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Trade Unions Act of 1926 (Download Notes)
October 22, 2024
Overview: The Trade Unions Act of 1926 governs India's formation, registration, and regulation of trade unions. It allows workers from various trades, industries, or companies to form unions for collective action to protect their interests.
The Trade Unions Act of 1926 is a foundational piece of legislation in Indian labour law governing the registration, rights, and obligations of trade unions.
Understanding this Act is crucial for law students and candidates preparing for exams like the All India Bar Examination (AIBE), as it significantly regulates labour relations and collective bargaining. Here’s why the Trade Unions Act of 1926 should be a key area of focus in legal education and professional exams.
In this blog, we will cover:
- Objectives of a Trade Union
- Important Provisions of the Trade Unions Act, 1926
- Downloadable notes of Trade Unions Act, 1926
- Amendments through the Trade Unions (Amendment) Act
Objectives of a Trade Union
A trade union is a voluntary organization aimed at protecting and advancing the welfare of its members. The key objectives include:
- Securing fair wages and providing better promotion and training opportunities for workers.
- Ensuring job security and improving service conditions.
- Enhancing working and living conditions.
- Providing educational, cultural, and recreational facilities.
- Facilitating technological advancement and enhancing workers' understanding of innovations.
- Improving production, productivity, and discipline among workers.
- Promoting individual and collective welfare to align worker interests with industry goals.
- Participating in management decision-making related to workers and taking disciplinary action when necessary.
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Important Provisions of the Trade Unions Act, 1926
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Definition of a Trade Union (Section 2):
A Trade Union is any combination, whether temporary or permanent, formed primarily to regulate the relations between workmen and employers, workmen and workmen, or employers and employers. It also includes federations of two or more trade unions. The union can also impose restrictive conditions on any trade or business conduct. -
Registration of Trade Unions (Section 4):
- Trade unions must register with the ‘Registrars of Trade Unions’ established in different states.
- A minimum of seven members is required to apply for registration, applying with the union's rules and details about members and office bearers.
- The Registrar, upon ensuring compliance with the Act, registers the trade union.
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Certificate of Registration (Section 9):
Once the application for registration is approved, the Registrar issues a certificate of registration, which serves as conclusive evidence that the trade union has been duly registered. -
Cancellation of Registration (Section 10):
The Registrar can cancel a trade union's registration either at the union's request or if it is proven that the registration was obtained fraudulently, or if the union violates the Act’s provisions, ceases to exist, or contravenes any rules. -
Annual Statutory Returns (Section 28):
Registered trade unions must submit annual returns detailing membership, general funds, income, expenditures, assets, and liabilities to the Registrar. The Labour Bureau consolidates this data and compiles national statistics on trade unions.
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Uses of Funds (Section 15):
The general funds of a registered trade union can only be used for purposes specified in the Act. Unions may create a separate fund for political and civic activities. Still, contributions to this fund are voluntary, and members who do not contribute cannot be excluded from other union benefits. -
Maintenance of Accounts (Section 20):
As per the union's rules, the account books and membership list of a registered trade union must be accessible for inspection by union office-bearers or members. -
Disqualification from Office (Section 21A):
A person is disqualified from holding office in a trade union if:- They are under 18 years of age.
- They have been convicted of an offence involving moral turpitude, and five years have not passed since their release.
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Amendments through the Trade Unions (Amendment) Act, 2001:
- A trade union can only be registered if at least 10% or 100 workers, whichever is lower, are members on the registration date.
- Registered unions must always maintain at least 10% or 100 workers as members.
- If a union's registration is refused or cancelled, they can appeal to the Industrial Tribunal or Labour Court.
- Most office bearers of a union must be currently employed in the industry or establishment, with some exceptions.
- Minimum membership fees are set at ₹1 for rural workers, ₹3 for unorganized sectors, and ₹12 for all others.
- Retired or retrenched workers are allowed to hold office in the union.
- Unions can establish separate political funds to promote civic and political interests.
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Growth of Trade Unions in India
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Number of Registered Unions:
In 2008, the number of registered trade unions grew by 31% from 1999 to 84,642 unions. However, only 11.47% of these unions submitted returns, with Tamil Nadu and Rajasthan leading in the number of registered unions. -
Workers’ Unions:
Out of 27,063 workers' unions, 88.76% were state unions, and the rest were central unions. The most significant number of these unions belonged to the manufacturing sector. -
Income and Expenditure of Workers’ Unions:
In 2008, workers' unions' total income and expenditure were ₹113.81 crore and ₹80.99 crore, respectively, with Tamil Nadu reporting the highest income and expenditure.
Employers’ Unions in 2008
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Number of Employers’ Unions:
There were 74 registered employers' unions in 2008, out of which only 7 unions (9.46%) submitted returns. These unions had a total membership of 6,924, with women making up 14.62% of the members. -
Income and Expenditure of Employers’ Unions:
The income and expenditure of these unions were ₹0.37 crore and ₹0.33 crore, respectively, with the manufacturing sector leading in terms of both income and expenditure.
Major Trade Union Organizations in India
Some well-known central trade unions in India include:
- All India Trade Union Congress (AITUC)
- Bharatiya Mazdoor Sangh (BMS)
- Centre of Indian Trade Unions (CITU)
- Hind Mazdoor Sabha (HMS)
- Indian National Trade Union Congress (INTUC)
Registration of Trade Unions
- Appointment of Registrars (Section 3): The government appoints a Registrar for each state to oversee trade union registration.
- Mode of Registration (Section 4): At least seven members are required to apply for trade union registration. Specific rules ensure the validity of applications even if some members withdraw.
- Provisions for Registration (Section 6): The application must contain the union’s name, objectives, membership list, and rules.
- Certificate of Registration (Section 9): Once approved, the Registrar issues a certificate, making the union legally recognized.
Rights and Liabilities of Registered Trade Unions
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Maintenance of Funds (Section 15)
- The general fund of a trade union can be used for activities like payment of office-bearers, settling disputes, providing allowances, and offering educational or social benefits to members.
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Immunity from Legal Action (Sections 17-18)
- Trade unions and their members are immune from criminal conspiracy charges under Section 120B of the Indian Penal Code for actions conducted to protect their legitimate interests.
- They are also protected from civil suits in certain cases relating to trade disputes.
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Political Funds (Section 16)
- Trade unions can maintain separate funds for political purposes like supporting candidates for legislative bodies or organizing political meetings. Contributions to this fund are voluntary.
Dissolution and Amalgamation of Trade Unions
- Change of Name or Amalgamation (Sections 23-26)
- A trade union can change its name or amalgamate with another union with the consent of two-thirds of its members.
- Dissolution (Section 27)
- A union can be dissolved by notifying the Registrar. The union’s funds will be distributed among members unless specified otherwise in its rules.
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Penalties and Legal Provisions
- Supplying False Information (Section 32)
- Providing false information regarding trade unions is punishable by a fine of up to ₹200.
- Failure to Submit Returns (Section 31)
- Not submitting required documents or making false entries can result in fines ranging from ₹5 to ₹500.
Conclusion
The Trade Unions Act, 1926 is vital for protecting workers' rights and ensuring they have a collective voice in negotiations with employers. By regulating the registration and functioning of trade unions, the Act promotes industrial harmony and provides a legal framework for workers to organize and safeguard their interests.