Overview of the Trade Unions Act, 1926
The Trade Unions Act, 1926 is one of India's oldest labour legislations. It provides the legal framework for the registration and functioning of trade unions, granting workers the right to organize and collectively bargain for better working conditions, wages, and other employment terms. The Act recognizes the fundamental right of workers to form associations and unions.
A trade union, once registered under the Act, acquires legal personality and enjoys certain rights and immunities, including protection from civil suits for lawful trade union activities. Registration confers legitimacy and makes the union a body corporate capable of holding property, entering contracts, and suing or being sued in its own name.
In the Indian industrial landscape, trade unions play a critical role in dispute resolution, wage negotiations, and safeguarding workers' welfare. Whether you are an employer understanding your obligations or workers seeking to form a union, this guide provides the essential legal framework.
Formation & Membership Requirements
Minimum Membership
- • General: Minimum 7 members can apply for registration
- • Amendment (2001): For establishments with 100+ workers, 10% or 100 workers (whichever is less) must be members
- • Any person above 15 years of age engaged in the trade or industry can be a member
- • Outsiders can be office bearers (max 1/3 of total or 50% in some states)
Registration Process
- • Apply to the Registrar of Trade Unions in the state
- • Submit rules of the union, names of members, and office bearers
- • Memorandum signed by all applicants
- • Prescribed registration fee (typically ₹500–₹1,000)
- • Registrar grants registration certificate within 60 days
Rights & Immunities of Registered Trade Unions
Legal Personality
A registered trade union becomes a body corporate with perpetual succession, a common seal, and the right to hold and dispose of property, enter contracts, and sue or be sued.
Immunity from Civil Suits (Section 18)
No civil suit can lie against a registered trade union or its members for any act done in contemplation or furtherance of a trade dispute, unless the act itself constitutes a criminal offence.
Collective Bargaining
Registered unions have the right to negotiate with employers on behalf of their members for better wages, working conditions, and other employment terms.
Political Fund
Unions can establish a separate political fund (Section 16) for civic and political activities, funded through voluntary contributions from members.
Obligations of a Registered Trade Union
- • Maintain a register of members and update it regularly
- • File annual return (Form L) with statement of income/expenditure and balance sheet
- • Get accounts audited annually
- • Notify the Registrar of any change in office bearers, registered address, or rules
- • Apply at least 50% of funds for the objects specified in Section 15
- • Maintain general fund and separate political fund
- • Hold elections as per union rules
Cancellation of Registration
The Registrar can cancel a union's registration under the following circumstances:
Grounds for Cancellation
- • Registration obtained by fraud or mistake
- • Union has ceased to exist
- • Wilful violation of provisions of the Act
- • Failure to submit annual returns for 3+ years
- • Membership falls below statutory minimum
Safeguards
- • 2 months’ notice must be given before cancellation
- • Union has right to be heard (show-cause opportunity)
- • Appeal to the High Court within 60 days of cancellation order
- • Cancellation does not affect existing liabilities
Key Takeaways
- ✓ Minimum 7 members needed to form and register a trade union
- ✓ Registration grants legal personality, collective bargaining rights, and immunity from civil suits
- ✓ Annual return and audited accounts must be filed with the Registrar
- ✓ Non-compliance can lead to cancellation of registration
- ✓ Employers cannot victimize workers for trade union activities (unfair labour practice)