applicable for trade union
EX-
 They may make agreement that they will not work in an industrial
establishment on low wages for long hours.
 They may agree not accept employment on the terms offered by the
employer unless their demands regarding higher wages, bonus or
other facilities accepted.
AMALGAMATION AND
DISSULUTION
Amalgamation

 Merger of two or more Trade Unions into one Trade Union

Section 24 to 26 of the Trade Union Act make provisions for
amalgamation.
 Amalgamation with dissolution of such TU
 Amalgamation without dissolution of such TU
 Amalgamation with divisions of funds of such TU
 Amalgamation without divisions of funds of such TU
 Right to Amalgamation: ( sec -
24)
 Any two are more registered trade unions may become amalgamated
together as one Trade Union with or without dissolution or division of
the funds of such Trade Union.
 Provided-
 The votes of at least one half of the members of each or every such
trade union entitled to vote
 At least 60% of the votes recorded are in favour of the proposal of the
amalgamation.
 Section 25: Procedure for
amalgamation
NOTICE:
• In the case of an amalgamation, by the Secretary and by seven members of each
and every Trade Union which is a party thereto, should be sent to the Registrar.
• If the Registrar feels that the proposed name is identical with the name of any
other existing Trade Union or, it so nearly resembles such name as it is likely to
deceive the public or the members of either Trade Union, the Registrar may refuse
to register the change of name.
CONTINUE..

 REGISTRATION:

If the Registrar of the State in which the head office of the

amalgamated Trade Union is situated is satisfied that the
provisions of this Act have complied with the amalgamation
shall be given effect from the date of such registration.
 Section 27: Dissolution

• A registered trade union may dissolved at any time.

• If a registered trade union has been dissolved, a notice of such dissolution which
must be signed by seven members and by the Secretary of the Trade Union should
be served to the registrar within 14 days of such dissolution
• If the registrar is satisfied that the dissolution has been effected in accordance with
the rules laid down by the trade union may register the dissolution.
• Where a union has been dissolved but its rules do not lay down the way in which
the fund is to be distributed after its dissolution, the registrar may distribute the
funds in any prescribed manner.
RECOGNITION
OF T.U
RECOGNITION OF TU

 A union must be recognised before it may effectively represent any

employees.
 Once a union is recognised it serves as the bargaining agent for the
workers in a particular bargaining unit. An employee may not
circumvent the union, because recognition entails willingness ‘to
negotiate with a view to striking a bargain and this involves a positive
mental decision.
 It has been debated time and again. But inspite of the government
stated policy to encourage trade unions, there is no enforced central
legislation on this subject.
 There are however voluntary code of discipline and legislations in
some states
Need for recognition:

 Recognition of trade union is the backbone of collective

bargaining.
 It is necessary in the interest of both trade unions and
employers.
 It will also in-effect prevent the number of disputes which
arise from inter union rivalry
 To facilitate the settlement of disputes
 To bring uniform standard for all trade unions
 Management in several states have refused to
recognise a trade union mainly on five grounds:

(1) most of the office bearers of the union were outsiders,

(2) and sometimes, those disapproved by management,
particularly politicians and ex-employees;
(3) the union consisted of only small number of employees;
(4) there were many rival unions in existence;
(5) the trade union was not registered under the Trade Unions
Act,1926.
 Recognition of Trade Unions
by Employers:
 After the registration of the trade union, the question of its recognition by the
employer comes to the forefront in as much as if it is recognised by the
employer for the purpose of collective bargaining, then it will have certain
privileges and an opportunity to fulfill its role.
 There is no provision in the Indian Trade Unions Act or Industrial Disputes
Act, 1947,
 only two central enactments in this respect in the country regarding
recognition of the trade union by employers.
The Trade Unions (Amendment
) Bill, 2019

• The Trade Unions (Amendment) Bill, 2019 was introduced in Lok Sabha by the
Minister of Labour and Employment, Santosh Kumar Gangwar, on January 8,
2019.

• The Bill amends the Trade Unions Act, 1926, which provides for the registration
and regulation of trade unions.

• The Bill seeks to provide for recognition of trade unions or a federation of trade
unions at the central and state level by the central and state government,
respectively.
•
CONTNUE…

• Such trade unions or the federation of trade unions will be

recognised as Central Trade Unions or State Trade Unions,
as the case may be.
• The central or state government may make rules for:
(i) the recognition of such Central or State Trade Unions
(ii) the authority to decide disputes arising out of such
recognition, and the manner of deciding such disputes.
COLLECTIVE
BARGAINING
INTRODUCTION

 The role of Collective Bargaining in the modern industrial

setup is assuming importance as a peaceful method to
resolve the individual disputes.
 Collective Bargaining is a process by which problems of
wages and conditions of employment are settled
amicably, peacefully and voluntarily between labour and
management.
 As an individual, labour or worker finds himself unable
to protect his legitimate interests. If he is a member of a
Trade Union bargains with the employer regarding the
terms and conditions of employment, he finds himself in
a commanding position.
MEANING

 Collective bargaining is that arrangement whereby the

wages conditions of employment of workman are
settled through a bargain between the employer and
the workmen collectively whether represented through
their Union or by some of them on behalf of all of them.
 Bargaining between an employer or group of employers
and a bona fide labour Union.
 Collective bargaining implies a community of interest.
According to an ILO Manual in
1960, the Collective Bargaining is
defined as:

”Negotiations about working conditions and terms

of employment between an employer, a group of
employees or one or more employers organization
on the other, with a view to reaching an
agreement.”
Main Features of
Collective Bargaining:
 It is a Group Action
 It is a Continuous Process
 It is a Bipartite Process
 It is Flexible and not Fixed or Static
 It is Industrial Democracy at Work
Process in Collective
Bargaining
PREPARING FOR NEGOTIATION

PROPOSE KEY DEMANDS

NEGOTIATION

AGREEMENT REACHED

ADMINISTRATION OF AGREEMENT
ADVANTAGES

 It is pro-employees.
 It prevents employees from going on strikes.
 It gives protection to all employees.
 It represents each employee within the
workplace.
 Collective bargaining encourages relationship
formation.
 It is a contract which provides binding results
to all parties.
Disadvantages

 It can be biased to employers.

 It takes a long period of time.
 It can widen the gap between employers
and employees.
 It is used as a political tool.
 All workers are bound by a collective
bargaining agreement.
IMPORTANT QUETIONS

1. Explain the Trade Union Movement in INDIA and U.K

2. Define Trade Union. Explain the procedure and process for
Registration of Trade Union.
3. What are the Funds of Trade Union. Explain.
4. Explain the Immunities and Privileges available to the
Registered Trade Union under The Trade Union Act 1926.
5. Explain the procedure for Amalgamation and Dissolution
of Trade Union.
6. Recognition of Trade Union
7. Collective Bargaining
Thank You