RIGHTS AND LIABILITIES OF TRADE UNION: A JUDICIAL

ANALYSIS

6.5 - LABOUR LAW

SUBMITTED BY:

DEVANG GAUR

UID: SM0117016

B.A., LL.B., 3rd YEAR, 6th SEM.

FACULTY IN-CHARGE:

MS. KASTURI GAKUL

NATIONAL LAW UNIVERSITY AND JUDICIAL ACADEMY, ASSAM

GUWAHATI, ASSAM

DATE: 2 JUNE 2020

 TABLE OF CONTENTS

PARTICULARS PAGE NO.

1. Introduction
1.1 Overview
1.2 Literature Review
1.3 Research Questions
1.4 Scope and Objective
1.5 Research Methodology
2. Trade Union: An Introduction
2.1 Statutory definition of Trade Union
2.2 Need for Trade Unions
2.3 Functions of Trade Unions
3. Liabilities of a Registered Trade Union
4. Rights and Privileges of a Registered Trade Union
4.1 Immunities Available to a Registered Trade Union
5. Conclusion
6. Bibliography
 CHAPTER – I
INTRODUCTION
1.1 OVERVIEW

1.2 LITERATURE REVIEW

1.3 RESEARCH QUESTIONS

1.4 SCOPE AND OBJECTIVES:

 SCOPE:

 OBJECTIVES:

1.5 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.
 CHAPTER-II
TRADE UNION: AN INTRODUCTION
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.

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 42 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 Webbs 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"2 Lester3 defines a trade union as "an
association of employees designed primarily to maintain or improve the conditions of
employment of its members".

J. Cunnison 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)
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 industry1.
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.

1
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. 

2.1 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.

2.2 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
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:

 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 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.

 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.
 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.

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.
 CHAPTER- IV
RIGHTS AND PRIVILEGES OF A REGISTERED TRADE UNION

 As per section 13 Features of Registered Trade Union, -upon registration, a trade union
becomes a legal entity and as a consequence, it gets perpetual succession and a corporate
seal, it can acquire and hold movable and immovable property, contract through agents,
and can sue and get sued.
 Under section 15 a registered trade union has a right to establish a general fund.
 Under section 16 Construction of separate fund for political purposes - a registered
trade union has a right to establish a political fund. Subscription to this fund is not
necessary for a member.

The fund can be utilized for the following purposes: 

1. Holding of any meeting or distribution of any literature or document in support of any

candidate for election as a member of legislative body constituted under the constitution
or of any local authority.
2. For maintenance of any person who is a member of any legislative body constituted under
the constitution.
3. For convening of political meeting of any kind or distribution of political literature or
documents of any kind.
4. The registration of electors for selection of a candidate for legislative body.

 Under section 17, 18, and 19 a registered trade union gets immunity in certain criminal,
civil, and contractual proceedings.
 Under section 24, trade unions have the right to amalgamate.
 Under section 28-F, the executive of a registered trade union has a right to negotiate with
the employer the matters of employment or non-employment or the terms of employment
or the condition of labour of all or any of the members of the trade union and
the employer shall receive and send replies to letters and grant interviews to such body
regarding such matters. It further provides that the executive is entitled to post notices of
the trade union meant for its members at any premises where they are employed and that
the employer shall provide reasonable facilities for that.
4.1 IMMUNITIES AVAILABLE TO A REGISTERED TRADE UNION

1. 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.

In the case of West India Steel Company Ltd. v. 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.

2. 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. 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.

In the case of 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.
In the leading case of Rohtas Industries Staff Union v. State of Bihar AIR 1963, 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.
In the case of Simpson & Group Companies Workers & Staff Union v. Amco Batteries
Ltd 1992 Karn., 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. Section 19 Enforceability of agreements - In India, an agreement in restraint of trade is

void as per section 27 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.
CHAPTER- V
CONCLUSION
BIBLIOGRAPHY