Unit 3: Trade Union Act, 1926
1. What do you mean by Trade Union? Discuss the historical background of Trade Union Movement in India. 2018
2. What are the objectives of Trade Unions Act, 1926.
3. Briefly explain the rights and privileges of a registered trade union under the Trade Unions Act, 1926. 2017, 2019
4. What are the contents of the rules of a registered Trade Union? Discuss in detail. 2018
5. Write a note on the conditions and procedures for registration of a Trade Union. Discuss how the name of a registered trade union may be changed. 2019
5. Define the term 'trade union'. Discuss the provisions for legal immunity of registered trade unions. 2023
6. Discuss the provisions for registration of trade unions. 2023
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Introduction to The Trade Union Act of 1926
The Trade Union Act of 1926 is a legislation enacted in India to provide legal recognition and regulation for trade unions. It sets out the rights, responsibilities, and privileges of trade unions and aims to promote collective bargaining and protect the interests of workers. The Act covers various aspects, including the registration of trade unions, their internal governance, financial management, dissolution procedures etc. It defines the conditions for the formation of trade unions, the qualifications for membership, and the rights and obligations of members It provides provisions for appeals, the cancellation of registration, and legal exemptions for registered trade unions.
Overall, the Trade Union Act of 1926 serves as a framework for the organization and functioning of trade unions in India, ensuring their legal recognition and promoting collective representation for workers. It is applicable to the whole of India.
History and Development of Trade Unionism in India
History of trade unionism in India
In India, trade unions have developed into an important platform for putting up with the demands of workers. They have also turned into one of the most influential pressure groups, which is an aggregate seeking to influence the government in framing legislation in favour of workers without aspiring to become part of the government. As an organised institution, trade unionism took its concrete shape after the end of World War 1. The trade unions in India are essentially the product of modern large-scale industrialization and did not grow out of any existing institutions in society. The need for an organised trade union was first realised in 1875 by various philanthropists and social workers like Shri Sorabji Shapurji Bengali and Shri N.M. Lokhandey, whose constant efforts resulted in the formation of trade unions like the Printers’ Union of Calcutta (1905) and the Bombay Postal Union (1907).
The setting up of textile and mill industries at the beginning of the 19th century in the presidency towns of Bombay, Madras, and Calcutta gave impetus to the formation of industrial workforce associations in India. The Bombay Mill-Hands Association, founded by N.M. Lokhande in 1890, was the first labour association in India. The following years saw the rise and growth of several other labour associations and unions in India, like the Madras Labour Union, which was 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 Gujarat, which turned into a union under the guidance of Mahatma Gandhi and was considered to be one of the strongest unions in the country at that time because of the unique method of arbitration and conciliation it had devised to settle the grievances of the workers with the employers. Since the union followed the ideals of truth and nonviolence laid down by Mahatma Gandhi, it was able to secure justice for the workers in a peaceful manner without harming the harmony in society. In the same year, the first trade union federation, the All India Trade Union Congress (AITUC), saw the light of day. It was formed after the observations made by the International Labour Organisation which highlighted the influence of politics on trade unions and associations and how the same is detrimental to any economy’s ability to prosper.
The importance of the formation of an organised trade union was realised by nationalist leaders like Mahatma Gandhi, who, to improve the employer and worker relationship, introduced the concept of trusteeship, which envisaged the cooperation of the workers and employers. According to the concept, the people who are financially sound should hold the property not only to make such use of the property as will be beneficial to themselves but should make such use of the property as is for the welfare of the workers who are financially not well placed in society, and each worker should think of himself as being a trustee of other workers and strive to safeguard the interests of the other workers.
Many commissions also emphasised the formation of trade unions in India for e.g. 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 and the only solution left is the formation of strong trade unions to alleviate the labours from their miserable condition and exploitation.
Development of Trade Union Law in India
Labour legislation in India has a key impact on the development of industrial relations. The establishment of social justice has been the principle of all labour legislation in India. The establishment of the International Labour Organisation to uplift the condition of labour all over the world gave further impetus to the need for well-framed labour legislation in the country. Several other internal factors like the Swaraj movement of 1921-24, the Royal Commission on Labour also paved the way for various labour laws and also encouraged the framers of the constitution to incorporate such laws in the constitution which will benefit the labourers. Under the Constitution of India, labour is the subject of the concurrent list and both the centre and the state can make laws related to the subject. The different labour laws in the country are as follows:
- The Apprentices Act, 1961: The object of the Act was the promotion of new manpower at skills and the improvement and refinement of old skills through practical and theoretical training.
- The Contract Labour (Regulation and Abolition) Act, 1970: The object of the Act was the regulation of employment of contract labour along with its abolition in certain circumstances.
- The Employees’ Provident Funds and Misc. Provision Act, 1952: The Act regulated the payment of wages to the employees and also guaranteed them social security.
- The Factories Act, 1948: The Act aimed at ensuring the health of the workers who were engaged in certain specified employments.
- The Minimum Wages Act, 1948: The Act aimed at fixing minimum rates of wages in certain occupations.
- The Trade Union Act, 1926: The Act provided for the registration of trade unions and defined the laws relating to registered trade unions.
Objectives of The Trade Union Act of 1926
1. Collective Bargaining: One of the primary objectives of trade unions is to engage in collective bargaining on behalf of their members. They negotiate with employers or employers’ associations to secure favourable employment conditions, such as fair wages, reasonable working hours, benefits, and improved working conditions.
2. Protecting Workers’ Rights: Trade unions aim to protect and promote the rights of workers in the workplace. This includes advocating for equal treatment, non-discrimination, and ensuring that workers are not subjected to unfair practices or exploitation. Trade unions also work towards the enforcement of labour laws and regulations to safeguard workers’ rights.
3. Improving Working Conditions: Trade unions strive to improve the overall working conditions of their members. They advocate for safe and healthy workplaces, access to training and skill development opportunities, job security, and measures to prevent and address workplace harassment or discrimination.
4. Enhancing Economic Security: Trade unions work to improve the economic security of workers by advocating for fair wages, better benefits, and social protections. They seek to ensure that workers receive adequate compensation for their labour and have access to social security benefits, including healthcare, pensions, and insurance.
5. Job Protection and Employment Rights: Trade unions aim to protect workers’ jobs and employment rights. They may advocate for policies and practices that prevent unjust dismissals, support fair and transparent hiring processes, and address issues related to layoffs, downsizing, or restructuring. Trade unions also work to promote job stability and secure appropriate compensation during periods of unemployment.
6. Promoting Skill Development and Training: Trade unions often emphasize the importance of skill development and training for workers. They advocate for access to quality training programs, professional development opportunities, and lifelong learning initiatives to enhance the employability and career prospects of their members.
7. Social and Economic Justice: Trade unions have a broader objective of working towards social and economic justice. They may engage in campaigns and advocacy efforts to address income inequality, fight against poverty, promote gender equality, and advocate for social policies that benefit workers and their families.
8. Unity and Solidarity: Trade unions aim to foster unity and solidarity among workers. They encourage cooperation, mutual support, and collective action to achieve common goals. By bringing workers together, trade unions strengthen their bargaining power and influence in advocating for their interests.
Meaning of Trade Union
A trade union is an organization that is formed by workers to protect and promote their common interests. It is a group of workers who have come together to achieve common goals and objectives. The main aim of a trade union is to safeguard and promote the interests of its members by negotiating better wages, working conditions, and other benefits from the employers.
Trade unions play a crucial role in promoting social justice, democracy, and economic growth. They act as a bridge between workers and employers and help in resolving industrial disputes. Trade unions not only represent the workers in negotiations with employers but also provide them with legal support, training, education, and other benefits.
Legal Immunity of Registered Trade Unions:
In many jurisdictions, including India, registered trade unions enjoy certain legal immunities and protections to carry out their activities effectively. These provisions are designed to safeguard the rights of trade unions and their members and facilitate their role in industrial relations. Here are some common provisions for legal immunity of registered trade unions:
1. Recognition as Legal Entities: Registered trade unions are recognized as distinct legal entities with the right to enter into contracts, own property, sue, and be sued in their own name. This recognition grants them legal standing to represent their members and engage in collective bargaining and other activities.
2. Immunity from Liability: Trade unions are often immune from civil liability for actions taken in pursuit of their legitimate objectives, such as negotiating with employers or advocating for workers' rights. This immunity protects them from being held personally liable for damages or losses incurred during the course of their activities.
3. Protection of Funds and Property: Trade unions' funds and property are typically protected by law from seizure or attachment to satisfy the personal debts or obligations of union officials or members. This safeguard ensures that union resources are used exclusively for the benefit of their members and organizational objectives.
4. Freedom from Interference: Registered trade unions are entitled to freedom from interference or intimidation by employers, government authorities, or other parties. This includes protection against unfair labour practices, discrimination, harassment, or retaliation for union activities.
5. Legal Privileges during Industrial Disputes: Trade unions enjoy certain legal privileges during industrial disputes, such as the right to engage in collective bargaining, strike, or participate in arbitration proceedings without fear of reprisal or legal sanctions, provided such actions are conducted in accordance with the law.
Contents of the Rule of a Registered Trade Union
The rules of a registered trade union outline the internal structure, governance procedures, membership criteria, rights, and responsibilities of the union and its members. These rules serve as a framework for the functioning of the trade union and provide clarity on various aspects of its operations. Some of the important contents of the rules of a registered trade union are listed below:
1. Name and Address of the Union: The rules begin by stating the name of the trade union and its registered address. This provides clarity regarding the identity and location of the union.
2. Objectives and Aims: The rules specify the objectives and aims of the trade union. This may include promoting the economic, social, and cultural interests of workers, securing better working conditions, advocating for workers' rights, and engaging in collective bargaining with employers.
3. Membership Criteria: The rules outline the eligibility criteria for membership in the trade union. This may include specifying the categories of workers eligible for membership, such as permanent employees, temporary workers, or specific occupations.
4. Rights and Duties of Members: The rules enumerate the rights and duties of members, including the right to participate in union activities, vote in elections, attend meetings, and access union services. Members are also expected to abide by the rules of the union, pay membership dues, and support the union's objectives.
5. Membership Fees and Dues: The rules detail the membership fees, dues, and other financial obligations imposed on members. This may include initiation fees, monthly or annual dues, and penalties for late payments.
6. Structure and Governance: The rules define the internal structure and governance procedures of the union. This includes provisions for the election of office bearers, formation of executive committees or governing bodies, tenure of office, and procedures for conducting meetings and decision-making.
7. Powers and Functions: The rules specify the powers and functions of the union, including the authority to negotiate with employers, represent members in disputes, organize strikes or industrial actions, and undertake welfare activities for members.
8. Dispute Resolution Mechanisms: The rules may outline procedures for resolving disputes within the union, including mechanisms for mediation, arbitration, or internal disciplinary proceedings in cases of member misconduct or grievances.
9. Amendment and Interpretation: The rules include provisions for amending the rules and procedures for interpreting and implementing them. Any amendments to the rules typically require approval by a specified majority of members or governing body.
10. Miscellaneous Provisions: The rules may contain miscellaneous provisions relating to the administration of the union, such as provisions for record-keeping, audit of accounts, dissolution of the union, and other matters of procedural or administrative significance.
Formation and Registration of Trade Union
The steps involved in the registration of trade union:
(a) Appointment of Registrars:
The government shall appoint a person to be the registrar of trade unions for each state. The 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.
(b) (i) Mode of Registration:
Any seven or more members of a trade union may, by subscribing their names to the rules of the trade union and by otherwise complying with the provision of this Act with respect to registration, apply for registration of the trade union under this Act.
(ii) Where an application has been made under subsection (i) for the registration of a trade union, such application shall not be deemed to have become invalid merely by reason of the fact that, at any time after the date of the application, but before the registration of the trade union, some of the applicants, but not exceeding half of the total number of persons who made the application, have ceased to be members of the trade union or have given notice in writing to the registrar dissociating themselves from the application.
(c) Application for Registration:
(i) Every application for registration of a trade union shall be made to the registrar and shall be accompanied by a copy of the rules of the trade union and a statement of the following particulars, namely—
The names, occupations and addresses of the members making application.
The name of the trade union and the address of its head office.
The titles, names, age, addresses and occupations of the office bearers of the trade union.
(ii) Where a trade union has been in existence for more than one year before the making of an application for its registration, these shall be delivered to the registrar, together with the application, a general statement of the assets and liabilities of the trade union prepared in such form and containing such particulars as may be prescribed.
(d) Provisions to Be Contained in the Rules of a Trade Union:
A trade union shall not be entitled to registration under this Act, unless the executive thereof is constituted in accordance with the provisions of this Act.
(e) Power to Call for Further Particulars and to Require Alterations of Names:
(i) The registrar may call for further information for the purpose of satisfying himself that any application complies with the provisions of Section 5, or that the trade union is entitled to registration under Section 6, and may refuse to register the trade union until such information is supplied.
(ii) If the name under which a trade union is proposed to be registered is identical with that of any other existing trade union that has been registered or, in the opinion of the registrar, so nearly resembles such name as is likely to deceive the public or the members of either trade union, the registrar shall require the persons applying for registration to alter the name of the trade union stated in the application, and shall refuse to register the union until such alteration has been made.
(f) Registration:
The registrar, on being satisfied that the trade union has complied with all the requirements of the Act in regard to the registration shall register the trade union by entering in a register, to be maintained in such form as may be prescribed, the particulars relating to the trade union contained in the statement accompanying the application for registration.
(g) Certificate of Registration:
The registrar, on registering a trade union under section, shall issue a certificate of registration in the prescribed form, which shall be conclusive evidence that the trade union has been duly registered under this Act.
(h) Cancellation of Registration:
A certificate of registration of a trade union may be withdrawn or cancelled by the registrar on the application of the trade union to be verified in such manner as may be prescribed in if the registrar is satisfied that the certificate has been obtained by fraud or mistake or that the trade union has ceased to exist.
It has to provide not less than two months’ previous notice, in writing, specifying the ground on which it is proposed to withdraw or cancel the certificate and shall be given by the registrar to the trade union before the certificate is withdrawn or cancelled, or otherwise on the application of the trade union.
(i) Registered Office:
All communications and notices 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 within 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 of the Companies Act.
(j) Incorporation of a Registered Trade Union:
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 and to contract, and shall, by the said name, sue and be sued.
Changing the name of registered trade union
Changing the name of a registered trade union typically involves following a formal procedure outlined in the relevant laws and regulations governing trade unions in the jurisdiction where the union is registered. While the exact process may vary depending on the specific legal requirements of the jurisdiction, the general steps involved in changing the name of a registered trade union may include:
1. Reviewing Existing Rules: Before initiating the name change process, the trade union should review its existing rules or constitution to ensure that there are no specific provisions that govern the procedure for changing the union's name. If there are, these provisions must be followed accordingly.
2. Proposal for Name Change: The trade union's governing body or executive committee may propose the change of name during a general meeting or through a resolution passed by the members. The proposal should include the new name that the union wishes to adopt.
3. Approval of Members: The proposed name change must be approved by a specified majority of the trade union's members, as per the rules or constitution of the union. This approval may be obtained through a vote conducted during a general meeting or by obtaining written consent from the members.
4. Notification to Registrar: Once the proposed name change is approved by the members, the trade union must formally notify the Registrar of Trade Unions or the relevant government authority responsible for trade union registration. This notification should include the details of the existing name of the union, the new proposed name, and any supporting documentation required by the Registrar.
5. Verification and Approval: The Registrar or government authority will verify the proposed name change and may conduct checks to ensure that the new name complies with any legal requirements, such as not being similar to the name of an existing trade union or violating any trademarks or copyrights. If the proposed name change meets the necessary criteria, the Registrar will approve the change and issue a new registration certificate reflecting the updated name of the union.
6. Publication and Public Notice: After receiving approval from the Registrar, the trade union may be required to publish a public notice of the name change in specified newspapers or other publications, as mandated by the relevant laws or regulations. This serves to inform the public and stakeholders about the change of name.
7. Updating Records and Documentation: The trade union must update its records, documents, and communications materials to reflect the new name. This may include updating official letterheads, websites, bank accounts, and any other relevant documentation or correspondence.
Rights and Privileges of Registered Trade unions
The Trade Unions Act, 1926, provides several rights and privileges to registered trade unions in India. Here are some of the key rights and privileges granted to registered trade unions under this Act:
1. Legal Recognition: Registered trade unions are legally recognized entities with the right to sue and be sued in their own name. This legal recognition enhances their bargaining power and allows them to enter into agreements and contracts with employers.
2. Representation: Registered trade unions have the right to represent their members in negotiations with employers regarding terms and conditions of employment, including wages, working hours, benefits, and other workplace issues.
3. Collective Bargaining: Trade unions have the right to engage in collective bargaining on behalf of their members. This includes negotiating with employers to reach agreements on various matters related to employment conditions and workplace policies.
4. Protection of Rights: Trade unions are empowered to protect the rights and interests of their members, including ensuring compliance with labour laws, preventing exploitation, and addressing grievances and disputes through legal means.
5. Participation in Industrial Disputes: Registered trade unions have the right to participate in industrial disputes on behalf of their members. They can initiate conciliation proceedings, represent workers in arbitration or legal proceedings, and engage in strikes or lockouts under certain conditions.
6. Access to Information: Trade unions have the right to access information relevant to the interests of their members, including information about company policies, financial performance, and other matters affecting employment conditions.
7. Freedom of Association: The Act recognizes and protects the right of workers to form and join trade unions of their choice without interference from employers or the government. Employers are prohibited from discriminating against employees based on their trade union membership.
8. Facilities for Trade Union Activities: Employers are required to provide reasonable facilities for trade union activities, such as holding meetings, distributing literature, and conducting discussions with members during non-working hours.
9. Political Activities: Trade unions have the right to engage in political activities, including endorsing candidates or supporting political parties, as long as such activities are in accordance with the laws and do not interfere with the primary objectives of the trade union.
Liabilities and Duties of a Registered Trade Union Under the Trade Unions Act, 1926
1. Duty to Make Provisions in the Rules of Certain Matters (Section 6): The Trade Union is obligated to incorporate specific provisions into its rules as outlined in Section 6 of the Trade Unions Act. These provisions include the declaration of the union’s purpose, the allocation of general funds, the admission of members, and dissolution procedures. Compliance with these rules is essential to the registration process.
2. Duty to Constitute Executive as Required (Sections 21-A and 22): A registered trade union must form its executive committee in accordance with the provisions of Sections 21-A and 22 of the Act. Failure to meet this obligation may result in the registrar refusing the registration of the union. These duties act as prerequisites for the registration process, ensuring the proper constitution of the union’s leadership.
3. Duty to Spend General Funds as Required (Section 15): Section 15 of the Act mandates that a registered trade union must allocate its general funds only for specific purposes outlined in the legislation. This duty ensures that the financial resources of the union are utilized in a manner consistent with the objectives set forth in the Act.
4. Duty to Constitute a Separate Political Fund (Section 16): If a trade union decides to promote the civil and political interests of its members, it is required to establish a separate fund, commonly known as a political fund, in accordance with Section 16. This fund must be utilized for the specified political purposes outlined in the Act.
5. Duty to Provide Access to Books of Trade Union: Registered trade unions are obliged to keep their account books and lists of members open for inspection by office-bearers or members as specified in their rules. This duty ensures transparency and accountability within the union by allowing its members to scrutinize financial records and membership details.
6. Duty to Send Notice to the Registrar: The Trade Union is under an obligation to inform the Registrar in cases of any change in its name, amalgamation, alterations in the head office address, or dissolution. This duty ensures that the Registrar is kept informed of significant changes, maintaining accurate records of registered trade unions.
7. Duty to Send an Annual Statement to the Registrar (Section 28): Annually, on or before the prescribed date, a registered trade union must submit a general statement, audited in the prescribed manner, detailing all receipts and expenditures during the preceding year. This statement must also include information on the assets and liabilities of the union as of December 31st. Compliance with this duty ensures financial transparency and regulatory oversight.