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In this age of extensive industrialisation and commercialisation, trade unions play a very
important role in determining and safeguarding the nature of the intricacies and complexities of
various working relationships, in particular, the employer-employee relationship. In a layman's
parlance, a trade union refers to an association formed primarily for the purpose of regulating the
relations between workmen and employers, or between workmen and workmen, or between
employers and employers.

The concept of trade unionism stemmed from the growth of industrialisation and capitalism.
India, being essentially an agricultural country, the growth of trade unionism was slow and
gradual. However, the establishment of the International Labour Organisation in 1919 largely
initialised the growth of trade unions in India. The constitution of the All India Trade Union
Congress in 1920, also acted as a catalyst for the growth of trade unionism in India. It was,
however, the Trade Unions Act, 1926, which facilitated legislative recognition to the workers'
right to organise trade unions. In this piece, let's take a look at the various aspects of the Trade
Unions Act, 1926.


The Indian Trade Unions Bill, 1925 passed by the Legislature received its assent on March 25,
1926. It came into force on June 1, 1927 as the Indian Trade Unions Act, 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).


I conditions governing the registration of Trade Unions;

ii. obligations imposed upon a registered trade Union; and
iii. rights and liabilities of registered Trade Unions


Seven or more members of a Trade Union may, by subscribing their names to the rules of the
Trade Union and by otherwise complying with the provisions of the Act with respect to
registration, apply for registration of the Trade Union under the Act.

A Trade Union can be registered only if:-

(i) At least ten percent, or one hundred of the workmen, which ever is less, 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.

(ii) It has on the date of making the application not less than seven persons as its members, who
are workmen engaged or employed in the establishment or industry with which it is connected.

Further, where an application has been made for the registration of a Trade Union, such
application shall not be deemed to have become invalid merely by reason of the fact that, at any
time after the date of the application, but before the registration of the Trade Union some of the
applicants, but not exceeding half of the total number of the persons who made the application,
have ceased to be members of the Trade Union or have, through notice in writing to the
Registrar, dissociated themselves from the application.


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Every application for registration of a Trade union shall be made before the Registrar of Trade
Unions and shall be accompanied by a copy of the Rules of the trade union and a statement
giving the following particulars:

(i) names, occupations and address of the members making application.

(ii) in the case of a Trade Union of workmen, the names, occupations and addresses of the place
of work of the members of the Trade Union making the application;

(iii) The name of the Trade union and the address of its head office;

(iv) the titles, names, age, addresses and occupations of the office bearers of the trade union.

Where a trade union is in existence for more than a year before making an application to the
Registrar, the application should be accompanied by a general statement of assets and liabilities
of the trade.


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 the particulars in a
register and will also 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.

Until now, we had a glimpse at the Legislative background of the Trade Unions Act, 1926,
registration of trade union, documents to be filed for registration of a trade union, Registration
Certificate etc. Now, let's take a look at the characteristics of registered trade unions, rights and
privileges of a registered trade union, cancellation of registration etc.



A Trade Union after registration acquires the following characteristics:

i. It becomes a body corporate by the name under which it is registered and becomes a legal
entity distinct from the members of which it is composed;
ii.It has a perpetual succession and a common seal;
iii. It has the power to acquire and hold both movable and immovable properties.
iv.It has the power to contract.
v. It can by the name under which it is registered sue and be sued.


A certificate of registration of a Trade Union may be withdrawn or cancelled by the


i. On the application of theTrade Union to be verified in the prescribed manner; or

ii. If the Registrar is satisfied that the certificate has been obtained by fraud or mistake; or
iii. If the Registrar is satisfied that the Trade Union has:

a. ceased to exist; or
b. has wilfully and after notice from the Registrar contravened any provision of the Trade Unions
Act, 1926; or
c. allowed any rule to continue in force which is inconsistent with any such provision; or
d. has rescinded any rule which ought to be there;

Provided that not less than two months previous notice in writing specifying the ground on
which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the
Trade Union before the certificate is withdrawn or cancelled otherwise than on the application of
the Trade Union.



i. 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.

ii. A registered Trade Union may constitute a separate fund, from contributions separately levied
for or made to that fund, from which payments may be made, for the promotion of the civic and
political interest of its members.

iii. No officers or members of a registered Trade union shall be liable to punishment under sub-
section (2) of Section 120-B of the Indian Penal Code, in respect of any agreement made
between the members for the purpose of furthering any such object of the Trade Union on which
the general funds may be spent.

iv. No suit or other legal proceeding shall be maintainable in any Civil Court against any
registered Trade Union or any 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. This protection is
available only on the ground 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 of his labour as he wills.

A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil
Court in respect of any tortuous act done in contemplation or furtherance of a trade dispute by
and agent of the Trade Union if it is proved that such person acted without the knowledge of, or
contrary to, express instructions given by the executive of the Trade Union.

But the Trade Union, its office-bearers and the members shall be liable for acts of violence or
vandalism or any act of deliberate trespass.

v. Notwithstanding anything contained in any other law for the time being in force, an agreement
between the members of a registered Trade Union shall not be void or violable merely by reason
of the fact that any of the objects of the agreement is in restraint of trade.

vi. The account books of a registered Trade Union and the list of members thereof shall be open
to inspection by an or member of the Trade Union at such times as may be provided for in the
rules of Trade Union.

vii. Any person who has attained the age of fifteen years may be a member of registered Trade
Union subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid,
enjoy all the rights of a member and execute all instruments an give all acquaintances necessary
to be executed or given under the rules.

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A trade union is said to be recognised when an employer consents to negotiate with it on pay and
working conditions for a particular group of workers. This is known as collective bargaining,
with the relevant workforce referred to as the bargaining unit.

A union can use voluntary means to gain recognition. In practice this means the union contacts
the employer without using any legal procedures. Acas is an independent public body that can
provide impartial information and advice on a variety of trade union and associated issues and
can fulfil a supportive role if both parties agree.

Voluntary recognition remains the most common form of trade union recognition.

A trade union can only make an application for statutory recognition where the employer,
together with any associated employers, employs 21 workers or more. There can be voluntary
agreements even after the union has triggered the statutory process For statutory recognition, the
union must apply to the Central Arbitration Committee (CAC), an independent public body.


Collective bargaining arrangements are usually voluntarily agreed between an employer and
trade union on behalf of all or part of the workforce - the bargaining unit. Businesses that
recognise trade unions use a combination of formal and informal agreements on the method and
scope of collective bargaining.

Well-established informal methods often work well. Formal written agreements, however,
prevent misunderstanding and achieve continuity and consistency. The employment relations
experts Acas provides impartial information on bargaining agreements. You can get guidance on
trade union recognition at the Acas website.

The agreement should set out procedural arrangements for bargaining, including:

ᑠwho the employer and union representatives are

ᑠtime off for union duties/activities
ᑠconsultation on collective redundancies - when more than 20 employees are made redundant and
the business transfers
ᑠdisclosure of information about the subject of bargaining
ᑠconduct of negotiations, ie how and when issues can be raised
ᑠstandstill arrangements, ie what should happen if deadlock is reached on an issue
ᑠdeduction of union contributions from employees' wages
ᑠhandling redundancies

Collective bargaining usually covers pay arrangements and other terms and conditions of
employment. The agreement should set out the level for negotiations to take place, for example
plant/factory, company or even national level.

The agreement should also specify the bargaining methods where two or more unions are
recognised, eg whether unions should bargain separately or as a single bargaining unit.

Both employers and union representatives usually need training on aspects of industrial relations
and the bargaining process. Some trade unions and independent organisations provide accredited

courses. Read about the learning opportunities offered by the TUC and partners on the TUC

Usually, collective bargaining agreements are not governed by law. But parts of the agreement
may become part of individual contracts and legally enforceable, if employer and employee
agree on the specific terms.

Membership of a trade union is entirely voluntary.


Independent trade unions in a business employing 21 workers or more have the right to claim
recognition for collective bargaining.

The first stage is to submit a written request to the employer, who has ten working days from the
day after getting it, either to refuse it or start negotiations. If the employer doesn't reply, that
counts as a refusal. If negotiations begin, the period is 20 working days, which can be extended
by agreement.

The parties can approach Acas for help at any time. They can reach a voluntary agreement even
after the statutory process has been started.

If agreement is achieved, the statutory procedure is finished.

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If an employer rejects the request or no agreement is reached, the union can apply to the Central
Arbitration Committee (CAC).

To have its application accepted, it must show that 10 per cent of workers in the bargaining unit
belong to the union with a majority likely to favour recognition.

If an application is accepted, employer and union have 20 days, which may be extended, to agree
on the appropriate bargaining unit - if they can't, the CAC will decide.

The CAC then decides whether to make a    
  or hold a ballot of workers
in the bargaining unit. It will make a declaration of recognition without a ballot if a majority of
the workers in the bargaining unit are members of the union. If not, it will call a ballot. The CAC
may call a ballot where there is majority union membership in certain circumstances.

If a ballot is held, the CAC will appoint a Qualified Independent Person (QIP) to conduct it
within 20 working days. The costs are split equally between employer and union.

The CAC informs both parties of the ballot result and consequences. The union needs the support
of a majority of those voting and at least 40 per cent of those entitled to vote to achieve

The union must wait three years before making a new application if it fails.

You can get information on trade union recognition and derecognition at the CAC website.


A number of consequences flow from a Central Arbitration Committee (CAC) declaration that a
union is entitled to be recognised for the purpose of carrying out collective bargaining with an

If the CAC makes such a declaration the union is entitled to conduct collective bargaining on
pay, hours and holidays, although the employer and the union can agree to widen the scope of
recognition to include other issues.

The employer and trade union must negotiate on the method to be used for carrying out
collective bargaining. Either party has the right to apply to the CAC for assistance if no
agreement has been reached within 30 working days. The CAC has 20 working days from the
application date to help achieve an agreement.

If no agreement is reached, the CAC will lay down legally binding terms. However, the imposed
method of collective bargaining can be modified by the union and employer, providing both

If these terms are not followed, either party can claim a breach of contract and apply to a court to
order the other party to fulfil their side of the contract. If this order is ignored, that party will be
in contempt of court, and may face a fine or even imprisonment.

Where the CAC has imposed a method for carrying out collective bargaining, the union has the
right to be consulted over training at least once every six months.

If an employer fails in these obligations the union has three months to make a complaint to an
employment tribunal.

If a union has become recognised by either the voluntary or statutory route, the employer must
also consult and inform the union on matters such as redundancy, health and safety, the transfer
of undertakings, and provide any information necessary for collective bargaining. Read about
representation at work on the Acas website.


This is when a union withdraws its request for statutory recognition because it has come to a
voluntary agreement with the employer. This must happen before the Central Arbitration
Committee (CAC) either makes a declarationthat the union is entitled to recognition without a
ballot, or arranges a recognition ballot.

Such an agreement is known as an agreement for recognition or semi-voluntary agreement and is

separate from voluntary agreements made outside the statutory procedure.

An agreement for recognition can only be made if the union's request to the employer was valid.

Once an agreement for recognition has been reached, both parties must enter into negotiations on
collective bargaining arrangements. If they can't agree on the method of collective bargaining,
either party may apply to the CAC for help.

If both the employer and the union still fail to reach agreement, the CAC will impose a method
for collective bargaining.

In order to qualify as an agreement for recognition, the agreement must be made before the CAC,
who will then either make a declaration that the union is entitled to recognition without a ballot,
 arrange a recognition ballot.


Once an agreement for recognition is made the union may terminate it at any time, unless an
agreement to the contrary had previously been made with the employer. The employer may not
terminate it for a period of three years.

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