The Trade Unions Act, 1926 Notes

The Trade Unions Act, 1926

Definitions

Trade Union: Any combination, temporary or permanent, primarily formed to regulate relations between:
- Workmen and employers
- Workmen and workmen
- Employers and employers
- To impose restrictive conditions on trade or business.
- Includes any federation of two or more Trade Unions.
Exclusions from the definition of Trade Union:
- Agreements between partners regarding their own business.
- Agreements between an employer and their employees regarding employment.
- Agreements concerning the sale of goodwill or instruction in a profession, trade, or handicraft.
Terminology: The definition's terminology is broad; ideally, a "Trade Union" should refer to an organization of employees, not employers or independent workers.
Trade Dispute: Any dispute between:
- Employers and workmen
- Workmen and workmen
- Employers and employers
- Connected with employment, non-employment, terms of employment, or conditions of labor.
Workmen: All persons employed in trade or industry, whether or not in the employment of the employer with whom the trade dispute arises.

Registration

Registrar of Trade Unions: The appropriate Government appoints a Registrar for each State; may also appoint Additional and Deputy Registrars for local areas.
Powers of Additional/Deputy Registrars: Exercise powers delegated to them under the superintendence and directions of the Registrar; deemed Registrars for their local limits.
Application for Registration: Any seven or more members of a Trade Union may apply to the Registrar by subscribing their names to the rules of the Trade Union.
Compliance: Must comply with requirements in Sec. 6 of the Act to be granted a certificate of registration.
Application Validity: An application remains valid even if up to half the applicants disassociate themselves after the application date but before registration.
Required Particulars with Application:
- Names, occupations, and addresses of the members making the application.
- Name of the Trade Union and address of its head office.
- Titles, names, ages, addresses, and occupations of the officers of the Trade Union.
- A statement of its assets and liabilities.
Conditions for Registration: At least half of the office-bearers must be engaged/employed in the industry the Union is concerned with (unless exemption is granted by the appropriate Government).
Mandatory Rules of the Union:
1. The name of the Trade Union.
2. The objects for which the Trade Union has been established.
3. Purposes for which general funds are applicable under the Act.
4. Admission of ordinary members (those engaged/employed in the connected industry) and honorary/temporary members as officers required under Sec. 22.
5. Maintenance of a list of members with adequate inspection facilities for office-bearers and members.
6. Subscription payment by members of not less than $25$ paise per month per member.
7. Conditions for entitlement to benefits and imposition of fines/forfeiture on members.
8. The manner in which rules are amended, varied, or rescinded.
9. The manner in which executives and office-bearers are appointed and removed.
10. Safe custody of funds, annual audit of accounts, and adequate facilities for inspection of account books by office-bearers and members.
11. The manner in which the Trade Union may be dissolved (Sec. 6).
Name Registration: The name must not be similar to any existing Trade Union (Sec. 7).
Change of Name: Possible with the consent of at least two-thirds of the total number of members (Sec. 23).
- Notice of change, signed by the Secretary and seven members, must be sent to the Registrar.
- The Registrar will register the change if the proposed name is not identical or similar to that of any existing Trade Union (Sec. 25).
Certificate of Registration: Issued by the Registrar upon compliance with all Act requirements (S. 8).
- The certificate is conclusive evidence of due registration (S. 9).

Cancellation of Registration

Grounds for Cancellation: The Registrar can withdraw or cancel registration if:
- The Union applies for it.
- The certificate was obtained by fraud or mistake.
- The Trade Union has ceased to exist.
- The Union has willfully contravened any provision of the Act after notice from the Registrar.
- The Union has allowed a rule inconsistent with the Act to continue.
- The Union has rescinded a rule required by the Act.
Notice Requirement: Before cancellation (except on the Union's application), the Registrar must give two months' notice stating the grounds for proposed cancellation (S. 10).

Appeal

Appeal Process: Any person aggrieved by the Registrar's refusal to register a Union or by cancellation of a certificate can appeal.
- Appeals go to the High Court if the head office is in a Presidency Town, or to a court appointed by the appropriate Government in other cases.
- The High Court is the final appellate authority in all cases (S. 11).

Minor Members

Eligibility: Any person who has attained the age of fifteen years may be a member of a registered Trade Union, subject to Union rules.
Rights: May enjoy all membership rights and execute necessary instruments under the rules.

Office Bearers

Requirement: At least one-half of the total number of office-bearers must be engaged/employed in the industry the Trade Union is connected with.
Exemption: The appropriate Government may exempt any Trade Union or class of Trade Unions from this rule (S. 22).
Disqualifications:
- A person must have attained the age of 18 years.
- Conviction 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 (Sec. 21A).

Registered Office

Communications: All communications and notices to a registered Trade Union may be addressed to its registered office.
Change of Address: Any change in the head office address must be communicated within 14 days to the Registrar, who will record it in the register (Sec. 12).

Incorporation

Legal Status: Every registered Trade Union is a body corporate under its registered name.
Powers: Perpetual succession, a common seal, power to acquire and hold movable and immovable property, and to contract; can sue and be sued in its name (S. 13).

Rights and Privileges of a Registered Trade Union

Immunity from Criminal Proceedings: Immunity to office-bearers and members regarding agreements for furthering any legal objects of the Union, but not for agreements to commit an offence (S. 17).
Immunity from Civil Suits: Granted for acts done in contemplation or furtherance of a trade dispute on the grounds that such act induces some other persons to break a contract of employment or that it is an interference with the trade, business or employment of some other person.
A registered Union cannot be sued in respect of any tortious acts of its agents committed without the knowledge of, or contrary to the express instructions given by, the executive of the Union (S. 18).
No immunity is granted for any act of deliberate trespass.
Restraint of Trade: An agreement between the members of a registered Trade Union is not void or voidable merely because any of the objects of the agreement is in restraint of trade.
This does not apply to an agreement between members of a Trade Union for the sale of goods, business transactions, work, or employment (S. 19).
Minors: Minors who have attained the age of $15$ years are eligible to become members of a Trade Union, unless its rules prohibit their entrance; but they cannot become office-bearers in any case. To become an office-bearer of a Trade Union a person must have attained the age of $18$ Years (S. 21).

Funds of the Trade Union

Permissible Expenditure (Section 15):
- Salaries, allowances, and expenses to office-bearers.
- Expenses for the administration of the Trade Union, including the audit of accounts.
- Prosecution or defense of legal proceedings for securing or protecting any right of the Trade Union or its members.
- Conduct of trade disputes on behalf of the Trade Union or any member.
- Compensation of members for loss arising out of trade disputes.
- Allowances to members or their dependants on account of death, old age, sickness, accidents, or unemployment.
- Insurance policies on the lives of members, or against sickness, accident, or unemployment.
- Educational, social, or religious benefits for members or their dependants.
- Upkeep of a periodical for discussing questions affecting employers or workmen.
- Contributions to any cause intended to benefit workmen in general, but expenditure must not exceed one-fourth of the combined 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 of those funds at the commencement of the year.
- Any other object notified by the appropriate government in the Official Gazette.

Separate Fund for Political Purposes

Establishment: Registered Trade Unions may create a separate fund for promoting the civic and political interests of its members (Sec. 16).
Permissible Payments:
- Expenses incurred by a candidate for election to a legislative body or local authority.
- Holding meetings or distributing literature in support of such candidates.
- Maintenance of any person who is a member of any legislative body or of any local authority.
- Registration of electors or the selection of a candidate for any legislative body or local authority.
- Holding political meetings or distributing political literature.
Voluntary Contribution: No member is compelled to contribute to this fund.
No Discrimination: Non-contributors shall not be excluded from any benefits of the Trade Union or placed under any disability compared to other members, except in relation to the control or management of the said fund.
Contribution to the fund shall not be a condition for admission to the Trade Union.

Amalgamation of Trade Unions

Process: Two or more registered Trade Unions may amalgamate as one, with or without dissolution or division of funds.
Voting: Requires votes of at least one-half of the members of each Trade Union, with at least $60$ % of the votes recorded in favor of the proposal.
Notification: Notice in writing, signed by the Secretary and seven members of each Trade Union, must be sent to the Registrar.
If the head office of the amalgamated Trade Union is in a different State, notification must be sent to the Registrar of that State.
Registration: The Registrar of the State where the head office is situated will register the Trade Union upon compliance with the Act.
Amalgamation does not prejudice any right of any of such Trade Unions or any right of a creditor of any of them (Secs 21-26).

Books and Returns

Inspection: The books of account and list of members are open for inspection by any officer or member as provided in the rules.
Annual Statement: A statement, audited in the prescribed manner, of all receipts and expenditure during the year ending on December 31st must be submitted annually to the Registrar.
Any changes made in the rules of the Trade Union during the year and all changes of office-bearer, during this period must also accompany the statement.
A copy of every alteration made in the rules must be sent to the Registrar within $15$ days of such alteration.
Inspection by Registrar: The Registrar or an authorized officer may inspect the certificate of registration, account books, registers, and other documents at the registered office, or require their production at a specified place (within 10 miles of the registered office).

Penalties

Failure to Submit Returns (Sec. 31):
- Default in giving notice or sending any statement, return, or other document as required leads to a fine up to Rs. $5$ , with an additional fine up to Rs. $5$ for each week of continuing default, but the aggregate fine shall not exceed Rs. $50$ .
False Entries: Any person who wilfully makes or causes to be made any false entry in, or any omission from the general statement required by Sec. 28, or in or from any copy of rules or of alteration of rules sent to the Registerr under that Section or in or from any retru referred to in Sec. 28 shall be punishable with fine which may extend to Rs. $500$ .
Deceptive Practices: Giving a false copy of rules (or alterations) to a member/prospective member, or pretending that unregistered Trade Union rules are registered Trade Union rules, is punishable with a fine up to Rs. $200$ .
Court Jurisdiction: No court inferior to that of a Presidency Magistrate or Magistrate of the first class shall try any offence under this Act.

Dissolution

Notice: When a registered Trade Union is dissolved, notice of the dissolution signed by seven members and by the Secretary must be sent to the Registrar within $14$ days.
Registration of Dissolution: The Registrar registers the dissolution if satisfied it was effected according to the Union's rules; dissolution takes effect from the registration date.
Distribution of Funds: If the Union's rules don't provide for fund distribution upon dissolution, the Registrar divides the funds among members as prescribed.
Regulation 11 of the Central Trade Union Regulations, 1938: Funds are divided in proportion to the amounts contributed by members via subscription during their membership.