INDUSTRIAL LAW

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Trade Union Act, 1926

By: Milind Gandhi

INTRODUCTION
TRADE UNION ACT, 1926 is one of the earliest acts
relating to labour. It makes provision about the registration
of trade unions. Until the trade unions act, 1926 was enacted
the workers did not the importance of being an organized
force. As there was no collective action, workers were made
at the mercy of the employers and had to be contended with
the wages. Which each one of them was getting separately,
depending upon the negations with the employer. The
necessity of this act was that the employers were exploiting
the workers and the workers did not have any power, as they
were not united. To give the workers their right & power the
government came out with act. This act extends to the
whole of India. This act has been amended in September
2001. The registration of trade union is not compulsory
under the trade unions act, however, only a registered trade
union can have the protections granted under the act.
The laws relating to the registration of trade union is
contained in the trade unions act, 1926. This act covers the
following:
• Conditions governing the registration of trade unions.
• Obligations imposed upon a registered trade union.
• Rights and liabilities of registered trade union.

DEFINITIONS UNDER THE ACT

TRADE UNION:

Trade union means any combination whether

permanent or temporary formed primarily for the purpose of
regulating the relations between –
1. Workmen or employees; or
2. Workmen and workmen; or

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3. Employers and employers; or

4. For imposing restrictive conditions on the conduct
of any trade or business.
Trade union includes any federation of two or more
trade unions.
The provision for this does not apply to:
1. Any agreement between partners as to their own
business.
2. Any agreement between an employer and those
employed by him as to such employment; or
3. Any agreement in consideration of the sale of the
goodwill of a business or of instruction in any profession,
trade or handicraft

• TRADE DISPUTE:

Trade dispute means any dispute between –

1. Employers and workmen; or
2. Workmen and workmen; or
3. Employers and employer;
Which is connected with ----
1. The employment or non-employment, or
2. The terms of employment,
3. The conditions of labour of any person.
The definition of “Trade Dispute” is similar to the
definition of industrial dispute in the Industrial Disputes act.

WORKMEN:

The second part of the definition of the trade dispute

defines workmen. According to it workmen means “All
persons employed in trade or industry whether or not in the
employment with whom the trade dispute arises.”
The above definition of trade union contains the
following requirements:
1. There should be real or substantial dispute or
differences;
2. The dispute or difference must be between-
a. Employers and workmen or

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b. Between workmen and workmen or

c. Between employers and employers
3. The dispute or difference must be connected with-
a. Employment or non-employment or
b. Terms of employment or
c. With the conditions of labour of any person.
The terms and industry has not been defined in this act.
Therefore, if an establishment or an activity falls within the
meaning of the word industry the workmen employed in a
trade or industry will have a right to form a trade union and
get it registered under trade unions act, 1926. The definition
of workmen also includes in it a dismissed, discharged,
removed or retrenched worker.

THE TRADE UNION ACT AND THE FACTORY

• APPLICABILITY OF THE TRADE UNION ACT ON THE

FACTORY:

As discussed earlier Trade Union Act, 1926 is applicable

to the Trade Unions in the factory or any other establishment
who have registered themselves under the Trade Union Act,
1926. As per the law, if an establishment or activity falls
within the meaning of the word Industry, the workmen
employed in a Trade or Industry has right to form a Trade
Union and get it register under the Trade Union Act,1926.
Registration of the union under the Act is not compulsory.
However it has certain benefits which would be discussed
further. The factory visited falls under the meaning of the
term industry as well as the Trade Union in the factory has
registered themselves under the Trade Union Act,1926.
Hence all the rules and regulations as well as the laws
related to the Trade Union are to be followed by the factory
workmen and employers.

• REGISTRATION OF THE TRADE UNION:

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The Trade Union of the VENUS factory was registered

under the Trade Union Act, 1926 on 25th of October, 1997.
It is a Trade Union of the workmen. As per the rule of
naming the Union, the Trade Union of the factory was named
as VENUS MAJDUR SANGH. It is known as internal Trade
Union and it is recognized and approached by the Factory’s
Management.
As per the law, at least seven person or members of
the Trade Union have to make application in the prescribed
form accompanied by the prescribed fees. And no Trade
Union of workmen shall be registered unless minimum 10%
or 100 of the workmen, which ever is less, engaged or
employed in the establishment or industry with which the
Trade Union is connected are its members on the date of
making of application for registration.
15 members (including the union leader) of The
Trade Union of the VENUS factory (at that time) had
subscribed their names to the rules of the Trade Union Act.
The application is to be accompanied by a copy of the
rules of the Trade Union. As per the law the application
made by the workmen of the VENUS factory accompanied by
a statement of the following particulars:
1. Names, occupation and address of the place of work of
all the 15 members of the Trade Union.
2. Name of the Trade union and its Head Office.
3. Titles, names, ages, address and occupation of the
office bearers.
The Trade Union of the VENUS factory already existed
before registration. The Trade Union of the factory was
formed much before registration. It existed from around
mid 1996 i.e. for more than 1 year before the date of
registration. Hence as per the law, during the time of
application the Trade Union had to submit a general
statement of the assets and liabilities to the Registrar
containing the prescribed particulars.

• TRADE DISPUTE:

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As per the definition of “Trade Dispute”(mentioned

above) it is clear that for a trade dispute, it is necessary that
there must be some difference between the parties stated in
the definition (employer and workmen) i.e. a demand from
one party and refusal to accept those demands by the other
party. This difference need not necessarily only between the
workmen and the employer. It can be also between
employers and employers or even between workmen and
workmen.
The formation of trade union rose out of the
trade dispute in the VENUS factory. However, much
information is not revealed about the nature of the dispute.
But the main dispute was between two groups of workers
which resulted in formation of Trade Union. The Trade
Union formed played a very important role in settling
the Trade Dispute. And as mentioned by them there has
been no such major Trade Dispute since the formation of the
Trade union.

• WORKMEN:

As defined earlier workmen plays a vital role in Trade

Union. It is clarified in this Act under Section 9-A that a
registered trade union of workmen shall at all time continue
to have not less than 10% or one hundred of the workmen,
whichever is less as its members, subject to a minimum of 7,
engaged or employed in an establishment or industry with
which the Trade Union is connected. According to Section 21,
any person who has attained age of 15 years may be a
member of a registered Trade Union.
The Trade Union of the VENUS Factory, at present has
all the eligible employees as the member of the Trade Union.
i.e. 120 workmen (excluding 7 who are below 15) are
members of the Trade Union. However, it is recognized and
approached by the factory’s management. All the 120
members pay their minimum subscription fees as per the
rule.

• APPROPRIATE GOVERNMENT:

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(A) The term Appropriate Government is the Central

Government in relation to:
1. an establishment belonging to or under control of
central government,
2. in relation to an establishment connected to a
railway company,
3. a major port,
4. a mine, OR
5. an oil field, OR
6. a controlled industry, OR
7. In relation to an establishment having
departments and branches in more than one
State.
(B) In relation to any other establishment other than
those mentioned above, the appropriate Government
means the State Government.
In relation to Trade Union whose objects are not
confined to one State, it is The Central Government. While in
relation to other Trade Unions Appropriate Government
means The State Government.
For the VENUS MAJDUR SANGH the appropriate
Government is The State Government. .i.e. The
Maharashtra State Government. All the rules and regulations
in relation to the Trade Union are to be accepted by the
Maharashtra State Government.

• FUNDS OF THE VENUS MAJDUR SANGH:

As per the information available the amount of the two

funds (general and political) are not fixed. Due to some they
did not reveal the total funds required and collected for the
functioning of the Trade union. However, some of the fields
where these funds are utilized are under:
1. Allowances to the member or their dependants on
account of death, old age, sickness, accidents and
unemployment of the members. As informed a major share
of the funds of VENUS MAJDUR SANGH is contributed for this
purpose.

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a. Death- approximately a year ago, a workman

named Srinivas who was also a member of the VENUS
MAJDUR SANGH met with an accident (not during the
work) and was severely injured. He was admitted in a
Government hospital. As the expenses were high for
the individual workmen 40% of the medical expenditure
were barred by the Trade Union, 40% by the Factory
Management and the rest was barred by the workman.

b. Old Age- few months ago an employee named

Sakharam had to retire due to old age. As informed he
was serving the VENUS TRADE UNION right from the
date of its existence and had played vital role in settling
few minor Trade disputes. So at the time of retirement
he was given some amount of cash reward which was
contributed by the Trade Union.

2. Payment of expenses of the administration of the

Trade Union including audit of the accounts of these funds.
3. Expenses on legal proceedings related to the Trade
Union. As informed by the respective Authority, till date no
such expenses are barred on this matter.
4. Provision of Educational, social or religious benefits
for the members or for their dependents, payment of
expenses of funeral or religious ceremonies for deceased
members. As informed, the Trade Union has settled a rule
sort of like to pay all the expenses on the funeral of the
deceased member of the Union from the funds of the Trade
Union.

• PROCEEDINGS AS PER THE RULES OF THE ACT:

As per the rule the Trade Union have to name the newly
registered Trade Union. So as mentioned above it was
named as VENUS MAJDUR SANGH.
The objects of their Trade Union mentioned were not
clearly informed to us.

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The Office Bearers and the members of the Trade Union

of the factory has to maintain a list of the members and
adequate facilities for its inspection.
Allowing admission of the ordinary members who are
actually engaged or employed in the factory with which the
Trade Union is connected.
The members of the Trade Union have to pay Rupees
Three per year as the payment of a minimum subscription.
The members of the Trade Union have accepted the
conditions laid down by the Act, under which any member
shall be entitled to any benefit or can be imposed any kind
of fine or forfeiture.
The Trade Union at the time of Registration, had also
submitted the statement about the manner in which the
rules shall be amended, varied or rescinded.
As per the rule, the Trade Union have also priory
decided about the manner in which the union will dissolve
and have submitted the relevant document at the time of
registration.

CASE LAW- TRADE DISPUTE

NEWSPAPERS LTD V/S STATE INDUSTRIAL TRIBUNAL,
U.P.
It was observed by the Supreme Court- an individual
dispute cannot “perse” be a Trade Dispute unless the
cause is sponsored by a Trade Union or by a
substantial number of workmen.
Normally this kind of information is not provided to the
outsiders. But on much request the respected authority
agreed to discuss on the matter. They said few months back
a worker name Raghav had problems with working hours
and wages paid to him. However it was clear on the part of
the management side about the work conditions and wages.
The management side was firm on their decision that they
cant apply any changes at that point of time. Even the
members of the VENUS TRADE SANGH agreed with the
management except 3 of the other members including
Raghav.

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Further Raghav threatened to lodge a police complaint

and warned that he will take the management to the court.
But before any such compliant or case were filed the other 2
members declined and did not support Raghav.
But when the Management discussed the matter
with their advocate they realized that there are no
chances of filing of the case and any legal
proceedings under Trade Dispute as the cause was
supported/sponsored by Trade Union nor by the
substantial number of workmen.

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