Trade Union Act, 1926: Labour Organization:

Before the arrival of industrialization on a massive scale, there were personal contracts between workers and employers. Therefore, until then there was no demand for the development of any machinery regulating the relation between workers and employers. However, after the introduction of the modern factory system, this relationship lost importance due to large-scale industrialization. Which tempt employers to reduce production costs in order to withstand the aggressive competition in the market and maximize their profits by using more technologically sophisticated means of production. Which, results in the rise of a new class of workers, who were totally dependent on wages to survive. This change the existing employer-employee relationship in which employees were exploited by their employers. The clash of interests between workers and employers and labor shortages result in the growth of various unions.

A trade/labor union is an organized group of workers. Union seeks to help workers with issues related to fair wages, good working conditions, working hours, and other benefits they should entitled to instead of their jobs. They act as a link between workers and management . Despite the fact that these are newly formed institutions, they have turn into a powerful force due to their direct influence on the social and economic life of the workers. Various legal regulations governing the same are require to control and manage the work of these unions. In India, the Trade Union Act, 1926 is the main law for the control and management of trade union work. The aim of this article is to provide and explain various aspects of the law.

History of Trade Union in India:

In India, trade unions have developed into an important platform for workers’ demands. They also turned into one of the most influential pressure groups. Which is an aggregate that tries to influence the government to create legislation in favor of workers without wanting to become part of the government. As an organized institution, the trade union acquired its concrete form after the end of the First World War. Trade unions in India are essentially a product of modern large-scale industrialization and did not grow out of any existing institutions in society. The need for this trade union was first realized in 1875 by various philanthropists and social workers. Like Shri Sorabji Shapaji Bengali and Shri N.M. Lokhandey, whose constant efforts result in the formation of unions. Example- The Printers Union of Calcutta (1905), Bombay Postal union (1907).

The establishment of textile and mill industries in the early 19th century in the presidency cities of Bombay, Madras and Calcutta gave impetus to the formation of industrial labor associations in India. The Bombay Mill-Hands Association, founded by N.M. Lokhand in 1890. It is the first trade association in India. The following years saw the rise and growth of several other work association and trade unions in India. Such as the Madras Trade Union which is the first duly register on trade union organization register by B.P. Wadia in 1918, in 1920.

During Gandhian Era:

The importance of creating an organized trade union was realized by nationalist leaders like Mahatma Gandhi. Who gave the concept of trusteeship, which assumed cooperation between workers and employers. It is to improve the relationship between employer and worker. According to the concept, people who are financially healthy should hold assets so that they can use assets that will benefit themselves. But they should also use assets that are for the welfare of workers who are not financially well placed in the company. Also each worker should consider himself a trustee of other workers and try to protect the interests of other workers.

Many commissions also focus attention on the formation of trade unions in India. Example- the Royal Commission on Labour or the Whitley Commission on Labour. Which was set up in 1929-30 recommended that the problems created by modern industrialization in India were similar to the problems it created elsewhere in the world. For this the only the solution that remains is to create so-called strong unions to relieve the workers of their pathetic condition and exploitation.

Development of Trade Union Law in India:

Labour legislation in India has a several impact on the development of industrial relations. The establishment of social justice has been the principle of all labour legislation in India. The establishment of the International Labour Organization is to improve working conditions. Throughout the world it gave further impetus to the need for well-designed labour legislation in the country. Several other internal factors like the Swaraj movement of 1921-1924, the Royal Commission on Labour also paved the way for various labour laws. And also encouraged the framers of the constitution to include such laws in the constitution that would benefit the workers. According to the constitution, labour is a subject in the concurrent list in both the center and the state can make laws. The various labour laws in the country are as follows:

  • Apprentices Act, 1961: The subject of the Act was to support the new employees in skills. Also to improve and refine of old skills through practical and theoretical training.
  • Trade Union Act, 1926: The Act provided for the registration of trade unions and defined laws relating to registered trade unions.
  • Factories Act, 1948: An Act aimed at ensuring the health of workers engaged in certain specified occupations.
  • Minimum Wages Act of 1948: The purpose of the Act was to fix minimum wages in certain occupations.
  • Employees’ provident funds and misc. Provision Act, 1952: The law regulated the payment of wages to employees and also guaranteed them social security.
  • Contract Labour (Regulation and Abolition) Act, 1970: The subject of the law was the regulation of the employment of contract workers together with its abolition under certain circumstances.

Indian Trade Union (Amendment) Act, 1947:

Workers, especially those working in unorganized sectors, lack bargaining power and this becomes the main reason for their exploitation. The right to collective bargaining is given only to those unions which are registered. In India there are laws regarding the recognition of unions, but there is no single legislation on the registration of unions. Recognizing the need for central legislation for the registration of trade unions. Parliament passed the Indian Trade Unions (Amendment) Act in 1947. Conditions required for compulsory recognition of any trade union. However, this law never went into effect. Therefore, compulsory recognition of trade unions is not present under any law in force in India.

Registration of Trade Unions:

The Trade Unions Act 1926 was passed in 1926 but came into force in 1927. The Act contains provisions relating to registration, regulation, benefits and protection for trade unions. Chapter 2- Section 3 to Section 14 of the Act deals with the registration of trade unions in the territory of India.

Section 3: Appointment of Registrars:

3rd Section of the Act empowers the appropriate Government to appoint a person as Registrar of a trade union. The appropriate government may also appoint as many additional and deputy registrars in the trade union as it deems fit to carry out the objectives of the Act.

Section 4: Mode of Registration:

4th Section of the Act regulates the method of registration of a trade union. According to the section, an application for the registration of a trade union may be made by seven or more then seven members of the trade union if the following two conditions are fulfill:

On the date of application, at least 7 members should  employed in the establishment.
At least 10% or one hundred members, whichever is less, should be part of the business at the date of application.

Section 6: Provisions should contain in the rules of a Trade Union:

Section 6 of the Act enumerates the provisions that should be contained in the constitution of a trade union. And provides that no trade union shall be recognized unless it has established an executive committee in accordance with the provisions of the Act and its rules determine the following matters namely:

  • The name of the trade union;
  • The subject of the establishment of a trade union;
  • The purposes for which the funds with the union will be directed;
  • A list of union members should maintain. Office bearer and members of the trade union shall inspect the list;
  • The inclusion of ordinary members who shall be those actually engaged or employed in the industry with which the trade union is associated;
  • The conditions which entitle members to any benefit secured by the rules. And also the conditions under which any penalty or forfeiture may impose on members;
  • The procedure by which the rules may be amended, modified or repealed;
  • The way in which the members of the senior staff and also the substitute holders of the workplaces of the trade union will elected and dismissed;
  • The safe custody of the funds of the trade union, the annual audit of their accounts in such manner as may be prescribed. And adequate means of inspection of the books of account by office bearers and union members, and;
  • The way even a trade union could be dissolved.

Section 7: Power to call for further particulars and require alteration of the name:

7th Section of the Act gives the filing office the authority to request information. It is to ensure that a possible request by a trade union is in accordance with Sections 5 and 6 of the Act. In matters in which a discrepancy is detected, the registrar reserves the right to reject the request if the union does not provide this information.

This section also empowers the registrar to order a trade union to change its name or title. If the registrar finds that the name of such trade union is identical to the name of any other trade union. To resemble the name of any existing trade union which could mislead the public or the members of any trade union.

Section 8: Registration:

According to Section 8 of the Act, if the registrar fully satisfying that the bond fulfill all the necessary provisions of the law. Then he can register such a bond by recording all its details in the manner prescribed by law.

Section 9: Certificate of Registration:

According to Section 9 of the Act, the registrar shall issue a certificate of registration to each trade union. Which has been register under the provisions of Section 8 of the Act. Which should be proof of the registration of the trade union.

Section 9A: Minimum requirement related to the membership of a Trade Union:

9th Section of the Act sets out the minimum number of members that must be present in any trade union that has duly registered. The sections mandate that a registered trade union must continue to have at least 10% or one hundred workers. Whichever is less, subject to a minimum of seven who are employed or employed in the institution or trade with which it is connected as members thereof.

Section 10: Cancellation of Registration:

The Registrar has the power under Section 10 of the Act to withdraw or cancel the certificate of registration. It is of any department under any of the following conditions:

  • At the request of a trade union that wants to be verified in the prescribed manner;
  • If the registrar is satisfied that the trade union obtained the certificate by fraud or deceit;
  • If the trade union is ceased to exist;
  • If the trade union has willfully and after giving notice to the Secretary. If it violates any provision of the Act or continued any rule contrary to the provisions of the Act;
  • If any trade union has repealed any rule laid down in Section 6 of the Act.

Section 11: Appeals:

According to Section 11 of the Act, any trade union that is aggrieved by the refusal of registration or cancellation of registration by the registrar may file an appeal:

In any High Court if the registered office of the trade union is in any of the Presidency Towns;

In any labor court or industrial court if the trade union is located in a place where the labor court or trade union has jurisdiction;

If the headquarters of the trade union is at any other place. Then an appeal may be filed in any court. Not inferior to that of an additional or assistant chief civil court having original jurisdiction.

Section 12: Registered office:

12th Section of the Act provides that all notices and communications to any trade union must addressed to its registered office. If a trade union changes the address of its headquarters. Then it is obliged to inform the registry in writing within fourteen days. And it will enter the changed address in the register in accordance with section 8 of the Act.

Section 13: Incorporation of Registered Trade Union:

Section 13 of the Act states that every trade union that is registered under the provisions of the Act is obliged to:

  • Being a company under the name under which it is registered.
  • They should have eternal succession and a common seal.
  • Authority to enter into contracts. Hold and acquire any movable and immovable property.
  • You can sue and be sued under that name.

Rights and Liabilities of Registered Trade Unions:

Sections 15 to 28 clarify the rights that a registered trade union has, as well as the obligations that can imposed on it.

Section 15: Objects on which general funds may spent:

In Section 15 of the Act, only the activities on which a registered trade union can spend its financial resources are determine. These activities include:

  • Salaries should paid to officers.
  • Costs incurred in the administration of the trade union.
  • Compensation to workers as a result of any loss arising out of any trade dispute.
  • Costs spent on the social activities of workers.
  • Benefits provided to workers in the event of unemployment, disability or death.
  • Costs incurred in filing or defending any lawsuit.
  • Issuing materials to spread awareness among workers.
  • Education of workers or their family members.
  • Provision of medical treatment for workers.
  • Taking out policies for the welfare of workers.

The section further stipulates that the reason for not contributing to the said fund, nor the contribution to the fund, cannot be a criterion for admission to the union.

Section 16 : constitution of a separate fund for political purposes:

16th Section provides that a trade union may, in order to promote the civil and political interests of its members, create a separate fund from contributions paid separately for the aforementioned purposes. No union member can forced to contribute to the fund.

A legally recognized trade union may establish a separate fund to promote the civic and political goals of its members. A recognized trade union may not use its general funds for the political campaigns of its members. The union must establish a separate political fund for political causes. Contributions to such a fund must collected separately. Some of them are as follows:

  • Reimbursement of all expenses directly or indirectly incurred by a candidate or prospective candidate for election as a member of any government body or local authority.
  • Maintenance of any individual who serves in a local or legislative body.
  • Election of a candidate for any legislative or municipal body or registration of voters.
  • Holding political rallies of any type or distributing any political materials or newspapers to union members.

also read: what is the concept of crime. 


The Trade Union Act, 1926 is a social security legislation enact to protect workers in the organized and unorganized sectors from inhumane treatment and to provide protection to their human rights. As such, the legislation contains provisions for the registration, regulation, benefits and protection of unions. This benefits the workers.

Trade unions are important bodies for the democratic development of any country because they represent the needs and demands of workers through collective bargaining. Collective bargaining is an important aspect of the employer to employee relationship. However, collective bargaining is not provided to all trade unions, but only to those trade unions which are recognised. Therefore, the demand for compulsory recognition of trade unions, which was not provided for under the Trade Union Act of 1926, was raised again and again by the employees. The rise of media today has resulted in the empowerment of trade unions and they have turned into influential pressure groups not only in industrial sectors but also in agriculture and other related sectors.



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