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THE TRADE UNIONS ACT, 1926

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• The Trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful
organisation of labour to enable collective bargaining. It also confers on a registered trade union certain
protection and privileges. The Act extends to the whole of India and applies to all kinds of unions of workers
and associations of employers, which aim at regularising labour management relations.

• A Trade Union is a combination whether temporary or permanent, formed for regulating the relations not
only between workmen and employers but also between workmen and workmen or between employers
and employers.

Definitions.
Definitions: In this Act `the appropriate Government' means, in relation to Trade Unions whose objects are
not confined to one State, the Central Government, and in relation to other Trade
Unions, the State Government, and], unless there is anything repugnant in the subject or context,--
a) "executive" means the body, by whatever name called, to which the management of the affairs of a Trade
Union is entrusted;
b) “office-bearer", in the case of a Trade Union, includes any member of the executive thereof, but does not
include an auditor;
c) "registered office" means that office of a Trade Union which is registered under this Act as the head office
thereof;
d) "registered Trade Union" means a Trade Union registered under this Act;

e) "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; and

f) "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 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.

Appointment of Registrar
• Section 3 of the Trade Union Act, 1926 empowers the appropriate Government to appoint a person to be
registrar of Trade Unions. The appropriate Government be it State or Central, as the case may be is also
empowered to appoint additional and Deputy Registrars as it thinks fit for the purpose of exercising and
discharging the powers and duties of the Registrar. However, such person will work under the
superintendence and direction of the Registrar. He may exercise such powers and functions of Registrar
with local limit as may be specified for this purpose.

Mode of Registration
Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain
rights and privileges under the Act. Section 4 of the Act provides for the mode of registration of the trade union.
According to the Section, any seven or more than seven members of a trade union may by application apply for
the registration of the trade union subject to the following two conditions:
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• At Least 7 members should be employed in the establishment on the date of the making of the application.
• At Least 10% or a hundred members whichever is less, are employed in the establishment should be a part
of it on the date of making the application.
If the union has been in existence for more than a year, then a statement of its assets and liabilities in the
prescribed form should be submitted along with the application.

Rules of a Trade Union

• Section 6 of the Act enlists the provisions which should be contained in the rules of trade union and it
provides that no trade union shall be recognized unless it has established an executive committee in
accordance with the provisions of the Act and specified rules.

Registrar’s power to call for information

• Section 7 of the Act furnishes upon the registrar power to call for information in order to satisfy himself that
any application made by the trade union is proper. In matters where the discrepancy is found the registrar
reserves the right to reject the application unless such information is provided by the union.

Registration
• According to Section 8 of the Act, if the registrar has fully satisfied himself that a union has complied with
all the necessary provisions of the Act, he may register such union by recording all its particulars in a manner
specified by the Act.

Certificate of Registration
• According to Section 9 of the Act, the registrar shall issue a registration certificate to any trade union which
has been registered under the provision of Section 8 of the Act and such certificate shall act as conclusive
proof of registration of the trade union.

Minimum requirement related to the membership of a Trade Union

• Section 9A of the Act lays down the minimum number of members required to be present in any union
which has been duly registered, the Sections mandates that a trade union which has been registered must
at all times should continue to have not less than 10% or one hundred of the workmen, whichever is less,
subject to a minimum of seven, engaged or utilized in an institution or trade with that it’s connected, as its
members.

Cancellation of Registration
The registrar, according to Section 10 of the Act has the power to withdraw or cancel the registration certificate
of any union in any of the following conditions:
• On an application made by the trade union seeking to be verified in such manner as may be prescribed;
• If the registrar is satisfied with the fact that the trade union has obtained the certificate by means of fraud
or deceit;
• If the trade union has ceased to exist;
• If the trade union has wilfully and after submitting a notice to the Registrar, has contravened any provision
of the Act or has been continuing with any rule which is in contravention with the provisions of the Act;
• If any union has rescinded any rule provided under Section 6 of the Act.

Legal Status of a Registered Trade Union

Incorporation of Registered Trade Union Section 13 of the Act states that every trade union which is registered
according to the provisions of the Act, shall:
• Body corporate by the name under which it is registered.
• have perpetual succession and a common seal.
• Power to contract and hold and acquire any movable and immovable property.
• By the said name can sue and be sued.
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Criminal conspiracy in Trade Disputes

• Section 17 of the Act states that no member of a trade union can be held liable for criminal conspiracy
regarding any agreement made between the members of the union in order to promote lawful interests of
the trade union.
Immunity from civil suits in certain cases
• Section 18 of the Act immunes the members of trade union from civil or tortious liabilities arising out of any
act done in furtherance or contemplation of any trade disputes.
• For example. in general, a person is subject to tortious liability for inducing any person to breach a contract.
But, the trade unions and its members are immune from such liabilities provided such inducement is in
contemplation or furtherance of any trade disputes. Further, the inducement should be awful and should
not involve any aspect of any violence, threat or any other illegal activity.

Appointment of Office Bearers

• 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. “Unorganised sector” means
any sector which the appropriate Government may, by notification in the Official Gazette, specify.
• Save as otherwise provided in sub-section (1), all office-bearers of a registered Trade Union, except not
more than one-third of the total number of the office-bearers or five, whichever is less, shall be persons
actually engaged or employed in the establishment or industry with which the Trade Union is connected.
• Explanation- For the purposes of this sub-section, an employee who has retired or has been retrenched shall
not be construed as outsider for the purpose of holding an office in a Trade Union.

To be appointed as an office bearer or executive of a registered trade union, a person must have-
a) attained the age of 18 years; and
b) not been convicted of any moral turpitude and sentenced to imprisonment, or a period of at least 5
years has elapsed since his release.

Change of Name & Registered Office

• A registered trade union may change its name with the consent of at least 2/3rds of the total numbers of
its members.
• Notice of change of name in writing, signed by the secretary and 7 members of the union, should be sent to
the registrar.
• The Registrar shall register the change in name if he is satisfied that the proposed name is not identical with
the name of any other existing union and the requirements with respect to change of name have been
complied with.
• The change of name shall not affect any rights and obligations of the trade union or render any legal
proceeding by or against the trade union as defective.

Change of Registered Office

• Notice of change in registered office address should be given to the Registrar in writing within 14 days of
such change.

Amalgamation of Trade Unions

As per Section 24 of Trade Union Act 1926, any registered trade union may amalgamate with any other union(s),
provided that-
a) at least 50% of the members of each such union record their votes and
b) at least 60% of the votes so recorded are in favour of amalgamation.
• A notice of amalgamation signed by the secretary and at least 7 members of each amalgamating union,
should be sent to the registrar, and the amalgamation shall be in operation after the Registrar registers the
notice.
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Dissolution of a Trade Union

• A registered trade union can be dissolved in accordance with the rules of the union. A notice of dissolution
signed by any seven members and the secretary of the union should be sent to the registrar within 14 days
of the dissolution.
• On being satisfied the registrar shall register the notice and the union shall stand dissolved from the date.
The funds of the union shall be divided by the Registrar amongst dissolved Union’s members in the manner
prescribed under the rules of the union or as laid down by the government.

• Obligations of Registered Trade Unions

1. General funds
The general funds of a registered trade union should be spent only for the activities specified such as-
• Salaries to be given to the office-bearers.
• The cost incurred for the administration of the trade union.
• Compensation to the workers due to any loss arising out of any trade dispute.
• Expenses incurred in the welfare activities of the workers.
• Benefits conferred to the workers in case of unemployment, disability, or death.
• The cost incurred in bringing or defending any legal suit.
• Publishing materials with the aim of spreading awareness amongst the workers.
• Education of the workers or their dependents.
• Making provisions for medical treatment of the workers.
• Taking insurance policies for the welfare of the workers.
The Section also provides that the reason of non-contribution to the said fund and also a contribution to
the fund cannot be made as a criterion for admission into the union.

2. Separate Political fund

The trade union may set up a separate political fund for furtherance of civic and political interest of
members. Contribution to this fund is not compulsory.
3. The account books and membership register of the union should be kept open for inspection by any of its
office‐bearers.
4. A copy of every alteration made in the rules of the union should be sent to the Registrar within 15 days of
making the alteration.
5. An annual statement of receipts and expenditure and assets and liabilities of the union for the year ending
on the 31st December, prepared in the prescribed forms and duly audited should be sent to the Registrar
within the prescribed time. This statement should be accompanied by a statement showing changes in office
bearers during the year and a copy of the rules as amended up to date.

Offence Penalty
1 If the registered trade union/ its office bearers or Fine upto Rs. 5 plus additional fine upto Rs. 5
members fail to give any notice or send any per week in case of continuing offence.
statement as required under the Act. (Maximum fine imposable Rs. 50)

2 If any person wilfully makes any false entry in the Fine upto Rs. 500
annual statement of the union or its rules
3 If any person, with intent to deceive, gives an Fine upto Rs. 200
incorrect copy of rules of the union to any member
or a prospective member

Power to make regulations

Under Section 29 of Trade Union Act, 1926, the appropriate Government means State Government of Central
govt. may make regulations for the purpose of carrying into effect the provisions of the Act. Such regulations
may provide for all or any of the following matters, namely: --
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(a) the manner in which Trade Unions and the rules of Trade Unions shall be registered and the fees payable
on registration;
(b) the transfer of registration in the case of any registered Trade Union which has changed its head office from
one State to another;
(c) the manner in which, and the qualifications of persons by whom, the accounts of registered Trade Unions
or of any class of such Unions shall be audited;
(d) the conditions subject to which inspection of documents kept by Registrars shall be allowed and the fees
which shall be chargeable in respect of such inspections; and
(e) any matter which is to be or may be prescribed.

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.

Summary
• Trade union is an indispensable part of industrial sector in India.
• In fact Trade Unions Act as an effective platform for the workers class to enjoy their due rights without being
exploited. To strengthen the fundamental rights of voiceless working class trade unions are originated.
• Gradually trade union got recognition from the authority and became a legally approved representation of
labor mass.
• In India various trade union related Acts and regulations are enacted to empower the working classes.
• Indian Trade Union Act 1926 is a principal act that provides adequate safeguards to the rights of labor
masses.
• The Trade Unions Act, 1926 is a fountain head Act in India that provides varied rules and regulation related
to trade unions.
• It has underlined wide range of provisions for the benefit of labor mass. This Act states all modalities related
to trade union registration to trade dispute resolution.
• The Trade Unions Act, 1926 has defined the role of trade unions and also set certain controlling mechanisms
and its main aims and objectives of this Act emphasizes on the reciprocal relationship between the
employers and employees.
• Trade dispute can be defined as, any disputes that arises in between, employers and workmen, workmen
and workmen or employers and employers, in connection of employment or non-employment or the terms
of employment or the conditions of labour, of any person.
• Any seven or more members of a Trade Union may be subscribing their names to the rules of the Trade
Union complying with the provisions of this Act with respect to registration, apply for its registration.
• Unless the agreement is an agreement to commit an offence as under section 15, no officers or members
of a registered Trade Union shall be liable to punishment under sub-section (2) of Section 120B of the Indian
Penal Code.
• In the present shape, the Trade Unions Act, 1926 does not serve the purpose and requires immediate
amendment to make it more useful.
• The non-existence of provisions on Recognition of Trade Unions makes the Collective Bargaining processes
absolutely difficult and industry faces acute difficulties in shape of inter-union rivalry and multiplicity of
trade unions, having no or negligible following.

Keywords
• Amalgamation: The combination of one or more companies into a new entity.
Authorities: Institutionalized and legal power inherent in a particular job, function, or position
• that is meant to enable its holder to successfully carry out his or her responsibilities.
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• Commissioner: Commissioner is in principle the title given to a member of a commission or to an

individual who has been given a commission.
• Dissolution: The closing down or dismissal of an assembly, partnership, or official body. Industrial
Relations: Industrial relations are the relationships between employees and employers
• within the organizational settings.
• Intervention: An intervention is a deliberate process by which change is introduced into peoples’
thoughts, feelings and behaviors.
• Penalty: A punishment imposed for breaking a law, rule, or contract.
Registration: Entering certain information in a register, such as about invoices or mail delivered or
received.
• Statutory: Established, regulated or imposed by or in conformity with laws passed by a legislative body.
• Trade Union: 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.
• Workmen: A man employed to do manual labour.