RIGHTS AND LIABILITIES OF TRADE UNION: A

JUDICIAL ANALYSIS

6.5 - Labour Law

Submitted By:

Aipun Kutum

UID: SM0119006

B.A., L.L.B., 3rd Year, 6th Sem.

Faculty In-Charge:

Ms. Kasturi Gakul

National Law University and Judicial Academy, Assam

 TABLE OF CONTENTS

PARTICULARS PAGE NO.

Table of Cases…........................................................................................................................ii
Table of Statutes.........................................................................................................................ii
1. Introduction....................................................................................................................1
1.1 Aim(s).......................................................................................................................1
1.2 Objectives(s).............................................................................................................1
1.3 Scope and Limitations..............................................................................................1
1.4 Review of Literature................................................................................................2
1.5 Research Questions..................................................................................................2
1.6 Research Methodology.............................................................................................2
2. Trade Union: An Introduction........................................................................................4
2.1 Statutory definition of Trade Union.........................................................................4
2.2 Need for Trade Unions.............................................................................................7
2.3 Functions of Trade Unions.......................................................................................8
3. Rights of a Trade Union and Judicial Analysis............................................................11
4. Liabilities of a Trade Union and Judicial Analysis......................................................16

Conclusion................................................................................................................................20
Bibliography.............................................................................................................................iii
Table of Cases

1. Gross v. British Iron Steel and Kindered Trade Association, (1968) Lab. I.C. 1926
(C.A.).
2. IFFCO Phulpur Karamchari Sangh v. Registrar of Trade Unions, (1992) II. L.L.J. 239
(All.).
3. Indian Explosives Workers Union and Anr. v. State of Bihar, (1992) I I.L.J. 578 (Pat.).
4. Indian Oxygen Ltd. v. Their Workmen, AIR 1969 SC 306.
5. Jaya Engineering works v. State of West Bengal, AIR 1968 Cal 407.
6. Mario Raposo v. H.M. Bhandarkar, (1994) II L.L.J 680, (Bom.).
7. Mecon Employees Union v. State of Jharkhand and Ors., (2002) I I.L.J. 993
(Jharkhand).
8. Osborn v. Amalgamated Society of Railway Servants, (1909) 1 Ch. 176.
9. P Mukundan and others v. Mohan Kandy Pavithran, (1992) II L.L.J. 160 (Kerala).
10. Rohtas Industries Staff Union v. State of Bihar, A.I.R. 1963 Pat. 170.
11. Simpson & Group Companies Workers & Staff Union vs Amco Batteries Ltd, (1992) I
L.L.J. 266 (Karn.).
12. West India Steel Company Ltd. v. Azeez, (1990) II I.L.J. 133 (Kerela).

Table of Statutes
1. Indian Trade Unions Act 1926
2. The Central Trade Union Regulations, 1938.
3. Industrial Disputes Act, 1947
 CHAPTER – I
INTRODUCTION

Due to a surge in industrial activity in the later part of 19th century, the population of
working class increased. Since the employers were mainly interested only in profitability,
workers were at a mercy of the employers. Slowly, the concept of a union started taking hold
in India. In 1890, mill workers of Bombay associated under the name of Bombay Millhands
Association. Although it was not a trade union in a strict sense, it was nevertheless a start in
India.

After the First World War the cost of living increased and the workers frequently agitated to
demand more pay. In the early 20th century Royal Trade Commission studied the condition
of workers and suggested the formations of Trade Unions. As per the recommendations of the
Royal Commission, Indian Trade Unions Act was passed in 1926. However, due to strong
opposition from employers, it was enforced only in 1927. The original act lacked teeth in the
sense that the formation of a Trade Union itself dependent on the recognition by the
employer. Later on several amendments were made to fix the issues. In 1947, the act was
amended widely as per the socialist inclination of the polity.1

With the changed social, political and educational environment in terms of awareness of
right, trade unions are considered a major component of industrial relations system. Workers
union plays a crucial role to protect the interest of its members. Therefore, this research work
focuses on the rights and liabilities of trade union.

1.1 AIM(S)

This project aims at judicially analysing the rights and liabilities of Trade Unions.

1.2 OBJECTIVES
1. To study the concept of Trade unions.
2. To study the rights of trade unions.
3. To study the liabilities of trade unions.
1.3 SCOPE AND LIMITATIONS

The scope of this project is limited to studying the concept of trade unions and judicially
analysing the rights and liabilities of trade unions.
1
Baisali Mohanty, ILO Freedom of Association, https://unpost.net/ilo-freedom-of-association/.
1.4 LITERATURE REVIEW

S.N. Misra’s2 Labour and Industrial Laws is a comprehensive book on laws for Law students,
which covers the topics related to this research in an analysed manner with the help of
judicial opinions and pronouncements. The book comprises of basic concepts and many
important features of the law that are associated with different aspects. Although the subject
is considered to be quite technical and intricate, this book covers it with simplicity. This is a
must book to begin a basic study in Labour and Industrial law topic certainly.

S.K. Puri’s3 Labour and Industrial Law gives a lucid study on the evolvement of the concept
of trade unions. This book undoubtedly has made the topic very easy to understand as it talks
about the changing perceptions with regard to the topic. This is very important to study when
one wants to know the judicial development of the concept of trade unions in detail. It helps
in clearing the basic and the best part is that it has given enough explanation with simple and
easy to understand manner.
1.5 RESEARCH QUESTIONS
1. What is a ‘trade union’?
2. What are the rights and liabilities of trade unions?
3. How have the rights and liabilities been interpreted by the judiciary
1.6 RESEARCH METHODOLOGY:
 APPROACH TO RESEARCH:
The approach involved in this project regarding research is Doctrinal Approach. This
research includes research in which secondary sources are used and materials are
collected from libraries, books, journals, articles, etc.
 SOURCES OF DATA COLLECTION:
Secondary sources of data are used in this project. This mainly includes books and
commentary on India Constitution and various articles related to power and role of
President in context of Indian Constitution.
 TYPES OF RESEARCH:
Explanatory type of research was used in this project, because the project topic was not
relatively new and unheard of and also because various concepts were needed to be
explained.

2
S.N. MISRA, LABOUR AND INDUSTRIAL LAWS (Central Law Publications 26th ed. 2011).
3
S.K. PURI, LABOUR & INDUSTRIAL LAW (Allahabad Law Agency 10th ed. 2011)
 CHAPTER-II
TRADE UNION: AN INTRODUCTION
Trade unions are those organisations of employees/workers who work for the maintenance
and enhancement of their economic status by insisting on a rise in money wages and
improvement in working conditions and benefits. Besides this economic objective, there are
other dimensions of trade unions which have grained importance in the context of the
changing socio-political environment. The workers are not only a factor of production but an
individual whose total life situation is a matter of concern for the trade unions.

Gandhiji viewed trade unions as moral institutions aiming at making the workers better
individuals and responsible citizens. Trade unions are considered to be institutions
experimenting with industrial democracy which would strengthen democracy. Traditionally,
trade unions have been resistance organisations defending the interests of workers and see to
it that they are not exploited. They have also been viewed as instruments of change in the
socio- political system so that workers may have their own government and prevent their
exploitation.

Different authors have defined a trade union in different ways. However, the various
definitions of a trade union exhibit two important features, i.e., in the first place, a trade union
is defined usually in the light of the functions it is expected to perform. Though there is a
diversity of opinions in regard to the role of trade unions in the working-class movement, yet
all agree to the fundamental purpose of trade unionism, viz., the pursuit of the economic
interests of the members. Secondly, a trade union is confined to workers alone.

The Webbs4 defined a trade union as "a continuous association of wage-earners for the
purpose of maintaining of improving the conditions of their working lives." According to
G.D.H. Cole, "a trade union means an association of workers in one or more occupations - an
association carried on mainly for the purpose of protecting and advancing the members'
economic interests in connection with their daily work" 5 Lester6 defines a trade union as "an
association of employees designed primarily to maintain or improve the conditions of
employment of its members".

4
Webb, Sydney & Webb, Beatrice: History of Trade Unionism, London, 1920, p.1.
5
Cole, G.D.H. : An Introduction to Trade Unionism, p. 13.
6
Lester, R.A. : Economist of Labour, p.539.
J. Cunnison7 defines a trade union as "a monopolistic combination of wage-earners who stand
to the employers in a relation of dependence for the sale of their labour and even for its
production; and that the general purpose of the association is in view of that dependence to
strengthen their power to bargain with the employers."

2.1 STATUTORY DEFINITION OF TRADE UNION

The statutory definition of the term ‘trade union’ in India is borrowed from the British Trade
Union Acts of 1871, 1875 and 1913.

According to section 2(h) of the Indian Trade Unions Act 1926, trade union means any
combination whether temporary or permanent, formed primarily for the purpose of regulating
the relations between- workmen and employers or between workmen and workmen or
between employers and employers or for imposing restrictive conditions on the conduct of
any trade or business and includes any federation of two or more trade unions.

Provided 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

(iii) Any agreement in consideration of the sale of the goodwill of a business for instruction
in any profession, trade or handicraft.

The analysis of the definition of the trade union clearly shows that the purpose of trade union
is to maintain balance, harmony in the relations of the persons involved in industrial activity
such as process and production. The purpose of the trade union is not only to secure harmony
between employers and workmen but also it is intended to improve peaceful relations
between employers and employees.

The definition indicates that it is an association of workmen or employers based on mutual

confidence, understanding and co-operation for safeguarding common interests. It need not
be permanent combination; it can be formed for a shorter period.

The definition further indicates that the trade union is formed primarily for the following two
purposes. Firstly, for regulating the relations between (a) workmen and employers, or (b)

7
Counnson J, 'Labour Organisatioin' London, 193; p-13.
workmen and workmen, or (c) employers and employers. Secondly, for imposing restrictive
conditions on the conduct of any trade or business of its members.

The word ‘impose’ connotes an agreement and not compulsion31. Restrictive conditions
would mean to enter into a contract restricting the manner in which one can earn a living.
Any regulation of relations in employment would amount to imposing restrictive conditions.
However, it is to be treated separately from restrictive conditions on the conduct of trade or
business.

The Act confers civil and criminal immunities to the workers under sections 17, 18 of Trade
Unions Act. No employer can sue for damages on the basis of conspiracy on the part of a
trade union, even though damage is caused, provided the means adopted are not unlawful.
The law relating to civil conspiracy will have no application and it will not be necessary to
prove that their acts are justified in the same manner. It was perfectly legal for the employer
to seek a monopoly and to employ such tactics as boycott or black list etc. but the same were
branded as unlawful if they were adopted by union.

After a protected struggle the interests of trade unions have today been placed on par with
those employers in trade. The courts are no more required to investigate if the trade dispute
exists or is apprehended that the acts were done in furtherance of their purpose or to injure
the other party.

The use of the word ‘primarily’ in the Trade Unions Act suggests that trade union can have
secondary objectives as well. A trade union may provide for other objectives also and it
cannot be refused registration simply on this ground. But the secondary objectives should not
be inconsistent with the primary objects. These ancillary objects must not be opposed to any
law or opposed to public policy.

We can distinguish three classes of objectives which a trade union can have. The first may be
classified as purely economic objectives i.e., those which relate to questions concerning
wages, hours of work, working and living conditions. The second one viz. benefits purpose,
which includes dispensation of various benefits like sickness and unemployment. The third
group consists of social and political objectives.

The words ‘trade or businesses are not defined in the Trade Unions Act. However, these
words can have a wide variety of meaning, indeed trade is not only in the etymological or
dictionary
sense, but as legal usage, a term of widest scope. It is connected originally with the word
trade and indicates a way of life or an occupation. Persons belonging to a number of trades or
to no trade at all may constitute a trade union whose members may not be members of any
one trade. There may be trade union which is composed neither of workmen nor masters
although it may be a combination to regulate the relations between workmen and workmen or
workmen and employers or employers and employers. What matters is the object of the union
and not its composition. A union may consist of both workmen and employers.

In ordinary usage it may mean the occupation of small keeper equally with that of a
commercial magnate. Trade includes generally speaking, any gainful occupation. Any one
from a dustman to highly skilled professional worker may enter into contract in restraint of
trade restricting the manner in which he can earn a living.

However wide the term ‘trade’ might be, the Supreme Court approved the dictum that those
activities of the government which should be properly described as legal or sovereign
activities are outside the scope of industry8.
In the same manner when Madras Raj Bhavan Workers Union applied for registration under
Trade Unions Act the Registrar rejected on the ground that the members were not connected
with a trade or industry or business of the employer.
With regard to word ‘workmen’ it has not been independently defined in the Trade Unions
Act. But in the definition of the term “trade dispute” in section 2(g) the definition of the
‘workmen’ is found which runs.

All persons employed in any trade or industry, whether or not in the employment of the
employer with whom the trade disputes arise.

Another term ‘employer’ also was not defined in Trade Union Act 1926, However section
2(g) of the Industrial Disputes Act, 1947 defines an ‘employer’ to mean (i) in relation to an
industry carried on by or under the authority of any department of the central government or a
state government the authority prescribed in this behalf or where no authority is prescribed
the head of the department (ii) in relation to an industry carried on by or on behalf of a local
authority, the Chief Executive Officer of that authority.

8
State of Bombay Vs Hospital Mazdoor Sabha (1960) ILLJ 251 SC
Appropriate Government [Sec. 2]: In relation to Trade Unions whose objects are not
confined to one state 'the appropriate Government' is the Central Government. In relation to
other Trade Unions, the 'appropriate Government' is the State Government.
Executive [Sec. 2(a)]: Executive means the body of which the management of the affairs of a
Trade Union is entrusted.
Trade Dispute [Sec. 2(g)]: A trade dispute means any dispute between the employers and
workmen, the workmen and workmen and the 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' mean all persons employed in trade or industry whether or
not in the employment of the employer with whom the trade dispute arises.
Registered Trade Union [Sec. 2(e)]: A registered Trade Union means a 'Trade Union'
registered under the Act.

2.2 NEED FOR TRADE UNIONS

The worker joins a trade union for a variety of reasons, but he may be no more conscious of
the motive or motives that prompt him to join a union. The trade unions are the organizations
formed by working male and female workers both to improve the conditions of labour and to
further to attain better life.

(i) The individual workers all alone feels especially weak in a world of mass production and
mass movement. An organization may give him an opportunity to join others for the
achievement of those objectives that he considers as socially desirable.

(ii) The basic purpose of trade union is to safeguard the economic interests of its members.
One of the problems in the life of the workers is how to provide sufficient food, clothing and
a home for himself and for the members of his family. This is first and foremost a question of
finding a job on a reasonable wage. To improve and maintain the wage at a reasonable
standard is one of the primary reasons for which a worker joins a trade union.

(iii) A worker does not only require the bare necessaries of existence but he also wants to
obtain the amenities of civilized life, e.g., a better home, more leisure, better conditions of
work, etc. The workers also join the trade unions, to a very large extent, because they have
interests such as these to promote or defend.
(iv) The need for trade unions arises due to this fact also that the workers require help in time
of sickness or death, protection from suffering and want when they are not of a job and an
income of some kind when they are too old to work anymore.

(v) There is an aesthetic reason for the existence of trade unions, viz., need for adequate
machinery for settling the relations between the employers and employees. In modern
industry the old personal relationship between the employers and the workers largely
disappears. The worker may become dissatisfied with his working conditions or the treatment
of his employers while the employer may feel that he has reason for complaint against the
workers. With the growth to industry the number of such questions to be settled increases and
it is much better to adjust these differences by agreement between the employers and
employees through negotiations. Thus, a trade union is the best and socially most desirable to
conduct bargaining on behalf of the workers and the development of collective bargaining
between the employers' and workers' organizations is an essential basis for the establishment
of peace in industry.

(vi) Trade unions developed on proper lines lessens violent class conflicts and, thus, is
beneficial to employers, the employees, the state and the public. It is, thus, clear that no
agency formed or promoted to look after the interests of the workers can be a real substitute
for trade unions. The organization of workers is, therefore, not only necessary but also
inevitable.

2.3 FUNCTIONS OF TRADE UNIONS

Trade unions in present era of industrial development, perform two sets of functions: the
"Militant Functions and the Fraternal Functions." The trade union is a militant organisation
designed to fight for the cause of the workers. One of the main aims of the organisation of
workers into trade union is to secure better conditions of work and employment. The trade
unions try to fulfil this aim by the method of collective bargaining and negotiations and if
they do not succeed in securing their purpose in this manner, they put up a fight with the
employers for achieving their end in the form of strikes and boycotts.

More recently, the trade unions have started making efforts to secure some share in the profits
and also control of the industry. Then, the trade union is also a fraternal association, a benefit
organization, providing sickness and accident benefits to the members and supporting them
during strikes and lockouts and during the period when they are temporarily out of work.
Such financial help to the members is given by the trade unions out of their own funds
created
through subscriptions by members. Such functions are known as fraternal functions:
However, in modern period, the various functions are performed by trade unions as pointed
out below:

(A) Militant or protective or intra-mutual functions: These functions include protecting

the workers' interests, i.e., hike in wages, providing more benefits, job security, etc. through
collective bargaining and direct action such as strikes, gheraos, etc.

(B) Fraternal or extra-mutual functions: These functions include providing financial and
non-financial assistance to workers during the periods of strikes and lock-outs, extension of
medical facilities during slackness and casualties, provision of education, recreation,
recreational and housing facilities, provision of social and religious benefits, etc.

(C) Political functions: These functions include affiliating the union to a political party,
helping the political party in enrolling members, collecting donations, seeking the help of
political parties during the periods of strikes and lock-outs.

(D) Social functions: These functions include carrying out social service activities,
discharging social responsibilities through various sections of the society like educating the
customers etc.

From above cited functions, one cannot take a static view of the functions which trade unions
have to perform in the larger interests of the community. In every country the role of the trade
unions has to change depending on the stage of economic and social development. It also
depends on the strength of the unions, both organisational and financial, and also to a great
extent on the institutional set-up of the society in which they operate.

For instance, in France and the Netherlands, unions are required statutorily to be consulted on
any draft legislation dealing with economic and social issues. In Sweden, unions participate
at the level of the Planning Commission and are responsible for the implementation of labour
and social security legislation. The range of responsibilities of the unions covers the
experience of co-determination in the Federal Republic of Germany and workers' control over
industrial establishments in Yugoslavia.

In Denmark, unions participate at the level of the Economic Council. In the U.S.A. and in
Australia, the contacts of unions with governmental authorities are less formal. Like unions'
participation in framing and implementation of social and economic policies, their
consciousness of community responsibility varies from country to country depending upon
the extent of wage employment.

In the early stages of their growth, unions in many countries concerned themselves primarily
with their members' interests, but took on wider functions in due course. Thus, trade unions
have become far more developed than their forerunners undertaking a wider range of
functions and having a clearer perception of their ultimate aims.
 CHAPTER- III
RIGHTS OF A TRADE UNION AND JUDICIAL ANALYSIS

The trade unions are granted rights so that they may be able to take appropriate actions for the
attainment of objectives for which they have been formed. Sec. 15-28 is applicable only in
case of a registered trade union and not for unregistered ones. Although registration is not
necessary but it can be done under the provisions in chapter 2 of the Act. By way of an
application to the registrar of trade union but in compliance with the rules provided there
under. It has to be sponsored by at least 7 members who may apply by filing an application to
registrar of Trade Union of the state in which the head office or registered office is to be
located.

(1) Rights granted to it as a legal person9-

i. Right to have perpetual succession and a common seal in its own name.
ii. Right to acquire, hold and dispose of both movable and immoveable property in its
own name.
iii. Right to contract in its own name
iv. Right to use for any infringement of its rights whatsoever. Any aggrieved party
may also sue it in its name.

There are two kinds of funds of trade union namely, general fund and political fund, every
trade union has a right of creation and spend out of the two funds maintained by it and these
two are not to be intermixed but should be kept separate.

(a) The General Fund: Sec 15:

It may be spent on payment of salaries, allowances of office bearers of the union, payment of
expenses on the administration and audit of account, for legal proceedings or protecting the
rights of workers it will be an illegal act to spend the union funds for any purpose other than
those stated in sec 15. It is illegal to devote union funds in support of an illegal strike or
lockout and a Union can be restrained by injunction from applying it, funds for any unlawful
purpose, because such expenditure shall be ultra vires of the Act. 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
9
§ 13, Trade Unions Act, 1926.
arising out of trade disputes; provision of education, social or religious benefits for members;
upkeep of a periodical published.

In Gross v. British Iron Steel and Kindered Trade Association,10 the court observed that if
the solicitor of the Union had advised that further inquiries should be made or that an action
should be brought, the Union would have been under a duty to act accordingly. But in the
absence of such direction from the Solicitor, the Union would have been under a duty to act
accordingly.

In Mario Raposo v. H.M. Bhandarkar11 and others,' the petitioner as well as the respondents
was members of a Union called V.C.O. Bank Employees' Association Nagpur. The office
bearers of the union purchased shares of U.T.I. in their individual names out of the Union
General Fund. It was held that purchase of shares cannot be termed as investment under
section 15 of the Act but is a speculative activity. Section 15 of the Act does not allow to
spend the fund of the union on speculative activity.

(b) Sec. 16 Constitution of a Separate Fund for Political purposes. —

There could be separate funds of trade union for political objectives. No contribution should
be made from the general fund to it. A registered trade union may constitute it, 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.

No member shall be compelled to contribute to the political fund and if anyone so refuses he
shall not be denied the benefits of trade union. There shouldn’t be any discrimination on the
ground of a member having contributed or not to the political funds of the Trade Union shall
be made. Further, contribution to the political fund cannot be made a condition for admission
of a person to the Trade Union. However, the control of management of the political funds
can
10
Gross v. British Iron Steel and Kindered Trade Association, (1968) Lab. I.C. 1926 (C.A.).
11
Mario Raposo v. H.M. Bhandarkar, (1994) II L.L.J 680, (Bom.).
exclusively be vested in the hands of only those members who have contributed to political
funds.

(2) Right to change its name-

Any registered Trade Union may, with the consent of not less than 2/3rd of the total
members and subject to Section 25 change its name.12

(3) Right to amalgamate-

Any two or more trade unions may amalgamate together as one without dissolution of funds
but at least one half of vote of members of trade union is recorded and at least sixty percent
of those votes are in favour of amalgamation under Section 24 of the Act.

(4) Right to Inspect Books of Trade Union-

The account books of a registered Trade Union and the list of members of such a Trade
Union shall be open to inspection by an officer or member of the Trade Union at such times
as may be provided for in the rules of the Trade Union. Sec. 20 states any person interested
in the funds of the Trade Union may inspect the books himself or he can appoint an agent for
this purpose who shall communicate the results of the inspection only to his principal and to
none else.

(5) Right of minors to membership of Trade Union-

This section provides that a person who has attained the age of 15 years may become a
member of a trade union, i.e. even a minor can become such a member but subject to the
rules of the Union as to office bearers as the prescribed minimum age is 18 years. The Trade
Union being a voluntary association is free either to admit or to refuse a person as its
member. Hence it is discretionary exercise of power by a trade union and it can’t be
compelled by the courts to admit any person as a member.[6]Ordinarily membership of trade
union is guided by the rules governing the union and a trade union is free to expel a member
provided that it based on a reasoned decision by following the rules of natural justice.

IMMUNITIES OF A TRADE UNION:

There is criminal as well as civil immunity to trade union in a number of circumstances.

12
§ 23, Trade Unions Act, 1926.
 (1) Immunity against Criminal conspiracy in Trade Disputes.

Section 17 of the Act confers immunity from liability in case of criminal conspiracy under
section 120-B of the Indian Penal Code committed by an office bearer or member of a
registered Trade Union. But the protection is available only in respect of agreements,
between the members in furtherance of any of the legitimate object of a Trade Union as
provided in section 15 of the Act. Therefore if it is to do an act which is an offence, no
immunity can be claimed as was held in the case of Jaya Engineering works v. State of
West Bengal.13

In the case of West India Steel Company Ltd. v. Azeez,14 it was held that a worker inside the
factory is bound to obey the reasonable instructions given by his superiors and carryout the
duties assigned to him. The mere fact that such worker is a Trade Union leader does not
confer on him any immunity in that regard. A trade union leader has no right in law to share
managerial powers and he cannot dictate any worker to do their work or discharge their
duties. A trade union can espouse the cause of the workers and can resort to lawful agitations
for conducting their rights but officials of Trade union are not entitled to order a workman to
stop his work or otherwise obstruct the work of the establishment. Where officials of a Trade
Union obstruct the work management is justified in proceeding against such worker and deal
with him effectively.

(2) Immunity from civil suits in certain cases (Sec. 18)

This section confers immunity from civil proceedings a tortious liability may arise if anyone
induces a person to breach a contract. 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.

In P Mukundan and others v. Mohan Kandy Pavithran 15 1992 Kerala, it was held that strike
per se is not an actionable wrong. It was held that trade union, its officers, and its members
are immune against legal proceedings linked with the strike of workmen by the provisions of
section 18.

13
Jaya Engineering works v. State of West Bengal, AIR 1968 Cal 407.
14
West India Steel Company Ltd. v. Azeez, (1990) II I.L.J. 133 (Kerela).
15
P Mukundan and others v. Mohan Kandy Pavithran, (1992) II L.L.J. 160 (Kerala).
In another leading case Rohtas Industries Staff Union v. State of Bihar16, it was held that
employers do not have the right to claim damages against the employee participation in an
illegal strike and thereby causing loss of production and business.

In the case of Simpson & Group Companies Workers & Staff Union vs Amco Batteries
Ltd17 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.

(3) Enforceability of agreement-

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.

16
Rohtas Industries Staff Union v. State of Bihar, A.I.R. 1963 Pat. 170.
17
Simpson & Group Companies Workers & Staff Union vs Amco Batteries Ltd, (1992) I L.L.J. 266 (Karn.).
 CHAPTER- IV
LIABILITIES OF A TRADE UNION AND JUDICIAL ANALYSIS

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:

 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:

1. salaries of the office bearers.

2. expenses required for the administration of the trade union

3. compensation to workers due to loss arise of any trade dispute.

4. welfare activities of the workers including housing, clothing, or any such activity.

5. benefits to the workers or their dependents in the case of unemployment, disability, or

death.

6. publishing material for creating awareness in the workers.

7. legal expenses required for defending or bringing a suit.

8. education of workers or their dependents.

9. expenses for medical treatment of workers.

10. taking insurance policies for workers.

Mario Raposo v. H.M. Bhandarkar18 - 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.

 A trade union cannot force members to subscribe to political fund under section 16.
 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.

18
Mario Raposo v. H.M. Bhandarkar, (1994) II L.L.J 680, (Bom.).
  Section 21 Rights of minors to membership of Trade Unions- allows minors
more than 15 yrs. of age to be members of a trade union. However, such minors
cannot hold office.
 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.
 As per section 22, at least half of the office bearers of a trade union of workers of
unorganized sector 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.
 Under section 28, a general statement, audited in a prescribed manner, of all
income and expenses must be sent to the registrar every year.
 The trade union has to send notice to registrar in case of every change of its name,
amalgamation of trade unions, any change in the address of head office, for
dissolution and a copy of every alteration made in the rules of registered trade
union which conferred by section 25 and section 28.

Disqualification: A person shall be disqualified for being chosen as, and for being a member
of, the executive or any other office-bearer or 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 elapsed since his release.

DUTIES OF A TRADE UNION:

The constitution of the Trade union must provide for the matters enumerated in Section 6 of
the Trade Unions Act section 6 contains matters in respect of which the Trade Union must
provide within its rules.

(1) Duty to constitute executive as required—

It is under duty to constitute the executive of the Trade Union in accordance with the
provisions of this Act. The provisions relating to the constitution of executive of the Trade
Union are contained in Sections 21-A and 22 of the Act. It’s a condition precedent to the
process of registration.

(2) Duty to spend general funds as required—

 The Trade Union is under statutory duty to spend general funds of the Trade Union in
accordance with Section 15 of the Act which enumerates certain specified objects on which
only the general kinds can be spent and not otherwise.

(3) Duty to constitute a separate political fund—

The Trade Union, if decides to promote civil and political interests of its members, has to
constitute a separate fund commonly known as political fund in accordance with Section 16
of the Act and it may lye spent on the objects specified therein.

(4) Duty to provide access to books of Trade Union—

According to Section 20, the account books and list of members shall be kept open by a
registered Trade Union for inspection by an office-bearer or member of the Trade Union at
such titles as may be provided for in the rules of the Trade Union.

(5) Duty to send notice to the Registrar—

The Trade Union is under duty to send notice to Registrar in cases of every change of its
name, every amalgamation, any change in the address of the head office of Trade Union, and
dissolution thereof. Where the head office of the amalgamated Trade Union is situated in a
different State, notice of amalgamation shall be sent to the Registrar of such State. The
Registrar of the State in which the head office of the amalgamated Trade Union is situated,
shall, if he is satisfied that the provisions of this Act in respect of amalgamation have been
complied with and the Trade Union formed thereby is entitled to registration under section 6,
register the Trade Union in the manner provided in section 8 of the Act. The amalgamation
shall have effect from the date of registration.

(6) Notice of change of name or amalgamation.—

Section 25(1.) of the Act requires that notice in writing of every change of name signed by
the Secretary. If there is any alteration or change in the rules of trade union then under
Section 28(3) a copy of every alteration made in the rules of registered Trade Union shall be
sent to the Registrar within fifteen days of the making of the alteration. On receiving a copy
of an alteration made in the rules of the Trade Union, the Registrar, unless he has reason to
believe that the alteration has not been made in the manner provided by the rules of the
Trade Union, shall register the alteration in a register to be maintained for this purpose.19

19
R. 9, The Central Trade Union Regulations, 1938.
 And the registrar shall register the alteration if otherwise it contravenes the provisions of sec
6 (g) that it is invalid under the Act. All valid alterations in the rules of a Trade Union shall
be operative from the date they are made, whether action under section 28 (3) to send a copy
of it to the Registrar has been taken or not. 20 The registrar shall notify the fact of registration
or the alteration to the Secretary of the Trade Union and until then amendment do not
become effective.21 The fee payable for registration of rules shall be rupee one for each set of
alterations made simultaneously.22

(7) Duty to file returns—

These shall be sent annually to the Registrar, on or before such date as may be prescribed, a
general statement audited in the prescribed manner, of all receipt and expenditure of every
registered Trade Union during the year ending on the 3lst December. The statement shall be
prepared in such form and shall comprise such particulars as may be comprised.

It was held in Indian Explosives Workers Union and Anr. v. State of Bihar,23 that the
Registrar of Trade Unions has jurisdiction to hold election of two rival Trade Unions and call
upon the unions to furnish information for holding of elections.
It was held in IFFCO Phulpur Karamchari Sangh v. Registrar of Trade Unions,24 that the
action of the registrar of Trade Unions registering the change of names of office bearers of a
union does not tantamount to registration of trade union.
In Mecon Employees Union v. State of Jharkhand and Ors.,25 as a sequel to quarrels
between two factions of the employees union the Registrar Trade Union had by an order
stayed the election of the Union and called for list of non-executive employees. The High
Court held that the order of Registrar was without jurisdiction since it directly interfered with
the election of the Union. It was further made clear that the later order of Registrar setting
aside the above referred order of the Registrar merely allowed Union to resume election and
hence it could not be held to be interference with election of Union.

20
Osborn v. Amalgamated Society of Railway Servants, (1909) 1 Ch. 176.
21
Indian Oxygen Ltd. v. Their Workmen, AIR 1969 SC 306.
22
R. 9(2), The Central Trade Union Regulations, 1938.
23
Indian Explosives Workers Union and Anr. v. State of Bihar, (1992) I I.L.J. 578 (Pat.).
24
IFFCO Phulpur Karamchari Sangh v. Registrar of Trade Unions, (1992) II. L.L.J. 239 (All.).
25
Mecon Employees Union v. State of Jharkhand and Ors., (2002) I I.L.J. 993 (Jharkhand).
 CHAPTER- V
CONCLUSION

The growth of an economy depends on the growth of corporations, which in turn depends on its
workers and employees. This is possible only in the presence of an environment that allows the
workers to voice their grievances and opinions on matters that directly or indirectly concern their
employment. Most often, power vests in favour of the employers, so balancing that with providing
equal, if not more, powers to the workers is absolutely necessary. This is where the importance of
trade unions comes in. 

Due to politicization of unions causes the union to overlook the true welfare and benefits of the
worker. Outside Leadership causes unions to lose focus because such leadership does not
understand the problems of the labourers. Closed Shop/Union Shop companies forces labourers to
join the union and thus causes monopoly. Close shops/Union Shops are now illegal in many
countries. Sometime the employers do not recognize union.
 BIBLIOGRAPHY

1. S.K. PURI, LABOUR & INDUSTRIAL LAW (Allahabad Law Agency 10th ed. 2011).

2. S.N. MISRA, LABOUR AND INDUSTRIAL LAWS (Central Law Publications 26th ed.
2011).
3. Jigyasa Agrawal, Rights and Liabilities of a Trade Union under TU Act 1926:
Our Legal World, https://www.ourlegalworld.com/rights-and-liabilities-of-a-
trade-union-under- tu-act-1926

4. Role Of Trade Unions & Management Associations And Their Present Trend In
India, http://migreat-
oer.eu/media/com_form2content/documents/c6/a131/f118/Doc%201.pdf

5. Sandeep Kumar, RIGHTS AND LIABILITIES OF TRADE

UNIONS, http://youngarenalitigators.blogspot.com/2017/03/rights-and-
liabilities-of-trade- unions.html

6. Trade Unions: Objectives, Functions, Formation, Regulations, Rights and

Liabilities, https://www.businessmanagementideas.com/trade-unions/trade-
unions-objectives