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Trade Union Act, 1926

Nitya Nand Pandey


Assistant Professor
(Amity Law School)
Amity University Jaipur
Mo. 9415422181
Mail id. nnp.vns@gmail.com
The Trade Union Act, 1926

Total Section - 33
Chapter - 05
Came into force - 1st June of 1927
Chapter- I Preliminary (S.1-2)

1. Short title, extent and commencement

2. Definitions
Chapter II Registration of Trade
Unions (S. 3-14)
3. Appointment of Registrars.
4. Mode of Registration.
5. Application for registration.
6. Provisions to be contained in the rule of a Trade Union.
7. Power to call for further particulars and to require alteration of
name.
8. Registration.
9. Certificate of registration.
10. Cancellation of registration.
11. Appeal.
12. Registered office.
13. Incorporation of registered Trade Unions.
14. Certain Acts not to apply to registered Trade Unions.
Chapter III Rights and liabilities of
registered trade unions (S.15-28)
15. Objects on which general funds may be spent.
16. Constitution of a separate fund of political purposes.
17. Criminal conspiracy in the trade disputes.
18. Immunity from civil suit in certain cases.
19. Enforceability of agreements.
20. Right to inspect books of Trade Unions.
21. Rights to minors to membership of Trade Unions.
21A. Disqualification of office bearers of Trade Union
22. Proportion of office-bearers to be connected with the industry.
23. Change of name.
24. Amalgamation of Trade Union.
25. Notice of change of name on amalgamation.
26. Effects of change of name, and of amalgamation.
27. Dissolution.
28. Returns
Chapter IV Regulations
(S. 29-30)

29. Power to make regulations.

30. Publication of regulations.


Chapter V Penalties and procedure
(S. 31-33)

31. Failure to submit returns.


32. Supplying false information regarding Trade
Unions.
33. Cognizance of offences.
Section. 2. Definition Clause

• Trade Dispute (2g)


• Worker (2g)
• Trade Union (2h)
Section. 2(g) "trade dispute"
• (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.
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 labour,

of any person.
Workmen
• “Workmen" means all persons employed in
trade or industry, and
• Whether or not in the employment of the
employer with whom the trade dispute arises
Section. 2(h)- Trade Union
• "Trade Union" means 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 condition on the conduct of
any trade or business,
 and includes any federation of two or more Trade
Unions.
Exception
• Provided that this Act shall not affect–
(i) any agreement between partners as to their
own business;
(ii) any agreement between an employer and those
employed by him as to such employment; or
(iii) any agreement in consideration of the sale of
the good-will of a business or of instruction in
any profession, trade or handicraft.
It is the object of the association or
combination that determines whether it is
a trade union or not

• Example. A society of authors, publishers, and


other owners of copyright meant to protect
their copyright in music and songs, was held
NOT to be a Trade Union by the House of
Lords.
Tamil Nadu NGO Union vs Registrar,
Trade Unions, AIR 1962, Madras HC
• 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 where were its
inalienable functions.
GTRTCS and Officer's Association,
Bangalore and others vs Asst. Labor
Commissioner and anothers AIR 2002,
Kar. HC
• 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.
Chapter II

Registration of Trade Unions


(S. 3-14)
Important provisions
3. Appointment of Registrars.
4. Mode of Registration.
5. Application for registration.
6. Provisions to be contained in the rule of a Trade Union.
7. Power to call for further particulars and to require
alteration of name.
8. Registration.
9. Certificate of registration.
10. Cancellation of registration.
11. Appeal.
12. Registered office.
13. Incorporation of registered Trade Unions.
14. Certain Acts not to apply to registered Trade Unions.
Introduction
• The registration of a trade union is not
necessary.
• However, upon registration, a trade union gets
several benefits including some immunities
that are not available to an unregistered Trade
Union.
Section 13 specifies that upon
registration, a trade union gets a
legal entity status, due to which-
 it has perpetual succession and a common
seal.
can acquire and hold movable as well as
immovable properties.
can contract through agents.
can sue and can be sued.
Procedure of Registration
• Appointment of the Registrar (S.3)
• Mode of registration
• Application of Registration
• Contains of the registration form
Section. 3. Appointment of Registrars.
1. The appropriate Government shall appoint a person
to be the Registrar of Trade Unions for each State.
2. The appropriate Government may appoint as many
Additional and Deputy Registrars of Trade Unions as it
thinks fit for the purpose of exercising and
discharging, under the superintendence and direction
of the Registrar, such powers and functions of the
Registrar under this Act as it may, by order, specify
and define the local limits within which any such
Additional or Deputy Registrar shall exercise and
discharge the powers and functions so specified.
S. 3……..
• Subject to the provisions of any order under
sub-section (2), where an Additional or
Deputy Registrar exercises and discharges the
powers and functions of a Registrar in an area
within which the registered office of a Trade
Union is situated, the Additional or Deputy
Registrar shall be deemed to be the Registrar
in relation to the Trade Union for the purposes
of this Act.
Mode of registration (S. 4)
• Section 4 says that to register a Trade Union, an
application must be sent to the Registrar of Trade
Unions appointed by an appropriate
government.
• The application must be made by seven or more
persons who are engaged in the trade or industry
in connection to which the Trade Union is to be
formed.
• All the applicants must subscribe their names to
the rules of the Trade Union and comply with the
provisions of this act regarding registration.
Mode of registration (S. 4)
• There must be at least 10% or 100, whichever is
less, members who are engaged or employed in
the establishment or industry to which it is
connected.
• There must not be less than seven members who
are engaged or employed in the establishment or
industry to which it is connected.
• If more that half of the persons who applied for
the registration cease to be members of the
union or expressly disassociate themselves from
the application, the application will be deemed to
be invalid.
Application of Registration
• Section 5 gives the details of the application. It says
that the application should be sent to the registrar
along with the copy of the rules of the trade union and
a statement of the following particulars-
1) The name, occupation, and addresses of the
applicants.
2) The name of the trade union and the address of its
head office.
3) The titles, names, ages, addresses, and occupations of
the office bearers of the trade union.
4) If the trade union has been in existence for more than
1 yr, a general statement of its assets and liabilities.
Contain of the rule book
• Section 6 (Provisions to be contained in the
rules of a Trade Union) specifies the provisions
that should be contained in the rule book of
the trade union. A copy of this rule book must
be supplied along with the application for
registration of the trade union. This rule book
details the internal administration of the trade
union and also determines and governs the
relationship between the trade union and
its members.
Contain of the rule book…….
• It must contain the rules for the following matters:
1. name of the trade union.
2. the whole object of the trade union.
3. the whole purposes for which the general funds can be used.
4. the maintenance of the list of members and adequate facilities to
inspect it by the members of the trade union.
5. the membership of ordinary members who are actually engaged
or employed in an industry with which it is connected as well
as the membership of the honorary or temporary members.
6. the appointment of members of the executive body.
7. the membership or subscription fee, which shall not be less that
25 paisa per member per month
8. the conditions under which a member can get the benefits or has
to pay fines.
9. the safe custody of funds and provisions for inspecting or auditing
the statements, or other documents of the trade union.
10. dissolution of the trade union.
M T Chandersenan vs Sukumaran
AIR 1974
• SC held that if a member fails to pay
subscription fee, he cannot be considered a
member of the trade union. However,
subscriptions cannot be refused under some
pretext which results in the denial of
membership.
Bokajan Cement Corporation
Employees Union
vs
Cement Corporation of India, 2004

• SC held that membership of the union does


not automatically cease upon termination of
the employment.
Power of Registrar (S.-7)
• the registrar has the power
I. to ask for further information from the trade
union to satisfy himself that the trade union
complies with section 5 and is eligible to be
registered under section 6.
II. The registrar can refuse to register the trade
union until he receives the information.
III. Further, he has the power to ask to change the
name of the trade union if a union with the
same name already exists or if he feels that the
name could be deceiving or confusing to the
public or the members of the trade union.
Registration
• Under section 8, upon satisfaction of all the requirements, the
Registrar of the Trade Unions will register the trade union. It is
mandatory for the registrar to register a trade union if the
union satisfies all the technical requirements of this act.

In the case of Re Indian Steam Navigation Workers Union AIR


1936 the court held that a Registrar only has to see whether
all the technical requirements are being fulfilled and not
whether it could be described as unlawful.

In the case of ACC Rajanka Limestone Quarries Worker's


Union vs Registrar of Trade Unions, AIR 1958, it was held that
if the registrar does not register the trade union within 3
months of application, an appeal can be made to the High
Court under art 226.
Certificate
• Under section 9, the registrar will issue the
certificate of registration in the prescribed
form, which shall be a conclusive evidence
that the trade union is registered under this
act.
Cancellation of Registration (S.-10)

• The Registrar of Trade Unions has the power to cancel the


registration of a trade union in the following conditions:
I. On the application of the trade union to be verified in the
prescribed manner.
II. If the registrar is satisfied that registration was obtained by fraud
or mistake.
III. If the trade union has ceased to exist.
IV. If the trade union willfully, upon notice of the registrar, has
contravened or allowed any rule to continue in force, which is
inconsistent with the provisions of this act.
V. If the trade union rescinds any rule providing for any matter,
provision for which is required to be made in section 6.
VI. If the registrar is satisfied that a trade union of workmen has
ceased to have the requisite number of members.
Tata Electric Companies Officer's
Guild vs Registrar of Trade Unions,
1994, Bombay HC
• In this case the court held that for a registrar
to cancel the registration, willful neglect of the
notice is a must. If the trade union sends the
account statement upon notice of the
registrar, the registrar cannot cancel the
registration on the ground that the account
statement was not filed earlier.
After the dissolution
• Under section 27, upon dissolution of a trade
union, seven or more members must send a
notification to the registrar within 14 days of
dissolution and the registrar shall register it after
verifying that the dissolution has been done as
per the provisions of this act.
• Further, if the rules of the trade union do not
provide for distribution of the funds upon
dissolution, the registrar may distribute the funds
in such manner as may be prescribed.
Appeal against the decision of
Registrar (S.11)
• Section 11 grants a limited right to appeal the
decisions or orders passed by the registrar.
• An appeal may be made -
 To the high court, if the head office of the trade union
is located in a presidency town.
 To the labour court or industrial tribunal, if the head
office of the trade union is located in its jurisdiction.
 if the head office of the trade union in any other
location, 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 govt. may
appoint in this behalf for that area.
Other conditions for the Appeal

• An appeal must be made within 60 days of the date on


which registrar passed the order against which the
appeal is made.

• In the case of Registrar of Trade Unions, West Bengal


vs Mihir Kumar Guha 1963, Cal, it was settled that a
trade union whose head office is in a presidency town
has only a single chance of appeal against the decision
of the registrar, which is to the high court while a trade
union whose head office is in muffasil has two chances
of appeals, first in the local court and second in the
high court.
S. 12- Registered office
• All communications and notice to a registered
Trade Union may be addressed to its
registered office. Notice of any change in the
address of the head office shall be given with
fourteen days of such change to the Registrar
in writing, and the changed address shall be
recorded in the register referred to in Section
8.
S. 13- Incorporation of registered
Trade Unions
• 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
an contract, and shall, by the said name sues
and be sued.
S. 1-. Certain Acts not to apply to
registered Trade Unions
• The following Act, namely –
(a) The Societies Registration At, 1863.
(b) The co-operative Societies Act, 1912.
And
(c) The Company Act shall not apply to any
registered Trade Union, had the registration of
any such Trade Union under any such Act shall
be void.
Rights and liabilities of registered
trade unions (S. 15-28)
15. Objects on which general funds may be spent.
16. Constitution of a separate fund of political purposes.
17. Criminal conspiracy in the trade disputes.
18. Immunity from civil suit in certain cases.
19. Enforceability of agreements.
20. Right to inspect books of Trade Unions.
21. Rights to minors to membership of Trade Unions.
21A. Disqualification of office bearers of Trade Union
22. Proportion of office-bearers to be connected with the industry.
23. Change of name.
24. Amalgamation of Trade Union.
25. Notice of change of name on amalgamation.
26. Effects of change of name, and of amalgamation.
27. Dissolution.
28. Returns
Rights and liabilities of registered
trade unions (S. 15-28)
• Liabilities of a registered Trade Union
• Rights and Privileges of a registered Trade
Union
• Immunities available to a registered Trade
Union
Liabilities of a registered Trade Union
• A registered trade union must follow the provisions of the Trade Unions Act 1926.
In particular, the following are some restrictions in a registered trade union:
1. A Trade Union cannot spend the funds on anything the office bearers want. It can
spend funds only on the activities specified in Section 15. These include:
– salaries of the office bearers.
– expenses required for the administration of the trade union
– compensation to workers due to loss arise of any trade dispute.
– welfare activities of the workers including housing, clothing, or any such
activity.
– benefits to the workers or their dependents in the case of unemployment,
disability, or death.
– publishing material for creating awareness in the workers.
– legal expenses required for defending or bringing a suit.
– education of workers or their dependents.
– expenses for medical treatment of workers.
– taking insurance policies for workers.
Liabilities…………..
2. A trade union cannot force members to subscribe to political fund
under section 16.
3. Under section 20 a trade union must make available all its record
books of accounts and list of membership for inspection upon
request of any member or his representative.
4. Section 21 allows minors more than 15 yrs of age to be members of
a trade union. However, such minors cannot hold office.
5. Under section 21-A, a trade union cannot appoint a person who has
been convicted of a crime involving moral turpitude and has been
imprisoned for 6 months or more within last 5 years.

6. As per section 22, at least half of the office bearers of a trade union
must be engaged or employed in an industry to which the trade
union is connected. Also, while a union has a right to remove any
office bearer, this power must be used judiciously and rules of
natural justice must be followed.
7. Under section 28, a general statement, audited in a prescribed
manner, of all income and expenses must be sent to the registrar
every year.
Mario Raposo vs H M Bhandarkar
and others 1994

• Office bearers of a trade union invested the


money from general fund into shares of UTI.
This was held invalid because it is a
speculative investment.
Rights and Privileges of a registered
Trade Union
• Under section 15 a registered trade union has
a right to establish a general fund.
• Under section 16, a registered trade union has
a right to establish a political fund.
Subscription to this fund is not necessary for a
member.
• Under section 17, 18, and 19 a registered
trade union gets immunity in certain criminal,
civil, and contractual proceedings.
Immunites available to a registered
Trade Union
• Section 17 confers immunity from liability in the case
of criminal conspiracy under section 120-B of IPC,
committed by an office bearer or a member.
• However, this immunity is partial in the sense that it is
available only with respect to the legal agreements
created by the members for the furtherance of valid
objects of a trade union as described in section 15 of
the act.
• The immunity cannot be claimed for an act that is an
offence.
• Registered Trade Unions have certain rights to do in
furtherance of their trade disputes such as calling for
strike, persuading members.
West India Steel Company Ltd. vs
Azeez 1990 Kerala
• a trade union leader obstructed work inside the factory for 5
hrs while protesting against the deputation of a workman to
work another section. It was held that while in a factory, the
worker must submit to the instructions given by his superiors.
A trade union leader has no immunity against disobeying the
orders. A trade union leader or any worker does not have any
right by law to share managerial responsibilities. A trade
union can espouse the cause of workers through legal ways
but officials of a trade union cannot direct other workers
individually or in general about how to do their work. They do
not have the right to ask a worker to stop his work or
otherwise obstruct the work of the establishment. An
employer may deal with a person causing obstruction in work
effectively.
Immunity from civil suit in certain
cases.
• Section 18 confers immunity from civil
proceedings in certain cases to a trade union
or its office bears or members.
• In general, a person is liable in torts for
inducing another person to breach his
contract of employment or for interfering
with the trade or business of another.
Immunity in civil matter
• However, a trade union, its officers, and its
members are immune from this liability
provided that such an inducement is in
contemplation or furtherance of a trade
dispute.
• Further, the inducement should be lawful.
• There is no immunity against violence, threats,
or any other illegal means.
P Mukundan and others vs Mohan
Kandy Pavithran 1992 Kerala
• it was held that strike per se is not an
actionable wrong.
• Further, it was held that the trade union, its
officers, and its members are immune against
legal proceedings linked with the strike of
workmen by the provisions of section 18.
Rohtas Industries Staff Union vs State
of Bihar AIR 1963
• In this leading case it was held that employers
do not have the right to claim damages
against the employee participating in an illegal
strike and thereby causing loss of production
and business.
Simpson & Group Companies Workers & Staff
Union vs Amco Batteries Ltd 1992 Karn

• In this case it was held that physical obstruction of


movement of management officials,
contractors, goods, or vehicles carrying raw materials,
is not a trade union right or a fundamental right under
art 19.
• Immunity under section 18 cannot be claimed for such
activities. Right to picket is a very intangible right and it
extends only up to the right of free movement of
others. The methods of persuasion are limited to oral
and visual and do not include physical obstruction of
vehicles or persons.
Enforceability of agreements
• Section 19 - In India, an agreement in
restraint of trade is void as per section 25 of
Indian Contract Act.
• However, such an agreement between trade
union members is neither void nor voidable.
• It is important to note that this right is
available only to registered trade unions.
• An unregistered trade union must follow the
principles of general contract law.
Change of name

• Section 23. change of name


• Section 25. Notice of change of name
• Section 26. Effect of change in name
Section 23. Change the name
• Any registered Trade Union may, with the
consent of not less than two-thirds of the total
number of its members and subject to the
provisions of Section 25 change its name.
• It means-
i. Trade union can change the name
ii. Minimum two third majority is necessary
iii. The requirement prescribed under section
25 must be fulfilled.
S. 25- Notice to Registrar
• S. 25. - (1) Notice in writing of every change of
name, signed by the Secretary and by seven
members of the Trade Union changing its name,
shall be sent to the Registrar.
• (2) If the proposed name 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 refuse to register
the change of name.
Notice to registrar………
• S. 25(3) Save as provided in sub-section (2),
the Registrar shall if he is satisfied that the
provisions of this Act in respect to change of
name have been complied with, register the
change of name in the register referred to in
Section 8, and the change of name shall have
effect from the date of such registration.
Effect of change in name
• S. 26. - (1) The change in the name of a registered
Trade Union shall not effect-
• any rights or obligation of the Trade Union or
• render defective any legal proceeding by or
against the Trade Union, and any legal proceeding
which might have been continued or commenced
by or against it by its former name may be
continued or commenced by or against it by its
former name or may be continued or
commenced by or against it by its new name.
Procedure for amalgamation
 Section 24 says that any two or more registered
trade unions may become amalgamated together
into one trade union with or without dissolution
or division of the funds of such trade unions or
either or any of them.
 Provided that votes of at least one half of the
members of each trade union are recorded and at
least 60% of the votes of each trade union are in
favor of the proposal.
Notice to registrar

• The notice of such amalgamation, signed by


the secretary and seven members of each of
the trade unions, should be sent to the
registrar of the state where the head office of
the amalgamated trade union is to be located.
Satisfaction of Registrar
• If the registrar is satisfied that -
i. All the provisions of this act have been
fulfilled, and
ii. The amalgamated trade union is entitled to
registration under section 6,
• he will register the new trade union under
section 8 and the amalgamation will take
effect from the date of registration.
Effects of amalgamation -S. 26 (2)

An amalgamation of two or more registered


Trade Unions shall not prejudice any right of
any such Trade Unions or any right of a
creditor or any of them.
Dissolution
• 27.(1) When a registered Trade Union is
dissolved, notice for 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 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 regulation.
Section 27 (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 and funds of the Trade Union on
dissolution, the Registrar shall divide the
funds amongst the member in such manner as
may be prescribed.
Returns (S. 28)
• (1) Return shall be sent annually to the Registrar,
on or before such date as may bee prescribed.
• It includes-
i. General statement
ii. Audit report in the prescribed manner
iii. All receipts and expenditure of every
registered Trade Union, and
iv. Assets and liabilities of the Trade Union
existing on such 31st day of December.
• The statement shall be prepared in such form and
shall comprise such particulars as may be
prescribed.
S. 28…………..
• (2) Trade Union during the year which the
general statement refers, together also with
copy of the rules of the Trade Union corrected
up to the date of the dispatch thereof to the
Registrar.
• (3) A copy of every alteration made in the
rules of a registered Trade Union shall be sent
to the Registrar within fifteen days of making
of the alteration.
S. 28………..
• (4) For the purpose of examining the documents
referred to in subsections (1), (2) and (3), the Registrar,
or any officer authorized by him, by general or special
order may, at all reasonable times, inspect the
certificate of registration account books, registers, and
other documents relating to a Trade Union, at -
i. its registered office, or
ii. may require their production at such place as he may
specify in this behalf,
• But no such place shall be at a distance of more then
ten miles from the registered office of a Trade Union.
Penalties and procedure (S.31-33)

S. 31- Failure to submit returns.

S. 32- Supplying false information regarding


Trade Unions.

S. 33- Cognizance of offences.


Failure to submit returns (S. 31)
 If the trade union is bound to send any notice, any
statement or other document, under this Act, and
 such trade union makes default, and
 As per the rule of trade union every office-bearer or
other person was bound to give or send such notice,
statement or document, or
 if there is no such person, every member of the
executive of the Trade Union, shall be punishable with-

i. fine which may extend to five rupees, and


ii. in the case of a continuing default, with an additional
fine which may extend to five rupees for each week
after the first during which the default continues:
• But The aggregate fine shall not exceed fifty
rupees.
• S. 31 (2). Any person who willfully makes, or
causes to be made any false entry –
i. in general statement, or
ii. any omission from the general statement
required by section 28, or
iii. in or form any copy of rules, or
iv. of alterations of rules sent to the Registrar
under that Section,
• shall be punishable with fine which may extend
to five hundred rupees.
Supplying false information regarding
Trade Union
• 32. - Any person who, with intent to deceive-
• gives document to any member of a registered Trade Union, or
• gives document to any person purporting or applying to become
a member of such Trade Union, and
• such document purporting to be a copy of the rules of the Trade
Union or of any alterations to the same,
• which he knows, or has reason to believe that it is not a correct
copy of such rules or alterations, or
• any person who, with the like intent gives a copy of any rules of
an unregistered Trade Union to any person on the pretence that
such rules are the rules of a registered Trade Union,
• shall be punishable with fine which may extend to two hundred
rupees.
Cognizance of offence
• 33. - (1) No court inferior to that of a Presidency
Magistrate or a Magistrate of the first class shall
try any offence under this Act.
• (2) No court shall take cognizance of any offence
under this Act, unless-
i. complaint thereof has been made by, or with
the previous sanction of, the Registrar or,
ii. in the case of an offence under section 32, by
the person to whom the copy was given, within
six months of the date on which the offence is
alleged to have been committed.
Thanks
Nitya Nand Pandey
Assistant Professor
(Amity Law School)
Amity University Jaipur
Mo. 9415422181
Mail id. nnp.vns@gmail.com