Trade Unions Act, 1926

The trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful organisation of labour to enable collective bargaining. It also confers on a registered trade union certain protection and privileges.
The Act extends to the whole of India and applies to all kinds of unions of workers and associations of employers, which aim at regularising labour management relations. A Trade Union is a combination whether temporary or permanent, formed for regulating the relations not only between workmen and employers but also between workmen and workmen or between employers and employers.


Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can form a trade union and apply to the Registrar for it registration.
  1. The application for registration should be in the prescribed form and accompanied by the prescribed fee, a copy of the rules of the union signed by at least 7 members, and a statement containing
    1. the names, addresses and occupations of the members making the application,
    2. the name of the trade union and the addresses of its head office, and
    3. the titles, names, ages, addresses and occupations of its office bearers.
  2. If the union has been in existence for more than a year, then a statement of its assets and liabilities in the prescribed form should be submitted along with the application.
  3. The registrar may call for further information for satisfying himself that the application is complete and is in accordance with the provisions, and that the proposed name does not resemble
  4. On being satisfied with all the requirements, the registrar shall register the trade union and issue a certificate of registration, which shall be conclusive evidence of its registration.


  1. A registered trade union is a body corporate with perpetual succession and a common seal.
  2. It can acquire, hold sell or transfer any movable or immovable property and can be a party to contracts.
  3. It can sue and be sued in its own name
  4. No civil suit or other legal proceeding can be initiated against a registered trade union in respect of any act done in furtherance of a trade dispute under certain conditions.
  5. No agreement between the members of a registered trade union shall be void or voidable merely on the ground that any of its objects is in restraint of trade.


At least 50% of the office bearers of a union should be actually engaged or employed in the industry with which the trade union is concerned, and the remaining 50% or less can be outsiders such as Lawyers, politicians, social workers etc.
To be appointed as an office bearer or executive of a registered trade union, a person must have
  1. attained the age of 18 years; and
  2. not been convicted of any affiance involving moral turpitude and sentenced to imprisonment, or a period of at least 5 years has elapsed since his release.

Change of Name & Registered Office

  1. A registered trade union may change its name with the consent of at least 2/3rds of the total numbers of its members.
  2. Notice of change of name in writing, signed by the secretary and 7 members of the union, should be sent to the registrar.
  3. the Registrar shall register the change in name if he is satisfied that the proposed name is not identical with the name of any other existing union and the requirements with respect to change of name have been complied with.
  4. The change of name shall not affect any rights and obligations of the trade union or render any legal proceeding by or against the trade union as defective.
Notice of change in registered office address should be given to the Registrar in writing within 14 days of such change.
A registered trade union can be dissolved in accordance with the rules of the union. A notice of dissolution signed by any seven members and the secretary of the union should be sent to the registrar within 14 days of the dissolution. On being satisfied the registrar shall register the notice and the union shall stand dissolved from the date. The funds of the union shall be divided by the Registrar amongst its members in the manner prescribed under the rules of the union or as laid down by the government.
Any registered trade union may amalgamate with any other union(s), provided that at least 50% of the members of each such union record their votes and at least 60% of the votes so recorded are in favor of amalgamation. A notice of amalgamation signed by the secretary and at least 7 members of each amalgamating union, should be sent to the registrar, and the amalgamation shall be in operation after the Registrar registers the notice.

Obligations of Registered Trade Unions

  1. The general funds of a registered trade union should be spent only for the objects specified such as, payment of salaries, allowances and expenses of its office bearers, its administrative and audit expenses, prosecution or defence af any legal proceeding for securing or protecting its rights, conduct of trade disputes, compensation for loss arising out of trade disputes, compensation for loss arising out of trade disputes, provision of educational, social or religious benefits and allowances on account of death, old age, sickness, accident or unemployment to its members, publication of labour journals etc. The trade union may set up a separate political fund for furtherance of civic and political interest of members. Contribution to this fund is not compulsory.
  2. The account books and membership register of the union should be kept open for inspection by any of its office-bearers.
  3. A copy of every alteration made in the rules of the union should be sent to the Registrar within 15 days of making the alteration.
  4. An annual statement of receipts and expenditure and assets and liabilities of the union for the year ending on the 31st December, prepared in the prescribed forms and duly audited should be sent to the Registrar within the prescribed time. This statement should be accompanied by a statement showing changes in office bearers during the year and a copy of the rules as amended upto date.
    Offence Penalty
    1. If the registered trade union/its office bearers or members fail to give any notice or send any statement as required under the Act. Fine upto Rs. 5 plus additional fine upto Rs. 5 per week in case of continuing offence. (Maximum fine imposable Rs. 50)
    2. If any person willfully makes any false entry in the annual statement of the union or its rules. Fine upto Rs. 500.
    3. If any person, with intent to deceive, gives an incorrect copy of rules of the union to any member or a prospective member.

    Fine upto Rs. 200.

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