CH-I: TRADE UNIONS: CONSTITUTION AND

MECHANISM
Trade Unions are organized body of workers that work collectively to
achieve the common objective of enhancement of conditions of
workers in any given industry. The primary function of trade unions is
viewed to safeguard the economic and legal interests of the
employees in any organization and to ensure that the norms of
fairness, equality and social justice are upheld in favour of each
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employee. From the employees' perspective, trade unions are
expected to not only protest against any violation perpetuated by the
management of the various rights of the employees but also to engage
in bargaining with the management in order to strive continually for a
better end of the deal for employees in terms of working conditions,
contractual rights, rewards and sanctions, as well as exercise of
2
control over the work situations.

PURPOSE OFA TRADE UNION

It had been well accepted that in order to ensure protection of the
rights of the workers and to promote their interests, the unions need to
3
be organized within the norms of organizational responsibility. The
result of either collective bargain or protest, whichever method is
adopted, should ideally transpire in the form of agreed rules,
procedures and acceptable practices such that they are capable of
4
guiding the conduct of relations at the workplace in future. The
policies that are arrived at and followed at various levels throughout
the organization through the collaborative work of the members of the
trade union and their say in the affairs of the larger community and
the social practices are only an extension of the primary responsibility
that the union has of protecting and upholding the rights and interests
of the employees.
Trade unions, thus, are essentially designed on the foundation of the
elementary principle of democratic logic in order to contribute a
countervailing force expressing voice on behalf of the employees in
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the manner and conduct of employment relations at a workplace.
Trade unions are voluntary organizations and consequently are
expected, and reasonably so, to govern themselves in a democratic
manner. This expectation arises from the very raison d'être of the
labour movement which emerged in the background of the need to
check the monopoly
1
C S Venktata Ratnam, ‘Trade Uni0ns and Wilder Society’ (2007) 42(4) Indian
2 3
Journal of Industrial Relations 621.
 ibid 623.
 Alan Bogg, Democratic Aspects 0f
Trade Union Recognition (Bloomsbury 2001) 44.
4
ibid 45.
 5 Venkata Ratnam (n 1) 622.

of the management over control in the work place and its dominating
hand in employment relations. With the growing influence of trade
unions in the power structure, politics surrounding the union has also
arisen as a practical concern. However, despite under such active
attention, union democracy seems to be escaping the framework of
the functioning of the trade unions.
The phenomena of undemocratic practices increasingly creeping into
the organizational structure of trade unions and its method of
operations were recognized and protested against by the British
workers which led to significant changes being brought in during the
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1970s. The law in Britain was amended to tackle the problems arising
from centralised government, national collective bargaining and an
increasingly high degree of office autonomy with respect to a passive
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membership in the unions. The changes were made with an objective
of developing more democratic forms of government, bargaining
without collusions for individual interests and an active member
participation in the union activities and decision making. This move
was undertaken to benefit the workers who were part of such trade
unions where the general character was such that the workers did not
possess any control over the labour market and thus, were dependent
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on the collective bargaining done by the union officials.
Consequently, the administration in such unions and the terms of
bargaining were monopolized by a small group of officials who were
appointed in the backdrop of a passive membership. Thus, it was
sought to balance the distribution of power in the internal structure of
the trade unions with introducing specific union rules and norms
Shifting the focus to the Indian industrial regime, something similar is
witnessed under the labour law governing union norms. Under the
Trade Union Act, 1926, the trade unions which seek to be registered
under the Act are required to adhere to certain thresholds of
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democratic structure. The Act mandates certain minimum procedures
to be provided for expressly in the rules adopted by the trade unions
before they are entitled to registration under the Act. Under the law,
the rules need to specify the manner in which the executive members
of the trade union are to be appointed and the procedure for their
removal. Another aspect of democracy which the law seeks to bring is
the requirement to provide the procedure to be followed for alteration
of the rules of trade unions once they are been registered and are
working bodies in order to
6
Paul Smith, ‘Change in British Trade Unions Since 1945’ (1995) 9(1) Work,
Employment & Society 137, 141. 7 ibid 137.
 8 ibid 138.
 9 Trade Union Act 1926,
s6.

safeguard the interests of its members and prevent self-perpetuating

practices among the office bearers.
An example of such a rule can be seen in the rules and bye-laws of a
certain trade union operating in Karnataka which provides for the
election of the office bearers and the members of the executive
committee to be undertaken directly by the membership biennially as
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per the election rules. The bye laws also provide that the executive
committee is required to meet every month at least once in order to
scrutinize the performance of the union, the accounts and chalk out
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design of further work. This is only an example of the manner in
which the rules of trade unions are formed to ensure compliance with
the Act. Similar rules can be found in the bye-laws of most of the
trade unions.

PROCESS OF REGISTRATION OF A TRADE UNION

The Trade Unions Act does not make the registration of trade unions
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compulsory. As a matter of fact, only a Union which has already
been formed can be registered. However, registration of a trade union
has certain benefits Firstly, a registered trade union acquires the status
of a body corporate by the name under which it is registered with a
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common seal and perpetual succession. This is beneficial in terms of
providing a separate legal entity for various purposes, as well as
ensuring continuity and succession of the union. Secondly, this allows
the Union to acquire and hold property, enter into contract and legally
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sue or be sued. This has tremendous functional benefits for most
trade unions. Thirdly, a registered trade union is granted immunity
from prosecution for criminal conspiracy and immunity from civil
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action as is laid down in the Trade Unions Act. Such immunity
makes it easier for unions to plan actions which help in their
collective bargaining efforts, and leads to a framework where
collective bargaining techniques can effectively be exercised without
fear of prosecution or criminal sanction. Fourthly, an agreement
between the members of a registered trade union in
10
Constitution and Rules 0f KSCWCU: Membership Rules: “Elections: a) The office
bearers and executive committee members of the union shall be elected directly by the
members of the union.”
 11 Constituti0n and Rules 0f KSCWCU: Membership Rules:
Meetings: “The Executive Committee shall meet at least once in a month to scrutinize
the report of the activities 0f the union, statement 0f accounts, to draw up the
programme 0f work, to consider all the matter pertaining t0 the union. Any member
of the Executive Committee who does not attend committee continuously for more
than three meetings shall cease to be a member of the committee.”
12
V.K. Kharbanda, Commentaries on Trade Unions Act, 1926 (2013 Law Publishing
H0use) 130. 13 Trade Unions Act 1926, s 13.

14 15
Trade Unions Act 1926, s 13.

Trade Unions Act 1926, s 17.

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restraint of trade is not void or voidable. This also provides
functional aid in the effective exercise of the methods and tools of
collective bargaining. Finally, after registration of a trade union, no
other evidence is required in order to prove that the trade union is a
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trade union.
In light of this discussion, it is pertinent to examine the mode of
registration of trade unions which is provided in Sec. 4 of the Act. As
per this section, any seven or more members of a trade union can
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apply for registration of the trade union.
It is pertinent to contrast this section with the section that provides for
incorporation of corporations under the Companies Act 2013. As per
the Companies Act, the act of registration and subsequent
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incorporation brings the company into existence. However, under
the Trade Unions Act, the Act presumes the existence of the Trade
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Union prior to its incorporation. Jurisprudentially, this reflects the
idea that the nature of registration under the Trade Unions Act is one
primarily of recognition of the trade union, while the nature of
registration under the Companies Act is one of giving birth to the
company.

REQUIREMENTS FOR THE VALID REGISTRATION OF

A TRADE UNION
As per Section 6, the rules of the trade union at the time of
registration must provide for the following information
I. “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 a list of the members of the Trade Union and
adequate facilities for the inspection thereof by the office-bearers and
members of the Trade Union
16 17 18
Trade Unions Act 1926, s 19. Trade Unions Act 1926, s 9. Trade Unions Act
19 20
1926, s 4. Trade Unions Act 1926, s 7. Trade Unions Act 1926, s 4.

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5. the admission of ordinary members who shall be persons 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 be not less than twenty-five naye paise per month per
member;
7. the conditions under which any member shall be entitled to any
benefit assured by the rules and under which any fine or forfeiture
may be imposed on the members;
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, an annual audit,
in such manner as may be prescribed, of the accounts thereof, and
adequate facilities for the inspection of the account books by the
office-bearers and members of the Trade Union; and
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11 the manner in which the Trade Union may be dissolved.”
The provision of these rules at the time of registration itself functions
to outline a framework for the operation of the trade union, and
therefore ensures that only trade unions with a functional operational
structure, prescribed norms and an organisational underpinning are
allowed to be registered. This is important in order to ensure that the
only trade unions that get registered are those capable of effectively
representing workers demands and which will not dissolve
immediately after, or get lost in organisational uncertainty. While
there exists a host of authority on the interpretation of the particular
functional operationalization of these rules, such as whether removal
of the executive can function in a particular manner or not, there is a
lack of authority which analyses these rules at the time of registration
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itself.
The incorporated rules serve as the primary framework for activities
of the trade union, and inflexible rigidity in these rules has been
upheld by the Courts at multiple points of time. In the
21 22
Trade Unions Act 1926, s 6.
 Vice Chancellor Utkal University v SK Ghosh AIR
1954 SC 217.

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landmark case of Vice Chancellor, Utkal University v. SK Ghosh the
Supreme Court upheld the proposition that inflexible rigidity imposed
by the incorporating Constitution must be strictly adhered to in a case
which was concerned with the omission to give notice to one member,
while the Rules in no uncertain terms stated that each member must
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be given notice for the resolution to be valid.
An important consideration arises when examining the nature of the
rules at the time of incorporation of a trade union. While Section 6
mandates that Rules must be framed prior to registration, registration
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of a trade union does not give these rules any statutory force. The
rules continue to be contractual in nature, and are binding upon the
members of the trade union in a contractual capacity, and not a
statutory or governing capacity. As a consequence of this, a violation
of the rules of a trade union cannot be enforced by virtue of a writ of
mandamus under Article 226 of the Constitution. The only effective
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remedy is via a suit.
The same principle was reaffirmed by the Calcutta High Court in the
case of Mohd Ibrahim v Assansol Iron and Steel Workers Union,
where the Court held that the Constitution of a union does not have
any statutory force and continues to be binding merely as a
contractual framework for regulating the relationship between the
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members of the union.

IMPORTANCE OF AN AUDIT
The importance of an audit cannot be understated. Corruption is one
of the biggest enemies of democracy. Whether this be at the Central
Government level or at the level of a trade union Both under the Rules
and the Act, the trade unions are required to undergo audits so as to
ensure that the affairs of the trade union are in proper order. This is
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especially necessary to ensure that the General Funds and Political
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Funds are being used for the right purpose.