Trade Union in India

Topics Covered

• Define Trade Union. 
• Is the registration of a Trade Union necessary? 
• Write down the procedure of registration, amalgamation, and cancellation of a trade union.
• Under what conditions can a Registrar of Trade Unions cancel the registration of a Trade Union?
• State the appellate provisions against the decisions of the Registrar.
• What are the rights, privileges, immunities, and liabilities of a registered trade union?
• What are the various functions performed by a trade union and how do they promote the welfare of the workers (what is the utility of a Trade Union).

Due to a surge in industrial activity in the later part of the 19th century, the population of the working class increased. Since the employers were mainly interested only in profitability, workers were at a mercy of the employers. Slowly, the concept of a union started taking hold in India. In 1890, the mill workers of Bombay were associated under the name Bombay Millhands Association. Although it was not a trade union in a strict sense, it was nevertheless a start in India.
After the first world war, the cost of living increased and the workers frequently agitated to demand more pay. In the early 20th century Royal Trade Commission studied the condition of workers and suggested the formation of Trade Unions. As per the recommendations of the Royal Commission, Indian Trade Unions Act was passed in 1926. However, due to strong opposition from employers, it was enforced only in 1927.  The original act lacked teeth in the sense that the formation of a Trade Union itself is dependent on the recognition by the employer. Later on, several amendments were made to fix the issues. In 1947, the act was amended widely as per the socialist inclination of the polity. 

Definition
Section 2(h) of the Trade Unions Act 1926 defines Trade Union as a combination, temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employer, workmen and workmen, or employers and employers, or for imposing restrictive condition on the conduct of any trade or business, and includes the federation of two or more trade unions.

It is the object of the association or combination that determines whether it is a trade union or not.
A society or authors, publishers, and other owners of copyright meant to protect their copyright in music and songs, was held NOT to be a Trade Union by the House of Lords.
In the case of Tamil Nadu NGO Union vs Registrar, Trade Unions, AIR 1962, Madras HC held that Tamil Nadu NGO Union, which was an association of sub magistrates of the judiciary, tahsildars, etc., was not a trade union because these people were engaged in sovereign and regal functions of the State where were its inalienable functions.
In the case of GTRTCS and Officer’s Association, Bangalore and others vs Asst. Labor Commissioner and anothers AIR 2002, Kar. HC held that the definition of workmen for the purpose of Trade Unions is a lot wider than in other acts and that the emphasis is on the purpose of the association rather than the type of workers and so it is a valid Trade Union.

The registration of a trade union is not necessary. However, upon registration, a trade union gets several benefits including some immunities that are not available to an unregistered Trade Union.  In the case of Workers of B and C Co vs Labor Commissioner, AIR 1964 Mad it was held that a Trade Union can raise or sponsor a trade dispute and represent on behalf of its members in legal proceedings arising out of a trade dispute.
Section 13 specifies that upon registration, a trade union gets a legal entity status, due to which it

• has perpetual succession and a common seal.
• can acquire and hold movable as well as immovable properties.
• can contract through agents.
• can sue and can be sued.

Procedure of Registration

Section 3 (Appointment of the Registrar) : The appropriate government appoints a person to be the registrar or trade unions for each state.

Section 4 (Mode of registration) says that to register a Trade Union, 

• an application must be sent to the Registrar of Trade Unions appointed by an appropriate government. 
• the application must be made by seven or more persons who are engaged in the trade or industry in connection to which the Trade Union is to be formed. 
• all the applicants must subscribe their names to the rules of the Trade Union and comply with the provisions of this act regarding registration.
• there must be at least 10% or 100, whichever is less, members who are engaged or employed in the establishment or industry to which it is connected.
• there must not be less than seven members who are engaged or employed in the establishment or industry to which it is connected.

If more than half of the persons who applied for the registration cease to be members of the union or expressly disassociate themselves from the application, the application will be deemed to be invalid.

Section 5 (Application of Registration) gives the details of the application. It says that the application should be sent to the registrar along with a copy of the rules of the trade union and a statement of the following particulars

• The name, occupation, and address of the applicants.
• The name of the trade union and the address of its head office.
• The titles, names, ages, addresses, and occupations of the office bearers of the trade union.
• If the trade union has been in existence for more than 1 yr, a general statement of its assets and liabilities.

Section 6 (Provisions to be contained in the rules of a Trade Union) specifies the provisions that should be contained in the rule book of the trade union. A copy of this rule book must be supplied along with the application for registration of the trade union. This rule book details the internal administration of the trade union and also determines and governs the relationship between the trade union and its members. It must contain the rules for the following matters:

1. name of the trade union
2. the whole object of the trade union
3. the whole purposes for which the general funds can be used.
4. the maintenance of the list of members and adequate facilities to inspect it by the members of the trade union.
5. the membership of ordinary members who are actually engaged or employed in an industry with which it is connected as well as the membership of the honorary or temporary members.
6. the appointment of members of the executive body.
7. the membership or subscription fee, which shall not be less than 25 paise per member per month
8. the conditions under which a member can get the benefits or has to pay fines.
9. the safe custody of funds and provisions for inspecting or auditing the statements, or other documents of the trade union.
10. dissolution of the trade union.

In the case of M T Chandersenan vs Sukumaran AIR 1974, SC held that if a member fails to pay subscription fee, he cannot be considered a member of the trade union. However, subscriptions cannot be refused under some pretext that results in the denial of membership.
In the case of Bokajan Cement Corporation Employees Union vs Cement Corporation of India, 2004, SC held that members of the union does not automatically cease upon termination of the employment.

Under section 7, the registrar has the power to ask for further information from the trade union to satisfy himself that the trade union complies with section 5 and is eligible to be registered under section 6. The registrar can refuse to register the trade union until he receives the information. Further, he has the power to ask to change the name of the trade union if a union with the same name already exists or if he feels that the name could be deceiving or confusing to the public or the members of the trade union.

Under section 8, upon satisfaction of all the requirements, the Registrar of the Trade Unions will register the trade union. It is mandatory for the registrar to register a trade union if the union satisfies all the technical requirements of this act.
In the case of re-Indian Steam Navigation Workers Union AIR 1936, SC held that a Registrar only has to see whether all the technical requirements are being fulfilled and not whether it could be described as unlawful.
In the case of ACC Rajanka Limestone Quarries Worker’s Union vs Registrar of Trade Unions, AIR 1958, it was held that if the registrar does not register the trade union within 3 months of application, an appeal can be made to the High Court under art 226.

Under section 9, the registrar will issue the certificate of registration in the prescribed form, which shall be conclusive evidence that the trade union is registered under this act.

Procedure for amalgamation
Section 24 says that any two or more registered trade unions may become amalgamated together into one trade union with or without dissolution or division of the funds of such trade unions or either or any of them, provided that votes of at least one half of the members of each trade union are recorded and at least 60% of the votes of each trade union are in favor of the proposal.
The notice of such amalgamation, signed by the secretary and seven members of each of the trade unions, should be sent to the registrar of the state where the head office of the amalgamated trade union is to be located. If the registrar is satisfied that all the provisions of this act have been complied with and the trade union formed thereby is entitled to registration under section 6, he will register the new trade union under section 8 and the amalgamation will take effect from the date of registration.

Cancellation of Registration
Under section 10, the Registrar of Trade Unions has the power to cancel the registration of a trade union in the following conditions:

1. On the application of the trade union to be verified in the prescribed manner.
2. If the registrar is satisfied that registration was obtained by fraud or mistake.
3. If the trade union has ceased to exist.
4. If the trade union willfully, upon notice of the registrar, has contravened or allowed any rule to continue in force, which is inconsistent with the provisions of this act.
5. If the trade union rescinds any rule providing for any matter, provision for which is required to be made in section 6.
6. If the registrar is satisfied that a trade union of workmen has ceased to have the requisite number of members.

In the case of Tata Electric Companies Officer’s Guild vs Registrar of Trade Unions, 1994, Bombay HC held that for a registrar to cancel the registration, willful neglect of the notice is a must. If the trade union sends the account statement upon notice of the registrar, the registrar cannot cancel the registration on the ground that the account statement was not filed earlier.

Under section 27, upon dissolution of a trade union, seven or more members must send a notification to the registrar within 14 days of dissolution and the registrar shall register it after verifying that the dissolution has been done as per the provisions of this act. Further, if the rules of the trade union do not provide for the distribution of the funds upon dissolution, the registrar may distribute the funds in such manner as may be prescribed.

Appeal against the decision of Registrar
Section 11 grants a limited right to appeal the decisions or orders passed by the registrar.

An appeal may be made to

1. the high court, if the head office of the trade union is located in a presidency town.
2. the labour court or industrial tribunal, if the head office of the trade union is located in its jurisdiction.
3. if the head office of the trade union in any other location, 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 govt. may appoint in this behalf for that area.

An appeal must be made within 60 days of the date on which registrar passed the order against which the appeal is made.
In the case of Registrar of Trade Unions, West Bengal vs Mihir Kumar Guha 1963, Cal, it was settled that a trade union whose head office is in a presidency town has only a single chance of appeal against the decision of the registrar, which is to the high court while a trade union whose head office is in muffasil has two chances of appeals, first in the local court and second in the high court.

Liabilities of a registered Trade Union

A registered trade union must follow the provisions of the Trade Unions Act 1926. In particular, the following are some restrictions in a registered trade union:

1. A Trade Union cannot spend the funds on anything the office bearers want. It can spend funds only on the activities specified in Section 15. These include:
   1. salaries of the office bearers.
   2. expenses required for the administration of the trade union
   3. compensation to workers due to loss arise of any trade dispute.
   4. welfare activities of the workers including housing, clothing, or any such activity.
   5. benefits to the workers or their dependents in the case of unemployment, disability, or death.
   6. publishing material for creating awareness in the workers.
   7. legal expenses required for defending or bringing a suit.
   8. education of workers or their dependents.
   9. expenses for medical treatment of workers.
   10. taking insurance policies for workers.

Mario Raposo vs H M Bhandarkar and others 1994 – Office bearers of a trade union invested the money from general fund into shares of UTI. This was held invalid because it is a speculative investment.

2. A trade union cannot force members to subscribe to political fund under section 16.
3. Under section 20 a trade union must make available all its record books of accounts and list of membership for inspection upon request of any member or his representative.
4. Section 21 allows minors more than 15 yrs of age to be members of a trade union. However, such minors cannot hold office.
5. Under section 21-A, a trade union cannot appoint a person who has been convicted of a crime involving moral turpitude and has been imprisoned for 6 months or more within last 5 years.
6. As per section 22, at least half of the office bearers of a trade union of workers of unorganized sector must be engaged or employed in an industry to which the trade union is connected. Also, while a union has a right to remove any office bearer, this power must be used judiciously and rules of natural justice must be followed.
7. Under section 28, a general statement, audited in a prescribed manner, of all income and expenses must be sent to the registrar every year.

Rights and Priviledges of a registered Trade Union

1. As per section 13, upon registration, a trade union becomes a legal entity and as a consequence, it gets perpetual succession and a corporate seal, it can acquire and hold movable and immovable property, contract through agents, and can sue and get sued.
2. Under section 15 a registered trade union has a right to establish a general fund.
3. Under section 16, a registered trade union has a right to establish a political fund. Subscription to this fund is not necessary for a member.
4. Under section 17, 18, and 19 a registered trade union gets immunity in certain criminal, civil, and contractual proceedings.
5. Under section 24, trade unions have the right to amalgamate.
6. Under section 28-F, the executive of a registered trade union has a right to negotiate with the employer the matters of employment or non-employment or the terms of employment or the condition of labor of all or any of the members of the trade union and the employer shall receive and send replies to letters and grant interviews to such body regarding such matters. It further provides that the executive is entitled to post notices of the trade union meant for its members at any premises where they are employed and that the employer shall provide reasonable facilities for that.

Immunites available to a registered Trade Union

1. Section 17 confers immunity from liability in the case of criminal conspiracy under section 120-B of IPC, committed by an office bearer or a member. However, this immunity is partial in the sense that it is available only with respect to the legal agreements created by the members for the furtherance of valid objects of a trade union as described in section 15 of the act. The immunity cannot be claimed for an act that is an offence. Registered Trade Unions have certain rights to do in furtherance of their trade disputes such as calling for strike, persuading members.
   
   In the case of West India Steel Company Ltd. vs Azeez 1990 Kerala, a trade union leader obstructed work inside the factory for 5 hrs while protesting against the deputation of a workman to work another section. It was held that while in a factory, the worker must submit to the instructions given by his superiors. A trade union leader has no immunity against disobeying the orders. A trade union leader or any worker does not have any right by law to share managerial responsibilities. A trade union can espouse the cause of workers through legal ways but officials of a trade union cannot direct other workers individually or in general about how to do their work. They do not have the right to ask a worker to stop his work or otherwise obstruct the work of the establishment. An employer may deal with a person causing obstruction in work effectively.
   
2. Section 18 confers immunity from civil proceedings in certain cases to a trade union or its office bears or members. In general, a person is liable in torts for inducing another person to breach his contract of employment or for interfering with the trade or business of another. However, a trade union, its officers, and its members are immune from this liability provided that such an inducement is in contemplation or furtherance of a trade dispute. Further, the inducement should be lawful. There is no immunity against violence, threats, or any other illegal means.
   
   In the case of P Mukundan and others vs Mohan Kandy Pavithran 1992 Kerala, it was held that strike per se is not an actionable wrong. Further, it was held that the trade union, its officers, and its members are immune against legal proceedings linked with the strike of workmen by the provisions of section 18.
   In the leading case of Rohtas Industries Staff Union vs State of Bihar AIR 1963, it was held that employers do not have the right to claim damages against the employee participating in an illegal strike and thereby causing loss of production and business.
   In the case of Simpson & Group Companies Workers & Staff Union vs Amco Batteries Ltd 1992 Karn., it was held that physical obstruction of movement of management officials, contractors, goods, or vehicles carrying raw materials, is not a trade union right or a fundamental right under art 19. Immunity under section 18 cannot be claimed for such activities. Right to picket is a very intangible right and it extends only up to the right of free movement of others. The methods of persuasion are limited to oral and visual and do not include physical obstruction of vehicles or persons.
   
3. Section 19 Enforceability of agreements – In India, an agreement in restraint of trade is void as per section 25 of Indian Contract Act. However, such an agreement between trade union members is neither void nor voidable. It is important to note that this right is available only to registered trade unions. An unregistered trade union must follow the principles of general contract law.

Activities of a Trade Union
Fatta

Problems with Trade Unions

1. Too many unions causes intra-union and inter-union rivalry and thus loss of precious resources that can be used for worker’s welfare.
2. Due to politicization of unions causes the union to overlook the true welfare and benefits of the worker.
3. Outside Leadership causes unions to lose focus because such leadership does not understand the problems of the laborers.
4. Closed Shop/Union Shop companies forces laborers to join the union and thus causes monopoly. Close shops/Union Shops are now illegal in many countries.
5. Sometime the employers do not recognize unions.

Keywords: Trade Union in India, Trade Union in India: Notes, Definition of Trade Union in India, Concept of Trade Union in India

Click here to read the Labour Laws in India

S.33C Industrial Disputes Act Is For Execution Of Award, Labour Court Can’t Enter Adjudicatory Process To Decide Disputed Facts: Gujarat High Court

Labour Court Amenable To High Court’s Supervisory Jurisdiction Under Article 227, Not Writ Jurisdiction Under Article 226: Andhra Pradesh High Court