Rights and Liabilities of a Trade Union under TU Act 1926: Our Legal World

Written by Jigyasa Agrawal

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Rights and Liabilities of a Trade Union under TU Act 1926: Our Legal World


Industrial activity surges in the later part of 19th century due to which the population of labours in working-class is increased, who were extremely exploited by employers. As capitalist class always want to seek profitability. After the World War I, the working class in our country realised the effectiveness of labour strikes as a means of attaining their rights regarding concessions, higher wages, and better working conditions. Many strikes were declared and most of them were successful. This success led to the several unions formation. In the early 20th century Royal Trade Commission analyze the condition of workers and recommended the formations of Trade Unions. As per commission’s recommendation, Indian Trade Union Act was passsed in 1926.However,  it was enforced only in 1927 due to strong opposition of employers.

The enactment of this Act was a landmark in the history of the labour movement. The Act gave a legal status to the registered trade union which confer their rights and liabilities and have immunity from civil suits and criminal presentation.

Trade union:

Section 2(h) of Trade Union Act,1926 -“Trade Union” means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions:

Provided that this Act shall not affect– (i) any agreement between partners as to their own business; (ii) any agreement between an employer and those employed by him as to such employment; or (iii) any agreement in consideration of the sale of the good-will of a business or of instruction in any profession, trade or handicraft.[i]

Trade union is a voluntary organization of workers relating to a specific trade, industry or company and formed to safeguard their interests and welfare by collective action. It is the most suitable organisation for balancing and improving the relations between the employees and the employer. They are formed for both purposes one for cater worker’s demands and other for imparting discipline and to inculcate the sense of responsibility.

Also Read: Object, Constitutional Validity and Salient features of Minimum Wages Act, 1948

 Registered Trade Union:

The trade union must be registered to seek their rights and for having legal status. There is a procedure given in Section 3-14[ii] of the aforesaid Act under which trade union have been registered. The Registrar, while registering a Trade Union under section 8, shall 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.[iii]

Rights of Trade Union:

The trade union are granted rights so that they may be able to take appropriate actions for the attainment of objectives for which they have been formed. Under section 15-28 rights, liabilities and immunities which granted to registered trade union is given.

  • Under section 15 a registered trade union has a right to establish a general fund.
  • Under section 16 a regitered trade union has a right to establish a political fund. For member subscription to this fund is not mandatory.
  • Under section 23 a registered trade union can change the name with minimum 2/3 majority and all requirement of section 25 must be fulfilled.
  • Section 24 gave the right to amalgamation: any two or more than two trade unions may amalgamate into one with or without dissolution of funds but atleast 50% of majority votes is recorded and atleast sixty percent of those votes are in favour of amalgamation
  • Any member of Trade Union may inspect the books himself or through agent under section 20.
  • Section 21 confer the right of minor membership: minor more than 15 years of age can become a member but cannot hold the office until the attainment of 18 years of age.
  • As a legal person some rights are granted:
  1. Right to have perpetual succession
  2. Common seal in its own name.
  3. Right to acquire, hold and dispose of both movable and immovable property in its own name.
  4. Right to contract in its own name.
  5. Can sue and can be sue.[iv]


Under section 17,18 and 19 a registered trade union have immunity in certain criminal, civil and contractual proceedings.

  • Section 17 confers immunity from liability in the case of criminal conspiracy under sec 120-B of Indian Penal Code, 1860 committed by a office- bearer or member, this immunity available only with repect to the legal agreements created by the members for the furtherance of valid object of a trade union under sec 15 of Trade Union Act.Noone can claim immunity for an offensive act. They have right to do in furtherance of their trade dispute such as calling strikes and persuading matters.

A trade union leader has no immunity against disobeying the orders of employers when they already accepted terms and conditions.A trade union leader or any worker doesnot have any right by law to share managerial responsibilities. In the case of West India Steel Company Ltd. v. Azeez 1990 kerala.[v]

  • Section 18 confers immunity from civil proceedings in certain cases to a trade union office bearers or its members However, there is no immunity against violence, threat or any other illegal means.

 Strike per se is not an actionable wrong and trade union officers and it members are immune against legal proceeding linked with the strike which confer in section 18.It was held in case P Mukundan and others v. Mohan Kandy  Pavithran 1992 Kerala.[vi]

In another leading case Rohtas Industries Staff Union v. State of Bihar[vii], it was held that employers do not have the right to claim damages against the employee participation in an illegal strike and thereby causing loss of production and business.

In the case Simpson & Group Companies Workers and Staff Union v. Amco Batteries Ltd.[viii], it was held that physical obstruction of movement of management officials, contractors, goods, or vehicles carrying raw materials is not an trade union right or a fundamental right under Article 19. Immunity under sec 18 cannot be claimes for such activities.

  • An agreement of restraint in trade is void under sec 25 of Indian Contract Act. But here section 19 of Trade Union Act confer that such agreement is neither void nor voidable between trade union members.


  • Restriction to spend fund: The trade union cannot spend the fund for any voluntary reasons. They can only spend for specific activities which is enumerated in section 15.

Office bearers of a trade union invested the money from general fund into the share of UTI. This was held invalid because it is a speculative investment, it was held in the case Mario Raposo v. H M Bhandarkar and others 1994[ix]

  • If trade union decides to promote its civil and political activites, then a separate political fund has to constitute under section 16. However, no trade union can force its members to subscribe to political funds.
  • Trade union must make available all records, its books of accounts and list of membership for inspection which confered in section 20 upon request of any member or his representatives.
  • Minors more than 15 years of age can be a member as per section 21 but they can’t hold office.
  • Under section 21-A trade union cannot appoint a person who has been convicted for a crime involving moral turpitude or has been imprisonrd for 6 months or more within last 5 years.
  • Under section 22 at least half of the office bearers of union must be engaged or employed in an industry to which trade union is connected and they also use the power judiciously while removing any member.
  • Under section 28, general statement, audit report in prescribed manne, all income and expenses and assests and liabilities existing on such 31st day of december must be sent to the register every year.
  • The trade union has to send notice to registrar in case of every change of its name[x], amalgamation of trade unions[xi], any change in the address of head office, for dissolution[xii] and a copy of every alteration made in the rules of registered trade union which confered by section 25 and section 28.


The emergence of trade unions is a boon for labourers who are unable to represent individually. Trade union form with the object of taking collective action for their benefits and to obtain their rights. For ensuring the smooth functioning of union, Trade Union Act was enacted where certain rights and liabilities protect their intersts and possibility of exploitation. The Trade Unions Act, 1926 provides for registration of trade unions with a view to form lawful organisation of labour to enable collective bargaining.

  • [i] Trade Union Act,1926
  • [ii] Ibid
  • [iii] Section 9 of Trade Union Act, 1926
  • [iv] section 13 of Trade Union Act, 1926
  • [v] (1990) IILLJ 133 Ker
  • [vi] (1992) II L.L.J. 160 (Kerala)
  • [vii] AIR 1963
  • [viii] (1992) I L.L.J. 266 (Karn).
  • [ix] (1994) IILLJ 680 Bom
  • [x] section 23 of Trade Union Act, 1926
  • [xi] section 24 of Trade Union Act, 1926
  • [xii] section 27 of Trade Union Act, 1926


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