Contents

1. INTRODUCTION...............................................................................................................................4
2. TRADE UNIONS IN INDIA..................................................................................................................5
3. IMMUNITY FROM CRIMINAL CONSPIRACY......................................................................................7
LIMITATION.......................................................................................................................................8
PEACEFUL ENVIRONMENT................................................................................................................8
NATURE OF EXEMPTION WHICH SERVES AN ANOTHER LIMITATION......................................................9
I. CRIMINAL CONSPIRACY UNDER SECTION 120-A OF IPC...............................................................9
II. BREACH OF CONTRACTUAL OBLIGATIONS...................................................................................9
4. EXEMPTION FROM CIVIL SUITS (SEC. 18)........................................................................................11
STRIKES 12
UNLAWFUL ACTIVITIES................................................................................................................14
5. PROBLEMS ASSOCIATED WITH SECTION 18................................................................................15
6. SEC. 19. ENFORCEABILITY OF AGREEMENT.....................................................................................16
7. NO IMMUNITY IN CONSUMER FORUM..........................................................................................17
8. CONCLUSION..................................................................................................................................18
 1. INTRODUCTION
Until 1926, unions of workers indulging in strike and causing financial loss to management were
liable for illegal conspiracies. For instance in Buckingham and Camatic Mills the unions were
held liable for illegal conspiracies and employers were awarded damages. It was only in 1926
that the Trade Unions Act, 1926 immunises trade union activity, from restraint of trade and
conspiracy. But these provisions are of preconstitutional era. These statutory provisions must
now be considered in the light of the Constitutional guarantees of the right to freedom of speech
and expression, to assemble peaceably, to form associations and unions, to practice any
profession and to carry on any occupation, trade or business, and grants protection against
economic exploitation. This paper seeks to examine the nature and scope of the immunity
afforded to the members and office-bearers of registered trade union from civil and criminal
conspiracies and restraint of trade under the Trade Unions Act, 1926.

The“Trade Unions Act, 1926”has made provisions for the members and office-bearers of a
registered trade union from criminal and civil conspiracies during the strikes and causing any
financial loss to the employer.

The Trade Unions Act, 1926”seeks to insulate two types of protection only to a fraction of
labour force, i.e., exemption from criminal conspiracy and exemption from civil suits under
section 17 & 18.
 2. TRADE UNIONS IN INDIA
A Trade Union is commonly understood as an association of wage earners or workers. Usually it
is a voluntary association of workers in a particular industry or craft. Trade Union is an
association of wage earners for the purpose of maintaining and improving their working
conditions. The definition of ‘Trade Union’ according to the Trade Unions Act, 1926 is same as
the definitions in the British Trade Union Acts of 1871, 1875 and 1913.

Section 2(h) of the Trade Unions Act, 1926 defines Trade Union 1 as “any combination whether
temporary or permanent, formed primarily:

 for the purpose of regulating relation between:

o Workmen and employers; or
o Workmen and workmen; or
o Employers and employees.
 imposing respective conditions on the conduct of any trade or business and includes
any federation of two or more trade unions, is called Trade Union: Provided that
this act shall not affect-
o Any agreement between partners as to their own business.
o Any agreement between an entrepreneur and those employed by him as
to such employment; or
o Any agreement in consideration of the sales of the goodwill of a
business or of instruction in any profession, trade or handicraft.

Important elements of Trade Union:

 There must be combination of workmen and employers;

 There must be trade or business; and

1
Trade Unions Act, 1926, Universal Law Publishing.
 The main object of the Union must be to regulate relations of employers and
employees or to impose restrictive conditions on the conduct of any trade or
business.
 3. IMMUNITY FROM CRIMINAL CONSPIRACY
“Criminal conspiracy in trade disputes. —No office-bearer or member of a registered Trade
Union shall be liable to punishment under sub-section (2) of section 120B of the Indian Penal
Code (45 of 1860), in respect of any agreement made between the members for the purpose of
furthering any such object of the Trade Union as is specified in section 15, unless the agreement
is an agreement to commit an offence.”

Thus the essentials for claiming immunity under section 17 may be summed up as:2

1. to office-bearers and members of registered trade unions;

2. for agreement;
3. which further any such trade union object as is specified in section 15 of the Act; and
4. which are not agreements to commit offences.

Registered Trade Unions have certain rights punishable a conspiracy unless such act, if
committed by an ind to pursuade their members to abstain from their work furtherance of their
trade disputes, such as to declare strike and for that purpose

In West India Steel Company Ltd. v. Azaz3 a Trade Union leader obstructed work in the
factory for five hours protesting against deputation of workman work in another section. It was
held that a worker inside the factory is be to obey the reasonable instruction given by his
superiors and carryout 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 night in
law to share managerial powers and he cannot dictate any worker individually or to the workmen
generally about the manner in which they have to do their work or discharge their duties. A
Trade Union can espouse the 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
otherwise obstruct the work of the establishment. Where officials of Trade union obstruct the
work the management is justified in proceeding against such worker and deal with him
effectively.

2
Section 17, The Trade Unions Act, 1926.
3
West India Steel Company Ltd. v. Azaz 1990 (60) FLR 802.
 LIMITATION:

PEACEFUL ENVIRONMENT
Section 17 & 18 of the Indian Trade Unions Act grant certain exemptions to members of a Trade
Union, but there is no exemption against either an agreement to commit an offence or
intimidation, molestation or violence, where they amount to an offence. Members of a trade
union may resort to peaceful strike, that is to say, cessation of work with the common object of
enforcing their claims. Such strikes must be peaceful and not violent and there is no exemption
when an offence is committed. Therefore, a concerted movement by workmen by gathering
together either outside the industrial establishment or inside, within the working hours is
permissible when it is peaceful and does not violate the provisions of law. But when such a
gathering is unlawful or commits an offence then the exemption is lost.4

Where it resorts to confinement of persons, criminal trespass or where it becomes violent and
indulges in criminal force or criminal assault or mischief to person or property or molestation or
intimidation, the exemption can no longer be claimed.

It was upheld in Russel v. Amalgamated Society of Carpenters and Joiners that an offence
under section 7 of the Criminal Law (Amendment) Act, 1932 which prohibits obstructing and
use of violence or intimidation and loitering and persistently following and other acts mentioned
therein, if done with intent to cause any person to abstain from doing or to do any act which such
person has a right to do or abstain from doing, is an offence mentioned in Section 17 of the Act.
There is no immunity if the act falls within the scope of above section of the Act of 1932.5

4
C.B. Mamoria & others, “Dynamics of Industrial Relations” (2014) , Himalaya Publishing House.
5
Russel v. Amalgamated Society of Carpenters and Joiners, (1912) A.C. 42.
 NATURE OF EXEMPTION WHICH SERVES AN ANOTHER LIMITATION
Section 17 of the Act which grants exemptions from conspiracies, raises an issue with regard to
the very nature of the exemption.

I. CRIMINAL CONSPIRACY UNDER SECTION 120-A OF IPC

(i) an agreement between two or more persons to commit an offence, i.e., in, general, an act
which is punishable under IPC or any other law for the time being in force; and

(ii) an overt act done in pursuance of an agreement between two or more persons to do an illegal
act or to do a legal act by”illegal means.6 “The word 'illegal' under IPC includes,“inter alia:
everything which is prohibited by law, or which furnishes ground for a civil action. ” 7

Section 17 does not provide immunity against commission of offences. In Jay Engineering,8 the
Court while interpreting the provisions of Section 17 observed: “No protection is available to
members of a trade union for any agreement to commit an offence ... When a group of workers,
large or small, combine to do an act for the purpose of one common aim or object, it must be
held that there is an agreement among the workers to do the act and if the act committed is an
offence, it must similarly be held that there is an agreement to commit an offence.”

II. BREACH OF CONTRACTUAL OBLIGATIONS

The breach of contract and damage to the property of employer cease to be actionable under
section 17 of the Act. Hence, do not amount to criminal conspiracy as defined in IPC, section
120-A read with section 43. Here the question arises as to what is the criminal liability.“In
considering the matter, it is relevant to note that Section 17 does not grant charter of liberty to
commit an offence, which is punishable with death, life imprisonment or rigorous imprisonment
for a term of two years or more.9In the Trade Unions Act, 1926, the last words of the Section 17
point out that“it does not insulate agreement to commit any offence whatsoever. Perhaps the
immunity is confined to an agreement between two or more persons to do, or cause to be done,

6
Section 120-A, Indian Penal Code, 1860.
7
Section 43, Indian Penal Code, 1860.
8
Jay Engineering Works Ltd. vs State Of West Bengal And Ors. AIR 1968 Cal 407.
9
Section 120-B, The Indian Penal Code, 1860.
acts which are prohibited by law but which neither amount to an offence nor furnish grounds for
civil action.”10

Under section 43 of the IPC, any break of contract withdrawing the labour as an instrument of
economic coercion is deemed to be a criminal conspiracy in a labour-management dispute. The
criminal conspiracy would be deemed to be committed, if any member of the contract in any
manner takes part or encourages, persuades or instigates or acts in furtherance of the objectives.
Under section 120-B of IPC, any criminal conspiracy is an offence and punishable, it is
susceptible if section 17 grants immunity at all.

10
Section 43, IPC 1860.
4. EXEMPTION FROM CIVIL SUITS (SEC. 18)
 Section 18(1)provides that:11

No suit or other legal proceeding shall be maintainable in any Civil Court against any registered
Trade Union or any 1[office-bearer] or member thereof in respect of any act done in
contemplation or furtherance of a trade dispute to which a member of the Trade Union is a party
on the ground only that such act

1. Induces some other person to break a contract of employment, or

2. That it is in interference with the trade, business or employment of some other person or
3. With the right of some other person to dispose of his capital or of his labour as he wills.

EMPHASIS ON ONLY

The word “only” here means that the protection is limited only to the grounds of actionability
provided in this sub section, and a registered trade union, its members or office bearers shall be
laible for any act not covered under this clause. No immunity would hence be provided in cases
of threats, violence or other illegal means.

 Exemption from Tortious Liability (Sec. 18 (2))

A registered Trade Union shall not be liable in any suit or other legal proceeding in any civil
court in respect of any tortuous act done in contemplation or furtherance of a trade dispute by an
agent of the Trade Union if it is proved that such person acted without the knowledge of, or
contrary to express instructions given by, the executive of the Trade Unions.12

“The above section does not afford immunity to the members or office-bearers of a trade union
for an act of deliberate trespass. The immunity also cannot be availed by them for unlawful or
tortuous act. Further, such immunity is denied if they indulge in an illegal strike or gherao.
Moreover, the immunities enjoyed by the union do not impose any public duty on the part of the
union.13

11
Section 18(1) The Trade Unions Act, 1926.
12
Section 18 (2) of the Trade Unions Act, 1926.
13
Chemosyn Pvt. Ltd v. Kerala Medical and Representatives Association (1988) Lab. IC 115.
 STRIKES
As already stated, immunity also cannot be availed by them for unlawful or tortuous act.
Further, such immunity is denied if they indulge in an illegal strike or gherao. Moreover, the
immunities enjoyed by the union do not impose any public duty on the part of the union.

 Ram Singh and others v. MA. Ashok Iron Foundry and others : a suit for perpetual
injunction restraining the workmen from indulging in unfair Labour practice is deemed as
one of civil nature and hence cognizable under Section 9 of the Civil Procedure Code.
Therefore, where the court has barned the workmen from holding meeting, dharma and
interfering in the rights company, such a restraint does not curtail the just trade union
activities of orkers. It cannot be construed as unjust and the workmen are at liberty to on
legitimate trade union activities peacefully.

 P. Mukundan and others v Mohan Kandy Pavithran : that a strike, per se would not
be an actionable wrong. Further the office bearers, and the members of a registered trade
union are immune against legal proceedings linked with the strike of the workmen by the
provisions of Section 18 of the Trade Unions Act.
 Rohtas Industries Staff Union v. State of Bihar 14 is the leading case on this section. In
this case the question for determination was, whether the employers have any right to
claim damages against the employee participating in an illegal strike and thereby causing
loss of production and business. Ramaswami, C.J.observed

"Upon consideration of the various provisions of the Act it is

manifest that the overriding purpose of the Act is the benefit of the
community and not the benefit of the employees or the employers. It
is true that section 24 imposes a statutory duty on the employees not
to commence or declare an illegal strike. But it is manifest that if
there is a breach of this statutory duty on the part of the employees,
the employer has no right of civil action against the employees in

14
Rohtas Industries Staff Union v. State of Bihar AIR 1963 Pat 170.
default apart from the statutory penalty provided by section 26 (1) of
the Industrial Disputes Act, 1947. Similarly if the employer declares
an illegal lockout there is a breach of the statutory obligation created
by section 24 of the Industrial Disputes Act, 1947, but the employees
have no right of civil action. The exclusive remedy open to them is
criminal prosecution under section 26 (2) of the Act. For these
reasons I hold that the duties imposed by sections 22, 23 and 24 of the
Industrial Disputes Act are statutory duties owed by the employees,
not to the employers concerned but duties owed of the public which
can be solely enforced by criminal prosecution under section 26 (1) of
the Act. It follows, therefore, that the employers have no right of civil
action, for damages against the employees participating in an illegal
strike within the meaning of section 24 (1) of the Industrial Disputes
Act.”
 UNLAWFUL ACTIVITIES
The following cases substantiate the non inclusion of unlawful activities in the immunity from
civil suits.

Simpson & Group Companies Workers & Staff Union v. Amco Batteries Lt executives 15,
contractors, staff, suppliers and other public or il was held that physical interference or duress
with free movement of physically materials, intermediaries, end products into and out of the
factory premises obstructing the free movement of cars, vehicles and lorries carrying raw could
not be justified as a trade union right or a fundamental right under Article 19 of the Constitution.
Immunity under section 18 of the Trade Unions Act does not extend to the above activities.
Right to picket is a very intangible one and is limited by the equal right of others to go about
their lawful affairs free from objection or intimidation. The methods of persuasion are limited to
oral and visual methods and it does not extend to physical obstruction of a vehicle or person.

Reserve Bank of India v. Ashis Kusum16 in order to secure immunity from civil liability under
section 18 inducement or procurement of breaches of contract of employment in furtherance of a
trade dispute interference with business of another person in furtherance of a trade dispute must
be by lawful means and not by means which would be illegal or wrongful by other provisions of
law. It was further held that the movement or agitation or demonstration by the employees for
the purpose of compelling employer to withdraw certain disciplinary proceeding initiated against
some of them was in contemplation or in furtherance of trade dispute and, therefore, not
acceptable. So also to threaten to induce breaches of contracts of employment is not actionable.
But the inducement of breaches of contract must not be by unlawful means. Watching and
besetting may in certain circumstances constitute unlawful means of procuring or inducing
breaches of contract

Sri Rat Vilas Service Ltd. and others v. Simpson and Group Companies Workers Union
and others17 it was held that if cessation of work is the result of strike, the effect of strike will be
nullified if the managements either by themselves or through their customers are permitted to
remove the goods either manufactured by the managements or coming into custody of the

15
Simpson & Group Companies Workers & Staff Union v. Amco Batteries Lt executives 1991 (61) FLR 708.
16
Reserve Bank of India v. Ashis Kusum CalLT 290.
17
Sri Rat Vilas Service Ltd. and others v. Simpson and Group Companies Workers Union and others (1979) IILLJ
284 Mad.
management in the course of their trade. If the customers of the management are to be permitted
to remove the goods by themselves without the aid of the labour that would tantamount to
rendering the strike ineffective and to achieve that purpose the court should not lend its hand.

5. PROBLEMS ASSOCIATED WITH SECTION 18

 1 st, like immunity from criminal conspiracy, immunity from civil action is also
confined to members of the registered trade unions. We have already seen that such
18
protection was limited to 10.6 per cent of the labour force in 2005.
 2 nd, it does not afford adequate protection from civil liabilities. For, it is arguable
whether it gives protection and, if so, to what extent in excess of the aforementioned
Section 17 of the Trade Unions Act. A suit or proceeding may not be maintainable for a
number of reasons. Does it necessarily follow that the conduct does not' furnish ground
for civil action' within the meaning of Section 43 of the Indian Penal Code?
 3 rd, the expression 'in contemplation or furtherance of a trade dispute to which a
member of the trade union is a party' is obviously narrower than the ambit of protection
under the said Section 17. 19
 4 th, Section 18 helped in maintenance of union funds, howsoever meagre. The real
significance is in rejecting the application of the common law doctrines of restraint of
trade and criminal conspiracy in so far as they encroach on the field of labour
management relations. Together with Section 17, it provides a great impetus for, and
facilitates the active participation of 'outside leaders' in the trade union movement.20

18
Anandjee, “Impact of Labour Laws on Trade Union Movement,” a paper read at the All India Labour Economic
Conference.
19
Ibid.
20
Ibid.
6. SEC. 19. ENFORCEABILITY OF AGREEMENT.-
In India it is the general principle that an agreement in restraint of trade is void because it is
opposed to or in violation of public policy: The public in general have an interest in every person
carrying on his trade or business freely. Therefore all restraints on individual liberty to trade are
declared void on the grounds of policy. The above principle is affected by the provisions of
section 19 of the Trade Unions Act, 1926.

According to this section an agreement between the members of a registered Trade Union in
restraint of trade shall not be void or voidable. It means agreements, made between the members
of a registered Trade Union not to accept employment unless certain conditions as to pay, hours
of work etc, are fulfilled, will not be void or voidable.

There is an important proviso to this rule in section 19 itself which prevents Civil Courts from
entertaining any legal proceeding instituted for the recovering damages for breach Agreement
concerning the conditions on which any members of a Trade Union shall or shall not sell their
goods, transact business, work, employ the purpose of instituting the legal proceeding is not
expressly to recover employed. In this sub-section the word 'express' is important. It means
where validity, which means the courts can pronounce upon the meaning or created under the
Act relates to the enforcement of an agreement, not to its damages for breach of an agreement, it
is enforceable.

It was held in Amalgamated Society of Carpenters v. Braithwaite 21 that it is totally a different

proposition to say that a man claims to possess a right that he seeks to enforce the obligations
they create.

21
Amalgamated Society of Carpenters v. Braithwaite, 1922 AC 44.
7. NO IMMUNITY IN CONSUMER FORUM
After the enactment of the Consumer Protection act, 1986 which seeks to protect the interest of
consumer and covers in its ambit not only the goods but services, bought or hired, for
consideration, a question arose whether the immunity available under the Trade Unions Act,
1926 may be taken as a plea for not taking cognizance under the Consumer Protection Act, 1986.
This issue was answered in negative.

Thus, in Common Cause v, Union of India,22 the Indian Flight Engineers Association raised an
objection that proceedings instituted against them under the Consumer Protection Act are barred
under section 18 of the Trade Unions Act, 1926. The National Commission rejected this
contention on the ground that "section 18 operates only as a bar to the institution of a suit or
other legal proceedings in any civil court against any registered trade union in respect of any act
done in contemplation or furtherance of a trade dispute etc. The fora constituted under the
Consumer Protection Act are not civil courts and proceedings instituted before the fora are not
civil suits or other legal proceedings instituted in civil courts".

The National Commission relied upon its earlier decision in N.K. Modi v. Mis. Fair Air
Engineers Pvt. Ltd.23 Relying on the case of Indian Medical Association v. T.P. Santha24
decided by the Supreme Court the National Commission has observed that the ratio in the said
case conclusively lay down that persons employed on salary in an organization which is
rendering service for consideration are equally amenable to the provisions .of Consumer
Protection Act along with the management even though there may not be any privity of contract
as between the persons hiring the service and the concerned employees. The following
observations are apposite: In above, we also think it necessary to administer a strong word . of
caution that in case of similar instances of disruption of services by illegal strikes or agitations
come to the notice of the Commission in future, on the part of the employees in an organization
rendering service to the public for consideration or any association or any union of employees,
we will be dealing with the matter in a very strict manner and we will have no hesitation to
award proper compensation to the consumers, who are thereby affected and aggrieved.

22
Common Cause v, Union of India 1996(2) CPR 39.
23
K. Modi v. Mis. Fair Air Engineers Pvt. Ltd [1993] CPJ 5 (NC).
24
Indian Medical Association v. T.P. Santha [1995] CPJ 1.
8. CONCLUSION

Thus we see that the immunities given to trade unions are essential for the proper execution of
the dissent mechanism entrusted to them in the form of privileges that bar one from civil and
criminal consequences. The protection afforded to trade unions are of preconstitutional era and
requires re-examination in the light of the constitutional guarantee given under article 19 of the
Constitution. The nature and scope of immunity from criminal liability afforded members and
officers of the registered trade unions are very limited. The criminal and civil immunities are
available to the members and officers of the registered trade unions. This needs to be re-
examined particularly when the registration of trade unions is not compulsory and they are
permitted to bargain with the employer on the same footing as that of registered trade unions. the
immunity from criminal liability is only limited to agreement between two or more persons to
do, or cause to be done, acts which are prohibited by law but which neither amounts to an
offence nor furnishes ground for civil action. In other words no protection is available to the
members or officers of a registered trade union for any agreement to commit an offence. Section
18 does not afford protection from civil liabilities. The scope of the expression in contemplation
or furtherance of a trade dispute to which a member of a trade union is a party is narrower than
the ambit of protection under section 17 of the Trade Unions Act, 1926