Indian Trade Unions Act 1926 - Trade unions and collective bargaining

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The case 
Ashok, Dayal Singh, Kunder, Hiraram, Ramsingh and many of their friends and family work in Mica mines in Bihar and Jharkhand. They dug out mica under harsh sun for a meagre income that sustains them and their families. They work for various mines operated by manufacturers who process and produce industry-grade mica and minerals that can be used by the cosmetic industry.

They often wonder if they and many such workers like them hold any power to speak and fight for their rights, and working conditions? They often wonder how can they organize themselves into a cohesive group. 

They have faintly heard about a trade union or something from some of their co-workers but don't exactly know the nitty-gritty of it.

They approach you as a knowledgeable lawyer (that's you my friend who understands labour laws and they ask you to simplify and give them a walkthrough of the process)

Here are some of their questions which they have asked you to resolve as a legal expert.
Are you ready for the challenge to understand legal provisions that help workers organize themselves into unions and in turn enhance their bargaining power?

Here are the questions Ashok and his fellow workers have for you:

1. Which law governs trade unions?
2. What is a trade union they keep hearing about?
3. What dispute is a trade dispute? Are all disputes trade disputes? If not which, ones then?
4. What is the process for registering a trade union?
5. Who is the government authority that deals with trade unions? What is their duties and powers?
6. What are the rights of the trade union?
7. What are the duties of a trade union?
8. How are expenses of a trade union financed? 



Previous year questions that you encountered as a law student :P
  1. Procedure for registration of a trade union. What are the duties of a registrar while considering an application for trade union registration?
  2. Define trade union. Rights and liabilities of a registered trade union.
  3. qualification of office holders of a trade union? when can a member be expelled from the union?
  4. utility of a trade union? objects on which political fund can be used?
  5. criminal immunities of registered trade union
Legislations:
Let's begin and demystify the Indian Trade Union Act 1926 for Ashok and his fellow mine workers, shall we?

You gather Ashok and his friends and answer all their questions individually.


  1. You explain to them that the Indian Trade Union Act 1926 is a law that governs registration and legal provisions that apply to trade unions.

  2. You ensure that they understand the basic components of a trade union as per Section 2
    1. Executive - body to whom the management of affairs of the trade union is entrusted
    2. Office bearer - members of the executive excluding the auditor of the trade union
    3. Registered office - registered head office of the trade union under the act
    4. Registrar - Registrar of trade union including Additional or deputy registrar of trade unions

  3. You explain to them that 
    1. As per sec 2, (g) trade dispute is a dispute in which
      1. is b/w employers and workmen, or workmen and workmen or employers and employers
      2. is related to employment or unemployment or terms of conditions of labour or any person, [workmen as per sec (2) g implies persons employed in the trade of industry whether or not employed by the employer with whom the dispute arises

        Interpretation:
        - it can be a dispute between workmen too, or two employers in the same trade/industry not necessarily b/w workmen and an employer only
        - it may so happen that it is a dispute between an employer and persons working in the same trade/ industry but under different employers (as per workmen def)
    2. per sec 2, (h) trade union is a combination which can be
      1. permanent or temporary, includes federation of 2 or more trade unions
      2. formed mainly to regulate relations b/w any of the following parties
        1. employer and workmen
        2. workmen and workmen
        3. employer and employer
      3. or to apply restrictive conditions on any trade or industry
Exclusions: the act does not affect
  • any agreement b/w partners as to their business
  • any agreement b/w employer and those employed by him as to such employment
  • any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft

Sec 3 Appointment of registrars of trade union for each state 

How can a trade union be registered? / What is the process of registering a trade union? (Sec 4-6)

(Sec 5 Application for registration)

What are the Conditions as under Mode of Registration Sec 4?

    • at least 7 members of the trade union required
    • at least 10% of workmen or 100 workers employed in the industry/establishment it is connected, whichever is less
    • no more than half of the members can withdraw anytime between the application - registration of the total members at the time of application. For example, if there were 20 people, no more than 10 people can withdraw for the application to still hold good for registration

What comprises an Application for registration Sec 5?

    • Application would be made to Registrar of Trade Union along with the following
    • names, occupations, and addresses of members making the application 
      (++addresses of the place of work of workmen)
    • name of the trade union and its head office address
    • the titles, names, ages, addresses and occupations of the 2 [office-bearers] of the Trade Union
    • general statement of assets and liabilities in case it has existed for more than 1 year
    • Copy of the rule of the trade union (Sec 6)
    • Sec 6 following provisions must be contained in the rules of the trade union
      1. name of the trade union
      2. whole of the objects of the trade union
      3. the whole of purposes for which general funds 
      4. list of members and adequate inspection facilities
      5. admission of ordinary and temp / permanent office bearers under sec 22
      6. condition for benefit entitlement or payment of fine by members
      7. manner of amending, changing, and deleting rules
      8. manner of electing and removing office bearers
      9. safe custody and annual audit
      10. how dissolution can happen

What is the Legal Status of Trade Union? (Sec 13 Incorporation of a registered trade union)

    • each registered trade union is a body corporate with its common seal, perpetual succession, (Sec 13)  with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued
    • Sec 14 these rules do not apply to trade union
      • The Societies Registration Act, 1860 (21 of 1860), 
      • The Co-operative Societies Act, 1912 (2 of 1912), 
      • The Companies Act, 1956 (1 of 1956),

What are the rights and liabilities of a trade union (Chapter III)?

Rights 

Rights to spend from general funds (Section 15) 

  1. the payment of salaries, allowances and expenses to the office bearer of the Trade Union; 
  2. the payment of expenses for the administration of the Trade Union, including audit of the accounts of the general funds of the Trade Union 
  3.  the prosecution or defence of any legal proceeding to which the Trade Union
  4.  the conduct of trade disputes on behalf of the Trade Union or any member thereof;
  5.  the compensation of members for loss arising out of trade disputes;
  6. allowances to members or their dependants on account of death, old age, sickness, accidents or unemployment of such members
  7. the issue of, or the undertaking of liability under, policies of assurance on the lives of members, or under policies insuring members against sickness, accident or unemployment;
  8.  the provision of educational, social or religious benefits for members
  9. the upkeep of a periodical published mainly to discuss items affecting employers or workmen as such
  10. contributions to any cause intended to benefit workmen in general, provided these are less than 25% of accrued gross income  

Rights to establish a separate political fund and spend per provisions below (section 16)

  1. expenses are borne directly / indirectly for the candidature of a member of the legislative body
  2. meeting/literature distribution to support such candidature
  3. registration of electors or selection of candidates for local body
  4. maintenance of members elected to any legislative body 
  5. meetings/literature distribution of political documents

Rights as a legal entity (as mentioned in the legal status of reg trade union above) sec 13

  • each registered trade union is a body corporate with its common seal, perpetual succession, (Sec 13)  with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued

Right to inspect books of Trade Union. (Sec 20) by trade union members and office bearers

Rights of minors to membership of Trade Unions [Minor above 15 years] (Sec 21)

Right to change its name (sec 23) with consent of at least 2/3 of total members and subject to sec 25

Right to amalgamate Sec24 
conditional upon provided that the votes of at least one-half of the members of each or every such Trade Union entitled to vote are recorded and that at least sixty per cent. of the votes recorded are in favour of the proposal

Duties/liabilities of a Trade union
  • Constitution of the executive body
  • Constitution of provision as per Sec 6
  • To establish general and political funds and spend as per the mandate provisions Sec 15 and Sec 16
  • To offer books for inspection when requested 
  • The registrar should be duly notified of any name changes or amalgamation must be notified to Registrar as well as dissolution 
  • Notice of change of address (within 14 days) Sec 12 and dissolution (14 days) Sec 27 and alteration in the rules within 15 days of such change Sec 28(3)
  • Filing of annual returns (expenditure, assets and liabilities) of the year preceding 31st December

Privileges 

Immunity from criminal liability Sec 17 - no criminal liability of officer bearer and trade union members, wrt furtherance of any trade dispute unless it is an agreement is to commit an offence
Immunity from civil liability Sec 18 - no civil suit maintainable in contemplation of any act in furtherance of trade dispute solely on the ground that it induces some other person to break the contract of employment or dispose

Powers and duties of a registrar

Duties
Sec 8 Registration of Trade Union: Registrar to record the Trade Union in the register in any such form as may be prescribed
Sec 9 Certificate of registration: Registrar to issue Certificate of Registration to trade union post registration, acting as conclusive evidence of the trade union being registered under this
Sec 10 2 months of prior written notice must be given to the union 

Powers
Sec 7 The Registrar may call for further information to satisfy himself that the application complies with Sec 5, registration entitlement under Sec 6, and may refuse to register the Trade Union until such info is supplied

Sec 10 Cancellation of registration 
a on request by the trade union
b certificate has been obtained by fraud or mistake, or that the Trade Union has ceased to exist or has willfully and after notice from the Registrar contravened any provisions of this act, or allowed/rescinded a rule inconsistent with Sec 6

Mandatory conditions
Change of name - at least 2/3 of total member consent
Amalgamation - at votes of at least 2/3 of each TU recorded, and at least 60% in favour of the proposal

Penalties and Procedure Chapter V

Sec 31 Failure to submit returns - 5Rs  and 5Rs for each week delayed, aggregate fine less than 50 Rupees

Sec 32 Supplying false information 200 hundred rupees fine