Trade Union Legislation | Commerce & Accountancy Optional Notes for UPSC PDF Download

Introduction 

• The Trade Unions Act, 1926, alongside the Bombay Industrial Relations Act, 1946, and the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, serves as a primary legal framework for trade unions. It upholds the right of workers to associate and form unions. The Act allows a minimum of seven individuals to establish and register a union, although registration is optional, not mandatory. 
• The National Commission on Labour (1969) proposed compulsory union recognition, a suggestion still under government consideration. However, the 1982 amendment to the Industrial Disputes Act, 1947, essentially mandates registration by defining a "Trade Union" as one registered under the Trade Unions Act, 1926. 
• This grants registered unions specific rights and protections that unregistered unions lack, motivating workers to join registered trade unions. The Act not only outlines the registration process but also provides guidelines for the daily operations of registered unions, defining their rights and responsibilities. Notably, the Act played a significant role in promoting collective bargaining.

Scope and Coverage

• The Trade Unions Act, 1926, considers the term "Trade Union" to encompass both employers and workers' organizations. Employers' organizations are also eligible for registration as trade unions, aiming to establish equality in rights and responsibilities. The classification as a trade union is primarily based on the association or combination's objective. The act allows the formation of federations of two or more trade unions, evident in the Industrial Federations of Trade Unions.
• The Bombay Industrial Relations Act, 1948, is a crucial state legislation featuring compulsory employer recognition of unions. It grants workers the right to representation through either a recognized union or, in the absence of one, through elected worker representatives or a Government labor officer.
• While the Trade Unions Act, 1926, lacks provisions for resolving inter or intra-trade union disputes, the aggrieved party must resort to the common law and seek redressal through the courts.
• The Act applies nationwide, defining a "Trade Union" as any combination formed primarily to regulate relations between workmen and employers, workmen and workmen, or employer and employers. It also includes associations of two or more trade unions. Therefore, the Act covers not only workers' unions but also employers' associations.

Administration

The Trade Unions Act, 1926, is a central legislation, but its administration and enforcement fall under the jurisdiction of State Governments. State Governments are responsible for appointing Registrars of Trade Unions, along with Additional or Deputy Registrars who possess the authority to perform the Registrar's functions. Additionally, State Governments have the power to formulate rules to implement the provisions outlined in the Act (Section 3).

Registration of Trade Unions

• The primary provision of the Act allows any group of seven or more members to establish a trade union and seek registration from the Registrar. To initiate registration, members must sign their names on the union's rules and submit an application accompanied by key particulars, including the names, occupations, and addresses of the applying members, the union's name and head office address, and details about the office bearers. If the union has been active for over a year before seeking registration, a statement outlining its assets and liabilities during that period should be provided. 
• The Registrar may only register the trade union if its executive adheres to the Act's provisions, its rules clearly state the union's name, objectives, and fund usage, and if no more than 50% of the executive committee consists of outsiders. The rules should also cover membership lists, admission procedures, subscription rates, rule amendments, executive committee appointments, fund management, annual audits, and dissolution procedures. The Registrar has the authority to request additional information and can alter the union's name if identical to another registered union. Once satisfied, the Registrar records the union's details in a register and issues a registration certificate (Sections 4 to 9).
• For federations of trade unions, registration is also required. A legal case, National Organisation of Bank Workers' Federation of Trade Unions Vs. Union of India and others (Bombay - 1993), clarified that an unregistered federation of trade unions is not considered a trade union under the Act. Consequently, it lacks juristic personhood and cannot assert demands on behalf of employees within the scope of Industrial Disputes or file a writ petition.

Cancellation of Registration

The Registrar holds the authority to revoke or cancel a trade union's registration under various circumstances such as fraud, mistake, cessation of existence, contravention of the Act's provisions, or deletion of a rule covering essential matters. A two-month prior notice specifying the reasons for withdrawal or cancellation must be provided to the concerned trade union. The union has the right to appeal in a Civil Court against the Registrar's order, whether it is for refusing, withdrawing, or canceling the registration certificate (Sections 10, 11).

Dissolution of Trade Unions

In the event of a registered trade union's dissolution, a notice of dissolution signed by seven members and the Secretary must be sent to the Registrar within fourteen days. The Registrar registers the notice if satisfied that the dissolution aligns with the union's rules, and the dissolution becomes effective upon registration. If the union's rules do not stipulate fund distribution, the Registrar is responsible for dividing the funds among the members as per the prescribed manner (Section 27).

Penalties

The Act imposes penalties, including a fine of up to Rs. 500 for willful false entries or omissions in the general statement submitted to the Registrar. A fine of up to Rs. 200 is applicable for providing incorrect copies of rules or documents with the intent to deceive a member. If a registered trade union defaults in giving required notices or submitting statements or documents, officers, persons bound by the union's rules, or, in their absence, every executive member may face fines. The penalty is up to Rs. 5, with an additional fine of up to Rs. 5 for each subsequent week of default, not exceeding an aggregate fine of Rs. 50 (Sections 31, 32).

Obligations of Registered Trade Unions

• Membership Inclusion: A registered trade union is obligated to permit any person aged 15 years and above to become a member, enjoying all the associated privileges, unless the union's rules state otherwise (Section 21).
• Composition of Office Bearers: The union must ensure that 50% of its office bearers are individuals directly engaged or employed in the relevant industry, while the remaining 50% can be outsiders. Outsiders may include lawyers, politicians, social workers, or others not directly connected with the industry where workers are union members. Any person below 18 years of age or convicted of an offense involving moral turpitude and sentenced to imprisonment, unless five years have passed since release, is disqualified from being a member of the executive or an office bearer (Sections 21-A, 22).
• Maintenance of Records: The union is required to maintain account books and a membership register, accessible for inspection by any member or union officer (Section 20).
• Submission of Annual Statements: Submission of an annual statement of receipts, assets, and liabilities, audited as of December 31, along with a statement detailing changes in office bearers and rules made during the year, must be sent to the Registrar on or before the prescribed date (Section 28).

Rights of Registered Trade Unions

• Expenditure from General Fund: A registered trade union has the right to spend from its general fund for various purposes, including payment of salaries, allowances, and expenses to office-bearers, legal proceedings, compensation to members for losses in trade disputes, educational, social, or religious benefits, publication of periodicals on labor matters, and contributions to causes benefiting workmen (up to 25% of the gross income). Any other notified object by the appropriate Government is also covered (Section 15).
• Formation of Political Fund: The union can constitute a separate political fund for promoting civic and political interests of its members. However, contributing to this fund is not mandatory for members or a condition for union membership. The political fund can be used for supporting candidates, covering their election expenses, conducting elections and political meetings, and maintaining members elected to various governing bodies (Section 16).
• Protection from Prosecution: Registered trade unions, their members, and office-bearers can claim protection from being prosecuted under certain sections of the Indian Penal Code for bona-fide trade union activities. The immunity is partial and applies to agreements made between members for legitimate trade union objectives (Sections 17, 18).
• Immunity from Civil Proceedings: Section 18 provides immunity for registered trade unions, their members, or office-bearers from civil proceedings related to inducing a person to break a contract of employment or interfering with trade, business, or employment in contemplation or furtherance of trade disputes.
• Change of Name: A registered trade union can change its name with the consent of two-thirds of its total members, and the change becomes effective upon registration by the Registrar of Trade Unions (Sections 23, 25).
• Amalgamation with Other Unions: The union has the right to amalgamate with another union if at least 50% of the members vote, with 60% in favor of amalgamation. The Registrar's registration is necessary for the amalgamation to take effect (Sections 24, 25).

General Remarks on the Trade Unions Act

The Trade Unions Act has played a crucial role in fostering the trade union movement in India. By recognizing the right of workers to form and register trade unions, the Act provides legal status to unions, granting them and their office-bearers immunity from criminal prosecution and civil suits related to legitimate trade union activities. Section 22 of the Act, allowing 50% of office-bearers to be outsiders, is viewed as significant in protecting workers from victimization due to their trade union involvement. Attempts to amend the Act, particularly in reducing this percentage, have faced resistance from trade unions, emphasizing the potential setback to the trade union movement.
Proposed amendments to the Act include:

• Increasing the minimum required persons to form and register a union from 7 to 10% of employees in establishments with 100 or more workers (with a minimum of ten employees).
• Raising the minimum monthly union membership subscription from 25 n.p. to Re 1.
• Mandating Executive Committee meetings at specified intervals, with resolutions recorded in a Minutes Book.
• Yearly appointment of union office-bearers within a specified date.
• Registration of unions by the Registrar within sixty days of application receipt.
• Employer obligation to provide information to the Registrar on the number of persons employed.
• Authorizing employers, with employee consent, to collect union subscriptions from wages and remit them to the union.
• Limiting the number of outsiders in the Executive Committee to two.
• Resolving union disputes through arbitration or the Labour Court.
• Prohibiting Central and State Ministers from holding any office in the union, including membership on the Executive Committee.
• Cancellation of union registration for organizing, conducting, or sponsoring illegal strikes.
• Enhancement of penalties for violating or contravening any provisions of the Act.

Conclusion 

The current form of the Trade Union Act, 1926 falls short of its intended purpose and urgently requires amendments to enhance its utility. The absence of provisions for the Recognition of Trade Unions complicates the Collective Bargaining process, leading to challenges in the form of interunion rivalry and a proliferation of unions with minimal or no significant following. Despite the Supreme Court's 1995 judgment in Food Corporation of India Staff Union Vs. Food Corporation of India and others, suggesting the adoption of secret ballots in cases where multiple unions claim representative status, the industry still grapples with these issues. While some State Governments have enacted laws to determine representative character, the Central Government appears hesitant, possibly influenced by vested interests.