You are on page 1of 42

TRADE UNION ACT- 1926

Trade unions:
Trade Unions means an association of workers in a particular craft or industry. In Legal Sense it means an association formed primarily for the purpose of regulating the relations between workmen & employers or between workmen & workmen or between employers & employers. According to L J Hanson, a trade union is essentially an organisation of the workers. Its main function is to enable the workers to act together, the individual by himself being in a weak bargaining position to negotiate with employers, that is, to make possible collective bargaining, strike being their weapon of last resort to be used only after negotiations have broken down

Trade Union Sec. 2(h): It means any combination, whether temporary or permanent formed (1) Primarily for the purpose of regulating the relations (a) Between workmen and employees or, (b) Between workmen and workmen or, (c) Between employers and employers OR (2) For imposing restrictive conditions on the conduct of any trade or business

Object of an association determines whether it is trade union. It is primarily the object of an association or combination which determines whether it is a trade union or not. In Rangaswamy Registrar of Trade Unions, Madras (1962), it was held that a union of employees at Raj Bhawan of a State, which included among its members, the household staff, peons, chauffeurs, tailors, carpenters, gardeners, masons and sweepers could not be registered as a trade union on the ground that the employees were not workmen engaged in any industry, trade or business of the employer.

Growth of Unions:
The formation in 1920 of the All India Federation, namely, the All India Trade Union Congress, was the result of these recommendations. The passing of the Trade Unions Act, 1926 gave formal recognition to the workers right to organize. After the independence, particularly the period of 1947-1957, witnessed a rapid increase in the number of unions, and increase brought about variety of factors such as changed outlook towards labour organisations & the new spirit of awakening in the country. - The Indian National Trade Union Congress (INTUC) formed by the Congress Party; - The All India Trade Union Congress (AITUC) formed by Communist Party of India; - The Hind Mazdoor Sabha (HMS) formed by Socialists; - The Mazdoor Sangh (BMS) Affiliated by BJP party. ( Multiplicity of trade unions within industry, financial stability, linking of trade union to politics)

Role & Functions of trade Unions:


1. To secure for the workers fair wages 2. To safeguard security of tenure & improve conditions of service; 3. To enlarge opportunities for promotion & training; 4. To improve working & living conditions; 5. To provide for educational, cultural & recreational facilities; 6. To co-operate in & facilitate technological advance by broadening the understanding of workers on its underlying issues; 7. To promote identity of interests of the workers & their industry; 8. To offer responsive co-operation in improving levels of production & productivity, discipline & high standard of quality; 9. To promote individual & collective welfare; 10. To maintain records of the union; 11. To help in grievance redressal of employees.

Appointment of Registrars:
A State Government appoints a person to be the Registrar of Trade Unions for the State. Trade Unions have to act under the superintendence and control of the Registrar. State Government will also defines the local limits within which they shall exercise & discharge the powers & functions so specified. Where an Additional or Deputy Registrar exercises & discharges the powers & functions of a Registrar in an area within which the registered office of a trade union is situated, the Additional or Deputy Registrar is deemed to be the Registrar in relation to the trade union for the Act.

Functions of the Registrar:


1. First of all, the Registrar shall have to examine the applications received by him for registration & look at the objectives for which they are to be set up; 2. If satisfied with the statutory conditions, he shall grant registration certificates to such trade union; 3. He, while taking decision on any point raised by the applicants, shall act within his powers and jurisdiction; 4. He has no concern with the election of the office bearers of any trade union, but can make any enquiry on receipt of any complaint in this regard.

Modes Of Registration: ( Sec. 4)


Application for Registration: Any 7 or more members of a trade union may, by subscribing their names to the rules of the trade union and by otherwise complying with provisions of the Act, apply for its registration.

Applicants ceasing to be members or dissociating not to affect application unless their number is more than half:

Application for Registration to Registrar (Sec. 5):


1. The names, occupations, and addresses of the members making the application; 2. The name of the trade union and the address of its head office; & 3. The titles, names, ages, addresses and occupations of the officers of the trade union. (A general Statement of its assets & liabilities prepared in the prescribed form has also to be delivered to the Registrar, together with the application)

Rules of Trade Union: (Sec. 6)


A trade union is entitled to registration only if its executive is constituted in accordance with the provisions of the Act & its rules provide for the following matters, namely: a. the name of the trade union; b. the whole of its objects; c. the whole of the purposes for which the general funds of the trade union shall be applicable under Sec. 15; d. the maintenance of a list of the members of the trade union & adequate facilities for the inspection thereof by the office-bearers & members of the trade union Sec. 20; e. the admission of ordinary members who shall be the persons engaged or employed in the industry with which the trade unions is connected and also the admission of the number of temporary office-bearers to form the executive of the trade union.

f. the payment of a subscription by the members of the trade union which shall not be less than 25 paise per month per member; g. the manner in which the members of the executive and other office-bearers of the trade union shall be appointed & removed; h. the safe custody of the funds of the trade union, and annual audit in such a manner as may be prescribed , of the accounts thereof, and adequate facilities for the inspection of the account books by the office bearers and members of the trade union; i. the manner in which the trade union may be dissolved. ( The Registrar has the power to call for further requirements or particulars for satisfying himself that an application for registration complies with the provisions Sec.7)

Certificate of Registration: ( Sec. 9 )


The Registrar, on registering a trade union under Sec. 8, shall issue a certificate of Registration in the prescribed form. The Registrar can refuse registration ( 1. If an association or combination to be registered as a trade union does not comply with the necessary statutory formalities, or 2. When it refuses to supply the required information, or 3. When it refuses to alter its name which is identical with, or resembles, the name of an existing trade union.)

Characteristics of Registered Trade Union on Incorporation: Sec. 13


1. It becomes a body corporate by the name under which it is registered, and becomes a legal entity distinct from the members of which it is composed; 2. It has perpetual succession and a common seal; 3. It has the power to acquire and hold both movable and immovable properties; 4. It has the power to contract; 5. It can by the name under which it is registered sue and be sued. ( Under the present law, registration of a trade union is not compulsory. But the benefits conferred by the law on registered unions will not be available to unregistered trade unions. )

Change of Name ( Sec. 23, 25 & 26):


Change of name ( Sec. 23): With the consent of not less than 2/3rd of the total number of its members, change its name; Notice of change of name ( Sec 25): Notice in writing of the change of name signed by the secretary & by 7 members of the trade union shall be sent to the Registrar. Rights & Obligations to remain unaffected ( Sec 26): The change in the name does not affect any rights or obligations of the trade union or render defective any legal proceedings by or against the trade union.

Who May become Members ( Sec. 21):


Any person who has attained age of 15 years may be a member of a registered trade union. Any such member, subject to the rules of the trade union, may enjoy all the rights of a member and execute all instruments and give all acquittances necessary to be executed or given under the rules. But he cannot be an office-bearer of the trade union until he attains age of 18 years. Ordinarily the members of a trade union must be persons who are actually engaged in the trade or industry with which the union is concerned. But there is nothing in the Act which debars a trade union form admitting outsiders as its members.

Cancellation of Registration & Appeal: (Sec. 10)


1. On the application of the trade union to be verified in the prescribed manner; 2. If the Registrar is satisfied that the certificate has been obtained by fraud or mistake or; 3. If the Registrar is satisfied that the trade union hasa. Ceased to exist, or; b. Willfully contravened any provisions of the Act, or; c. Allowed any rule to continue in force, which is inconsistent with any such provision, or; d. Rescinded any rule which ought to be there. ( In case 2 & 3 the Registrar has to give to the trade atleast 2 months previous notice in writing specifying the ground on which it is proposed to withdraw or cancel the certificate of Registration)

In Gopal Upadhaya v. Union of India (1987): The Army Medical Corps Civilian Employees Union, Lucknow was registered on Jan 1964 with the Registrar of Trade Unions, UP, under the provisions of the Trade Unions Act. The members of the union were carpenters, tailors, boot makers, gardeners, sweepers, cooks, etc., who were described as campfollowers of the Army. The registration of the trade union was cancelled on Jan 1978 by the Registrar of Trade unions on the ground that such registration has ceased to be valid in the view of the decision of the Supreme Court. It was said that the registration was initially granted under a mistake and it was, therefore, cancelled.

Rights & Privileges of a Registered Trade Union:


1. Body Corporate: (Sec. 13) (Every Registered trade union is a body corporate by the name under which it is registered and has perpetual succession & common seal, & have the power to acquire both movable & immovable property and can sue others and be sued)
2. Separate Fund for political purposes: (Sec. 16) A registered Trade Union may constitute a separate fund out of contributions separately levied for or made to that fund. Out of this fund, payment may be made for the promotion of the civic & political interests of its members in furtherance of any civic or political objects enumerated in Sec 16 of the Act. a. The payment of any expenses incurred by the candidate for election as a member of any legislative body constituted under the constitution; b. The holding of any meeting or the distribution of documents in support of any such candidate or prospective candidate;

c. Maintenance of any person who is member of any legislative body constituted under the constitution or of any local authority; d. The holding of political meetings of any kind, or the distribution of political literature or political documents of any kind. 3. Immunity from punishment for criminal conspiracy: ( Sec. 17 ) An office bearer or member of the registered trade union shall not be liable to punishment under Sec. 120-B (2) of the Indian Penal Code, in respect of any agreement made between the members for the purpose of furthering any such object of the trade union on which general funds may be spent. But if the agreement is an agreement to commit an offence, no immunity can be claimed. E.g. A strike is accompanied by violence, assault, intimidation, threat etc., this exemption is not available. Likewise a union leader is not entitled to claim immunity form punishment for breach of discipline.

4. Immunity from civil suits: ( Sec. 18) A suit or legal proceedings shall not be maintainable in any Civil Court against any trade union or any office-bearer or member thereof in respect of any act done in furtherance of a trade dispute to which a member of the trade union is a party. This protection is available only on the ground that such act induces some other persons to break a contract of employment or; such act interferes with the trade, business or employment of some other person; The union members or office bearers will be liable for any acts which is not covered with Sec. 18 like acts of violence or vandalism, or a deliberate trespass.

5. Enforceability of Agreement: (Sec. 19) An agreement in restraint of trade is void because it is opposed to or is in violation of public policy. But under Sec.19 of this act an agreement between the members of a registered trade union is restraint of trade shall not be void or voidable. It means agreement made between the members of a registered Trade Union not to accept employment unless certain conditions as to pay, hours of work, etc are fulfilled, will not be void or voidable. 6. Right to inspect the Books of Trade Union: (Sec. 20) Sec. 20 provides that the accounts books of a registered trade Union & the list of members of the trade union shall be open for inspection by an officer or member of the trade union at such time as may be provided for in the rules. The object of conferring the right on office-bearers and members is that they satisfy themselves as to the genuineness of members and of the accounts of the union.

7. Right of Minors to be the Members: ( Sec. 21) Any person who has attained the age of 15 years can become a member of the registered trade union, & will enjoy all the rights of a member, but he cannot hold any office in the union unless he has attained the age of majority. 8. Right to Amalgamate: (Sec. 24) A trade union has the right to amalgamate to form a larger union or federation of unions. Such amalgamations or federations shall have the same rights as their member trade union.

Duties & Liabilities of A Registered Trade Union:


1. Change of Registered Office: ( Sec. 12) If any change in the address of the head office of a trade union takes place, notice of change must be given to the Registrar in writing.

2. Objects on which general funds may be spent: ( Sec. 15) a. The payment of salaries, allowances and expenses to office-bearers of the trade union; b. The payment of expenses for the administration of the trade union, including audit of the accounts of the general funds of the trade union; c. The expenses in prosecuting of any legal proceeding to which the trade union or any member is a party, undertaken for the purpose of securing or protecting any rights of the trade union; d. The conduct of trade disputes on behalf of the trade union or any members: e. The compensation of members for loss arising out of trade disputes;

f. The allowances to members or their dependants on account of death, old age, sickness, accidents or unemployment of such members; g. The provision of educational, social, or religious benefits for members or for the dependants of members; h. To upkeep of a periodical published mainly for the purpose of discussing questions affecting employees or workmen as such; i. The payment of contributions to any cause intended to benefit workmen in general. ( should not excess 1/4th of the combined total of the gross income for that financial year ) ( Any other expenses will be treated as Unlawful and Ultra vires. )

3. Constitution of a fund for political purposes: (Sec. 16) A registered Trade Union may constitute a separate fund out of contributions separately levied for or made to that fund. Out of this fund, payment may be made for the promotion of the civic & political interests of its members in furtherance of any civic or political objects enumerated in Sec 16 of the Act. 4. Proportion of Officers to be connected with the industry: ( Sec. 22) Not less than one-half of the total number of the office-bearers of every registered trade union must be persons actually engaged or employed in the industry with which the trade union is connected. The other half of the officebearers may be social or political workers.

5. Returns: ( Sec. 28 ) Every registered trade union shall send annually to the Registrar a general statement, audited in the prescribed manner, of all receipts & expenditure during the year ending on the 31st Day of December. It shall also send a statement of assets & liabilities on that date. It shall also send the statement showing all changes of office-bearers made by the trade union during the year.

6. Disqualifications of office-bearers of trade Union: (Sec. 21-A) A person shall be disqualified for being chosen as, & for being, a member of the executive or other office-bearer of a registered trade union if - He has not attained the age of 18 years; - He has been convicted by a Court in India for any offence involving moral turpitude & sentenced to imprisonment.

Amalgamation of Trade Unions: ( Sec. 24-26)


Sec 24, Any 2 or more registered trade unions may become amalgamated together as one trade union with or without dissolution or division of the funds of such trade unions. The amalgamation shall take place only when votes of atleast one-half of the members of each trade union entitled to vote are recorded, & that at least 60% of the votes recorded are in favour of the proposal of amalgamation.

Notice of Amalgamation: ( Sec. 25 )


Notice in writing of every amalgamation, signed by the secretary & by 7 members of each and every trade union which is a party there to, shall be sent to the Registrar.

Effect of Amalgamation: (Sec. 26)


An Amalgamation of 2 or more registered trade unions shall not prejudice any right of any such trade unions or any right of a creditor of any of them. Registration of Amalgamation by itself is not the conclusive proof of the validity of the amalgamation. The amalgamation may be declared invalid on the ground that the votes of 50% of the members had not been recorded.

Dissolution of Trade Union ( Sec. 27 )


When a trade union is dissolved, notice of the dissolution signed by 7 members & by the secretary of the trade union shall be sent to the Registrar within 14 days of the dissolution. If the Registrar is satisfied that the dissolution has been effected in accordance with the rules of the trade union, he shall register the fact of dissolution. - When the dissolution of a registered trade union has been registered & the rules of the trade union do not provide for the distribution of funds of the trade union on dissolution, the Registrar shall divide the funds in proportion to the amounts contributed by the members by way of subscription during their membership. This applies both to movable as well as immovable properties. - The rules of the trade union must provide for the manner in which the trade union may be dissolved. If for any reason the rules of the trade union do not provide for dissolution of the trade union, then like any other voluntary associations the dissolution is possible only with the consent of all members or by an order of the Court.

Penalties & Procedure:


Failure to submit returns: (Sec. 31) If default is made on the part of any registered trade union in giving any notice or sending any statement or other document as required by or under any provision of this Act, every office bearer or other person bound by the rules of the trade union to give or send the same, shall be punishable with fine which may extend to Rs.5. - Notice of change in address of the head office of the trade union ( Sec.12) - Notice of change of name on amalgamation ( Sec.25) - Notice of Dissolution ( Sec. 27) - Returns ( Sec. 28) Supplying False information regarding trade unions ( Sec. 32) Sometimes a person, with intent to deceive, gives to any member of a registered trade union, or to any person intending or applying to become a member of such trade union, which he knows, is not a correct copy of such rules or alterations are for the time being in force. Such a person shall be punishable with fine extend to Rs. 200.

Office Bearers:
Sec. 2(b) defines the term Office Bearer includes any member of the executive of the Trade Union. But an auditor is not deemed to be an office bearer of the Trade Union. Sec. 22 requires that at least half of the total number of office bearers of a registered Trade Union shall be persons actually engaged or employed in an industry with which the Trade Union is connected. The rest of the members may be honorary or temporary. A Trade Union has the right to remove any of the office bearers but the power of removal must be exercised by the Union Judiciously & the rules of natural justice must be followed, e.g. - The official sought to be removed must be supplied with sufficient grounds & reasons for his removal to enable him to defend himself; - He must also be given the opportunity of appearing & defending himself against the charges; & - The decision of removal arrived at any Union must be in good faith & after a fair hearing of the case.

Collective Bargaining:
Collective Bargaining is a process of negotiating between management & workers represented by their representatives for determining mutually agreed terms & conditions of work which protect the interest of both workers & the management. OR Collective Bargaining is a technique adopted by the organisations of workers & employers collectively to resolve their differences with or without the assistance of a third party. Its ultimate aim is to reach some settlement acceptable to both the parties involved in labour-management relations.

Features of Collective Bargaining:


1. Two-way process: It is a mutual give-and-take rather than a take-it-or-leave-it method of arriving at the settlement of a dispute. Both parties are involved in it. Collective Bargaining is a civilised confrontation with a view to arriving at an agreement for the object is not welfare but compromise. The essence of collective bargaining lies in the readiness of the two parties to an agreement & mutually settling it. 2. Continuous process: It is a continuous process which provides a mechanism for continuing an organised relationship between management & trade unions. 3. Complementary Process: It is not competitive process but complementary i.e. each party needs something that the other party has, labour can make a greater production effort & management has the capacity to pay for that effort & to organise for the effort. It is based on give & take approach.

4. Negotiation Process: Collective Bargaining is a negotiation process & is a device used by wageearners to safeguard their interests. It is an instrument of an industrial organisation for discussion & negotiation between the 2 parties.

Purpose & Importance of Collective Bargaining:


1. Collective Bargaining develops better understanding between employer & employees: Collective Bargaining is the technique that has been adopted by unions & management for compromising their conflicting interests. It plays a significant role in improving the labour-management relations and in ensuring industrial harmony. It helps a lot in better understanding of each others point of view & problems. Through discussions & interactions both the parties learn more about others & often misunderstandings may be removed. Collective bargaining helps in easing out many minor differences and there are many instances in which even major disputes are said to be settled without any workstoppage or outside intervention.

2. It benefits both employer & employee: The negotiation arrived at is acceptable to both parties the employer & the employees. 3. Employer-regulating device: From the unions point of view collective bargaining agreements ensure that managements do not take any unilateral decision. In other words collective bargaining is an employer-regulating device, a method of guaranteeing the rights & immunities of the workers by limiting the employers freedom of action. A collective bargaining agreement develops a sense of responsibility & of self-respect among the workers and is a guarantee towards wage protection etc. 4. It is adjustable to the changing conditions: A dynamic environment leads to changes in employment conditions. This require changes in organisational processes to match with the changed conditions. Among other alternative available, collective bargaining is found as a better approach to bring changes more amicably.

5. It facilitates the speedy implementation of decisions arrived at collective bargaining: The direct participation of both parties- the employer & the employees- in collective decision making process provides an in-built mechanism for speedy implementation of decisions arrived at collective bargaining.

Conditions or Prerequisites for Successful & Effective Collective Bargaining:


- Favourable Political & Social Climate: Existence of a favourable political & social climate is a necessary condition for effective collective bargaining. Collective Bargaining has made headways in settling industrial disputes in the countries where it has been supported by the government & favored by the public. The political climate has not been much favourable for collective bargaining in India. There has been multiplicity of trade unions in the country sponsored by different political parties. These trade unions favour employees not based on the merit of issues involved in disputes but based on their differing political considerations.

- Trade Unions: Like In a democratic country like ours, employees should have fundamental rights to form trade unions for protecting their interests. More the stronger the trade union is, the more the effective collective bargaining & vice-versa. - Problem Solving Attitude: Both the parties while negotiating should adopt a problem solving or compromising attitude to reach an agreement. Neither party should adopt fighting attitude. The negotiating teams should follow give & take approach. - Continuous Dialogue: Collective bargaining sometimes may not reach to an agreement. Instead there may be deadlock. In such case dialogue must not end but continue with problem solving approach. Keeping the controversial issues aside for the time being may help narrow down disagreement & continue the dialogue. - Honoured & fairly implemented: Once an agreement is reached, it should be put down in writing. It must be hounoured & fairly implemented.

Problems of Trade Union Movement In India:


- Small Size: According to the veteran trade union leader V.V. Giri Trade Union Movement in India is plagued by the predominance of small sized unions. There were 9023 trade unions submitting returns during the year 1992. The total membership of these unions was 57.4 Lakhs, with an average membership of 632 per union. Nearly three-fourth of the unions have a membership of less than 500. Smallness in size of the union implies weak bargaining power. - Lack of Enlightened Labour Force: The lack of an enlightened labour force capable of manning & conducting the movement efficiently, purposefully, & effectively has been a major problem in the development of trade unions in the country. Lack of education, division by race, religion, language & caste, migratory nature, lack of self consciousness of workers have been attributed as the causes for the lack of enlightened labour force in India.

- Poor Finance: The financial stability was very weak as the members were less & subscriptions made by these small size trade union members were also small & the trade unions cannot undertake welfare activities. There were also absence of paid office bearers in trade unions. - Politicalisation: A serious defect of the Trade Union movement in India is that the leadership has been provided by outsiders especially professional politicians. Leaders being affiliated to one or the other party interests of their party was given more importance rather than the protecting more interests. In many cases the political leaders possess little knowledge of the background of labour problems, fundamentals of trade unionism, the techniques of industry & even little general education. - Multiplicity of Unions: Trade Unionism in India is also characterised by multiplicity of unions based on creed, cast, religion. The implication of multiplicity of trade unions is that it leads to unions rivalry in the organisation. It also contributes to fragmentation to workers leading to small-sized unions.

Measures to Strengthen The Trade Union Movement In India:


- Maintaining Unity: Past experience indicate the multiplicity of unions, political rivalries, disunity among the ranks of workers have been responsible for lack of strength of trade unionism in India. Unity in Trade Unions can be striken & maintained in different ways: 1. All workers should join hands to form a single union to represent all their demands; 2. All unions with different political affiliations should have one policy, one programme, one objective & one method for labour movement. Workers Education: Workers should be provided with education so that there is a sense of discipline & responsibility to perform their jobs satisfactorily. The workers need to be made understand fully first their duties & responsibilities & then their rights & privileges. Workers need to be taught First Deserve, then Desire.

- Free from Political Influence: One Of the reasons of its failure is the trade union leadership in the hands of politicians who have more concern for their political ideologies than for the interest of working class. By freeing the political influence we can strengthen the trade unions. By making these union leaders a full-time paid officers of the union having qualities such as literate, organising capacity, hardworking & patience.

- Adequacy of Funds: Due to lack of adequate funds the workers movements/strikes did not prolong & ended in failure. Therefore, the maintenance of strike funds by union is a necessity. This strike fund would be used to help workers during strikes as Strike Pay. This will not only strengthen the bargaining position of the unions, but they will also get the loyalty of the workers.
- Warfare Activities for Workers: The trade unions may effectively start activities such as the provision of day schools for children, crches at work place, night schools for adults, cooperative stores, gymnasiums etc. These efforts help make workers loyal to their unions. ( INTUC, Hindustan Mazdoor Sewak Sangh)

You might also like