Trade Union Act, 1926

Nitya Nand PandeyAssistant Professor(Amity Law School)

Amity University JaipurMo. 9415422181

Mail id. nnp.vns@gmail.com

The Trade Union Act, 1926

Total Section - 33Chapter - 05Came into force - 1st June of 1927

Chapter- I Preliminary (S.1-2)

1. Short title, extent and commencement

2. Definitions

Chapter II Registration of Trade Unions (S. 3-14)

3. Appointment of Registrars.4. Mode of Registration.5. Application for registration.6. Provisions to be contained in the rule of a Trade Union.7. Power to call for further particulars and to require alteration of name.8. Registration.9. Certificate of registration.10. Cancellation of registration.11. Appeal.12. Registered office.13. Incorporation of registered Trade Unions.14. Certain Acts not to apply to registered Trade Unions.

Chapter III Rights and liabilities of registered trade unions (S.15-28)

15. Objects on which general funds may be spent.16. Constitution of a separate fund of political purposes.17. Criminal conspiracy in the trade disputes.18. Immunity from civil suit in certain cases.19. Enforceability of agreements.20. Right to inspect books of Trade Unions.21. Rights to minors to membership of Trade Unions.21A. Disqualification of office bearers of Trade Union22. Proportion of office-bearers to be connected with the industry.23. Change of name.24. Amalgamation of Trade Union.25. Notice of change of name on amalgamation.26. Effects of change of name, and of amalgamation.27. Dissolution.28. Returns

Chapter IV Regulations(S. 29-30)

29. Power to make regulations.

30. Publication of regulations.

Chapter V Penalties and procedure(S. 31-33)

31. Failure to submit returns.32. Supplying false information regarding Trade

Unions.33. Cognizance of offences.

Section. 2. Definition Clause

• Trade Dispute (2g)• Worker (2g)• Trade Union (2h)

Section. 2(g) "trade dispute"

• (g) "trade dispute" means any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment or non-employment, or the terms of employment or the conditions of labour, of any person, and "workmen" means all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises.

Trade dispute

"Trade dispute" means any dispute between employers and workmen, or between workmen and workmen, or between employers and employers - which is connected with the employment, or non-employment, or the terms of employment or the conditions of labour,

of any person.

Workmen

• “Workmen" means all persons employed in trade or industry, and

• Whether or not in the employment of the employer with whom the trade dispute arises

Section. 2(h)- Trade Union• "Trade Union" means 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 condition on the conduct of any

trade or business, and includes any federation of two or more Trade Unions.

Exception

• Provided that this Act shall not affect– (i) any agreement between partners as to their

own business; (ii) any agreement between an employer and those

employed by him as to such employment; or(iii) any agreement in consideration of the sale of

the good-will of a business or of instruction in any profession, trade or handicraft.

It is the object of the association or combination that determines whether it is a trade union or not

• Example. A society of authors, publishers, and other owners of copyright meant to protect their copyright in music and songs, was held NOT to be a Trade Union by the House of Lords.

Tamil Nadu NGO Union vs Registrar, Trade Unions, AIR 1962, Madras HC

• Tamil Nadu NGO Union, which was an association of sub magistrates of the judiciary, tahsildars, etc., was not a trade union because these people were engaged in sovereign and regal functions of the State where were its inalienable functions.

GTRTCS and Officer's Association, Bangalore and others vs Asst. Labor Commissioner and anothers AIR 2002, Kar. HC• the definition of workmen for the purpose of

Trade Unions is a lot wider than in other acts and that the emphasis is on the purpose of the association rather than the type of workers and so it is a valid Trade Union.

Chapter II

Registration of Trade Unions

(S. 3-14)

Important provisions3. Appointment of Registrars.4. Mode of Registration.5. Application for registration.6. Provisions to be contained in the rule of a Trade Union.7. Power to call for further particulars and to require alteration of

name.8. Registration.9. Certificate of registration.10. Cancellation of registration.11. Appeal.12. Registered office.13. Incorporation of registered Trade Unions.14. Certain Acts not to apply to registered Trade Unions.

Introduction

• The registration of a trade union is not necessary.

• However, upon registration, a trade union gets several benefits including some immunities that are not available to an unregistered Trade Union.

Section 13 specifies that upon registration, a trade union gets a legal entity status, due to which-

it has perpetual succession and a common seal. can acquire and hold movable as well as

immovable properties.can contract through agents.can sue and can be sued.

Procedure of Registration

• Appointment of the Registrar (S.3)• Mode of registration• Application of Registration• Contains of the registration form

Section. 3. Appointment of Registrars.

1. The appropriate Government shall appoint a person to be the Registrar of Trade Unions for each State.

2. The appropriate Government may appoint as many Additional and Deputy Registrars of Trade Unions as it thinks fit for the purpose of exercising and discharging, under the superintendence and direction of the Registrar, such powers and functions of the Registrar under this Act as it may, by order, specify and define the local limits within which any such Additional or Deputy Registrar shall exercise and discharge the powers and functions so specified.

S. 3……..

• Subject to the provisions of any order under sub-section (2), where an Additional or Deputy Registrar exercises and discharges the powers and functions of a Registrar in an area within which the registered office of a Trade Union is situated, the Additional or Deputy Registrar shall be deemed to be the Registrar in relation to the Trade Union for the purposes of this Act.

Mode of registration (S. 4)• Section 4 says that to register a Trade Union, an

application must be sent to the Registrar of Trade Unions appointed by an appropriate government.

• The application must be made by seven or more persons who are engaged in the trade or industry in connection to which the Trade Union is to be formed.

• All the applicants must subscribe their names to the rules of the Trade Union and comply with the provisions of this act regarding registration.

Mode of registration (S. 4)

• There must be at least 10% or 100, whichever is less, members who are engaged or employed in the establishment or industry to which it is connected.

• There must not be less than seven members who are engaged or employed in the establishment or industry to which it is connected.

• If more that half of the persons who applied for the registration cease to be members of the union or expressly disassociate themselves from the application, the application will be deemed to be invalid.

Application of Registration• Section 5 gives the details of the application. It says that the

application should be sent to the registrar along with the copy of the rules of the trade union and a statement of the following particulars-

1) The name, occupation, and addresses of the applicants.2) The name of the trade union and the address of its head

office.3) The titles, names, ages, addresses, and occupations of the

office bearers of the trade union.4) If the trade union has been in existence for more than 1 yr, a

general statement of its assets and liabilities.

Contain of the rule book

• Section 6 (Provisions to be contained in the rules of a Trade Union) specifies the provisions that should be contained in the rule book of the trade union. A copy of this rule book must be supplied along with the application for registration of the trade union. This rule book details the internal administration of the trade union and also determines and governs the relationship between the trade union and its members.

Contain of the rule book…….

• It must contain the rules for the following matters:1. name of the trade union.2. the whole object of the trade union.3. the whole purposes for which the general funds can be used.4. the maintenance of the list of members and adequate facilities to inspect it

by the members of the trade union.5. the membership of ordinary members who are actually engaged or

employed in an industry with which it is connected as well as the membership of the honorary or temporary members.

6. the appointment of members of the executive body.7. the membership or subscription fee, which shall not be less that 25 paisa per

member per month8. the conditions under which a member can get the benefits or has to pay

fines.9. the safe custody of funds and provisions for inspecting or auditing the

statements, or other documents of the trade union.10. dissolution of the trade union.

M T Chandersenan vs Sukumaran AIR 1974

• SC held that if a member fails to pay subscription fee, he cannot be considered a member of the trade union. However, subscriptions cannot be refused under some pretext which results in the denial of membership.

Bokajan Cement Corporation Employees Union

vs Cement Corporation of India, 2004

• SC held that membership of the union does not automatically cease upon termination of the employment.

Power of Registrar (S.-7)

• the registrar has the power I. to ask for further information from the trade union to

satisfy himself that the trade union complies with section 5 and is eligible to be registered under section 6.

II. The registrar can refuse to register the trade union until he receives the information.

III. Further, he has the power to ask to change the name of the trade union if a union with the same name already exists or if he feels that the name could be deceiving or confusing to the public or the members of the trade union.

Registration

• Under section 8, upon satisfaction of all the requirements, the Registrar of the Trade Unions will register the trade union. It is mandatory for the registrar to register a trade union if the union satisfies all the technical requirements of this act.

In the case of Re Indian Steam Navigation Workers Union AIR 1936 the court held that a Registrar only has to see whether all the technical requirements are being fulfilled and not whether it could be described as unlawful.

In the case of ACC Rajanka Limestone Quarries Worker's Union vs Registrar of Trade Unions, AIR 1958, it was held that if the registrar does not register the trade union within 3 months of application, an appeal can be made to the High Court under art 226.

Certificate

• Under section 9, the registrar will issue the certificate of registration in the prescribed form, which shall be a conclusive evidence that the trade union is registered under this act.

Cancellation of Registration (S.-10)

• The Registrar of Trade Unions has the power to cancel the registration of a trade union in the following conditions:

I. On the application of the trade union to be verified in the prescribed manner.

II. If the registrar is satisfied that registration was obtained by fraud or mistake.III. If the trade union has ceased to exist.IV. If the trade union willfully, upon notice of the registrar, has contravened or

allowed any rule to continue in force, which is inconsistent with the provisions of this act.

V. If the trade union rescinds any rule providing for any matter, provision for which is required to be made in section 6.

VI. If the registrar is satisfied that a trade union of workmen has ceased to have the requisite number of members.

Tata Electric Companies Officer's Guild vs Registrar of Trade Unions, 1994, Bombay HC

• In this case the court held that for a registrar to cancel the registration, willful neglect of the notice is a must. If the trade union sends the account statement upon notice of the registrar, the registrar cannot cancel the registration on the ground that the account statement was not filed earlier.

After the dissolution

• Under section 27, upon dissolution of a trade union, seven or more members must send a notification to the registrar within 14 days of dissolution and the registrar shall register it after verifying that the dissolution has been done as per the provisions of this act.

• Further, if the rules of the trade union do not provide for distribution of the funds upon dissolution, the registrar may distribute the funds in such manner as may be prescribed.

Appeal against the decision of Registrar (S.11)

• Section 11 grants a limited right to appeal the decisions or orders passed by the registrar.

• An appeal may be made - To the high court, if the head office of the trade union is located

in a presidency town. To the labour court or industrial tribunal, if the head office of the

trade union is located in its jurisdiction. if the head office of the trade union in any other location, to such

court, not inferior to the court of an additional or assistant judge of a principal civil court of original jurisdiction, as the appropriate govt. may appoint in this behalf for that area.

Other conditions for the Appeal

• An appeal must be made within 60 days of the date on which registrar passed the order against which the appeal is made.

• In the case of Registrar of Trade Unions, West Bengal vs Mihir Kumar Guha 1963, Cal, it was settled that a trade union whose head office is in a presidency town has only a single chance of appeal against the decision of the registrar, which is to the high court while a trade union whose head office is in muffasil has two chances of appeals, first in the local court and second in the high court.

S. 12- Registered office

• All communications and notice to a registered Trade Union may be addressed to its registered office. Notice of any change in the address of the head office shall be given with fourteen days of such change to the Registrar in writing, and the changed address shall be recorded in the register referred to in Section 8.

S. 13- Incorporation of registered Trade Unions

• Every registered Trade Union shall be a body corporate by the name under which it is registered and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property an contract, and shall, by the said name sues and be sued.

S. 1-. Certain Acts not to apply to registered Trade Unions

• The following Act, namely –(a) The Societies Registration At, 1863.(b) The co-operative Societies Act, 1912.

And(c) The Company Act shall not apply to any

registered Trade Union, had the registration of any such Trade Union under any such Act shall be void.

Rights and liabilities of registered trade unions (S. 15-28)

15. Objects on which general funds may be spent.16. Constitution of a separate fund of political purposes.17. Criminal conspiracy in the trade disputes.18. Immunity from civil suit in certain cases.19. Enforceability of agreements.20. Right to inspect books of Trade Unions.21. Rights to minors to membership of Trade Unions.21A. Disqualification of office bearers of Trade Union22. Proportion of office-bearers to be connected with the industry.23. Change of name.24. Amalgamation of Trade Union.25. Notice of change of name on amalgamation.26. Effects of change of name, and of amalgamation.27. Dissolution.28. Returns

Rights and liabilities of registered trade unions (S. 15-28)

• Liabilities of a registered Trade Union• Rights and Privileges of a registered Trade

Union• Immunities available to a registered Trade

Union

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:1. 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:– salaries of the office bearers.– expenses required for the administration of the trade union– compensation to workers due to loss arise of any trade dispute.– welfare activities of the workers including housing, clothing, or any such

activity.– benefits to the workers or their dependents in the case of unemployment,

disability, or death.– publishing material for creating awareness in the workers.– legal expenses required for defending or bringing a suit.– education of workers or their dependents.– expenses for medical treatment of workers.– taking insurance policies for workers.

Liabilities…………..

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

3. 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.

4. Section 21 allows minors more than 15 yrs of age to be members of a trade union. However, such minors cannot hold office.

5. 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.

6. As per section 22, at least half of the office bearers of a trade union 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.

7. Under section 28, a general statement, audited in a prescribed manner, of all income and expenses must be sent to the registrar every year.

Mario Raposo vs 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.

Rights and Privileges of a registered Trade Union

• Under section 15 a registered trade union has a right to establish a general fund.

• Under section 16, a registered trade union has a right to establish a political fund. Subscription to this fund is not necessary for a member.

• Under section 17, 18, and 19 a registered trade union gets immunity in certain criminal, civil, and contractual proceedings.

Immunites available to a registered Trade Union

• 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.

West India Steel Company Ltd. vs 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.

Immunity from civil suit in certain cases.• 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.

Immunity in civil matter

• 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.

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.

Rohtas Industries Staff Union vs State of Bihar AIR 1963

• In this leading case 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.

Simpson & Group Companies Workers & Staff Union vs Amco Batteries Ltd 1992 Karn

• In this case 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.

Enforceability of agreements

• Section 19 - In India, an agreement in restraint of trade is void as per section 25 of Indian Contract Act.

• However, such an agreement between trade union members is neither void nor voidable.

• It is important to note that this right is available only to registered trade unions.

• An unregistered trade union must follow the principles of general contract law.

Change of name

• Section 23. change of name• Section 25. Notice of change of name• Section 26. Effect of change in name

Section 23. Change the name

• Any registered Trade Union may, with the consent of not less than two-thirds of the total number of its members and subject to the provisions of Section 25 change its name.

• It means-i. Trade union can change the nameii. Minimum two third majority is necessaryiii. The requirement prescribed under section 25

must be fulfilled.

S. 25- Notice to Registrar

• S. 25. - (1) Notice in writing of every change of name, signed by the Secretary and by seven members of the Trade Union changing its name, shall be sent to the Registrar.

• (2) If the proposed name is identical with that by which any other existing Trade Union 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 of either Trade Union, the Registrar shall refuse to register the change of name.

Notice to registrar………

• S. 25(3) Save as provided in sub-section (2), the Registrar shall if he is satisfied that the provisions of this Act in respect to change of name have been complied with, register the change of name in the register referred to in Section 8, and the change of name shall have effect from the date of such registration.

Effect of change in name

• S. 26. - (1) The change in the name of a registered Trade Union shall not effect-

• any rights or obligation of the Trade Union or • render defective any legal proceeding by or against

the Trade Union, and any legal proceeding which might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its former name or may be continued or commenced by or against it by its new name.

Procedure for amalgamation

Section 24 says that any two or more registered trade unions may become amalgamated together into one trade union with or without dissolution or division of the funds of such trade unions or either or any of them.

Provided that votes of at least one half of the members of each trade union are recorded and at least 60% of the votes of each trade union are in favor of the proposal.

Notice to registrar

• The notice of such amalgamation, signed by the secretary and seven members of each of the trade unions, should be sent to the registrar of the state where the head office of the amalgamated trade union is to be located.

Satisfaction of Registrar

• If the registrar is satisfied that -i. All the provisions of this act have been

fulfilled, and ii. The amalgamated trade union is entitled to

registration under section 6, • he will register the new trade union under

section 8 and the amalgamation will take effect from the date of registration.

Effects of amalgamation -S. 26 (2)

An amalgamation of two or more registered Trade Unions shall not prejudice any right of any such Trade Unions or any right of a creditor or any of them.

Dissolution

• 27.(1) When a registered Trade Union is dissolved, notice for the dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution, be sent to the Registrar and shall be registered by him if he is satisfied the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such regulation.

Section 27 (2)

• Where the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution and funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the member in such manner as may be prescribed.

Returns (S. 28)• (1) Return shall be sent annually to the Registrar, on

or before such date as may bee prescribed.• It includes-i. General statementii. Audit report in the prescribed manneriii. All receipts and expenditure of every registered

Trade Union, andiv. Assets and liabilities of the Trade Union existing

on such 31st day of December. • The statement shall be prepared in such form and

shall comprise such particulars as may be prescribed.

S. 28…………..

• (2) Trade Union during the year which the general statement refers, together also with copy of the rules of the Trade Union corrected up to the date of the dispatch thereof to the Registrar.

• (3) A copy of every alteration made in the rules of a registered Trade Union shall be sent to the Registrar within fifteen days of making of the alteration.

S. 28………..• (4) For the purpose of examining the documents referred

to in subsections (1), (2) and (3), the Registrar, or any officer authorized by him, by general or special order may, at all reasonable times, inspect the certificate of registration account books, registers, and other documents relating to a Trade Union, at -

i. its registered office, or ii. may require their production at such place as he may

specify in this behalf, • But no such place shall be at a distance of more then ten

miles from the registered office of a Trade Union.

Penalties and procedure (S.31-33)

S. 31- Failure to submit returns.

S. 32- Supplying false information regarding Trade Unions.

S. 33- Cognizance of offences.

Failure to submit returns (S. 31)

If the trade union is bound to send any notice, any statement or other document, under this Act, and

such trade union makes default, and As per the rule of trade union every office-bearer or other

person was bound to give or send such notice, statement or document, or

if there is no such person, every member of the executive of the Trade Union, shall be punishable with-

i. fine which may extend to five rupees, and ii. in the case of a continuing default, with an additional fine

which may extend to five rupees for each week after the first during which the default continues:

• But The aggregate fine shall not exceed fifty rupees.• S. 31 (2). Any person who willfully makes, or causes

to be made any false entry –i. in general statement, or ii. any omission from the general statement required

by section 28, or iii. in or form any copy of rules, or iv. of alterations of rules sent to the Registrar under

that Section, • shall be punishable with fine which may extend to

five hundred rupees.

Supplying false information regarding Trade Union

• 32. - Any person who, with intent to deceive-• gives document to any member of a registered Trade Union, or • gives document to any person purporting or applying to become a

member of such Trade Union, and• such document purporting to be a copy of the rules of the Trade

Union or of any alterations to the same, • which he knows, or has reason to believe that it is not a correct copy

of such rules or alterations, or • any person who, with the like intent gives a copy of any rules of an

unregistered Trade Union to any person on the pretence that such rules are the rules of a registered Trade Union,

• shall be punishable with fine which may extend to two hundred rupees.

Cognizance of offence• 33. - (1) No court inferior to that of a Presidency Magistrate

or a Magistrate of the first class shall try any offence under this Act.

• (2) No court shall take cognizance of any offence under this Act, unless-

i. complaint thereof has been made by, or with the previous sanction of, the Registrar or,

ii. in the case of an offence under section 32, by the person to whom the copy was given, within six months of the date on which the offence is alleged to have been committed.

Thanks

Nitya Nand PandeyAssistant Professor(Amity Law School)

Amity University JaipurMo. 9415422181

Mail id. nnp.vns@gmail.com