Class Notes- Industrial Relations

Lecture 6-THE TRADE UNIONS ACT, 1926

The Trade Unions Act, 1926 provides for registration of trade unions with a view to render
lawful organisation of labour to enable collective bargaining. It also confers on a registered trade
union certain protection and privileges. The Act extends to the whole of India and applies to all
kinds of unions of workers and associations of employers, which aim at regularising labour
management relations.

A Trade Union is a combination whether temporary or permanent, formed for regulating the
relations not only between workmen and employers but also between workmen and workmen or
between employers and employers.

Appointment of Registrar
Section 3 of the Trade Union Act, 1926 empowers the appropriate Government to appoint a person
to be registrar of Trade Unions. The appropriate Government be it State or Central, as the case may
be is also empowered to appoint additional and Deputy Registrars as it thinks fit for the purpose of
exercising and discharging the powers and duties of the Registrar. However, such person will work
under the superintendence and direction of the Registrar. He may exercise such powers and
functions of Registrar with local limit as may be specified for this purpose.

Mode of Registration
Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys
certain rights and privileges under the Act. Section 4 of the Act provides for the mode of registration
of the trade union. According to the Section, any seven or more than seven members of a trade
union may by application apply for the registration of the trade union subject to the following two
conditions:

• At Least 7 members should be employed in the establishment on the date of the making of
the application.
• At Least 10% or a hundred members whichever is less, are employed in the establishment
should be a part of it on the date of making the application.

If the union has been in existence for more than a year, then a statement of its assets and
liabilities in the prescribed form should be submitted along with the application.

Rules of a Trade Union

Section 6 of the Act enlists the provisions which should be contained in the rules of trade union and
it provides that no trade union shall be recognized unless it has established an executive committee
in accordance with the provisions of the Act and specified rules.
Registrar’s power to call for information
Section 7 of the Act furnishes upon the registrar power to call for information in order to satisfy
himself that any application made by the trade union is proper. In matters where the discrepancy is
found the registrar reserves the right to reject the application unless such information is provided by
the union.

Registration
According to Section 8 of the Act, if the registrar has fully satisfied himself that a union has complied
with all the necessary provisions of the Act, he may register such union by recording all its
particulars in a manner specified by the Act.

Certificate of Registration
According to Section 9 of the Act, the registrar shall issue a registration certificate to any trade
union which has been registered under the provision of Section 8 of the Act and such certificate shall
act as conclusive proof of registration of the trade union.

Minimum requirement related to the membership of a Trade Union

Section 9A of the Act lays down the minimum number of members required to be present in any
union which has been duly registered, the Sections mandates that a trade union which has been
registered must at all times should continue to have not less than 10% or one hundred of the
workmen, whichever is less, subject to a minimum of seven, engaged or utilized in an institution or
trade with that it’s connected, as its members.

Cancellation of Registration
The registrar, according to Section 10 of the Act has the power to withdraw or cancel the
registration certificate of any union in any of the following conditions:

• On an application made by the trade union seeking to be verified in such manner as may be
prescribed;
• If the registrar is satisfied with the fact that the trade union has obtained the certificate by
means of fraud or deceit;
• If the trade union has ceased to exist;
• If the trade union has wilfully and after submitting a notice to the Registrar, has contravened
any provision of the Act or has been continuing with any rule which is in contravention with
the provisions of the Act;
• If any union has rescinded any rule provided under Section 6 of the Act.

Legal Status of a Registered Trade Union

Incorporation of Registered Trade Union Section 13 of the Act states that every trade union which is
registered according to the provisions of the Act, shall:

• Body corporate by the name under which it is registered.

• have perpetual succession and a common seal.
• Power to contract and hold and acquire any movable and immovable property.
• By the said name can sue and be sued.
Criminal conspiracy in Trade Disputes
Section 17 of the Act states that no member of a trade union can be held liable for criminal
conspiracy regarding any agreement made between the members of the union in order to promote
lawful interests of the trade union.

Immunity from civil suits in certain cases

Section 18 of the Act immunes the members of trade union from civil or tortious liabilities arising
out of any act done in furtherance or contemplation of any trade disputes.

For example. in general, a person is subject to tortious liability for inducing any person to breach a
contract. But, the trade unions and its members are immune from such liabilities provided such
inducement is in contemplation or furtherance of any trade disputes. Further, the inducement
should be awful and should not involve any aspect of any violence, threat or any other illegal
activity.

Appointment of Office Bearers

At least 50% of the office bearers of a union should be actually engaged or employed in the
industry with which the trade union is concerned, and the remaining 50% or less can be outsiders
such as Lawyers, politicians, social workers etc.

To be appointed as an office bearer or executive of a registered trade union, a person must have-

a) attained the age of 18 years; and

b) not been convicted of any moral turpitude and sentenced to imprisonment, or a period of at
least 5 years has elapsed since his release.

Change of Name & Registered Office

• A registered trade union may change its name with the consent of at least 2/3rds of the total
numbers of its members.
• Notice of change of name in writing, signed by the secretary and 7 members of the union,
should be sent to the registrar.
• The Registrar shall register the change in name if he is satisfied that the proposed name is
not identical with the name of any other existing union and the requirements with respect
to change of name have been complied with.
• The change of name shall not affect any rights and obligations of the trade union or render
any legal proceeding by or against the trade union as defective.

Change of Registered Office

Notice of change in registered office address should be given to the Registrar in writing
within 14 days of such change.

Amalgamation of Trade Unions

As per Section 24 of Trade Union Act 1926, any registered trade union may amalgamate with any
other union(s), provided that-
 a) at least 50% of the members of each such union record their votes and
b) at least 60% of the votes so recorded are in favour of amalgamation.

A notice of amalgamation signed by the secretary and at least 7 members of each amalgamating
union, should be sent to the registrar, and the amalgamation shall be in operation after the Registrar
registers the notice.

Dissolution of a Trade Union

A registered trade union can be dissolved in accordance with the rules of the union. A notice of
dissolution signed by any seven members and the secretary of the union should be sent to the
registrar within 14 days of the dissolution.

On being satisfied the registrar shall register the notice and the union shall stand dissolved
from the date. The funds of the union shall be divided by the Registrar amongst dissolved Union’s
members in the manner prescribed under the rules of the union or as laid down by the government.

Obligations of Registered Trade Unions

1. General funds
The general funds of a registered trade union should be spent only for the activities
specified such as-

• Salaries to be given to the office-bearers.

• The cost incurred for the administration of the trade union.
• Compensation to the workers due to any loss arising out of any trade dispute.
• Expenses incurred in the welfare activities of the workers.
• Benefits conferred to the workers in case of unemployment, disability, or death.
• The cost incurred in bringing or defending any legal suit.
• Publishing materials with the aim of spreading awareness amongst the workers.
• Education of the workers or their dependents.
• Making provisions for medical treatment of the workers.
• Taking insurance policies for the welfare of the workers.

The Section also provides that the reason of non-contribution to the said fund and also a
contribution to the fund cannot be made as a criterion for admission into the union.

2. Separate Political fund

The trade union may set up a separate political fund for furtherance of civic and political
interest of members. Contribution to this fund is not compulsory.

3. The account books and membership register of the union should be kept open for inspection
by any of its office‐bearers.
4. A copy of every alteration made in the rules of the union should be sent to the Registrar within
15 days of making the alteration.
5. An annual statement of receipts and expenditure and assets and liabilities of the union for the
year ending on the 31st December, prepared in the prescribed forms and duly audited should
be sent to the Registrar within the prescribed time. This statement should be accompanied by a
 statement showing changes in office bearers during the year and a copy of the rules as amended
up to date.

Offence Penalty
1 If the registered trade union/ its office bearers or Fine upto Rs. 5 plus additional
members fail to give any notice or send any statement fine upto Rs. 5 per week in
as required under the Act. case of continuing offence.
(Maximum fine imposable Rs.
50)

2 If any person wilfully makes any false entry in the Fine upto Rs. 500
annual statement of the union or its rules
3 If any person, with intent to deceive, gives an incorrect Fine upto Rs. 200
copy of rules of the union to any member or a
prospective member

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.