Trade Unions Act, 1926

The primary function of the Trade Unions Act was to protect the interests of workers against discrimination and unfair labor practice and provide them a blanket cover to stand up for their interests through the formation of trade unions. Through this article, the rights and regulations of the Trade unions Act have been covered including the scope and objectives of the act. This article discusses the key elements of the Trade Unions Acts and their governance.

Tue Jul 12 2022 | Employment, Criminal and Labour | Comments (0)


The Trade  Unions Act, 1926 provides for registration of trade unions with a view to render lawful organisation of labour to enable collective bargaining. It also confers on a registered trade union certain protection and privileges.

The Act extends to the whole of India and applies to all kinds of unions of workers and associations of employers, which aim at regulating  labour management relations. A Trade Union is a combination, whether temporary or permanent, formed for regulating the relations not only between workmen and employers but also amongst  workmen  or between employers and employers.

Objectives & Scope of Trade Unions Act, 1926:

The objective of the Trade Unions Act of 1926 was to:

  • Ensure Security of Workers:
    This ensured continued employment of workers, prevent retrenchment, lay off or lock-outs. Controlled application of “fire” or dismissal or discharge and VRS.
  • Obtain Better Economic Returns:
    This ensured wages hike at periodic intervals, bonus at higher rate, other admissible allowances, subsidized canteen and transport facilities.
  • Secure Power To Influence Management:
    This ensured workers’ participation in management, decision making, role of union in policy decisions affecting workers, and staff members.
  • Secure Power To Influence Government:
    This ensured influence on government to pass labour legislation, which improves working conditions, safety, welfare, security and retirement benefits of workers and their dependents, seek redressal of grievances as and when needed.

Functions of a Trade Union:

The important basic functions of unions listed by the National Commission are:

  • To secure fair wages to workers.
  • To safeguard security of tenure and improve conditions of service.
  • To improve  opportunities for promotion and training.
  • To improve working and living conditions.
  • To provide for educational, cultural and recreational facilities.
  • To co-operate  and facilitate technological advancement e by broadening the understanding of workers on its underlying issues.
  • To promote identity of interests of workers with their industry.
  • To offer responsive co-operation in improving levels of production and productivity, discipline and high standards of quality and
  • To promote individual and collective welfare.

Trade Union as an Organisation:

Many of the workers are members of any one of the trade unions.

There are many reasons of membership,  some of which are given below:

  • Security of employment and protection against calamity of accident, death and secure social security cover after retirement.
  • Meeting companionship and affiliation needs  and improve one’s influence with management.
  • To get a platform—to air one’s views, aims, ideas and feelings and obtain recognition and status among fellow workers.
  • Make use of the “principle of unity” for the purpose of securing good working conditions, high economic compensations, better career prospects and welfare needs.
  • Restrict management actions which are against the interest of workers.

Formation and Registration of Trade Union:

The steps involved in the registration of trade union:

Appointment of Registrars:

(a) 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.

Rights and 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 payment of salaries, allowances and expenses to the office bearers of the trade unions; expenses for the administration of the trade union; the presentation or defiance of any legal proceeding to which the trade union of any member thereof is a party; the conduct of trade disputes and compensation of members for loss arising out of trade disputes; provision of education, social or religious benefits for members; upkeep of a periodical published.
  • Constitution of a Separate Fund for Political Purposes:
    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 such as the payment of any expenses incurred, either directly or indirectly; the holding of any meeting or the distribution of any literature/documents in support of any such candidate; the registration of electors of the selection of a candidate for any legislative body constituted under or for any local authority; the registration of electors or the selection of a candidate for any legislative body constituted under/or for any local authority; holding of political meetings of any kind.
  • Criminal Conspiracy in Trade Disputes:
    No office bearer or member of a registered trade union shall be liable to punishment under sub-section (2) of Section 120 B of the Indian Penal Code, 1860 in respect of any agreement made between the members for the purpose of furthering any such object of the trade union as is specified in its section,  unless the agreement is an agreement to commit an offence.
  • Immunity from Civil Suit in Certain Cases:
    No suit or other legal proceeding shall be maintainable in any civil court against any registered trade union or any office bearer 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 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 labour as he wills.A registered trade union shall not be liable in any suit or other legal proceeding in any civil court in respect of any fortuitous 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 unions.
  • 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 by reason of the fact that any provisions subject to  the agreement are in restraint of the trade.
  • Right to Inspect Books of Trade Unions:
    The account books of a registered trade union and the list of members thereof shall be open to inspection by an office bearer or member of the trade union at such times as may be provided for in the rules of the trade union.
  • Right of Minors to Membership of Trade Unions:
    Any person who has attained the age of 18 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.

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. An amalgamation of 2 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.

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