“The labor movement was the principal force that transformed misery and despair into hope and progress.” A few words by King Martin Luther describe the change in the industry that the labor movement or trade unions brought into the world.

It was in the year 1918 when the first Trade Union in India was formed. It was called the Madras Labor Union. Since then a large number of unions sprang up in all the industrial centers of India. Hence, the Trade Union Act came into being in 1926. In this article, we will learn all about the Trade Union Act of 1926.  Let’s get started!

This article covers the following:

• What is a trade union?
• What is the trade union act of 1926?
• The extent of the act and commencement.
• Mode of registration
• Rights and liabilities of registration
• State amendment
• Change of name
• Dissolution
• Returns
• How can Deskera assist you?

What is a Trade Union?

A trade union is a group of workers or employees intending to maintain employees' rights and ensure that they are not discriminated against. Along with this, they mainly form ideas on how to improve their conditions as employees.

Here is a list of things that a trade union works after:

• Attainment of better wages.
• Attainment of better benefits.
• Improvement of their living conditions.
• Improvement of working conditions.
• Aligning complaint procedures.
• Work after getting proper holidays, healthcare, and retirement benefits.
• Protection of their integrity and rights.
• Helping employees strengthen the unity amongst them.

What is the Trade Union Act of 1926?

Way before the rise of industrialization, a monstrous scope, there were private agreements between employees and their managers. Hence, there was no real necessity for developing any apparatus administering the connection among the employees or laborers and businesses that emerged up to that point.

However, after the mechanization of factories, this intimate relationship between the two parties got lost. Its importance or significance too faded away with time. While it was still easy for employees of a specific position to continue their jobs peacefully and enjoy the benefits, the lower class of laborers who were completely dependent on the wages had to suffer. They were being exploited by their managers and their

This irreconcilable situation among laborers, managers, and the pain of laborers brought about the development of the Trade Union Act of 1926.  The Trade Union Act of 1926 is an act to provide for the registration of Trade Unions and, in certain respects, to define the law relating to registered Trade Unions.

The Extent of the Act & Commencement

• Trade Union Act of 1926 extends to the whole of India.
• It came into force after the approval of the Central Government in the year 1926

Before we learn more about the act, let us quickly understand all the terminologies concerning the act that you will find in this article.  

Executive-  The body by whatever name called, to which the management of the affairs of a Trade Union is entrusted.

Office Bearer- In the case of a Trade Union, this includes any member of the executive thereof but does not include an auditor.

Prescribed- By prescribed, it means prescribed by regulations made under the Trade Union Act of 1926.

Registered Office- Under this Act, the registered office means the head office.

Registered Trade Union-  Trade Union registered under the Trade Union Act of 1926.

Trade Dispute- Trade Dispute is any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment or non-employment, or the terms of employment or the conditions of labor, of any person, and “workmen” means all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises.

Appointment of Registrars

The appropriate Government shall appoint a person to be the Registrar of Trade Unions for each state. The appropriate Government may appoint as many Additional and Deputy Registrars of Trade Unions as it thinks fit for 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.

Subject to the provisions of any order under sub-section, where an Additional or Deputy Registrar exercises and discharges the powers and functions of a Registrar in an area within which the registered office of a Trade Union is situated, the Additional or Deputy Registrar shall be deemed to be the Registrar about the Trade Union for this Act.

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 provisions of this Act concerning registration, apply for registration of the Trade Union under this Act.

Application for Registration

Every application for registration of a Trade Union shall be made to the Registrar. It shall be accompanied by a copy of the rules of the Trade Union and a statement of the following:

(a) The names, occupations, and addresses of the members making the application; in the case of a Trade Union of workmen, the characters, occupations, and addresses of the place of work of the members of the Trade Union making the application

(b) The name of the Trade Union and the address of its head office; and

(c) The titles, names, ages, addresses, and occupations of the two office-bearers of the Trade Union.

Where a Trade Union has been in existence for more than one year before the making of an application for its registration, there 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.

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 by the provisions of this Act, and the rules thereof provide for the following matters.  

(a) The name of the Trade Union

(b) The whole of the objects for which the Trade Union has been established

(c) The whole of the purposes for which the general funds of the Trade Union shall be applicable, all of which purposes shall be purposes to which such funds are lawfully applicable under this Act

(d) The maintenance of a list of the members of the Trade Union and adequate facilities for the inspection thereof by the 2 office-bearers and members of the Trade Union;

(e) The admission of ordinary members who shall be persons engaged or employed in an industry with which the Trade Union is connected, and also the admission of the number of honorary or temporary members as 2 office-bearers required under section 22 to form the executive of the Trade Union.

Power to Call for Further Particulars and to Require Alteration of Name

(1) 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.

(2) If the name under which a Trade Union is proposed to be registered is identical with that by which any other existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles such name as to be 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.

Registration

The Registrar, on being satisfied that the Trade Union has complied with all the requirements of this Act in regard to 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.

Certificate of Registration

The Registrar, on registering a Trade Union under section 8, 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.

Cancellation of Registration

A certificate of registration of a Trade Union may be withdrawn or canceled by the Registrar.

(a) on the application of the Trade Union to be verified in such manner as may be prescribed, or

(b) if the Registrar is satisfied that the 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 provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter provided for which is required by section 6.

Appeal

(1) Any person aggrieved by any refusal of the Registrar to register a Trade Union or by the withdrawal or cancellation of a certificate of registration may appeal within such period as may be prescribed.

(a) Where the head office of the Trade Union is situated within the limits of a Presidency-town 2, to the High Court, or 3, where the head office is situated in an area, falling within the jurisdiction of a Labor Court or an Industrial Tribunal, to that Court or Tribunal, as the case may be.

(b) Where the head office is situated in any other area, to such Court, not inferior to the Court of an additional or assistant Judge of a principal Civil Court of original jurisdiction, as the 4 appropriate Government may appoint in this behalf for that area.

(2) The appellate court may dismiss the appeal or pass an order directing the Registrar to register the Union and to issue a certificate of registration under the provisions of section 9 or setting aside the order for withdrawal or cancellation of the certificate, as the case may be, and the Registrar shall comply with such order.

(3) For an appeal under sub-section

(1) an appellate Court shall, so far as may be, follow the same procedure and have the same powers as it follows and has when trying a suit under the Code of Civil Procedure, 1908 (5 of 1908), and may direct by whom the whole or any part of the costs of the appeal shall be paid. Such costs shall be recovered as if they had been awarded in a suit under the said Code.

(4) In the event of the dismissal of an appeal by any Court appointed under clause (b) of subsection 1, the person aggrieved shall have a right of appeal to the High Court. The High Court shall, for the purpose of such appeal, have all the powers of an appellate Court under sub-section (2) and (3), and the provisions of those subsections shall apply accordingly.

Registered Office

All communications and notices to a registered Trade Union may be addressed to its registered office. Notice of any change in the head office address 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.

Incorporation of Registered Trade Unions

Every registered Trade Union shall be a corporate by the name under which it is registered. It shall have perpetual succession and a body 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.

Certain Acts Not to Apply to Registered Trade Unions

The following Acts:

(a) The Societies Registration Act, 1860 (21 of 1860)

(b) The Co-operative Societies Act, 1912 (2 of 1912)

(c) The Companies Act, 1956 (1 of 1956)

Rights & Liabilities of Registered Trade Unions

Objects on which general funds may be spent. The general funds of a registered Trade Union shall not be spent on any other objects than the following.

(a) The payment of salaries, allowances, and expenses to 1 [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 prosecution or defense of any legal proceeding to which the Trade Union or any member thereof is a party, when such prosecution or defense is undertaken or the purpose of securing or protecting any rights of the Trade Union as such or any rights arising out of the relations of any member with his employer or with a person whom the member employs.

(d) The conduct of trade disputes on behalf of the Trade Union or any member thereof; (e) the compensation of members for loss arising out of trade disputes.

(f) Allowances to members or their dependents on account of death, old age, sickness, accidents, or unemployment of such members.

(g) 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.

(h) The provision of educational, social, or religious benefits for members (including the payment of the expenses of funeral or religious ceremonies for deceased members) or for the dependents of members.

(i) The upkeep of a periodical published mainly to discuss questions affecting employers or workmen as such.

(j) The payment, in furtherance of any of the objects on which the general funds of the Trade Union may be spent, of contributions to any cause intended to benefit workmen in general, provided that the expenditure in respect of such contributions in any financial year shall not at any time during that year be more than one-fourth of the combined total of the gross income which has up to that time accrued to the general funds of the Trade Union during that year and of the balance at the credit of those funds at the commencement of that year; and (k) subject to any conditions contained in the notification, any other object notified by the 2 appropriate Government in the Official Gazette.

State Amendment

Amendment of heading of Chapter III of Act XVI of 1926. In Chapter III of the Trade Unions Act, 1926, in its application to the State of Maharashtra here in after referred to as “the principal Act,” in the heading after the words “Trade Unions,” the words “and Settlement of Certain Disputes” shall be added.

Constitution of a Separate Fund for Political Purposes

(1)A registered Trade Union may constitute a separate fund, from contributions separately levied for or made to that fund, from which payments may be made, for the promotion of the civic and political interests of its members, in furtherance of any of the objects specified in sub -section 2.

(2) The objects referred to in sub-section one are

(a) the payment of any expenses incurred, either directly or indirectly, by a candidate or prospective candidate for election as a member of any legislative body constituted under the Constitution or of any local authority, before, during, or after the election in connection with his candidature or election; or

(b) the holding of any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate; or

(c) the maintenance of any person who is a member of any legislative body constituted under the Constitution or of any local authority; or

(d) the registration of electors or the selection of a candidate for any legislative body constituted under the Constitution or for any local authority; or

(e) the holding of political meetings of any kind, or the distribution of political literature or political documents of any kind.  

Criminal Conspiracy in Trade Disputes

No three office-bearers or members of a registered Trade Union shall be liable to punishment under sub-section (2) of section 120B of the Indian Penal Code (45 of 1860) in respect of any agreement made between the members to further any such object of the Trade Union as is specified in section 15, unless the agreement is an agreement to commit an offense.

Immunity from civil suit in certain cases

(1) No suit or other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union or any 3 office-bearers or member thereof in respect of any act done in contemplation or furtherance of a trade dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment, or that it is in interference with the trade, business or employment of some other person or with the right of some other person to dispose of his capital or of his labor as he wills.

(2) A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil Court in respect of any tortious act done in contemplation or furtherance of a trade dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union.

Enforceability of Agreements

Notwithstanding anything contained in any other law for the time being in force, an agreement between the members of a registered Trade Union shall not be void or voidable merely because any of the objects of the agreement are in restraint of trade.

Provided that nothing in this section shall enable any Civil Court to entertain any legal proceeding instituted for the express purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell their goods, transact business, work, employ or be employed.

Right to Inspect Books of Trade Union

The account books of a registered Trade Union and the list of members thereof shall be open to inspection by a 1 office-bearer or member of the Trade Union at such times as may be provided for in the rules of the Trade Union.

Rights of Minors to Membership of Trade Unions

Any person who has attained the age of fifteen years may be a member of a registered Trade Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid, enjoy all the rights of a member and execute all instruments and give all acquittances necessary to be executed or given under the rules.

Disqualifications of Office-Bearers of Trade Unions

(1) A person shall be disqualified for being chosen as, and for being, a member of the executive or any other office-bearer of a registered Trade Union if:

(i) he has not attained the age of eighteen years;

(ii) he has been convicted by a Court in India of any offense involving moral turpitude and sentenced to imprisonment unless a period of five years has elapsed since his release.

(2) Any member of the executive or other office-bearer of a registered Trade Union who, before the commencement of the Indian Trade Unions (Amendment) Act, 1964 (38 of 1964), has been convicted of any offense involving moral turpitude and sentenced to imprisonment, shall on the date of such commencement cease to be such member or office-bearer unless a period of five years has elapsed since his release before that date.

In its application to the State of Jammu and Kashmir, reference in sub-section (2) to the commencement of the Indian Trade Unions (Amendment) Act, 1964 (38 of 1964), shall be construed as a reference to the commencement of this Act in the said State.

A person shall be disqualified for being chosen as, and for being, a member of the executive or any other office-bearer of a registered Trade Union if:

(i) he has not attained the age of eighteen years;

(ii) he has been convicted by a Court in India of any offense involving moral turpitude and sentenced to imprisonment unless a period of five years has elapsed since his release.

Any member of the executive or other office-bearer of a registered Trade Union who, before the commencement of the Indian Trade Unions Amendment Act, 1964 (38 of 1964), has been convicted of any offense involving moral turpitude and sentenced to imprisonment, shall on the date of such commencement cease to be such member or office-bearer unless a period of five years has elapsed since his release before that date.

The Proportion of Office-Bearers to be Connected with the Industry

No less than one-half of the total number of the office-bearers of every registered Trade Union in an unorganized sector shall be persons engaged or employed in an industry with which the Trade Union is connected.

Provided that the appropriate Government may, by special or general order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in the order.

Except as otherwise provided in subsection 1, all office-bearers of a registered Trade Union, except not more than one-third of the office-bearers or five, whichever is less, shall be persons engaged or employed in the establishment or industry with which the Trade Union is connected.

No member of the Council of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the Trade Union is connected) in the Union or a State shall be a member of the executive or other office-bearer of a registered Trade Union.

Change of Name

Any registered Trade Union may, with the consent of not less than two-thirds of the total number of its members and subject to the provisions of section 25, change its name.

The Amalgamation of Trade Unions

Any two 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 or either or any of them, 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 percent. The votes recorded are in favor of the proposal.

Notice of Change of Name or Amalgamation

Notice in writing of every change of name and every amalgamation, signed, in the case of a change of name, by the Secretary and by seven members of the Trade Union changing its name, and, in the case of an amalgamation, by the Secretary and by seven members of each and every Trade Union which are a party thereto, shall be sent to the Registrar, and where the head office of the amalgamated Trade Union is situated in a different state, to the Registrar of such State.

If the proposed name is identical with that by which any other existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the public or the members of either Trade Union, the Registrar shall refuse to register the change of name.

Save as provided in subsection 2, the Registrar shall, if he is satisfied that the provisions of this Act in respect of change of name have been complied with, register the change of name in the register referred to in section 8. The change of name shall have an effect from the date of such registration.

The Registrar of the State in which the head office of the amalgamated Trade Union is situated shall, if he is satisfied that the provisions of this Act in respect of amalgamation have been complied with and that the Trade Union formed thereby is entitled to registration under section 6, register the Trade Union in the manner provided in section 8, and the amalgamation shall have effect from the date of such registration.

Effects of change of name and of amalgamation

(1) The change in the name of a registered Trade Union shall not affect any rights or obligations of the Trade Union or render defective any legal proceeding by or against the Trade Union, and any legal proceeding which might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its new name.

Effects of Change of Name and of Amalgamation

The change in the name of a registered Trade Union shall not affect any rights or obligations of the Trade Union or render defective any legal proceeding by or against the Trade Union, and any legal proceeding which might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its new name.

An amalgamation of two or more registered Trade Unions shall not prejudice any right of any of such Trade Unions or any right of a creditor of any of them.

Dissolution

When a registered Trade Union is dissolved, a notice of the dissolution signed by seven members and by the Secretary of the Trade Union shall, within fourteen days of the dissolution, be sent to the Registrar and shall be registered by him if he is satisfied that the dissolution has been effected in accordance with the rules of the Trade Union, and the dissolution shall have effect from the date of such registration.

Where the dissolution of a registered Trade Union has been registered, and 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 amongst the members in such manner as may be prescribed.

Returns

Returns shall be sent annually to the Registrar, on or before such date as may be prescribed, a general statement, audited in the prescribed manner, of all receipts and expenditure of every registered Trade Union during the year ending on the 31st day of 1st December next preceding such prescribed date, and of the assets and liabilities of the Trade Union existing on such 31st day of December. The statement shall be prepared in such form and shall comprise such particulars as may be prescribed.

Together with the general statement, there shall be sent to the Registrar a statement showing all changes of 2 office-bearers made by the Trade Union during the year to which the general statement refers, together also with a copy of the rules of the Trade Union corrected up to the date of the dispatch thereof to the Registrar.

A copy of every alteration made in the rules of a registered Trade Union shall be sent to the Registrar within fifteen days of the making of the alteration. For the purpose of examining the documents referred to in sub-section (1), (2), and (3), the Registrar, or any officer authorized by him, by general or special order, may at all reasonable times inspect the certificate of registration, account books, registers, and other documents, relating to a Trade Union, at its registered office or may require their production at such place as h e may specify in this behalf, but no such place shall be at a distance of more than ten miles from the registered office of a Trade Union.

Power of Industrial Court to Decide Certain Disputes

Where there is a dispute with respect to whether or not any person is an office-bearer or a member of a registered Trade Union, including any dispute relating to wrongful expulsion of any such office-bearer or member, or where there is any dispute relating to the property, including the account books of any registered Trade Union, any member of such registered Trade Union for a period of not less than six months may.

With the consent of the Registrar, and in such manner as may be prescribed, refer the dispute to the Industrial Court constituted under the Bombay Industrial Relations Act, 1946, for decision.

The Industrial Court shall, after hearing the parties to the dispute, decide the dispute; and may require an office-bearer or member of the Registered Trade Union to be appointed, whether by election or otherwise, under the supervision of such person as the Industrial Court may appoint in this behalf or removed, in accordance with the rules of the Trade Union.

Provided that the Industrial Court may, pending the decision of the dispute, make an interim order specifying or appointing any person or appointing a Committee of Administration for any purpose under the Act, including the purpose of taking possession or control of the property in dispute and managing it for the purposes of the Union pending the decision.

The decision of the Industrial Court shall be final and binding on the parties and shall not be called in question in any Civil Court. No Civil Court shall entertain any suit or other proceedings in relation to the dispute referred to the Industrial Court as aforesaid, and if any suit or proceeding is pending in any such Court, the Civil Court shall, on receipt of an intimation from the Industrial Court that it is seized of the question, cease to exercise jurisdiction in respect thereof.

Save as aforesaid, the Industrial Court may, in deciding disputes under this section, exercise the same powers and follow the same procedure as it exercises or follows for the purpose of deciding industrial disputes under the Bombay Industrial Relations Act, 1946.

Power to Make Regulations

Appropriate Government may make regulations for the purpose of carrying into effect the provisions of this Act. In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters:

• Trade Unions and the rules of Trade Unions shall be registered, and the fees payable on registration.
• The transfer of registration in the case of any registered Trade Union which has changed its head office from one State to another.
• The manner in which, and the qualifications of persons by whom, the accounts of registered Trade Unions or of any class of such Unions shall be audited.
• The conditions subject to which inspection of documents kept by Registrars shall be allowed and the fees which shall be chargeable in respect of such inspections.
• Any matter which is to be or may be prescribed.
• Every notification made by the Central Government under sub-section 1 of section 22 and every regulation made by it under sub-section 1 shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session.
• Or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree to make any modification in the notification or regulation, or both Houses agree that the notification or regulation should not be made, the notification or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification or regulation.
• Every notification made by the State Government under sub-section 1 of section 22 and every regulation made by it under sub-section 1 shall be laid, as soon as may be after it is made, before the State Legislature.

Publication of Regulations

The power to make regulations conferred by section 29 is subject to the condition of the regulations being made after previous publication. The date to be specified in accordance with clause 3 of section 23 of the General Clauses Act, 1897, as that after which a draft of regulations proposed to be made will be taken into consideration, shall not be less than three months from the date on which the draft of the proposed regulations was published for general information.

Regulations so made shall be published in the Official Gazette, and on such publication shall have effect as if enacted in this Act.

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Key Takeaways

• A trade union is a group of workers or employees intending to maintain employees' rights and ensure that they are not discriminated against.
• The Trade Union Act of 1926 is an act to provide for the registration of Trade Unions and, in certain respects, to define the law relating to registered Trade Unions.
• Trade Union Act of 1926 extends to the whole of India.
• It came into force after the approval of the Central Government in the year 1926
• The appropriate Government shall appoint a person to be the Registrar of Trade Unions for each state.

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