How Trade Unions Function In India?

Trade Union in India have been the natural outcome of the modern factory system. Establishment of International Labor Organization in 1919 helped the formation of trade unions in the country. The most important year in the history of Indian Trade Union Movement in 1920 is when All India Trade Union Congress (AITVC) was formed upon the necessity of electing delegates for the International Labor Organization.In the recent years, Trade Unionism witnessed tremendous growth and development in India, not only in the Industrial Sector, but also in the agriculture and other allied sectors.

Freedom to form Association {Article 19(1) (c)}

Article 19 (1) {c) of the constitution guarantees to the citizens of India the right to form associations or unions. Under Article 19(4) reasonable restrictions in the interest of public order, morality, sovereignty and integrity of India may be imposed on this right by law.

The Trade Union Act was passed in the year 1926 and inter alia:

  1. LegaliseTrade Unions
  2. Provides for their registration
  3. Gives certain immunity to a registered trade union
  4. Allow the trade union to participate in political activities

The act also lays down rights and liabilities of registered trade unions and permits the constitution of separate funds for political activities.

Main features of the Act

The Act provides for formation of trade union, which is a combination of 7 or more persons formed for the purpose as contained in the definition of trade unions.

According to section 2 (h) of the Trade Unions Act:

“Trade Union means

1. any combination, which is permanent or temporary,

2. formed, primarily for the purpose of

a. regulating the relations between:

  1. workmen and the employees or
  2. between workmen and workmen or
  3. between employers and employers,  or

b. for imposing restrictive conditions on the conduct of any trade or business,

3. and includes any federation of two or more trade unions.

Provided that this act shall not affect:

  1. any agreement between the partners as to their own business
  2. any agreement between the employer and those employed by him as to such employment
  3. any agreement in consideration of the sale of the goodwill of a business or an instruction in any profession, trade or handicraft.

The term trade union as defined under the Act contemplates the existence of the employer and the employees engaged in the conduct of a business or trade. Thus for a Trade Union the following conditions must be present:

  • It is a combination of 7 or more persons.
  • The principle object of the combination must be regarding the relation between workmen inter se, or between employees inter se or between workmen and employers.
  • The personnel must be either employers or workmen.
  • Where the persons are workmen, they must be employed in a trade or industry. The term industry must be understoon in the light of commercial undertaking.

Thus, government servants cannot form Trade Union under the Trade Unions Act, 1926.

Registration of Trade Unions

Section 4 of the act prescribes mode of the registration of the Trade Union as follows:


Provided that no Trade Union of workmen shall be registered unless at least ten per cent. or one hundred of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such Trade Union on the date of making of application for registration

Provided further that no Trade Union of workmen shall be registered unless it has on the date of making application not less than seven persons as its members, who are workmen engaged or employed in the establishment or industry with which it is connected


According to Section 5, a Trade Union may become a registered Trade Union in the following manner:

Application for registration. -

1. 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:—

  1. the names, occupations and addresses of the members making the application; in the case of a Trade Union of workmen, the names, occupations and addresses of the place of work of the members of the Trade Union 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 4 [office-bearers] of the Trade Union.


Section 8 provides that:

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.

Funds of Trade Union

A registered trade union is free to maintain two kinds of funds. They are – General Fund and Political Fund. The Trade Unions Act, 1926 expresses certain conditions on the Trade Unions to spend the funds only for some specific purposes as stated under Section 15 and Section 16 of the act.

Section 15 act states the objects on which general funds may be spent. Purposes for which the General Fund can be utilized:

  1. The payment of salaries, allowances and expenses to office bearers of the trade union.
  2. The payment of expenses for the administration of the trade union including an audit of accounts of the general fund.
  3. The expenses in connection with prosecution or defense undertaken for the purpose of securing or protecting any rights of the trade union.
  4. The conduct of trade disputes on behalf of the union or any member.

Section 16(2) states the objects for which the political fund may be utilized. Those are:

  1. The payment of any expenses incurred by a candidate or prospective candidate for election as a member of any legislative body or any local authority
  2. Conducting any meeting or distribution of any literature or documents in support of such candidate or prospective candidate;
  3. Maintenance of any person who is a member of any legislative body or local authority;
  4. Registration of electors or the selection of a candidate for any legislative body or local authority;
  5. Conducting of political meetings or distribution of political literature and documents to the members of the trade union or to the general public.

Advantages of registration:

Body Corporate

  1. Right of Representation: A trade union can represent the employees in any industrial dispute and in case of individual dispute, with the written permission of the employee.
  2. Right to Contract: A registered trade unioncan enter into agreements and contracts on its own name.
  3. Right to own property: A registered trade union can purchase and own movable and immovable property in its own name.
  4. Right to Sue: A trade union is a juristic person. It can sue on behalf of itself, and on behalf of its members.

Immunity from prosecution

The Trade Unions Act, 1926 provides for certain privileges and immunities to the members of the registered trade unions so that they conduct their legitimate trade union activities without any fear or threat of civil or criminal action. It is the most important right without which the office bearers of the registered trade unions may not be able to discharge their duties efficiently.

Section 17 of the Act provides immunity from Criminal liability. According to this provision, the office bearers of the registered trade unions are immune from criminal liability for criminal conspiracy under section 120 B (2) of the Indian Penal Code, if the offences arise out of any agreement entered into between members whose purpose is to further the objects specified in Section 15 of the Trade Unions Act.

Section 18 provides immunity from civil liability. According to this trade unions are immune from civil suits in certain cases, like contractual liability, tortuous liability etc.

The Registrar can cancel the registration of Trade Union in the following cases according to section 10:

  1. When there is an application from Trade Union itself.
  2. Where the certificate of registration has been obtained due to fraudulent practice.
  3. Where the trade union does not exist any longer.
  4. Where any principle of the union is not consistent with the provisions of the Act.
  5. Where practices of trade union violate the provisions of the Act.
  6. Where the union has revoked, cancelled or repealed any rule providing for any of the compulsory matters.
  7. Where the primary objects of the union are no longer consistent with the statutes.


on 09 February 2020
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