This article has been written by Sonal Srivastava, Student, Amity Law School, Lucknow, and Naveen Talawar, a law student at Karnataka State Law University’s law school. The article discusses trade union registration, the history of the Indian trade union movement, the registration procedure, the legal status of a registered trade union, the privileges and immunities of a trade union, the rights of a registered trade union, and the duties and liabilities of a trade union.

It has been published by Rachit Garg.

Introduction

At the beginning of the 20th century, India began to industrialise and become more capitalist. The need to formally establish the groups that had developed to defend and protect the rights of the workers arose as the workforce expanded day by day. Thus the Trade Unions Act, 1926 was enacted on March 25, 1926, in order to register and safeguard these worker groups. Consequently, the registration of the trade unions raised the status of the unions in the eyes of employers and the general public. Before we proceed with the registration of trade unions it is important to understand the history of the trade union movement in India.

Chapter II of the Trade Unions Act, 1926 deals with the provisions of the registration of trade unions. According to section 2 (h) of the Act, “Trade Union” means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions. Thus, the present article shall deal with the most important aspect of trade union, and that is the registration of trade unions.

Historical background of the trade union movement in India

The industrial revolution in India in the 19th century had a drastic impact on the western world. This caused an impact on the social structure resulting in significant changes in the production, shipping and transportation processes. The development of science and technology in the industrial sector led to the emergence of the two classes. The managerial class (entrepreneurship class) and the working class (labour or wage-earning class). Further , both these classes have conflicting interests. While the working class demands for higher wages with better working conditions the managerial class demands for more production at minimum wages.

As a result of change in the industrial relations, the managerial and the wage-earning classes have different goals and this conflict is mainly caused by how the government manages them. In order to resolve the dispute between both the classes the government implements certain policies and make use of administrative actions and tripartite consultation. These disputes include the dispute over wages of the worker, inadequate security and facilities and other similar issues.

The factors like restrictions on free speech, unequal wages for the workers, lack of industrial development and other forms of exploitation of the workers have significantly contributed to the growth of trade union movement in India during the 19th century and the First World War. N.M.Lokhande (Narayan Meghaji Lokhande) who is regarded as the father of the trade union movement in India was the first to set up the organised labour movement in India. His aim was to revise the Factories Act of 1881 and to create awareness about the unfair treatment of the textile workers in India.

As a result of this India witnessed another phase of trade unionism between 1904 and 1911 during which many trade unions were established. Further, the All India Trade Union Congress was established by the leaders of the Indian National Congress in 1920. This union provided the hierarchical setup of the associations at the provincial and regional levels which eventually connected the individual unions. Shri. N.M. Joshi, the father of modern trade unionism in India, introduced a trade union bill in the assembly in the year 1921, serving as the first representative of Indian labour at the International Labour Organization (ILO) in 1920. Thus, the struggle for legal recognition of trade unions in India began for the protection of the working class and their existing difficulties, at a time when British rule was in place and the government was unwilling to pass the bill.

However, the government was compelled to pass the Indian Trade Unions Act in 1926 as a result of intense pressure from the political parties. The second world war broke out unexpectedly after the Indian Trade Union Act of 1926 was passed, bringing with it some challenging circumstances for the business community and economic hardships for the working class. During the war, the government restrained trade union activity by citing the defence of Indian regulations, which expressly forbid strikes in essential services. After gaining independence in 1947, the national government promised to give the working class a fair deal and passed several labour laws that granted rights and benefits to industrial workers. This marked the beginning of a new era for the Indian labour movement.

What are trade unions

According to the Act, a trade union is any group that is eligible to register as one, which includes both employers’ and workers’ organisations. An association’s or combination’s main objective will determine whether or not it qualifies as a trade union. Section 2(h) of the Trade Unions Act, 1926, defines a trade union as “any combination or association of persons based upon mutual confidence, understanding, and cooperation for the protection of common interests”. It could be any group of workers or employers. It does not have to be a permanent combination; it can be formed even for a shorter period.

The definition outlines the primary objectives of a trade union. The trade union is therefore established primarily for the following two goals: 

1. First, for regulating the relationships between-

• Workmen and employers; 
• Workmen and workmen; or 
• Employers and employers

2. Second, for imposing limitations on the operation of any trade or business, which includes any federation of two or more trade unions.

The definition of the trade union under the Trade Union Act makes it clear that the main aim of a trade union is to keep the relationships between the persons involved in the industrial production and process in balance, harmony and with the right adjustments. 

Necessary to register a trade union

A trade union under the Industrial Dispute Act, 1947 has been defined as that which has been registered under the Trade Unions Act, 1926. Therefore a trade union which has not registered under the Trade Union Act is not regarded as a trade union under the Industrial Disputes Act. Further the Industrial Dispute Act provides certain rights to only those kind of trade unions which have been registered under the Trade Unions Act, 1926 and those trade unions which are not registered under the Act have no such rights.

It was frequently observed in India that the workers usually form their own association or unions without registering them under the Trade Union Act. These unions used to negotiate bonuses and other terms of employment with the employers and the employers in return were also used to give due consideration to their opinions. As a result of this recognition made by the employers it was often believed by the workers that they have a trade union with significant negotiating power with the employers. But this is not the case since their trade union or association are not legally recognised as a trade union, the powers provided to the trade unions under the Industrial Dispute Act do not apply to them. 

Although an unregistered trade union is permitted to carry out the same functions as a regular trade union as defined under the Trade Unions Act, it is not allowed to file a petition for an industrial dispute, represent an employee, or take part in any proceedings under the Industrial Disputes Act. An unregistered trade union is also unable to speak on behalf of its members or employees while negotiating a contract with an employer and even if it does it may not be able to enforce the contract.

Further, the Industrial Disputes (Central) Rules, 1957, makes the distinction by stating that a registered trade union has the right to give the employer the names of “protected workmen” and that the employer must maintain the terms of employment of such protected workmen while an industrial dispute is in progress. However, an unregistered trade union lacks the power to name “protected workmen,” and even if it does it has no legal significance. In other words “protected workmen” designated by an unregistered trade union are not eligible for the protection provided by Section 33 of the Industrial Disputes Act.

Similarly, the worker who is a party to a dispute may be represented in any proceeding brought under the Industrial Disputes Act by any executive or office holder of a registered trade union to which he belongs under Section 36 of the said Act. This benefit does not apply to unregistered trade unions.

In Calcutta Port Trust Union v. Haldia Shore Ship and Transport Handling Workers Co-Operative Construction Society Ltd. and Others (2013), the High Court of Calcutta stated that “any trade union that is not registered under the Trade Unions Act cannot be treated as a trade union under the Industrial Disputes Act, 1947.” Further, the court with respect to Section 36, which provides for the representation of the parties in clear terms stated that “any member of the executive or other office-bearer of a Registered Trade Union is entitled to represent a workman in any proceeding under the Industrial Disputes Act.” 

Therefore, if the workers intend to form an association to act as a trade union, they must register the union under the Trade Union Act, 1926.

Registration of trade unions

The method of registration of the trade unions encourages the unions to expand steadily and maintain strong unions. The Act provides certain protection and benefits to the registered trade union. As a result, it is necessary to register the trade union under the Trade Union Act, 1926.

The provisions relating to the registration of the trade unions are provided under Chapter II, Section 3 to 14 of the Trade Union Act, 1926. The registration of trade unions ensures the advancement of long-lasting and reliable unions. Although the registration of the trade union is not mandatory, it is recommended because the registered trade union enjoys certain immunities. Similarly, certain rights and privileges have been provided to the members of the registered trade union.

In other words, those who belong to a registered trade union are entitled to protection, immunity, and exemption from certain legal obligations on both civil and criminal liabilities. However, it should be noted that an individual dispute only turns into an industrial dispute when it is represented by a group of employees or a trade union, whether they are registered or not. Similarly, a union for civil servants cannot be registered under the Trade Union Act.

Procedure for registration 

The procedure for registration of a trade union is as follows:

Appointment of Registrars

According to section 3 of the Act, the appropriate government shall appoint a person to be the Registrar of Trade Unions for each state, and the appropriate government shall also appoint as many additional registrars as it may deem fit to carry out the purposes of the Act.

In the case of trade union registration, the trade union is in charge of the entire registration procedure. The appropriate government may appoint a person to serve as the registrar of trade unions under Section 3 of the Trade Union Act, 1926. The appropriate government, whether state or central, may also appoint additional and deputy registrars as it sees fit to exercise and carry out the registrar’s powers and duties. However, such a person will work under the supervision and direction of the registrar. He may exercise the powers and functions of the registrar within the limits specified for this purpose.

Mode of Registration

According to section 4 of the Act, any seven or more members of a Trade Union in accordance with the provisions of the Act may make an application apply for registration of the trade union. There are two conditions subsequent to the same, firstly no trade union of workmen shall be registered unless at least 10% or 100 of the workmen, whichever is less engaged in the employment of the establishment are its members on the date of making of its application and secondly no trade union shall be registered unless on the date of making of application, minimum seven of its members who are workmen are employed in the establishment or industry.

Also, such application shall not be deemed to be invalid merely on the ground that at any time after the date of the application, but before the registration of the trade union some of the members but not exceeding half of the total number of persons who made the application has ceased to be members.

Application for registration

According to section 5 of the Act, every application for the registration of the 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-

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, and
3. The titles, names, ages, addresses and occupations of the office- bearers of the trade union.

Where a trade union has been into existence for more than a year, then a copy of the assets and liabilities shall also be submitted along with the application for registration.

Provisions to be contained in the rules of a Trade Union

According to section 6 of the Act, a Trade Union shall not be entitled to registration under the Act unless the executive committee has been established in accordance with the provisions of the Act and the rules provide for the following-

1. The name of the trade union;
2. The whole of the objects for which the trade union has been established;
3. The whole of the purposes for which the general funds of the trade union shall be applicable;
4. The maintenance of a list of the members of the trade union;
5. The admission of ordinary members who shall be persons actually engaged or employed in an industry with which the trade union is connected;
6. The conditions under which any member shall be entitled to any benefit assured by the rules and under which any fine or forfeiture may be imposed on the members;
7. The manner in which the rules shall be amended, varied or rescinded;
8. The manner in which the members of the executive and the other office bearers of the Trade Union shall be elected and removed;
9. The safe custody of the funds of the trade union, an annual audit, in such 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, and;
10. The manner in which the trade union may be dissolved.

Power to call for further particulars and to require alteration of name

According to section 7 of the Act, the registrar may call for further information for the purpose of satisfying himself that whether all the particulars are in accordance with section 5 and 6 of the Act.

In case the trade union applying for registration bears a name identical to that of an existing trade union and the registrar feels that the name so resembles that of the other that there are fairs chances of the persons being misled then the registrar shall ask the trade union applying to change the name and shall refuse to register the same until such alteration has been made.

Registration

According to section 8 of the Act, if the registrar thinks that the trade union has complied with all the provisions of the Act, it shall register the Trade Union by entering in a register all the particulars in accordance with the provisions of the Act.

Certificate of registration

According to section 9 of the Act, the registrar shall issue a certificate of registration to the trade union after registration under section 8 which shall be conclusive proof that a trade union has been duly registered.

Cancellation of registration

According to section 10 of the Act, a certificate of registration of a trade union may be cancelled or withdrawn or an application of the trade union to be verified in such manner as may be prescribed; where  the registrar is satisfied that the certificate has been obtained by fraud or mistake or the trade union has ceased to exist or has willfully and other notice from the registrar contravened any provisions of the Act and if the registrar is satisfied that a registered trade union ceases to have requisite number of members.

Before issuing such an order, the registrar must be satisfied that the registration should be cancelled or withdrawn, as requested by the trade union. If the registration is being withdrawn or cancelled for any other reason, the registrar is required to provide two months’ notice specifying the particular grounds for the proposed action.

Appeal

According to section 11 of the Act, any person aggrieved by any refusal to register a trade union or withdrawal of registration, etc by registrar may file an appeal where the trade union head office is situated within the limits of a presidency town to the High Court, or where the head office is situated in an area, falling within the jurisdiction of a Labour Court or an Industrial Tribunal, to that court or tribunal as the case may be; where the head office is situated in any 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  appropriate government may appoint.

On an application to the appropriate forum, the court may either dismiss the appeal or pass an order directing the registrar to take appropriate measures.

The court shall have the same powers of a civil court under Civil Procedure Code, 1908 and may follow the same procedures.

The highest appeal can be made to the High Court.

Registered office

According to section 12 of the Act, all communications shall be made on the registered office of the trade union

Incorporation of registered trade union

According to section 13 of the Act, every registered trade union shall be a body corporate having a common seal and perpetual succession with power to acquire and hold movable and immovable property and shall by the said name sue and be sued.

The legal status of trade unions

Is a registered trade union a legal person? In light of the provisions of Section 13 of the Trade Union Act, 1926, the answer may be given in the affirmative. It is important to remember that the Trade Union Act only gives legal status, benefits, and rights to registered trade unions. An unregistered trade union does not get these things. Further, once a trade union is registered, all communications and notices to the registered trade union may be addressed to its registered office.

Legal status was granted to registered unions, bestowing certain advantages and powers, in order to encourage registration. The Trade Unions Act, 1926, empowers a legal personality to use funds for trade disputes to achieve its goals, as well as protection from criminal prosecution, immunity from civil action, and the validity of its members’ agreement from the challenge that its objectives are in trade restraint. Thus, following their registration in accordance with the provisions of this Act, trade unions are granted several rights.

Privileges and immunities of a registered trade union 

Registered trade unions are entitled to certain privileges and immunity. The Trade Unions Act, 1926, grants members and leaders of registered unions a number of privileges and immunities. The registered trade unions’ immunities or privileges can be explained under the following headings:

Immunity from civil liability

This immunity is available to all officers and members of a registered trade union. No civil action is admissible against them for an activity related to a trade dispute on the grounds that such an act induces some other person to breach a contract of employment; or it interferes with some other person’s trade, business, or employment. Further, the inducement should also be legal and not against the law of the land. There is no protection from threats, violence, or any other illegal methods.

Immunity from tortious liability

Torts are considered to be civil wrongs. It can be resolved through a civil court action. It is distinct from breaches of quasi-contracts, contracts, and trusts, as well as other equitable obligations (e.g., trespass, private nuisance, among others). The Trade Unions Act of 1926, however, provides immunity from tort liability in Section 18(2). The act that seeks immunity or exemption from tort liability must advance a trade dispute.

If an agent acted without the knowledge of the executive committee of the trade union; or against the express instructions of the executive committee, a registered trade union is not liable for the torts committed by the agent in furtherance of the trade dispute.

Immunity from criminal liability

Section 17 of the Trade Unions Act of 1926 exempts registered trade union officers from prosecution for criminal conspiracy. According to English law, a conspiracy is “an agreement between two or more persons to carry out an unlawful act or an authorized act in an unlawful manner.” Section 120-A of the Indian Penal Code, 1860, imposes penalties for criminal conspiracy.

A registered trade union is granted immunity under the Trade Union Act of 1926. This immunity is only applicable to legal agreements made by a trade union’s members for the stimulation of legitimate objects of a trade union, so it is only partially available. One right given to registered trade unions to help them settle trade disputes is the right to call for a strike and try to get their members to join. All acts that give rise to civil lawsuits are considered illegal acts.

So, for example, two men who agree to try to get employees to break their contracts with their employers are guilty of criminal conspiracy. However, Section 17 of the Trade Union Act of 1926 protects trade unionists from criminal conspiracy if the agreement they made was not to commit a crime.

Rights of registered trade unions

The following rights have been granted to registered trade unions:

Right of admission

The right to be admitted as a union member is not an absolute right. A trade union may set restrictions and admissions requirements in accordance with the Trade Union Act,1926, the rules, and any other applicable laws.

Right of representation

If an employee makes a written statement, the trade union may intervene in a dispute on their behalf. A trade union can then make a representation with that statement before any conciliation officer, industrial tribunal, labour court, etc. A trade union can then make a representation with that statement before any conciliation officer, industrial tribunal, labour court, etc.

Right to spend general funds

A registered trade union has the right to use its general fund for the payment of salaries, allowances, and expenses to its office-bearers, the prosecution or defence of any legal proceedings for securing or protecting any trade union rights, the conduct of trade disputes, compensation to members for any loss arising from trade disputes, the provision of educational, social, or religious benefits to members, the publication of periodicals on labour matters, the issue of or undertaking of liability under policies of assurance on members’ lives or policies of members against illness, accident, or unemployment, contribution to any cause intended to benefit workers, and any other object notified by the relevant government.

Right to constitute a separate political fund

If the registered trade union decides to pursue political objectives, it has the power to establish a separate political fund for those purposes using contributions that are separately collected for or made to that fund. Payments for the advancement of the civil and political interests of its members may be made out of this fund. Thus, the political funds are separate funds established by the trade union through a separate levy on its members for the advancement of the civil and political interests of its members.

Rights granted to it as a legal person 

The following rights are granted to a registered trade union as a result of its legal status and registration name: 

• Right to a common seal in its own name; 
• Right to purchase, hold, and sell both movable and immovable property in its own name; Right to enter into contracts in its own name; and 
• Right to bring legal action for any infringement of its rights. It may also be sued on its behalf by any aggrieved party. 

It should be noted that these are very important rights. Rights lose their significance if the trade unions lack the ability or competence to enforce them in their own name.

Right to inspect books

Members of the trade union or office bearers have a valuable right under Section 20 of the Trade Union Act, 1926, which allows them to inspect the book of accounts at any time. However, they are not allowed to take a copy of any books.

Right to amalgamate

According to Section 24 of the Act, two or more registered trade unions may amalgamate into one union with or without dissolution or division of their respective funds.

Right to change its name

Any registered trade union may change its name with the consent of at least two-thirds of all of its members, subject to the provisions of Section 25.

Duties and liabilities of a registered trade union 

The following duties and liabilities are placed on unions registered under the Trade Unions Act:

Duty to make provisions in the rules of certain matters

The provisions listed in Section 6 of the Trade Unions Act, 1926, must be included in the constitution of the trade union. Section 6 contains information that the trade union must include in its regulations. Some of these regulations specify the goals for which the trade union was founded, the uses for which its general funds may be put to use, the acceptance of new members, the process for dissolving the trade union, and other things.

Duty to constitute executive as required 

It is the responsibility of the registered trade union to set up the trade union’s executive in accordance with the rules of the Act. Sections 21-A and 22 of the Act contain the provisions pertaining to the formation of the executive board of the trade union. According to the provisions of the Act, two obligations must be fulfilled before the registration process can begin. The Registrar has the power to refuse to register the proposed trade union if these obligations are not met.

Duty to spend general funds as required 

The trade union has a legal obligation to use general funds in accordance with Section 15 of the Act, which lists specific items for which only general funds may be used and not otherwise.

Duty to constitute a separate political fund 

The trade union must establish a separate fund, commonly known as a political fund, in accordance with Section 16, and it may be used for the objects specified therein if it decides to advance the civil and political interests of its members.

Duty to provide access to books of trade union

A registered trade union shall maintain the account books and membership list for inspection by an officer or member of the trade union at such times as may be specified in the rules of the trade union.

Duty to send notice to the registrar

The trade union has a responsibility to notify the registrar of any changes to its name, any amalgamations, any changes to the address of its head office, and any dissolutions. Every year, a general statement of all receipts and expenditures of every registered trade union during the year ending on the 31st day of December, the next preceding such prescribed date, and of the assets and liabilities of the trade union existing on such 31st day of December, must be sent to the registrar on or before such date as may be prescribed. This general statement must be audited in the prescribed manner. The statement must be written in the appropriate format and include all necessary information.

Conclusion

In today’s system of production and distribution of goods and services, trade unions have evolved into a significant and powerful force. The modern industrialisation of society gave rise to trade unions. The methods used to produce goods and services, their distribution, the allocation of economic resources, the amount of employment and unemployment, the nature of rights and privileges, governmental policies, the mindset and status of significant portions of the population, and the very nature of economic and social organisations are all now being significantly impacted. In these circumstances, their role has given rise to significant and widespread controversy. In a developing economy like ours, trade unions and their policies are especially important.

Frequently Asked Questions (FAQs)

What is registration of 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.

Is it compulsory to register a trade union? 

The Trade Unions Act, 1926, does not require the registration of trade unions. However, it is recommended that a trade union be registered under the Act because the Act grants a registered trade union many rights.

Is it possible to cancel the registration of the trade union?

The Registrar can take away or cancel a trade union’s registration certificate if the trade union asks for it or if the Registrar finds that the certificate was obtained fraudulently, by mistake, or because the trade union no longer exists.

Who is disqualified from being members of registered trade unions?

Section 21A of the Trade Union Act specifies the disqualification of trade union office holders. If a person has not attained the age of eighteen or has been convicted by an Indian court of any offence involving moral turpitude and sentenced to imprisonment, they are ineligible to be elected as members of the executive or any other office bearers of a registered trade union until five years have passed since their release.

References

• https://monad.edu.in/img/media/uploads/Registered%20Trade%20Unions.pdf
• https://blog.ipleaders.in/trade-unions-act-1926/
• https://gyansanchay.csjmu.ac.in/wp-content/uploads/2022/10/law-relating-to-trade-union-in-India-CSJM.pdf
• https://www.legalwindow.in/how-to-register-a-trade-union-in-india/
• https://humancapitalonline.com/HR-Tools/details/393/The-Necessity-To-Register-A-Trade-Union

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