Trade Union Act, 1926: Empowering Workers and Shaping India’s Labor Movement

The Trade Union Act of 1926, enacted in India on March 25th, 1926, is a significant piece of legislation that provides a legal framework for the formation, registration, and functioning of trade unions in the country. This act recognizes the importance of trade unions as representative bodies for workers and aims to safeguard their rights and interests. By establishing guidelines and procedures for trade unions, the act seeks to promote collective bargaining, protect workers’ welfare, and provide a platform for workers to voice their concerns. The Trade Unions Act of 1926 has played a crucial role in shaping the labor movement in India, empowering trade unions, and ensuring their legal recognition and legitimacy.

Historical Background of Trade Union in India

The historical background of trade unions in India dates back to the late 19th century when workers in various industries began organizing themselves to address the issues and challenges they faced. The industrial revolution, coupled with the growth of capitalism, led to the emergence of a factory-based working class, predominantly in sectors such as textiles, jute, coal mining, and railways.

During this period, workers endured harsh working conditions, long hours, low wages, and exploitation by employers. As a response to these challenges, workers started forming associations and unions to collectively advocate for their rights and improve their working conditions. These early labor organizations laid the foundation for the trade union movement in India.

The Bombay Mill Hands Association, established in 1890, is considered one of the earliest trade unions in India. It aimed to address the grievances of textile mill workers in Bombay (now Mumbai) and played a pivotal role in organizing strikes and protests against unfair labor practices.

The labor movement gained momentum with the arrival of Mahatma Gandhi on the Indian political scene. Gandhi, a staunch advocate for the rights of workers and peasants, emphasized the importance of labor rights in the struggle for India’s independence from British colonial rule. Under his leadership, the labor movement became an integral part of the broader struggle for social and economic justice.

In 1920, the All India Trade Union Congress (AITUC) was formed, marking a significant milestone in the trade union movement in India. AITUC aimed to unite workers across industries and regions and played a crucial role in advocating for workers’ rights, organizing strikes, and negotiating with employers.

Post-independence, trade unions in India continued to grow in numbers and influence. The government recognized the importance of trade unions in safeguarding workers’ rights and enacted the Trade Unions Act of 1926 to provide a legal framework for their functioning. This act set the stage for the formal registration and regulation of trade unions, granting them legal recognition and protection.

Over the years, trade unions in India have played a vital role in shaping labor laws, advocating for workers’ welfare, and negotiating better working conditions and wages. They have addressed issues such as worker safety, social security, gender equality, and fair labor practices.

Today, trade unions in India are diverse and represent workers from various sectors, including manufacturing, services, agriculture, and the informal sector. They continue to be a powerful force in protecting workers’ rights, promoting social justice, and influencing labor policies.

Objectives of the Trade Union Act, 1926

The Trade Union Act, 1926 was enacted with the object of :

1. Providing for the registration of trade unions.
2. Verification of the membership of trade unions registered so that they may acquire a legal and corporate status.
3. The act has provision for “Registration” of trade unions but NOT “Recognition” of trade unions.

Mode of Registration

No trade union of workmen shall be registered unless at least 10% or 100, whichever is less, subject to a minimum of 7 workmen engaged or employed in the establishment with which it is connected are the members of trade union on the date of making of application for registration.

Application For Registration

Every application for registration of a Trade Union shall be accompanied by a copy of the Rules of the Trade Union and a statement of the following particulars:

1. The names, occupations and addresses of place of work of the members.
2. The name of the Trade Union and the address of its head office.
3. The title, names, ages, addresses and occupations of the office bearers of the Trade Union.
4. General statements of the assets and liabilities, if Trade Union is more than 1 year old.

Rules of Trade Union Includes

• Name of the Trade Union.
• Objectives of Trade Union.
• Purposes for which the general funds of the Trade Union shall be used.
• Maintenance of a list of the members.
• Admission of ordinary members, honorary or temporary members.
• Any benefit, fine, or forfeiture on the members.
• Procedure for amendment of rules.
• Election of members of the executive & office bearers.
• Safe custody of the funds of the Trade Union and an annual audit.
• Rules under which Trade Union may be dissolved.

Registration & Issuance of Certificate of Registration

The Registrar, on being satisfied, shall register the Trade Union by entering in a register. Once registered, he shall issue a certificate of registration.

Cancellation of Registration

A certificate of registration of a Trade Union may be cancelled by the Registrar:

1. On the application of the Trade Union.
2. If the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that the Trade Union has ceased to exist. But Registrar will provide 2 months’ notice in this case, before cancelation.
3. If the Registrar is satisfied that a registered Trade Union of workmen ceases to have the requisite number of members.

Registered Office

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

Appeal

Any person aggrieved by any refusal/withdrawal/cancellation of the Registrar to register a Trade Union may appeal to a :

• Labour Court or an Industrial Tribunal in the area.
• High Court
• Not inferior to the Court of an additional or assistant Judge.

Legal Status of A Registered Trade Union

• A registered trade union is a body corporate with perpetual succession and a common seal.
• It can acquire, hold sell or transfer any movable or immovable property and can be a party to contracts.
• It can sue and be sued in its own name.
• No civil suit or legal proceeding can be initiated against a registered trade union in respect of any act done in furtherance of a trade dispute under certain conditions.
• No agreement between the members of a registered trade union shall be void or voidable merely on the ground that any of its objects are in restraint of trade.

Certain Act Not To Apply To Registered Trade Unions

The following Acts do not apply to registered Trade Unions:

1. The Societies Registration Act, 1860.
2. The Co-operative Societies Act, 1912.
3. The Companies Act, 1956.

The registration of any Trade Union under any such Act shall be void.

Objects on Which General Funds May be Spent

The general funds of a registered Trade Union shall not be spent on any other than the followings:

• Payment of salaries, allowance and expenses to office bearers of the Trade Union.
• Payment of expenses for the administration of the Trade Union.
• Prosecution of defense of any legal proceeding.
• Conduct of trade disputes on behalf of the Trade Union or any member.
• Compensation of members for loss arising out of trade disputes.
• Allowance to members/dependents for death, old age, sickness, accidents or unemployment.
• Liability under policies of assurance on the lives of members or under policies insuring members against sickness, accident or unemployment.
• Educational, social or religious benefits for members (including expenses of funeral or religious ceremonies for deceased members) or for the dependents of members.
• Upkeep of a periodical published.

The expenditure in respect of such contributions in any financial year shall not be in excess of 25% of 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 at the commencement of that year.

Constitution of A Separate Fund For Political Purpose

A registered Trade Union may constitute a separate fund, from contributions separately levied for that fund, for the promotion of the civic and political interest of its members. It may be used for:

• Expenses incurred, by a candidate for election as a member of any legislative body.
• Holding any meeting or the distribution of any literature or documents in support of the candidate.
• Maintenance of any person who is a member of any legislative body.
• Registration of electors or the selection of a candidate for any legislative body.
• Holding of political meetings.
• No member shall be compelled to contribute to the political fund and by not contributing, shall not be excluded from any benefits of the Trade Union.

Disqualification of Office Bearers of Trade Union

A person shall be disqualified for being chosen as “office bearer” of a registered Trade Union if:

1. He has not attained the age of 18 years.
2. He has been convicted by a Court in India of any offence involving moral turpitude and sentenced to imprisonment, unless a period of 5 years has elapsed since his release.

Proportion of Office Bearer To Be Concerned With The Industry

At least 50% of the total number of the office bearers of registered Trade Union in an unorganized sector shall be persons actually engaged/employed in an industry with which the Trade Union is connected.

As per Amendment in 2001:

• All office bearers of a registered Trade Union, except not more than one-third of the total number of the office bearers or 5, whichever is less, shall be persons actually engaged or employed in the establishment or Industry with which the trade Union is connected.
• An employee who has been retired or retrenched shall not be construed as Outsider for the purpose of holding an office in a Trade Union.
• 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 Trade Union may change its name, with the consent of at least two-thirds of the total members.

Amalgamation of Trade Union

Any 2 or more Trade Unions may become amalgamated together as one Trade Union provided that the votes of at least 50% of the members of each of every Trade Union entitled to vote are recorded and that at least 60% of the votes recorded are in favour of the proposal of amalgamation.

Notice of Change of Name Or Amalgamations

In case of change of name of Trade Union and or amalgamations of multiple Unions, the Secretary and 7 members of the each Union, will give Notice in writing, to the Registrar.

The Registrar of the (State) in which the head office of the amalgamated Trade Union will be Registrar in case of amalgamation.

Dissolution

When a Trade Union is dissolved, notice for the dissolution signed by 7 members and the Secretary, shall be sent to the Registrar, within 14 days of the dissolution. If rules of the Dissolved Trade Union do not provide for the distribution of funds, the Registrar shall divide the funds amongst the member.

Returns

Trade Union will submit “general statement” of all receipts and expenditures, to the Registrar, on 31st December of each year. A copy of the rules of the Trade Union will also be submitted.

A copy of every alteration made in the rules of a registered Trade Union shall be sent to the Registrar within 15 days of making of the alteration.

The Registration may require production of certificate of registration, account book, registers, and other documents at registered office and at such place as he may specify, but not at a distance of more than 10 miles from the registered office of a Trade Union.

Power To Make Regulations

The appropriate Government may make regulations for:

1. Rules of registration of Trade Unions shall be registered and the fees payable.
2. Transfer of registration in the case change in head office from one State to another.
3. Qualification of person responsible for audit of the accounts of registered Trade Unions.
4. Conditions of inspection of documents kept by Registrars and fee chargeable for inspections.

Publication of Regulations

The date after which draft of regulations proposed to be made will be taken into consideration shall not be less than 3 months from the date on which proposed regulations were published for general information.

Penalties

• Failure to submit returns- Fine of Rs. 5, and in the case of a continuing default, additional fine of Rs. 5 per week. But the aggregate fine shall not exceed Rs. 50.
• Willful false entry/omission in the general statement/rules- Fine up to Rs. 500.
• Supplying false information regarding Trade Union- Fine which may extend to Rs. 200.

Amendments in Act in 2001

Some of the salient features of the Trade Union (Amendment) Act, 2001 are:

1. No trade union of workmen shall be registered unless at least 10% or 100, whichever is less, subject to a minimum of 7 workmen make the application for registration.
2. A registered trade union of workmen shall at all times continue to have not less than 10% or 100 of the workmen, whichever is less, subject to a minimum of 7 persons.
3. All office bearers of a registered trade union, except not more than one-third of the total number of office bearers or 5, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the trade union is connected.
4. Minimum rate of subscription for the trade union is Rs. 1 per annum for rural workers, Rs. 3 per annum for workers in other unorganized sectors and Rs. 12 per annum in all other cases.
5. Employees who have retired/retrenched shall not be construed as outsiders for purpose of holding an office in the trade union concerned.
6. Members of the executive and other office bearers of Trade Union shall be elected for minimum 3 years.

Trade Unions (Amendment) Bill, 2019

On 8 January 2019, The Trade Union (Amendment) Bill, 2019 was introduced in Lok Sabha. The Bill proposed to insert new section which will provide for the “Recognition” of Trade Unions or Federations of Trade Unions at Central and State Level. The Bill to achieve this objective is still pending.

Frequently Asked Questions (FAQs)

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