PROJECT ON

AIMS AND OBJECTIVE OF TRADE UNION ACT 1926

SUBMITTED TO:

VIPIN SHAH

GUEST FACULITY

(FACULTY FOR LAND LAW)

SUBMITTED BY:

ABHISHEK VERMA

14307005

IX SEMESTER

DR SHAKUNTALA MISRA NATIONAL REHABILITATION UNIVERSITY

I feel highly elated to work on this dynamic and highly popular topic on “AIMS AND
OBJECTIVES OF TRDE UNION ACT’ which had played a pivotal role in the Land
law studies. As this topic drew my attention and attracted me to choose this as a project
topic and examine it.

So, I hope I have tried my level best to bring in new ideas and thoughts regarding
the basics of this topic. Not to forget the deep sense of regard and gratitude to my faculty
adviser, VIPIN SHAH SIR who has played the role of a protagonist, who has always
given me the courage and wisdom to march ahead with my topic and whose presence
have always given me the impression of a shady tree which is giving its shade to us in the
noon of life. Last but not the least; I thank all the members of DSMNRU and all others
who have helped me, from the bottom of my heart.

ABHISHEK VERMA
9th SEMESTER
 TRADE UNIONS

Trade Unions are voluntary organization of Workers as well as Employers formed to protect
and promote the interest of their members. They are the most suitable organizations for
balancing and improving the relations between the employer and the employees. Trade
Unions have made headway due to rapid industrial development. The workers come
together to maintain and improve their bargaining power on wages and working conditions.
The first organized Trade Union in India named as the Madras Labour Union was formed in
the year 1918. From the beginning itself, Trade Unions were not confined to workers alone.
From 19thCentury itself there were Employer’s associations in the form of Chamber of
Commerce, Industrial Associations etc. to protect and promote the interests of their members
in a concerted manner. After independence, expansion of industrial activity and grouping
worker’s Trade Unions acted as a spur for strengthening and expansion of employers’
organization

In industrially advanced countries, trade unionism has made a great impact on the social,
political and economic life. India, being an agricultural country, trade unionism is restricted
to industrial areas and it is still in a stage of growth. The earliest known trade unions in India
were the Bombay Millhand's Association formed in 1890, the Amalgamated Society of
railway servants of India and Burma formed in 1897, Printers' Union formed in Calcutta in
1905, the Bombay Postal Union which was formed in 1907, the Kamgar Hitwardhak Sabha
Bombay formed in 1910.

Trade Union movement began in India after the end of First World War. After a decade
following the end of First World War the pressing need for the coordination of the activities
of the individual unions was recognised. Thus, the All India Trade Union Congress was
formed in 1920 on a National Basis, the Central Labour Board, Bombay and the Bengal
Trades Union Federation was formed in 1922. The All India Railwaymen's Federation was
formed in the same year and this was followed by the creation of both Provincial and Central
federations of unions of postal and telegraph employees. 1

1
See, Gajrajsingh v. Krishnapalsingh, 2000 RN 403=2001 (1) MPLJ 281 (HC).
The origin of the passing of a Trade Unions Act in India was the historic Buckingham Mill
case of 1940 in which the Madras High Court granted an interim injunction against the Strike
Committee of the Madras Labour Union forbidding them to induce certain workers to break
their contracts of employment by refusing to return to work. Trade Union leaders found that
they were liable to prosecution and imprisonment for bona fide union activities and it was felt
that some legislation for the protection of trade union was necessary. In March, 1921, Shri N.
M. Joshi, then General Secretary of the All India Trade Union Congress, successfully moved
a resolution in the Central Legislative Assembly recommending that Government should
introduce legislation for the registration and protection of trade unions. Opposition from
employers to the adoption of such a measure was, however, so great that it was not untill 1926
that the Indian Trade Unions Act was passed. 2

Indian Trade Unions Bill, 1925 having been passed by the Legislature received its assent on
25th March, 1926. It came into force on 1st June, 1927 as the Indian Trade Unions Act,
1926 (16 of 1926). By section 3 of the Indian Trade Unions (Amendment) Act, 1964 (38 of
1964) the word "Indian" has been omitted and now it is known as THE TRADE UNIONS
ACT, 1926 (16 of 1926).

This act summarizes all modalities pertaining to registration of trade union to decision of trade
related disputes. This act sets guidelines for both the workers and the industrialists. The Act
deals with the registration of trade unions, their rights, their liabilities and responsibilities as
well as ensures that their funds are utilised properly. It gives legal and corporate status to the
registered trade unions. It also seeks to protect them from civil or criminal prosecution so that
they could carry on their legitimate activities for the benefit of the working class. The Act is
applicable not only to the union of workers but also to the association of employers. It extends
to whole of India. Also, certain Acts, namely, the Societies Registration Act, 1860; the Co-
operative Societies Act, 1912; and the Companies Act, 1956 shall not apply to any registered
trade union, and that the registration of any such trade union under any such Act shall be void.

The main provisions made in this Act are as under:

2
TRADE UNION ACT 1926
Trade Union: 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.

Registration of Trade Union: The Act provides for the registration of the trade unions with
the 'Registrars of Trade Unions' set up in different States. For registration of a trade union,
seven or more members of the union can submit their application in the prescribed form to
the Registrar of trade unions. The application shall be accompanied by a copy of the 'rules of
the trade union' and a statement giving the following particulars:- (i) Names, occupations and
addresses of the members making the application; (ii)The name of the trade union and the
address of its head office; (iii) The titles, names, ages, addresses and occupations of the office
bearers of the trade union as per the format given in the Act. The Registrar, on being satisfied
that the Union has complied with all the requirements of this Act, registers the trade union.

Registration Certificate: On receipt of the application for registration, the Registrar issues
a certificate of registration in the prescribed form as a conclusive evidence of registration of
that trade Union.

Cancellation of Registration: A certificate of Registration may be withdrawn or cancelled

Annual Statutory Returns: The registered trade unions (workers & employers) are required
to submit annual statutory returns to the Registrar regarding their membership, general funds,
sources of income and items of expenditure and details of their assets and liabilities, which
in turn submits a consolidated return of their state in the prescribed proformae to Labour
Bureau, Ministry of Labour and Employment. The Labour Bureau on receiving the annual
returns from different States/Union Territories consolidates the all India statistics and
disseminates them through its publication entitled the 'Trade Unions in India' and its other
regular publications. Every trade union shall send annual returns to the Registrar in triplicate
on or before the 1st day of June of the year succeeding the calendar year.

Uses of Funds: The general funds of a registered trade union shall not be spent on any other
objects than those specified in the Act. Also, a registered trade union may constitute a separate
fund, from contributions separately levied for or made to that fund, for the promotion of the
civic and political interest of its members. No member shall be compelled to contribute to
such fund and a member who does not contribute to the said fund shall not be excluded from
any benefits of the trade union.

Maintenance of Accounts: The account books of a registered trade union and the list of
members thereof shall be open to inspection by an office-bearer or member of the trade union
at such times as may be provided for in the rules of trade union.

Disqualification: A person shall be disqualified for being chosen as, and for being a member
of, the executive or any other office-bearer or registered trade union if- (i) he has not attained
the age of eighteen years; (ii) he has been convicted by a court in India of any offence
involving moral turpitude and sentenced to imprisonment, unless a period of five years has
elapsed since his release.

The Trade Unions Act 1926 has been amended from time to time and the most important
being the Trade Unions (Amendment) Act, 2001. This Act has been enacted in order to bring
more transparency and to provide greater support to trade unionism in India. Some of the
salient features of the Trade Unions (Amendment) Act, 2001 are:-

• No trade union of workmen shall be registered unless at least 10% or 100, whichever is less,
subject to a minimum of 7 workmen 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.

• A registered trade union of workmen shall at all times continue to have not less than 10%
or 100 of the workmen, whichever is less, subject to a minimum of 7 persons engaged or
employed in the establishment or industry with which it is connected, as its members.
• A provision for filing an appeal before the Industrial Tribunal / Labour Court in case of
non-registration or for restoration of registration has been provided.

• All office bearers of a registered trade union, except not more than onethird of the total
number of office bearers or five, whichever is less, shall be persons actually engaged or
employed in the establishment or industry with which the trade union is connected.

• Minimum rate of subscription by members of the trade union is fixed at Rs 1 per annum for
rural workers, three rupees per annum for workers in other unorganised sectors and Rs 12
rupees per annum in all other cases.

• The employees who have been retired or have been retrenched shall not be construed as
outsiders for the purpose of holding an office in the trade union concerned.

• For the promotion of civic and political interest of its members, unions are authorized to set
up separate political funds.

Growth of Trade Union( Workers & Employers Combined )

Latest available information for trade unions pertains to year 2008. As per the information
available , number of registered trade unions have increased by about 31% in the ten years
duration i.e. 1999-2008 to 84,642 registered unions. However compared to 2008 the number
declined by about 12 per cent and the average membership per union declined from 1063 in
2007 to 986 in 2008. Out of the registered trade unions , only 9709 unions( 11.47 per cent )
have submitted returns during 2008 and amongst the States/UT’s, the information has been
furnished only by 13 states/UT’s . On the basis of available information , Tamil Nadu
accounted for the largest number of registered trade unions (8,793) followed by Rajasthan
(4,593). Out of the total of 27,137 registered unions in the 13 states , as many as 27,063
unions (99.73 percent) were Workers Unions and remaining 74 (0.27 percent) were
Employer Unions.
Workers Union :

Out of 27,063 Workers Unions, 88.76 percent were State Unions and remaining 11.24
percent were Central Unions. State Unions are those unions, whose activities/objectives are
confined to the boundaries of the State, while Central Unions have activities/objectives
beyond a State boundary. During 2008, out of 27,063 registered workers unions, only 9702
unions (35.85 percent) had submitted the returns. The average membership per workers
unions was 986 only.

Industrial Activity Wise Distribution of Workers Unions Submitting Returns:

Out of the 9702 unions that submitted returns during 2008 , 3452 unions ( about 40%)
belonged to the manufacturing group , followed by ‘Other community, social and Personal
Services Activities’ (1374 unions, 14 percent) & Transport Storage & Communication (1334,
14 per cent).

Income and Expenditure of Workers’ Unions

During 2008, total Income and Expenditure of all workers unions was Rs 113.81 Crore and
Rs 80.99 Crore respectively. The Income and Expenditure of Workers Central Unions
was Rs 44.79
Crore and Rs 24.10 Crore respectively. The remaining Income and Expenditure of Rs
69.02 Crore and Rs 56.89 Crore respectively pertained to State Unions. The highest income
and expenditure of Central Unions and as well as for State Unions these were in Tamil Nadu.

Employers Union :

In 2008, out of 74 registered, Employers Unions, 7 unions (i.e. 9.46 percent) had submitted
returns. All the employers, trade unions submitting returns were State Unions. These union
had a membership of 6,924 persons, out of which only 1,012 (14.62percent) were women.
The average membership per employers union was 989. Highest number of Employers
Unions submitting returns was 4 in ‘Manufacturing’ whereas Real Estate Renting &
Business Activities had highest membership amongst those submitting returns.
Income and Expenditure of Employers Unions
All the unions submitting returns were State Unions. Income and Expenditure of these
unions was Rs 0.37 Crore and Rs 0.33 Crore respectively. Among Industries, maximum
Income and Expenditure of Rs 0.29 Crore and Rs 0.29 Crore respectively was reported in
industry group “Manufacturing (Ind. Code D) ” followed by “Real Estate, Renting and
Business Activities” (Ind. Code K).

Source of Trade Union Statistics : The Rules Framed under the “Trade Unions Act,1926
impose obligation on the registered Trade Unions (Workers & Employers) to submit annual
statutory return in the prescribed format to the Registrar of their respective States/ Union
Territories. These State/U.T. Authorities in turn furnish the consolidated data in respect of
the entire State/U.T. to the Labour Bureau. The Labour Bureau , Ministry of Labour &
Employment, compiles and disseminates these statistics at All India level.

Note : Statistics on Trade Unions is constrained by non reporting by several states . Even in
the States that submit returns , information wrt a large number of trade unions is not available
due to non filing of their returns.
 CONCLUSION
The topic “Relations between trade unions and politics in the light of the Economic
reforms”, is somewhat of a controversial nature. The study gains much importance as
trade unions in India were created, nourished and led by political leaders of the freedom
movement. From the date of establishment of trade unions, they have been controlled and
dominated by political leaders. There is a criticism that trade unions are involved in
political aspects rather than economical aspects. The Trade Unions Act, 1926 is meant
primarily for regulating relations between the employer and the workmen through which
industrial peace can be improved and the prosperity of workmen achieved.