UNIT I:TRADE UNION

-Namratha,
Assistant Professor,
BMSCL.
 HISTORICAL ASPECTS
 The industrial revolution in the 19th century.
 As a result of the introduction of the factory system production -
increase of the labour population at all such places.
 The village workers migrated to the industrial towns-difficulties of
finding adequate livelihood in their native places.
 resulted in disappearance of the popular village handicraft system –
 they could not compete with the machine made goods.
 The goods produced on the large scale with the help of the machines in
the industries were cheaper than the goods produced by handicraft
method.
 But the development of the industry in India brought with it great evils
in as much as it changed the status of a craftsmen into wage earner.
 Therefore, the craftsmen had to migrate from village to industrial cities
in search of employment in the factories.
 The factory system had some inherent evils to which the factory
workers were exposed in the beginning. These may be divided into two
heads like, Economic & Social.
 The artisan who in the handicraft system had the psychological
satisfaction of producing the goods himself. But in the factory system,
he became only a tender of the machine.
 He had to produce the goods with the help of the tools & the raw
materials supplied by his employer in the workshop of the employer.
 In the factory system, different categories of workmen produced different parts of
the same goods. Thus the goods came in the final shape by the composite labour of
many categories of workers.
 The workmen did not get full satisfaction of creation.
 Psychologically, this indirectly arrested his mental development & creative tents.
 The wages paid to the factory workers were inadequate to meet the barest needs in the
new environment which was different from their rural life.
 The employment of factory workers was not secure in the beginning they had to suffer
from periodic unemployment & under-employment as a consequence of over production
of or trade circle.
 A worker could be discharged by his employer at any time without assigning at any
reason.
 Factories were sick not only due to economic evil but also due to social
evil, overcrowding of cities with insanitary slums & acute housing storage
because of large scale migration of village population to industrial towns
has its natural effect on the health, morality & social of the worker.
 Worker in the factories was very hazardous & difficult with long hours of
duty, no rest & no facility for recreation.
 little regards for the safety of the employees.
 Workers were exposed to serious accidents because the machines were not
properly screened. Accidents were considered as normal risk incidental to
employment in a factory & the workers who were unfortunate victims of the
accident lost his employment & did not have any right to claim
compensation.
Wages paid to the workers were very low. Wages were the
only source of income of the workers, they found it extremely
difficult to live with the wages so earned by them.
 Therefore they had to find ways & means to supplement their
earnings.
 Consequently their wives & children started to seek
employment.
The factory owners began to take advantage of the situation &
employed them in large numbers at extremely low wages
without any regards to their physical conditions.
 The workers found it very difficult to adjust with these conditions.
 These evils of industrialization & lack of adjustment & harmonious
relationship between the employer & the labour, created problems in
the industry, which is called as Labour problems.
 It also created the gap between capital and labour.
 The laws then prevailing were only reflecting the laissesz-fare ideal,
indirectly helping the employer at the cost of the working class.
 The freedom of contract theory was fully exploited by this
entrepreneur class & the courts and legal systems supported them.
 To eradicate all these problems, the British Parliament was forced to evolve a
number of legislations designed to curb the progress of the freedom of contract
theory.
 The state began to assume more responsibility in the well-being of the workers.
 Trade Unionism was finally recognized & collective bargaining was evolved as
an effective weapon.
 For protecting British manufacturers & the English economy, the British Govt
was particular to see that India is not a part in the track of industrialization.
 The spirit of nationalism, the independent movement, the no-cooperation
movement, etc. compelled the imperial regime to soften their attitude to Indian
industries & some labour laws enacted to protect Indian labour class.
 In real sense, the industrial legislation began to take shape only after
independence.
 TRADE UNIONISM
 Before the emergence of industrialization on a massive scale, there were personal contracts between
the workers & employers.
 Therefore, no requirement for the evolution of any machinery governing the relationship between
workers & employers arose until then.
 But after the establishment of modern factory system this relationship lost its significance due to the
large scale industrialization which enticed employers to reduce the cost of production in order to
withstand the cut-throat competition in the market & maximize their profit by using technologically
more sophisticated means of production which in turn resulted in the rise of a new class of workers
who were completely dependant on the wages for their survival which changed the existing employer
& employee relationship in which the employees were exploited by their employers.
 The conflict of interest between workers & employers and the distress of workers resulted in the
growth of various TU.
 A Trade Union is an organized group of workers who strive to help the workers in the issues relating to the
fairness to pay, good working environment, hours of work & other benefits that they should be entitled to.
 They act as a link between management & worker.
 To control & manage the working of these TU different legislations regulating the same is required.
  History:
 In India, trade unionism took its concrete shape after the end of
World War I.
 The trade unions in India are essentially the product of modern large
scale industrialization & did not grow out of any existing institutions
in society.
 The need for an organized trade union was first realized in 1875 by
various philanthropists & social workers like Shri Sorobji Bengali
and Shri N.M. Lokhandey whose constant efforts resulted in the
formation of trade unions like Printers Union of Calcutta (1905), the
Bombay Postal Union (1907).
 The setting up of textile & mill industries at the beginning of the 19th century in
the presidency towns of Bombay, Madras & Calcutta gave impetus to the
formation of industrial workforce association in India.
 The Bombay Mill-Hands Association, founded by N.M. Lokhande in 1890 is
the first labour association of India.
 The following years saw the rise & growth of several other labour association &
unions in India like the Madras Labour Union which is the first properly
registered trade union founded by B.P. Wadia in the year 1918.
 In the year 1920, the country saw the growth of the
Ahmedabad Textile labourer’s Association in Gujarath
which turned into a union under the guidance of Mahatma
Gandhi & is considered to be one of the strongest unions in the
country of that time because of the unique method of arbitration
& conciliation it had devised to settle the grievances of the
workers with the employers.
 Since the union followed the ideals of truth & non violence laid
down by Mahatma Gandhi it was able to secure justice to the
workers in a peaceful manner without harming in the society.
 In the same year, the first trade union federation -All India Trade Union
Congress (AITUC) saw the light of the day, it was formed after the observation
made by the International Labour Organization which highlighted the influence
of politics on trade unions & associations and how the same is detrimental for
any economy to prosper.
 The importance of the formation of an organized trade union was realized by
nationalist leaders like Mahatma Gandhi who to improve the employer & worker
relationship gave the concept of trusteeship which envisaged the cooperation of
the workers & employers.
 According to the concept, the people who are financially sound should hold the
property not only to make such use of the property which will be beneficial for
themselves but should make such use of the property which is for the welfare of the
workers who are financially not well placed in the society & each worker should
think of himself as being a trustee of other workers & strive to safeguard the interest
of the other workers.
 Many commission also emphasized the formation of Trade Unions in India. For eg:
The Royal Commission on labour or Whitley commission on labour
 which was set up in the year 1929-30
 recommended that the problems created by modern industrialization in India are
similar to the problems it created elsewhere in the world & the only solution left is
the formation of strong trade unions to alleviate the labours from their miserable
condition & exploitation.
 ILO CONVENTIONS RELATING TO TRADE
 International Labour OrganisationUNION
(ILO) is the most important organization in the
world level & it has been working for the benefit of the workers throughout the
world.
 It was established in the year 1919.
 It consists of representatives of Govt, Employer, workers.
 It functions in a democratic way by taking interest for the protection of working
class throughout the world.
 It is also working at the international level as a ‘Saviour of workers’, ‘protector
of poor’.
 ILO examines each & every problem of the workers pertaining to each member
country & discuss thoroughly with all countries.
 ILO passes many conventions & Recommendations on different
subjects like Social Security, Basic Human Rights, Welfare measures &
Collective Bargaining.
 On the basis of conventions & recommendations of ILO every country
incorporates its recommendations & suggestions in its respective laws.
 Aims of the ILO:
 Labour is not a commodity
 Freedom of expression & of association are essential to sustained
progress
 Poverty anywhere constitutes danger to prosperity everywhere.
 ILO CONVENTIONS RELATING TO TRADE
UNION
1. Freedom of Association & Protection of the Right to
organize Convention, 1948:
 This Convention provides that workers & employers shall have the right to
establish & join organizations of their own choosing without previous
authorization.
 The public authorities are to refrain from interference which would restrict the
right to form organization or restrict its lawful exercise.
 These organizations shall not be liable to be dissolved or suspended by
administrative authority.
 It also provides protection against act of anti-union discrimination in respect of
their employment.
2. Workers Representatives Convention, 1971:
 Workers representatives in an undertaking shall enjoy effective protection against any act
prejudicial to them including dismissal, based on their status or activities as a workers
representative or on union membership or participation in union activities, in so far as they act in
conformity with the existing laws or collective agreements.
 Facilities in the undertaking shall be afforded to workers’ representatives as may be appropriate
in order to enable them to carry out their functions promptly and efficiently.
3. Rural workers Organizations Convention, 1975:
 All categories of rural workers, whether they are wage earners or self employed, shall have the
right to establish and join organizations of their own choosing without previous authorization.
 The principles of freedom of association shall be fully respected; rural workers organizations
shall be independent & voluntary in character & shall remain free from all interference,
coercion, etc.
 National policy shall facilitate the establishment and
growth, on a voluntary basis, of strong and independent
organizations of rural workers as an effective means of
ensuring the participation of these workers in economic
and social development.
 Freedom of Association & Constitution of India:
 Constitution of India which envisages fundamental right to freedom of speech &
expression also guarantees the country’s citizen the right “to form associations or
unions” under Article 19(1)(c) including trade unions.
 The right guaranteed under Article 19(1)(c) also includes the right to join an
association or union. This right also carries with it the right of the State to impose
reasonable restrictions.
 Furthermore it has been established that the right to form associations or unions
does not in any manner encompass the guarantee that a trade union so formed
shall be enabled to engage in collective bargaining or achieve the purpose for
which it was formed.
 The right to recognition of the trade union by the employer was not
brought within the purview of the right under Article 19(1)(c) and
thus, such recognition denied by the employer will not be considered
as a violation of Article 19(1)(c).
 The various freedoms that are recognised under the FR- Article 19(1)
(c) are:
1. The right of the members of the union to meet
2. The right of the members to move from place to place
3.The right to discuss their problems & propagate their views
4. The right of the members to hold property
 TRADE UNIONS ACT, 1926

 Trade union is a voluntary organization of workers relating

to a specific trade, industry or a company and formed to
help & protect their interests and welfare by collective
actions.
 brings balance and improving the relations between the
employees and employer.
 Objectives of Trade Unions Act:
 Secure fair wages for workers and improve their opportunities for promotion and
training
 Safeguard security of tenure and improve their conditions of service
 Improve working and living conditions of workers
 Provide them educational, cultural and recreational facilities
 Facilitate technological advancement by broadening the understanding of the
workers.
 Help them in improving levels of production, productivity, discipline and high
standard of living
 Promote individual & collective welfare and correlate the workers interests with
that of their industry
 Definition:
 Sec 2(h) states that “Trade Union” means any combination, whether
temporary or permanent, formed primarily for the purpose of
1.regulating the relations -
 between workmen and employers, or
 between workmen and workmen, or
 between employers and employers, or
2. 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:

 any agreement between partners as to business, Or
 any agreement between an employer and those employed by him as
to such employment,
 any agreement in consideration of the sale of the goodwill of a
business or instruction in any profession, trade or handicraft.
 Trade Dispute
 Sec 2(g) states “trade disputes” means any dispute between
 employer & workmen
 workmen & workmen
 employers & employers
 any such disputes must be connected with-
 the employment; or
 non-employment; or
 the terms of employment; or
 the conditions of labour, or any person.
 Workman- Sec 2(g):
• “Workman” means all persons employed in trade or industry whether
or not in employment of the employer with whom the trade dispute
arises.

 There are 2 ingredients here:

1. “Workman” means all persons employed in trade or industry.
2. It is immaterial that the persons employed in a trade or industry are
not in employment of the employer with whom the trade Dispute
arises.
 REGISTRATION OF TRADE UNION
[Sec 3-13]
Sec 3: Appointment of Registrars
 Appropriate govt shall appoint a person to be the Registrar of Trade Unions for
each state.
 Appropriate Govt is also authorised to appoint Additional and Deputy Registrars
of Trade Unions. They shall work under the supervision and direction of registrar.
 Appropriate Govt shall specify & define the local limits within which these
registrars shall exercise and discharge such powers & functions.
 If such registrar is appointed & discharges the powers & functions of a Registrar
in an area within which the registered office of the TU is situated, then he shall
be deemed to be the registrar in relation to that TU.
Sec 4: Mode of Registration
 An application must be sent to the Registrar of TU.
 Any seven or more members of a TU may apply for registration of the TU.
 All the members applying for registration must subscribe their names to the rules
of the TU and also comply with the provisions of the Act relating to the
registration of TU.
 At any time after the application, but before the registration of TU, some of the
applicants but not exceeding half of the total number of persons who made the
application, have ceased to be the members of the TU or have given notice in
writing to the registrar disassociating themselves from the application- will not
affect the registration.

 If more than half of the members who applied for registration of TU, cease to be
members of the TU or disassociate themselves from the application by giving
notice in writing to the registrar before the registration is granted to the TU, the
application shall be deemed to have been invalid.
Sec 5: Application of registration
 TU may become a registered Trade Union in the following manner:
1. Application should be sent to the registrar in which 7 or more members of such TU
must subscribe their names.
2. Application should be accompanied with a copy of rules of TU and a statement of the
following particulars:
a. the names, occupation and addresses of the members making the application.
b. the name of the TU and the address of its head office; and
c. the titles, names, ages, addresses and occupations of the office bearers of the TU.
3. Where the Trade Union is in existence for more than one year before making of an
application for its registration, then the general statements of its assets and liabilities of the
TU prepared in such form & containing such particulars as may be prescribed.
Sec 6: Provisions to be contained in the rules of a TU-
 A copy of the rule book of the trade union must be supplied along with the
application for registration of TU.
 provide for the following matters-
a. Name of the TU
b. Whole object for which TU has been established
c. Whole of the purpose for which the general funds of the TU shall be applicable
d. the maintenance of a list of the member of the TU and adequate facilities for the
inspection thereof by the office bearers and members of the TU.
e. admission of ordinary members who shall be persons actually engaged or employed
in an industry with which the TU is connected & also the admission of the number of
honorary or temporary members as office bearers required under sec 22 to form the
executive of the TU.
ee. The payment of a minimum subscription by members of the TU which shall
not be less than-
 One rupees per annum for rural workers;
 three rupees per annum for workers in other unorganised sectors;
 twelve rupees per annum for workers in any other case;
f. The conditions under which any member shall be entitled to any benefit assured
by the rules and under which any fine or forfeiture may be imposed on the
members;
g. The manner in which the rules shall be amended, varied or rescinded;
h. The manner in which the members of the executive and the other office
bearers of the TU shall be elected and removed;
hh. The duration of period being not more than three years, for which
the members of the executive and the other office bearers of the TU
shall be selected and removed.
i. The safe custody of the funds of TU, and annual audit, in such manner
as may be prescribed, of the accounts thereof, and adequate facilities for
the inspection of accounts books by the office bearers and members of
the TU, and
j. The manner in which the TU may be dissolved
Sec 7: Power to call for further particulars and to require alteration of name-
 The registration of a TU will be refused by the Registrar if the name under
which a TU is proposed to be registered is identical with that of any existing
Trade union or so nearly resembles such name as to be likely to deceive the
public or the members of either TU.
 In such a case the Registrar may require the persons applying for such
registration to change the name of the TU, and it shall be registered only after
such alteration.
 Registrar may also ask for further information which he thinks necessary for the
purpose of satisfying himself that the application complies with the provisions of
sec 5 & 6 of the Act.
Sec 8: Registration
 The registrar will register the TU if he is satisfied that the TU has
complied with all the requirements of this Act with regard to
registration.
 The registrar shall register the TU by making necessary entries in the
register, to be maintained in such form as may be prescribed.
 The particulars relating to the TU contained in the statement
accompanying the application for registration shall be entered in the
register.
Sec 9: Certificate of registration
 Registrar on registering a Trade Union shall issue a certificate of
registration in the prescribed form which shall be conclusive evidence that
the TU has been duly registered under this Act.
Sec 10: Cancellation of registration
 Power to withdraw or cancel registration of a TU is given to the registrar.
 The registrar can exercise his power in the following cases:
 On the application of the trade union to be verified in the prescribed manner.
 If the registrar is satisfied that the certificate of registration has been obtained by frauds or
mistake.
 Where the TU has ceased to exist.
 If the Union has wilfully & after notice from the Registrar contravened any provisions of this
Act or allowed any rule to continue in force which is inconsistent with the provisions of the Act.
 Where the union has rescinded any rule providing for any matter provision for which is
required to be made by sec 6.
 If the Registrar is satisfied that a registered TU of workmen ceases to have the requisite number
of members, the registration can be cancelled.
Sec 11: Appeal
 Any person aggrieved by any refusal of the registrar to register a TU or by
withdrawal or cancellation of a certificate of registration may, within such period
as may be prescribed, appeal under sec 11 of the Act-
a. Where the head office of the TU is situated within the limits of a Presidency town
to the High Court.
b. Where the head office is situated in an area, falling within the jurisdiction of a
Labour Court or an Industrial Tribunal, to that Court or Tribunal, as the case may
be;
c. Where the head office is situated in any area.
 The appellate court may dismiss the appeal, or pass an order directing the
Registrar to register the Union and to issue a certificate of registration
under the provisions of section 9 or setting aside the order or withdrawal or
cancellation of the certificate, as the case may be, and the Registrar shall
comply with such order.
Sec 12: Registered office
 All communications and notices to the registered TU are addressed to the
registered office.
 Notice of any change in the address of the head office shall be given within
fourteen days of such change to the Registrar in writing.
 The changes in address shall be recorded in the register referred to in sec 8.
Sec 13: Incorporation of registered TUs:
 A TU enjoys the following advantages after registration under sec 13 namely:
a. A TU after registration becomes a body corporate
b. It gets perpetual succession and common seal
c. It can acquire and hold both movable & immovable property
d. It can enter into a contract
e. It can sue and be sued in its registered name.
 RIGHTS AND LIABILITIES OF REGISTERED
TRADE UNIONS [Sec 15-28]
Sec 15: Objects on which general funds may be spent
 General funds of registered TU shall not be spent on any other objects other than the following:
1. For the payment of salaries, allowances and expenses to the bearers of the trade union;
2. For the payment of expenses of the administration of the trade union, including audit of accounts
thereof;
3. For the prosecution or defence of any legal proceeding to which the TU or any members of it is
a party when such prosecution or defence is undertaken for the purpose of securing or protecting
any rights of the TU as such or any rights arising out of the relations of any member with his
employer or with a person whom the member employs;
4. For the conduct of trade disputes of the TU or any member thereof;
5. For giving compensation to the members for loss arising out of trade disputes;
6. For giving allowances to members or their dependents on account of death, old
age, sickness, accident or unemployment of such members.
7. For the issue of or the undertaking of liability under the policy of assurances on
the lives of members against sickness, accident or unemployment of such members;
8. For providing education, social & religious benefits to the members or for their
dependants;
9. For the upkeep of periodicals published for the purposes of discussing questions
affecting the employers or workmen;
10. For the payment in furtherance of any of the objects of which the general fund
of the TU may be spent, etc. and to other objects notified by the appropriate govt in
the official Gazette.
Sec 16: Constitution of a separate fund for political purposes:
 A registered TU may constitute a separate fund, 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 following objects:
1. The payment of any expenses incurred, either directly or indirectly, by a candidate or
prospective candidate for election as a member of any legislative body constituted under the
constitution or of any local authority, before, during, or after the election in connection with his
candidature or election; or
2. The holding of any meeting or the distribution of any literature or documents in support of any
such candidate or prospective candidate; or
3. The maintenance of any person who is a member of any legislative body constituted under the
constitution or for any local authority; or
4. The registration of electors or the selection of a candidate for any legislative body constituted
under the constitution or for any local authority; or
5. The holding of political literature or political documents of any kind.
 Immunities/privileges of a Registered Trade Union: (Sec 17-18)

A. Immunity from Criminal liability (Sec 17)

B. Immunity from Civil liability (Sec 18)
A. Immunity from Criminal liability:
 Sec 17 of the Act confers immunity from liability in case of criminal conspiracy
under sec 120-B of the Indian Penal Code (under sec 61 of Bharathiya Nyaya
Sanhita, 2023) committed by an office bearer or member of a registered TU.
 The protection provided to members or office bearers of a registered TU is
partial in the sense that the immunity is available only in respect of agreements
made between the members for the purpose of furthering any legitimate object of
the TU as provided in sec 15 of the Act.
 If the agreement is an agreement to do an act which is an offence, no immunity
can be claimed.
 Sec 15 of the Act enumerates 10 objects for which alone the general fund of the TU
can be spent.
 Hence, an agreement between the members of a registered trade union to promote any
of those objects will not be attracted by the offence of criminal conspiracy under sec
120-B of Indian Penal Code (Sec 61 of BNS, 2023)and they cannot be prosecuted for
the same.
 The immunity from criminal liability which is under sec 17 is limited to those cases
and not to any agreement which is not in furtherance of any object of sec 15.
 For eg: If two or more members of a registered TU agree to persuade the workers to
commit an assault or such other offences on the management, they will not be
protected by sec 17 because the agreement here is one to commit an offence & not to
promote the benefits of the workers. Sec 17 does not give protection against an
agreement to commit an offence and it is expressly excluded from the purview of sec
17.
 Sec 17 of the Act does not exempt an agreement to commit an offence or
violence which may amount to an offence. Therefore, a concerted movement by
workmen by gathering either inside or outside the establishment during the
working hours is permissible, when it is peaceful and does not violate the law.
But when such gathering commits an offence, the exemption is lost.
 Thus, where it becomes violent and indulges in criminal force or criminal assault
or mischief to a person or property, the exemption cannot be claimed.
 The reason is that sec 17 does not give immunity to an agreement to commit an
offence.
 Jay Engineering Works Ltd v. Staff
• The Calcutta High Court, while interpreting the provisions of
section 17 of the Trade unions Act, 1926 held that, no
protection is available to the members of a trade union for any
agreement to commit an offence.
• When a group of workers, large or small, combined 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.
B. Immunity from Civil Liability:
 Sec 18 of the Act deals with the immunity from civil proceedings afforded to a
registered TU, and to its members or office bearers.
 A person is liable in torts for deliberately bringing about a breach of contract of
employment between the employer & the employee.
 But a registered TU, its members or office bearers are protected from being sued
for inducing a person to break his contract of employment or for interfering with
the trade, business or employment of some other person, provided such
inducement is in contemplation or furtherance of a trade dispute.
 Sec 18(1) of the Act provides that no suit or proceeding shall be maintainable in any
Civil Court against any registered TU or any office bearer or member thereof in
respect of any act done-
 in contemplation or furtherance of a trade dispute to which a member of a TU is a
party on the ground only that such act induces some other person to break a contract
of employment, or
 that it is an interference with the trade, business or employment of some other person,
or
 with the right of some other person to dispose of his capital or of his Labour as he
wills.

 There shall be no immunity if threaten, violence or other illegal means are employed .
 Rohtas Industries Staff Union v. State of Bihar
• In this case, consequent to non-payment of bonus and failure to
implement an existing award, the workers went on a strike.
• Later they withdraw the strike on agreement to refer the matter for
arbitration.
• Arbitrator awarded that the strike was illegal and so the Union will not
get immunity under 18 of the TU Act and that the company is entitled to
compensation.
• This was challenged before the High Court which set aside the award.
• It held that conspiracy as a tort would become actionable if the real
purpose of the combination was to inflict damage as distinguished from
serving the bonafide & legitimate interest of those who so combine.

……..Continued
• If the combination is with the object of improving wage prospects, it will
not become actionable even if it may affect the interest of the employer.
• The right of workmen to strike is an essential element in the concept of
collective bargaining and if the predominant purpose of strike is the lawful
protection of any legitimate interest of the combiners, it is not tortious
conspiracy even though it causes damage to employer.
 West India Steel Company v. Azeez
• Held that, TU has certain rights to do in furtherance of their trade
disputes, such as to declare strike and for that purpose to persuade the
members to abstain from their work.
 Enforceability of agreement (sec 19):
 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.
 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.
 This principles are affected by the provisions of sec 19 of 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 TU not to accept employment
unless certain conditions as to pay, hours of work, etc., are fulfilled, will not be void or voidable.
 Right to inspect Books of Trade Union (Sec 20):
 It provides that the account books of a registered TU and the list of members of a TU
shall be open to inspection by an officer or members of a TU at such times as may be
provided for in the rules of the TU.
 Rights of minors to membership of TU (Sec 21):
 Any person who has attained the age of fifteen years may be a member of a registered
TU. Any such member, subject to the rules of TU, shall enjoy all the rights of a
member.
 Although a person on attaining the age of fifteen years may become a member of the
TU, but in view of the disqualification laid down in sec 21-A he cannot be an office
bearer of the TU until he attains the age of eighteen years.
 The TU being a voluntary association is free either to admit or to refuse a person as
its member.
Sec 21-A: Disqualification of office bearer of TU
 A person shall be disqualified for being chosen as, and for being a member of
the executive or any other office bearer of a registered TU, 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 & sentenced to imprisonment, unless a period of five years has
elapsed since his release.
Sec 22: Proportion of office bearers to be connected with the industry-
 Not less than one –half of the total number of the office bearers of every
registered TU in an unorganized sector shall be persons actually engaged or
employed in an industry with which the TU is connected:
 Provided that the appropriate govt may, by special or general order, declare that
the provisions of this section shall not apply to any TU or class of TU specified
in the order.
Sec 23: Change of name-
 Provides that any registered TU may, with the consent of not less than two-thirds
of the total number of its members and subject to the provisions of sec 25 of the
Act, change its name.
Sec 24: Amalgamation of TU-
 Any two or more registered Trade Unions may become amalgamated together as
one TU with or without dissolution or division of the funds of such TUs.
 But to support any amalgamation the votes of at least One-half of the members
of each & every such TU entitled to vote must be recorded & also that at least
sixty percent of the votes recorded must be in favour of the proposal of
amalgamation.
Sec 25: Notice of change of name or amalgamation
 Act requires that notice in writing of every change of name and of every amalgamation signed in
the case of changing of name- by the Secretary & by seven members of the TU changing its
name, and in case of an amalgamation- by the Secretary and by seven members of each & every
TU which is a party thereto shall be sent to the Registrar.
 Where the head office of the amalgamated TU 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 TU is situated, shall, if
satisfied that the provisions of this Act in respect of amalgamation have been complied with &
the TU formed thereby is entitled to registration under sec 6, shall register the TU in the manner
provided in sec 8 of the Act.
 Amalgamation shall have effect from the date of registration.
 If proposed name is identical with that by which any other existing TU has been
registered, or in the opinion of the registrar, so nearly resembles such name as to
be likely to deceive the public or the members or either TU, the registrar shall
refuse to register the change of name.
 The registrar shall, if he is satisfied that the provisions of this Act in respect of
change of name have been complied with register the change of name in the
register referred to in sec 8 and the change of name shall have effect from the
date of such registration.
Sec 26: Effect of change of name & amalgamation
 The change in the name of a registered TU shall not affect any rights or obligations of the TU.
 It shall also not render ineffective any legal proceeding by or against the TU.
 Any legal proceeding which might have been continued or commenced by or against a TU by its
former name may be continued or commenced by or against its new name.
 Amalgamation of two or more registered TU shall not prejudice any right of any of such Trade
Unions or any right of a creditor or any of them.
 An amalgamation shall have effect only after it has been registered.
 But registration of amalgamation by itself is not the conclusive proof of the validity of
amalgamation.
 Amalgamation may be declared invalid on the ground that the votes of fifty percent of the
members had not been recorded.
Sec 27: Dissolution :
 When registered TU is dissolved, notice of dissolution signed by seven members
& by the Secretary of the TU shall be sent to the Registrar, within fourteen days
of dissolution.
 If the Registrar is satisfied that the dissolution, has been effected in accordance
with rules of the TU, the notice shall then be registered.
 The dissolution of the TU shall have effect after registration of the notice.
 Where the dissolution of a registered TU has been registered & rules of a TU do
not provide for the distribution of funds of the TU on dissolution, the Registrar
shall divide the funds amongst the members in such manner as may be
prescribed.
Sec 28: Returns
 A general statement audited in the prescribed manner of all receipts &
expenditure of every registered TU, shall be sent annually to the Registrar.
 A general statement of the assets & liabilities of the TU shall also be sent
annually on the prescribed date to the Registrar.
 Along with the general statement, a statement showing all changes of office
bearers made by the union during the year to which general statement refers,
shall be sent to Registrar.
 A copy of the rules of the TU corrected up to the date of the despatch of the
statement shall also accompany the statement of the Registrar.
 RECOGNITION TRADE UNION
 Sec 28-C to 28-I of the Act deals with the rules relating to recognition of TU by
an amendment of the Trade Unions Act, 1926, in the year 1947. But these
provisions have not been put into operation so far.
 Sec 28-C: Recognition by Agreement:
 Where an employer agrees to recognize TU, a memorandum of agreement by the
employer and the officers of the TU, or their authorised representatives may be
presented to the Registrar & the shall record the memorandum in a register in the
prescribed manner.
 Such an agreement may be revoked by either party, on the application made to
the Registrar.
 When such an agreement is in force, the TU shall have all the rights of
recognised TU.
Sec 28-D: Conditions for recognition by order of a Labour Court:
 A TU shall not be entitled to recognition by order of a Labour Court under Sec 28-E unless it
fulfils the following conditions, namely:
a. That all its ordinary members are workmen employed in the same industry or in industry
closely allied to or connected with one another;
b. that it is representative of all the workmen employed by the employer in that industry or those
industries.
c. that its rules do not provide for the exclusion from membership of any class of the workmen
referred in clause b.
d. that its rules provide for the procedure for declaring a strike.
e. that its rules provide that a meeting of its executive shall be held at least once in every six
months;
f. that it is a registered TU and it has complied with all the provisions of this Act.
Sec 28-E: Application to & grant of recognition by Labour courts:
 Where a registered TU having applied for recognition to an employer has failed to obtain
recognition within a period of three months from the date of making such application, it may
apply in writing setting out such particulars as may be prescribed, to the Labour Court for
recognition by that employer.
 The Labour Court may call for further information, for the purpose of ascertaining whether
the TU is entitled to recognition by the employer and if the TU fails to supply the required
information within the time granted, the labour court may dismiss the application.
 The Labour Court shall, after serving notice on the employer, investigate whether the TU
fulfils the conditions for recognition set out in sec 28-D.
 If the Labour Court is satisfied that the TU is fit to be recognised by the employer, it shall
make an order directing such recognition.
Sec 28-F: Rights of recognised TU:
 The executive of a recognised TU shall be entitled to negotiate with employers
in respect of matters connected with the employment or non-employment or the
terms of employment or the conditions of labour of all or any of its members &
the employer shall receive and send replies to letters sent by the executive &
grant interviews to that body regarding such matters.
 Any dispute between the employer & the executive of a recognised TU as to
whether a conclusion has been arrived or whether there has been a change in
circumstances, shall be referred to the Registrar whose decision shall be final.
 The executive of the recognised TU shall be entitled to display notices of the TU
in any premises where its members are employed, and the employer shall afford
the executive reasonable facilities for that purpose.
Sec 28-G: Withdrawal of recognition:
 Where the recognition of a TU has been directed under sec 28-E, the Registrar or the
employer may apply in writing to the Labour Court for withdrawal of the recognition
on any of the following grounds, namely:
a. That the executive or the members of the TU have committed any unfair practice
within three months prior to the date of the application
b. that the TU has failed to submit any return to the Registrar
c. that the TU ceased to be the representative of the workmen
 On the receiving the application, Labour Court serve notice to the TU to show cause
why its recognition should not be withdrawn.
 If after giving a reasonable opportunity to the TU to show cause, the Labour Court is
satisfied that the TU is no longer fit to be recognized, it shall make an order declaring
that the recognition of the TU has been withdrawn.
Sec 28-H: Application for fresh recognition:
 On the expiry of not less than six months from the date of
withdrawal of recognition of a TU, the TU ,if it continues to be a
registered TU, may again apply for recognition, and the procedure
laid down in this Act shall apply in respect of such applications as if it
were an original application for recognition.
Sec 28-I: Recognized Trade Unions to submit prescribed returns:
 Every TU recognised under sec 28-E shall submit the returns to the
Registrar at the prescribed time & in the prescribed manner.
 REGULATIONS
Sec 29: Power to make regulations:
 Appropriate govt may make regulations for the purpose of carrying into effect the provisions of
this Act.
 They may provide for following matters-
a. The manner in which TU & rules of the TU shall be registered & the fees payable on
registration
b. the transfer of registration in the case of any registered TU which has changed its head office
from one state to another
c. the manner in which & qualification of the person by whom the accounts of registered TU shall
be audited.
d. the conditions subject to which inspections of documents kept by Registrar shall be allowed &
the fees which shall be chargeable in respect of such inspections
e. any other matters.
Sec 30: Publication of Regulations:
 All regulations made by Appropriate Govt shall be published in the Official
Gazette.
 PENALTIES
Sec 31: Failure to submit returns:
 Following defaults are made punishable u/s 31-
a. Failure to give notice which is required to be given by a registered TU
b. Failure to send statements which is required to be sent by a registered TU
c. Failure to send any document which is required to be sent by a registered TU.


 Any office bearer or other person bound by the rules of the TU to give any
information or send any statement or document shall in case of default be
punishable with fine which may extend to five rupees.
 Where there is no office bearer or person as aforesaid, then every member of the
executive of the TU in case of default to give information or send statement or
document, shall be punishable with fine which may extend to five rupees.
 In case of continuing default an additional fine extending to five rupees for each
week after the first during which default continues, may be imposed.
 But in no case shall, aggregate fine exceed fifty rupees.
 The information or statements are required to be submitted by a registered TU:
a. Notice of change in the address of head office of the TU
b. Notice of change of name or amalgamation u/s 25 of the Act
c. Notice of dissolution of the TU
d. Return as per sec 28 of the Act
 Any person who willfully makes or causes to be made any false entry in, or any
omission from, the general statement, the copy of rules, or the copy of alteration
of rules which are required to be submitted to the Registrar in case of a registered
TU by sec 28 of the Act, shall be punishable with fine which may extend to five
hundred rupees.
Sec 32: Supplying false information regarding TU:
 Where any person with the intention to deceive –
a. gives to any member of a registered TU, or
b. to a person intending or applying to become a member of such a TU,
 any false information then he shall be punishable with fine which may extend to
two hundred rupees.
Sec 32: Supplying false information regarding TU:
 Where any person with the intention to deceive –
a. gives to any member of a registered TU, or
b. to a person intending or applying to become a member of such a TU,
 any false information -punishable with fine -may extend to two hundred rupees.
 COLLECTIVE BARGAINING
 When an organized body negotiates with the employer & fixes the
terms of employment by means of bargaining is known as Collective
Bargaining.
 The essence of collective bargaining is between the interested parties
& not with the outside parties.
 Purposes of Collective Bargaining:
1. To provide an opportunity for the workers to voice their complaints &
grievances regarding the working conditions.
2. To pave the way for the employer and workers to reach an amicable solution
peacefully without having any ill will towards one another.
3. To sort out all the disputes & conflicts between the employer & worker
4. To prevent any dispute which is likely to take place in the future by mutually
agreeing on the contract
5. To foster a peaceful & stable relationship between the workers & the
organization


 Essentials of Collective Bargaining:

1. Right to organise:
 The success of collective bargaining in any country depends upon the
right of the workers to organise themselves & bargain.
 This means that workers must have right to organise & have
collective bargaining.
 Workers & employers organisation should be free & strong & must
also be relatively equal in strength.
2. Stable & Strong Trade Union:
 TU must be stable & strong.
 That means, the more the organisations or unions of workers are strong the more
effective role they will be able to play at the time of bargaining. It helps in the
success of Collective bargaining.
 Weak union or union that suffers from intra union rivalries hinder the progress of
collective bargaining because they do not find themselves in a position to take a
firm stand at the time of bargaining.
3. Recognition of TU:
 For successful collective bargaining recognition of TU is most essential.
 Unless the TU is recognised by the employers, the union will face lot of
problems before going to negotiate with the employer.
 If the employer refuses to recognise the TU of workers, the collective bargaining
will almost be impossible.
 Attitude of employers & Trade Unions:
 In addition to the above factors on which the success of collective bargaining
depends it also greatly depends on the attitude of the parties. i.e., TU & the
employer.
 If they are rigid & non-compromising it may create problem for collective
bargaining.
 On the contrary if parties are compromising & are ready to give & take, they
may achieve at least something by collective bargaining.