flowchart LR S[7+ members<br/>subscribe to rules] --> A[Application<br/>under §5] A --> Rg[Registrar<br/>scrutiny] Rg --> C[Certificate of<br/>Registration §8-9] C --> B[Body Corporate<br/>§13] B --> Im[Immunity §17, §18] C -. May be cancelled .-> Cn[Cancellation §10] style S fill:#FFF3E0,stroke:#E65100 style A fill:#E3F2FD,stroke:#1565C0 style Rg fill:#FFF8E1,stroke:#F9A825 style C fill:#E8F5E9,stroke:#2E7D32 style B fill:#F3E5F5,stroke:#6A1B9A style Im fill:#FCE4EC,stroke:#AD1457 style Cn fill:#FFEBEE,stroke:#C62828
30 The Trade Unions Act, 1926
This chapter studies the Trade Unions Act, 1926 — the foundational statute of Indian trade unionism for nearly a century. The Act has now been subsumed within the Industrial Relations Code, 2020, but its principal architecture survives in the Code and the older Act remains the conceptual reference point for understanding union law in India.
30.1 Why the Act was Passed
Until 1926, Indian trade unions had no separate legal status. They were treated as criminal conspiracies (under Section 120A of the Indian Penal Code) or as restraints of trade (under Section 27 of the Indian Contract Act). The 1920 prosecution of B.P. Wadia and the Madras Labour Union — where the Madras High Court issued an injunction against strike action under common-law restraint-of-trade principles — demonstrated the urgent need for a protective statute.
TipWhy the Act was Needed
| Pre-1926 problem | Effect |
|---|---|
| Unions vulnerable to criminal-conspiracy charges | Workers and leaders could be prosecuted for organising |
| Unions held as restraints of trade | Civil suits and injunctions against legitimate trade-union activity |
| No formal legal personality | Unions could not own property, sue or be sued |
| No protection of officers | Personal liability for the union’s acts |
| ILO Convention No. 87 (1921) and recommendations | International pressure for a protective regime |
The result was the Indian Trade Unions Act, 1926 — passed by the Legislative Assembly on 25 March 1926, with N.M. Joshi as the principal advocate; the Act came into force on 1 June 1927.
30.2 Objects of the Act
TipFour Objects of the Trade Unions Act, 1926
| Object | What it does |
|---|---|
| Provide for registration | A simple statutory mechanism for trade unions to obtain legal status |
| Confer rights and privileges | Civil and criminal immunity for legitimate trade-union acts |
| Define duties and liabilities | Conditions of recognition; transparency and accountability |
| Regulate political activities | Permit a separate political fund subject to safeguards |
30.3 Coverage and Definitions — Section 2
The Act applies to the whole of India. Section 2 carries the definitions; the most-tested are below.
TipKey Definitions under Section 2
| Term | Definition (paraphrased) |
|---|---|
| Trade union [§2(h)] | Any combination, temporary or permanent, formed primarily to regulate relations between workmen and employers, between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business; includes federations |
| Trade dispute [§2(g)] | Any dispute between employers and workmen, or between workmen and workmen, or between employers and employers, connected with the employment, non-employment, terms of employment or conditions of labour |
| Workmen | Persons employed in trade or industry, whether or not in the employment of the employer with whom the dispute arises |
| Office-bearer | A member of the executive of a trade union (including any other office-bearer of a trade union) |
| Executive | The body to which the management of a trade union’s affairs is entrusted |
| Registered trade union | A trade union registered under this Act |
| Registrar | The person appointed by the appropriate government to administer the Act |
The Section 2(h) definition is broad enough to cover unions of workers, unions of employers and federations of either.
30.4 Registration of Trade Unions
Registration is the gateway to all the rights and privileges the Act confers. Sections 3 to 14 set out the registration regime.
30.4.1 Appointment of Registrar — Section 3
The appropriate government appoints a Registrar of Trade Unions, and may appoint additional and deputy registrars. The Registrar’s office is the single point of contact for registration, audit and disputes.
30.4.2 Mode and Application for Registration — Sections 4 to 6
TipRequirements for Registration
| Requirement | Provision |
|---|---|
| Number of members for application | Any seven or more members of a trade union may apply, by subscribing their names to the rules of the union (§4) |
| Minimum membership | At the time of registration, the union must have on its rolls at least 10% or 100 members, whichever is less, with a minimum of seven (added by 2001 amendment); the IR Code, 2020 retains the threshold |
| Application content (§5) | Names, occupations and addresses of applicants; name of the union and address of the head office; titles, names, ages, addresses and occupations of office-bearers; if the union has been in existence more than a year, a general statement of assets and liabilities |
| Rules to be filed | A copy of the rules of the union, signed by all applicants and dated — §5 read with §6 |
| Provisions of rules — §6 | Specific matters that the rules must provide for |
30.4.3 Section 6 — Mandatory Provisions in Union Rules
The rules of a registered trade union must contain provisions on the following matters.
TipSection 6 — Required Contents of Union Rules
| # | Matter |
|---|---|
| 1 | Name of the trade union |
| 2 | Object for which the trade union has been established |
| 3 | Purposes for which the general fund may be applied |
| 4 | Maintenance of a list of members and adequate facilities for inspection by office-bearers and members |
| 5 | Admission of ordinary members and the proportion of office-bearers; admission of honorary and temporary members |
| 6 | Subscription payable by members (minimum levels prescribed) |
| 7 | Conditions under which a member is entitled to benefits and a fine or forfeiture may be imposed |
| 8 | Manner in which the rules may be amended, varied or rescinded |
| 9 | Manner in which office-bearers are to be appointed and removed |
| 10 | Safe custody of funds, annual audit and inspection of books |
| 11 | Manner in which the trade union may be dissolved |
These eleven items are the most-tested examination point on the registration regime.
30.4.4 Power to Call for Further Particulars — Section 7
The Registrar may call for further information; if not provided, registration may be refused.
30.4.5 Registration and Certificate — Sections 8–9
Once satisfied that the application complies with the Act and the rules conform with Section 6, the Registrar registers the union and issues a Certificate of Registration — conclusive evidence of registration.
30.4.6 Cancellation of Registration — Section 10
The Registrar may withdraw or cancel registration on three grounds:
- on the application of the trade union itself;
- where the certificate has been obtained by fraud or mistake;
- where the trade union has ceased to exist or has wilfully contravened any provision of the Act.
30.4.7 Appeal — Section 11
An aggrieved person may appeal to the High Court (where the union’s head office is in a presidency town) or to such other court as the appropriate government appoints.
30.4.8 Registered Office — Section 12
Every registered trade union must have a registered office to which all communications and notices may be addressed.
30.4.9 Incorporation — Section 13
A registered trade union is a body corporate with perpetual succession and a common seal, the right to acquire and hold property, and the capacity to contract, sue and be sued.
30.5 Rights and Privileges of Registered Trade Unions
Once registered, a trade union enjoys five principal rights.
30.5.1 Body Corporate Status — Section 13
A registered trade union acquires legal personality. It can hold property, enter into contracts, sue and be sued in its own name.
30.5.2 Criminal Immunity — Section 17
No office-bearer or member of a registered trade union shall be liable to punishment under Section 120B(2) of the Indian Penal Code (criminal conspiracy) in respect of any agreement made between the members for the purpose of furthering any lawful object of the union, unless the agreement is an agreement to commit an offence.
The protection is narrow but crucial — without it, every collective agreement among workers could be charged as a conspiracy.
30.5.3 Civil Immunity — Section 18
No suit or other legal proceeding shall be maintainable in any civil court against any registered trade union, office-bearer or member in respect of any act done in contemplation or furtherance of a trade dispute, on the ground only that the act:
- induces some other person to break a contract of employment, or
- 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 labour as he wills.
The civil immunity is not absolute — it does not protect unlawful acts (violence, criminal trespass, defamation), and it applies only to acts done in contemplation or furtherance of a trade dispute.
30.5.4 Enforceability of Agreements — Section 19
Notwithstanding the law on restraint of trade, an agreement between the members of a registered trade union shall not be void or voidable merely because some of the objects are in restraint of trade. But the agreement is not directly enforceable in court between members and the union for breach of any agreement to attend a meeting, pay subscription, or accept the union’s decision.
The provision overcomes the restraint-of-trade common-law objection that had earlier crippled Indian unions.
30.5.5 Right to Constitute Funds — Sections 15 and 16
A registered trade union may constitute two separate funds.
TipGeneral Fund vs Political Fund
| Fund | Permissible uses | Section |
|---|---|---|
| General fund | Salaries of office-bearers; expenses of administration; legal expenses; conduct of trade disputes; compensation for loss arising from trade disputes; allowances on death, sickness, accident or unemployment; provision of educational, social or religious benefits to members; publication of materials in furtherance of the union’s objects | §15 — exhaustive list |
| Political fund | Promotion of the civic and political interests of members — payments connected with election of candidates, holding of political meetings, distribution of political literature, registration of voters | §16 — voluntary contributions only |
The political fund is separate from the general fund. Contributions to it are voluntary; no member may be compelled to contribute, and refusal to contribute may not be a ground for excluding the member from any benefit, position or office.
30.6 Office-Bearers and Outsiders
The Act limits the proportion of outsiders (non-employees) who may serve as office-bearers of a union, to ensure that the union remains worker-led. The 2001 amendment fixed the maximum proportion of outsiders at one-third of the total office-bearers, or five, whichever is less. The IR Code, 2020 retains this provision with minor refinements.
TipOffice-Bearer Provisions
| Provision | Rule |
|---|---|
| Disqualification (§21A) | Person under 18 or convicted of an offence involving moral turpitude (within five years) cannot be an office-bearer |
| Outsiders limit | One-third of total office-bearers, or five, whichever is less (after 2001 amendment) |
| Members allowed at 15 years | Section 21 — any person aged 15 or above may be a member of a registered trade union |
30.7 Duties and Liabilities of Registered Trade Unions
TipDuties of Registered Trade Unions
| Section | Duty |
|---|---|
| §27 | Dissolution to be notified to the Registrar |
| §28 | Annual returns of receipts and expenditure, assets and liabilities, and changes in office-bearers, audited as prescribed |
| §22 | Proportion of office-bearers from outside |
| §23 | Change of name; alteration of rules |
| §24 | Amalgamation of trade unions |
| §29 | Power of the appropriate government to make regulations |
30.8 Penalties
TipPenalties under the Act
| Section | Offence | Penalty |
|---|---|---|
| §31 | Failure to submit returns | Fine; continuing default attracts daily fine |
| §32 | Supplying false information | Fine |
| §33 | Cognisance of offences | Only by Presidency Magistrate or Magistrate of First Class on complaint by Registrar |
The penalties are deliberately light — the Act’s intent is to encourage registration, not to deter it.
30.9 Amalgamation, Change of Name and Dissolution
TipProcedural Provisions
| Provision | Procedure |
|---|---|
| Change of name (§23) | Resolution at general body meeting; notice to Registrar; consent of two-thirds of members |
| Amalgamation (§24) | Two or more unions may amalgamate; requires consent of one-half of members and majority approval |
| Dissolution (§27) | Notice to Registrar within 14 days; assets distributed in accordance with rules; if no rule, by Registrar’s order |
30.10 Recognition — A Critical Gap
The Trade Unions Act, 1926 provides for registration — the legal status — but is silent on recognition — the practical question of which union an employer must bargain with. This gap has been the most-criticised feature of the Act and has been one of the principal drivers of inter-union rivalry, recognition disputes and frequent strikes over recognition.
The IR Code, 2020 has now addressed the gap (chapter 29) by introducing the sole negotiating union and negotiating council concepts.
30.11 Position under the Industrial Relations Code, 2020
The IR Code, 2020 has repealed the Trade Unions Act, 1926 — but most of its substantive provisions are reproduced in Chapter III of the Code (Sections 6–25). The major continuities and changes are summarised below.
TipTU Act 1926 → IR Code 2020 — Continuity and Change
| Element | TU Act 1926 | IR Code 2020 |
|---|---|---|
| Registration regime | §§3–14 | §§6–13, broadly retained |
| Body corporate | §13 | Retained |
| Civil and criminal immunity | §§17–18 | Retained as §§19–20 of the Code |
| General and political funds | §§15–16 | Retained |
| Outside office-bearers limit | One-third or five (whichever less) | Retained, refined |
| Recognition | Silent | New regime — sole negotiating union (≥51% membership) and negotiating council (≥20%) |
| Penalties | §§31–32 | Strengthened in the Code |
| Settlement of disputes | Not covered | Trade-disputes machinery integrated with IR Code |
The Act’s centenary in 2026 thus coincides with its successor’s full operationalisation — Indian trade-union law has had its first major restatement in seven decades.
30.12 Major Weaknesses of the Act
The Act has been criticised on five long-standing grounds.
TipCriticisms of the Trade Unions Act, 1926
| Criticism | What it says |
|---|---|
| No compulsory recognition | Employers free to refuse recognition; recognition disputes inevitable |
| Multiplicity of registered unions | Anyone with seven members can register; produces fragmentation |
| Inadequate audit and inspection | Returns under-filed; weak Registrar capacity |
| Permissive outside leadership | Even the one-third / five rule allows substantial outside political control |
| Inadequate protection against employer interference | Anti-union practices not specifically penalised |
The IR Code, 2020 addresses some of these — recognition, election of office-bearers — but other criticisms remain valid against the new regime as well.
30.13 Important Case Law (Selected)
A few Supreme Court decisions are routinely cited in the academic study of the Act.
TipSelected Judicial Decisions
| Case | Year | Held |
|---|---|---|
| Rohtas Industries Staff Union v. State of Bihar | 1963 | Civil immunity under §18 protects only acts in contemplation or furtherance of a trade dispute; not acts unconnected with a dispute |
| Tata Workers’ Union v. Tata Engineering and Locomotive Co. | 1981 | Members of a registered union have rights against the union in matters of internal democracy |
| All India Bank Employees’ Association v. National Industrial Tribunal | 1962 | Article 19(1)(c) (right to form associations) does not include the right to recognition or the right to strike as fundamental rights |
| T.K. Rangarajan v. Government of Tamil Nadu | 2003 | Government employees have no fundamental, statutory, moral or equitable right to strike |
| Ahmedabad Textile Research Association v. Atira Employees Union | 1995 | Registered trade union may sue and be sued in its own name; its acts protected only when within the union’s lawful objects |
30.14 Practice Questions
Eight questions to test the chapter. Each card hides the answer — click Show answer to reveal it.
Q1
The Trade Unions Act, 1926 was
The Trade Unions Act, 1926 was passed primarily because:
ATrade unions were already too powerful
BTrade unions had no legal personality and were vulnerable to conspiracy and restraint-of-trade actions
CILO Convention C87 required India to ratify it
DIndian unions were holding too many strikes
Show answer
Correct answer
B. The Madras Labour Union case and similar prosecutions made the protective statute necessary.
Q2
Section 13 of the Trade Unions
Section 13 of the Trade Unions Act, 1926 confers on a registered trade union the status of:
AA government department
BA body corporate with perpetual succession and a common seal
CA society under the Societies Registration Act
DA non-profit company under the Companies Act
Show answer
Correct answer
B. Body corporate with perpetual succession and a common seal.
Q3
Section 17 of the Trade Unions
Section 17 of the Trade Unions Act, 1926 grants:
ACivil immunity for trade-dispute acts
BCriminal immunity from charges of conspiracy under Section 120B(2) IPC, for lawful trade-union objects
CTax exemption to registered trade unions
DThe right to recognition
Show answer
Correct answer
B. Criminal immunity for lawful trade-union conspiracies; not for criminal acts.
Q4
Match the section with its content
Match the section with its content:
| Section | Content | ||
|---|---|---|---|
| (i) | §15 | (a) | Body corporate status |
| (ii) | §16 | (b) | General fund |
| (iii) | §13 | (c) | Civil immunity |
| (iv) | §18 | (d) | Political fund |
A(i)-(b), (ii)-(d), (iii)-(a), (iv)-(c)
B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
C(i)-(c), (ii)-(d), (iii)-(b), (iv)-(a)
D(i)-(d), (ii)-(c), (iii)-(b), (iv)-(a)
Show answer
Correct answer
A. (i)-(b), (ii)-(d), (iii)-(a), (iv)-(c)
Q5
Under the Trade Unions Act, 1926
Under the Trade Unions Act, 1926 (as amended), the maximum proportion of outside office-bearers permitted in a registered trade union is:
AOne-fourth
BOne-third or five, whichever is less
COne-half
DThree-fourths
Show answer
Correct answer
B. The 2001 amendment fixed the limit at one-third of office-bearers, or five, whichever is less.
Q6
A registered trade union may apply
A registered trade union may apply its political fund under Section 16 for:
ASalaries of office-bearers
BConduct of trade disputes
CElection of members to legislative bodies and political meetings
DProvision of educational benefits
Show answer
Correct answer
C. Section 16 lists permissible political-fund applications. Items A, B and D are general-fund uses.
Q7
Cancellation of registration may be ordered
Cancellation of registration may be ordered by the Registrar under Section 10 on which of the following grounds?
AThe union has ceased to exist
BThe certificate has been obtained by fraud or mistake
COn the union's own application
DAll of the above
Show answer
Correct answer
D. Section 10 lists all three grounds.
Q8
Which of the following is not
Which of the following is not one of the matters that the rules of a registered trade union must provide for under Section 6?
AMaintenance of a list of members
BManner in which office-bearers are to be appointed and removed
CSources of foreign funding
DManner in which the union may be dissolved
Show answer
Correct answer
C. Section 6 does not require a rule on foreign funding.
ImportantQuick recall
- Trade Unions Act, 1926 — passed 25 March 1926; in force 1 June 1927; N.M. Joshi the principal advocate.
- Triggered by the Madras Labour Union (B.P. Wadia) prosecution, 1920 under common-law restraint of trade.
- Four objects: registration, rights and privileges, duties and liabilities, regulation of political activity.
- §2(h) — broad definition of trade union covering worker, employer combinations and federations.
- Registration: 7 or more members to apply; minimum membership 10% or 100, whichever is less, with a minimum of seven (post-2001).
- §6 — rules must cover eleven specific matters.
- §13 — body corporate with perpetual succession and common seal.
- §17 — criminal immunity from §120B(2) IPC for lawful trade-union objects.
- §18 — civil immunity for acts in contemplation or furtherance of a trade dispute.
- §15 — general fund with exhaustive list of uses; §16 — political fund funded by voluntary contributions.
- Outside office-bearers limit: one-third or five, whichever is less (2001 amendment).
- §21 — members allowed from age 15; §21A — disqualification for office-bearers.
- Major gap: no compulsory recognition under the Act.
- Repealed and substantially reproduced in the Industrial Relations Code, 2020 (Chapter III, §§6-25), which now adds the sole negotiating union (≥51%) and negotiating council (≥20%) recognition framework.