Trade Unions Act 1926, Notes, Study notes for Labour Law. K L University
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megh-maneshinde

Trade Unions Act 1926, Notes, Study notes for Labour Law. K L University

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1 OSN Academy, Lucknow

CHAPTER 1

THE TRADE UNIONS ACT, 1926

Before the passing of the Indian Trade Union Act, 1926, the Indian workers were

denied the fundamental right of freedom of association. This handicapped the trade

union movement in India. Not only were the officers of the trade unions liable for civil

action for infringing contractual rights and obligations, but were also exposed to

criminal proceedings for taking concerted action. The right to strike and lock-out were

ultimately recognized in India indirectly under the provision of the Indian Trade Disputes

Act, 1929 and later under the Industrial Disputes Act, 1947. The Indian Trade Unions Act,

1926, was enacted with a view “to provide for the registration of Trade Unions and in

certain respects to define the law relating to registered Trade Unions.”

Features of the Act:

The important features of the Trade Unions Act are listed below:

1. It provides for the registration of trade unions with the Registrar of the Trade

Unions. It empowers the Registrar to call for further particulars andto require

alteration of names and to issue or cancel the certificate of registration.

2. It provides that every registered trade union shall be a body corporate and shall

have perpetual succession and a common seal.

3.It lays down

(i) the right and liabilities of registered trade unions,

(ii) objects on which general funds of trade unions may be spent.

(iii) constitution of a separate fund for political purposes, etc.

4. It provides to the registered trade unions or any of its office-bearers or members,

immunity from civil suits in certain cases.

5. It provides that certain Acts shall not apply to registered trade unions. These

Acts are as follows:

2 OSN Academy, Lucknow

i. The Societies Registration Act, 1860

ii. The Cooperative Societies Act, 1912

iii. The Companies Act, 1956.

Definitions

Executive [Sec. 2(a)]:

“Executive” means the body, by whatever names called to which the management of the

affairs of a trade union is entrusted.

Office Bearer [Sec. 2(b)]:

“Office Bearer”, in the case of a trade union, includes any member of executive thereof,

but does not include an auditor.

Registered Office [Sec. 2(d)]:

“Registered Office” means that office of a trade union which is registered under this act

as the head office thereof.

Registered Trade Union [Sec. 2(e)]:

“Registered Trade Union” means a trade union registered under this act.

Registrar [Sec. 2(f)]:

“Registrar” means:

1. A registrar of trade unions appointed by the appropriate government under

Section 3, and includes, and includes any additional or deputy registrar of trade

unions, and

2. In relation to any trade union, the registrar appointed for the state in which the

head or registered office, as the case may be, of the trade union is situated.

Trade Dispute [Sec. 2(g)]:

“Trade disputes” means any dispute between employers and workman or between

workmen and workmen and workmen or between employers and employers which is

connected with employment or non-employment, or the terms of employment, or the

conditions of labor, of any person, and “workmen” means all persons employed in trade

or industry whether or not in the employment of the employer with whom the trade

dispute arises.

3 OSN Academy, Lucknow

Workmen [Sec. 2(g)]:

“Workmen” means all persons employed in trade or industry whether or not in the

employment of the employer with whom the trade dispute arises.

Trade Union [Sec. 2(h)]:

“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 Unions

Appointment of Registrar (Sec.3), Additional and Deputy Registrars:

The appropriate government is required to appoint a person to be registrar of

trade unions. The appropriate government, in respect of trade unions whose objectives

are not confined to a single state, is the central government and, in all other cases, the

government. It may also appoint additional and deputy registrars of trade unions for the

purpose of exercising and discharging, under the superintendence of registrar, such

powers and functions of the registrar as may be specified by order, and define the local

limits within which they are to operate.[sec. 3]

Mode of Registration (Sec. 4):

Any seven or more members of a trade union may, by subscribing their names to the

charter of the trade union and by otherwise and complying with the provisions of this

act with respect to registration apply for registration of the trade union under this act.

Application for Registration (Sec. 5) :

Every application for registration of trade union shall be accompanied by copy of the

rules of the trade union and a statement of the following particulars, namely:

1. The names, occupations and address of the members making application;

2. The name of the trade union and address of its head office;

4 OSN Academy, Lucknow

3. The titles, names, ages and addresses and occupations of the office bearers of

the trade unions; and

4. Where a trade union has been in existence of more than one year before the

making of an application for its registration, a general statement of the assets

and liabilities of the trade union prepared in such form and containing such

particulars as may be prescribed.

Provisions to be contained in the Rules of Trade Unions (Sec. 6):

A trade union is entitled to registration only if its executive is constituted accordance

with the provisions of the act and its rules provide for the following matters, namely:

1. The name of the trade union

2. The whole of the objects for which the trade union has been established

3. The whole of the purposes for which the general funds of the trade union shall

be applicable, all of which purposes shall be purposes to which such funds are

lawfully applicable under this act;

4. The maintenance of the list of the members of the trade union and adequate

facility for the inspection thereof by the office-bearer and members of that trade

union

5. The admission of ordinary members who shall be person actually engaged or

employed in an industry with which the trade union is connected, and also the

admission of the number of honorary or temporary members as office-bearers

required under section 22 to form the executive of the trade union.

6. The payment of a subscription by members of the trade union which shall not be

less than twenty five paisa per month per member

7. The condition under which any member shall be entitled to any benefit assured

by the rules

8. The manner in which the rules shall be amended, varied or rescinded

9. The manner in which the members of the executive and the other office bearers

of the trade union shall be appointed and removed

10. The safe custody of the funds of the trade union, and annual audit, in such

manner as may be prescribed

11. The manner in which the trade union may be dissolved

5 OSN Academy, Lucknow

Powers of Registrar

1. Power to Call for Further Particulars [Sec. 7(1)]:

The registrar may call for further information for the purpose of satisfying

himself that any application for registration of a trade union compels with the

necessary formalities under section 5 and 6 of the act. The registrar may refuse to

registrar the trade union until such information is supplied.

2. Power to Require Alteration of Name [Sec. 7(2)]:

If the name under which a trade union is proposed to be registered is identical

with that by which any other existing trade union has been registered or, in the

opinion of the registrar , so nearly resembles such name as to be likely to deceive

the public or the members of either trade union, the registrar shall require the

persons applying for registration to alter the name of the trade union stated in

the application, and shall refuse to register the union until such alteration has

been made.

3. Registration (Sec. 8):

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.

4. Certificate of Registration (Sec.9):

The registrar, on registering a trade union under section 8, shall issue a certificate

of registration in the prescribed form which shall be conclusive evidence that the

trade union has been duly registered under this act.

Legal Status of a Registered Union.

A trade union enjoys the following privileges after registration:

a) It becomes a body corporate. (sec.13)

b) It gets perpetual succession and common seal

c) It can acquire and hold both movable and immovable property

d) It can enter into contracts with others

e) It can sue and be sued in its registered name

6 OSN Academy, Lucknow

5. Cancellation of Registration (Sec. 10):

The registrar has been empowered to withdraw or cancel the registration of a

trade union. The registrar can exercise this power in the following cases

i. On the application of the trade union to be verified in such manner as

may be prescribed, or

ii. If the registrar is satisfied that the certificate has been obtained by fraud

or mistake ;

iii. Where the trade union has ceased to exist

iv. Where the union has willfully after notice from the registrar contravened

any provision of this act or allowed any rule to continue in force which is

inconsistent with any such provision

v. Where the union has rescinded any rule providing for any matter

provision for which is required to be made by section 6.

Appeal (Sec. 11):

Any person aggrieved by any refusal of the registrar to register a trade union or

by the withdrawal or cancellation of a certificate of registration may, within such

period as may be prescribed, appeal-

i. Where the head office of the trade union is situated within the limits of a

presidency town to the high court, or

ii. Where the head office is situated in any other area, to such court, not

inferior to the court of an additional or assistant judge of a principal civil

court of original jurisdiction, as the appropriate government may appoint

in this behalf for that area.

Registered Office (Sec. 13):

All communications and notices to a registered trade union may be addressed to

a registered office. Notice of any change in the address of the head office shall

be given within fourteen days of such change to the registrar in writing, and the

changed address shall be recorded in the registrar of trade unions.

7 OSN Academy, Lucknow

Incorporation of a Trade Union (Sec. 13):

Every registered trade union shall be a body corporate by the name under which

it is registered, and shall have perpetual succession and a common seal with

power to acquire and hold both movable and immovable property and to

contract, and shall by the said name sue and be sued. Thus, a registered trade

union becomes a legal entity distinct from its members.

Change of Name and Amalgamation

1. Change of Name (Sec. 23)

Any registered trade union may, with the consent of not less than two-thirds of

the total number of its members and subject to the provisions of section 25,

change its name.

2. Amalgamation of Trade Unions (Sec. 24):

Any two or more registered trade unions may become amalgamated together in

one trade union with or without dissolution or the division of the funds of such

trade union or either or any of them, provided that:

i. The votes of at least one-half of the members of each or every such trade

union entitles to vote are recorded, and

ii. At least sixty percent of the votes recorded are in favor of the proposal.

3. Notice of Change of Name or Amalgamation (Sec. 25):

Change of Name :

Notice of writing of every change of name signed by the secretary and by seven

members of the trade union changing its name shall be sent to the registrar. The

notice should state whether the consent of the members was obtained by a

resolution of a general meeting or by referendum. On receipt of such notice, the

registrar must satisfy himself that the provisions of the act in respect of change

of name have been compiled with and, if satisfied, must register the change of

name in the date of such registration.

8 OSN Academy, Lucknow

Amalgamation:

Notice in writing of every amalgamation of trade unions, signed by the secretary

and by seven members of each and every trade union which is a party thereto

shall be sent to the registrar, and where the head office of the amalgamated

trade union is situated in a different state, notice shall be sent to the registrar of

such state.

4. Effect of Change of Name and of Amalgamation (Sec. 26):

The change in the name of the name of a registered trade union shall not affect

any rights or obligations of the trade union or render infective any legal

proceeding by or against the trade union, and any legal proceeding which might

have been continued or commenced by or against it by its new name.

Privileges of a Registered Trade Union

Section 17-21 of the act provide for the following privileges to a registered trade union:

1. Immunity from Criminal Prosecution (Sec. 17):

No office bearer or member of a registered trade union shall be liable to

punishment for criminal conspiracy in respect of any agreement made between

the members for the purpose of furthering any of its objects unless the

agreement is an agreement to commit an offence, no immunity can be claimed.

2. Immunity from Civil Suit (Sec.18):

this section deals with the immunity from civil proceedings in certain cases,

afforded to a registered trade union or its office bearers or members. It lays

down that no suit or legal proceeding shall be maintainable in any civil court

against any registered trade union or any office bearer or member thereof in

respect of any act done in contemplation or furtherance of a trade dispute to

which a member of the trade union is a party on the ground only that such act

induces some other person to break a contract of employment, or that it is in

interference with the trade, business or employment of some other person or

with the right of some other person to dispose of his capital or his labor as he

wills. (Sec. 18(1))

9 OSN Academy, Lucknow

3. Immunity from Tortuous Liability:

A registered trade union shall not be liable in any suit or legal proceeding in any

civil court in respect of any tortuous act done in contemplation of furtherance of

a trade dispute by an agent of the trade union if it is proved that such person

acted without the knowledge of, or contrary to express instructions given by, an

executive of the trade union. This provision extends protection to an agent of the

trade union from tortuous liability if the acts are done by him in contemplation

or in furtherance of trade dispute or procuring a breach of contract. It is to be

noted that the breach of contract should be of contract of employment and there

should be no unlawful act like defamation, coercion etc.

4. Enforceability of Agreements (Sec. 19):

An agreement between the members of a registered trade union shall not be

void or voidable merely by reason of the fact that any of the objects of the

agreement is in restraint no trade. But this shall not enable any civil court to

entertain any legal proceeding instituted for the express purpose of enforcing

the conditions on which any members of a trade union shall or shall not sell their

goods, transact business, work employ or be employed.

5. Right to Inspect Books of Trade Union (Sec.20):

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 time as may be provided for in the rules of the trade union.

6. Rights of Minors to Membership of Trade Unions (Sec.21):

Any person who has attained the age of 15 years may be member of a registered

trade union subject to any rule of the trade union to the contrary, and may,

subject as aforesaid, enjoy all the rights of a member and execute all instruments

and give all acquaintances necessary to be executed or given under the rules.

Although a p[person may become a member of a trade union on attaining the

age of 15 years, he cannot become an office bearer of the trade union until he

attains the age of 18 years as required by section 21A of the act.

10 OSN Academy, Lucknow

Disqualifications of Office Bearers (Sec.21A)

1. A person shall be disqualified for being chosen as, and for being a member of

the executive or any other office-bearer of a registered trade union if-

a) He has not attained the age of eighteen years;

b) 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.

2. Any member of the executive or other office-bearer of a registered trade union

who before the commencement of the Indian trade unions (amendment) act,

1964 has been convicted of any offence involving moral turpitude and sentenced

to imprisonment, shall on the date of such commencement cease to be such

member or office bearer unless a period of five years has elapsed since his

release before that date.

Funds of the Trade Union

1. General Fund:

Section 15 of the Act provides certain restraints against expenditure out of the

general funds of a registered trade union. It lays down that the general fund of a

registered trade union shall not be spent on any other objects than the following,

namely;

i. The payment of salaries, allowances and expenses to office bearers of the

trade unions.

ii. The payment of expenses for the administration of the trade union, including

audit of the accounts of the general funds of the trade union.

iii. The prosecution or defense of any legal proceeding to which the trade union

or any ember thereof is a party

iv. The conduct of trade disputes on behalf of the trade union or any member

thereof.

v. The compensation of members for loss arising out of trade disputes

vi. Allowances to members for laws arising out of trade disputes.

11 OSN Academy, Lucknow

vii. The issue of or the undertaking of liability under, policies of assurance on the

life of member or (under) policies ensuring members against sickness,

accident or unemployment.

viii. The provision of education, social or religious benefits for members

(including the payment of the expenses of funeral or religious ceremonies for

deceased members) or for the dependents of the members.

ix. The upkeep of periodical published mainly for the purpose of discussing

questions affecting employers or workmen as such.

2. Fund for Political Purpose (Section 16):

A registered trade union may constitute a separate fund, from contribution

separately levied for or made to that fund, from which payments may be made

for the promotion of the civic and political interests of its members, in

furtherance of any of the objects spe4cified below;

(i) The payment of any expenses incurred, either directly or indirectly by a

candidate or prospective candidate for election as a member of any

legislative body constituted under the constitution or of any local

authority, before, during, or after the election in connection with his

candidature or election; or

(ii) The holding of any meeting or the distribution of any literature or

documents in support of any such candidate or prospective candidate; or

(iii) The maintenance of any person who is a member of any legislative body

constituted under the constitution or for any local authority; or

(iv) The registration of electors or the election of a candidate for any

legislative body constituted under the constitution or of any local

authority; or

(v) The holding of political meetings of any kind, or the distribution of

political literature for political documents of any kind.

Miscellaneous Provisions

1. Dissolution of Trade Unions (Section 27 {1}):

When a registered trade union is dissolved, notice of the dissolution signed by

seven members and by the secretary of the trade union shall within 14 days of

12 OSN Academy, Lucknow

the dissolution, be send to the registrar and shall be registered by him if is

satisfied that the dissolution has been affected in accordance with the rules of

the trade union, and the dissolution shall have effect from the date of such

registration.

2. Distribution of Funds Upon Dissolution (section 27 {2}):

Where the dissolution of a registered trade union has been registered and the

rules of the trade union do not provide it for the distribution of the funds of the

trade union on dissolution, the registrar shall divide 5the funds amongst the

members in such manner as may be prescribed.

3. Returns (Section 28):

Registered trade union is required to send the following information to the

registrar.

i. General Statement:

there shall be sent annually to the registrar, on or before such date as may be

prescribed, a general statement audited in the prescribed manner, of all

receipts and expenditure of every registered trade union during year ending

on the 31t day of December next preceding such prescribed date and of the

assets and liabilities of t5he trade union existing on such 31st day of

December.

ii. Statement of Changes:

Together with the general statement there shall be sent to the registrar a

statement showing all changes of office bearers made by the trade union

during the year to which the general statement refers, together also with a

copy of the rules of the trade union corrected up to the date of the dispatch

thereof to the registrar.

iii. Copy of Alterations and Rules:

A copy of every alteration made in the rules of a registered trade union shall

be sent to the registrar within 15 days of the making of the alteration.

13 OSN Academy, Lucknow

SAMPLE MULTIPLE CHOICE QUESTIONS

1. Which of the following is the right of Registered Unions?

(a) Right to collect membership fees within the premises of the organisation.

(b) Right to raise issues with the management

(c) Right to discuss members grievances with employer

(d) All of the above.

2. Which sections of the Trade Union Act 1926, grant immunity to registered Trade

Unions from civil suits?

(a) Sec. 19, (b) Sec. 18 (c) Sec.14 (d) Sec.13

3. Which of the following Acts shall not be applied to a Registered Trade Union?

(a) The Societies Registration Act, 1860 (b) The Co-operative Societies Act, 1912

(c) The Companies Act, 1956 (d) All of the above

4. Under which of the following conditions Registrar can withdraw or cancel

registration of the Trade Union by giving 2 months notice?

(a) If the registration has been obtained by fraud or mistake

(b) If the Trade Union has ceased to exist.

(c) If it has willfully contravened any of the provisions of the Act.

(d) All of the above.

5. Which of the following constitute the obligations of Registered Trade Unions?

(a) The general funds can only be spent on few specific objects under Section 15

(b) The Account books and membership register should be kept open

(c) A copy of every alteration made in the union rules should be sent to the

registrar within 15 days

(d) All of the above

6. Which of the following is / are the features of Trade Union?

(a) An association of employers, employees or independent workers.

(b) A permanent body, not a casual or temporary

(c) Negotiation and collective bargaining are its tools

(d) All of the above.

14 OSN Academy, Lucknow

7. Which of the following documents are to be submitted to the Registrar for the

registration of a Trade Union?

(a) Application in form A (b) Minutes of the General Body Meeting

(b) Form F membership Register (d) All of the above

8. Where can an appeal be made on any refusal of a Registrar to register a trade-

union or cancellation of registration?

(a) Where the head office of the Trade Union is situated (b) To High Court

(c) Either „a‟ or „b‟ (d) None of the above

9. Which of the following is the main reason for disqualification of office-bearers of

Trade Unions?

(a) If the applicant has not attained the age of eighteen years

(b) If the applicant has been convicted by a Court in India of any offence

involving moral turpitude

(c) If the applicant has been sentenced to imprisonment and a period of five

years has not been passed since his release

(d) All of the above

10. Which of the following is / are the main provisions to be contained in the rules of

Trade Union?

(a) The objects for which the Trade Union has been established

(b) List of the members of the Trade Union

(c) The manner of election of office bearers

(d) All of the above.

ANSWERS

1 2 3 4 5 6 7 8 9 10

d b d d d d d c d d

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