Trade unions: history, registration and cancellation

1. History and development

Organised labour in India begins with the Madras Labour Union, formed in April 1918 by B.P. Wadia among the workers of the Buckingham and Carnatic Mills. It had no legal status. In 1920 the mill owners sued Wadia and the union leaders in the Madras High Court and got an injunction restraining them from inducing workers to break their contracts of employment. That case showed the problem clearly. Under the common law of conspiracy and inducement of breach of contract, any union calling a strike could be sued and its funds taken.

The All India Trade Union Congress was formed in 1920. In 1921 N.M. Joshi moved a resolution in the Central Legislative Assembly for legislation to register and protect trade unions. The result was the Trade Unions Act, 1926, in force from 1 June 1927. It provided for voluntary registration, gave registered unions corporate status, and protected them from criminal conspiracy charges and civil suits for acts done in furtherance of a trade dispute.

Later amendments: a 1947 amendment added a chapter on compulsory recognition, but it was never brought into force; the 2001 amendment brought in the minimum membership requirement (10 per cent or 100 workers) and limited outsiders among office-bearers. The IR Code keeps both and adds new elements: Tribunal jurisdiction over union disputes, appeals to the Tribunal, and statutory recognition of a negotiating union.

The constitutional base is Article 19(1)(c), the freedom to form associations or unions. In O.K. Ghosh v. E.X. Joseph, 1962 INSC 303, AIR 1963 SC 812, the Court struck down a service rule that stopped government servants from joining an unrecognised association. But the freedom stops at forming the union. In All India Bank Employees’ Association v. National Industrial Tribunal, 1961 INSC 248, AIR 1962 SC 171, the Court held that Article 19(1)(c) does not carry with it a guaranteed right to strike or to bargain collectively.

2. Definitions

• Trade Union, section 2(zl) [s.2(h)]: any combination, temporary or permanent, formed primarily to regulate relations between workers and employers, workers and workers, or employers and employers, or to impose restrictive conditions on the conduct of a trade or business, and includes a federation of two or more unions. So employers’ unions are covered too. The proviso leaves out agreements between partners, agreements between an employer and his own employees, and agreements on the sale of goodwill or for instruction in a trade.
• Worker for Chapter III: by the proviso to section 2(zr), “worker” here means all persons employed in trade or industry and includes unorganised workers. The managerial and supervisory exclusions in the main definition do not apply to Chapter III.
• Registered Trade Union, section 2(zf); Registrar, section 2(zg), appointed by the State Government under section 5 [s.3]; office-bearer, section 2(zb), includes any member of the executive but not an auditor; Trade Union dispute, section 2(zm).

3. Registration

Who may apply (section 6) [s.4]. Any seven or more members may apply by subscribing their names to the rules of the union. No union of workers can be registered unless at least 10 per cent of the workers or 100 workers, whichever is less, in the establishment or industry with which it is connected are members on the date of the application (section 6(2)). If some applicants leave after the application, it does not become invalid unless more than half of them have left or dissociated themselves (section 6(3)). After registration the union must keep at least 10 per cent or 100 workers, subject to a minimum of seven (section 6(4)).

Rules (section 7) [s.6]. The rules must provide for the name, all the objects, the purposes for which the general fund may be spent, a list of members open to inspection, admission of ordinary members actually engaged in the establishment or industry, subscriptions, benefits and fines, an annual general body meeting, election of office-bearers once every three years, custody and annual audit of funds, amendment of rules, and dissolution.

Application (section 8) [s.5]. It goes to the Registrar, electronically or otherwise, with an affidavit, the rules and the resolution adopting them, and the resolution authorising the applicants. A union more than a year old must add a statement of assets and liabilities. The Registrar may call for further information, and must refuse a name identical with, or deceptively similar to, an existing union’s name until it is changed.

Registration and certificate (section 9(1)–(3)) [ss.8, 9]. Once the Registrar is satisfied, he enters the union in the register and issues a certificate, which is conclusive evidence of registration. Unions registered under the 1926 Act are deemed registered under the Code (section 9(4)).

Effects of registration. The registered union becomes a body corporate with perpetual succession, a common seal, power to hold property and to contract, and to sue and be sued (section 12) [s.13]. The Societies Registration Act, the co-operative societies laws and the Companies Act do not apply to it, and any registration under them is void (section 13) [s.14]. It gets the immunities in sections 16 to 18 and can become a negotiating union under section 14.

4. Cancellation and appeal

Under section 9(5) [s.10] the Registrar may withdraw or cancel the certificate:

• on the union’s own verified application;
• on information that the union has contravened the Code, the rules, or its own constitution or rules; or
• if membership falls below 10 per cent of the workers or 100 workers, whichever is less.

Except where the union itself applies, the Registrar must give at least sixty days’ written notice stating the grounds. He must cancel where the Tribunal has ordered cancellation (section 9(6)), and he must record reasons and send them to the union in writing (section 9(7)). The union must itself tell the Registrar if its membership falls below the threshold (section 11(2)).

Appeal (section 10) [s.11]. Anyone aggrieved by a refusal to register or by a cancellation may appeal to the Industrial Tribunal within the prescribed period; delay may be condoned for sufficient reason. The Tribunal may dismiss the appeal or direct the Registrar to register the union or set aside the cancellation. Under the 1926 Act the appeal lay to the High Court or a principal civil court.

5. Problem

The employees of Raj Bhavan form a union and apply for registration. The Registrar refuses. Decide. (Set in December 2013.)

Issue. Whether employees of a Governor’s household and secretariat are “workers” who can form a registrable trade union.

Law. A union must be connected with an establishment or industry, and for Chapter III “worker” means persons employed in trade or industry (proviso to section 2(zr)). Section 6(2) measures membership against the workers of the establishment or industry with which the union is connected. Under the 1926 Act the Madras High Court in Tamil Nadu Non-Gazetted Government Officers’ Union v. Registrar of Trade Unions (1962) upheld a refusal to register a union of government servants in departments doing sovereign work, since they were not employed in trade or industry.

Application. Raj Bhavan is the office of a constitutional head. Its staff serve the Governor in discharging constitutional functions. That is not a trade, business or industry, and section 2(p) also excludes sovereign functions from “industry”. The staff can still form an association under Article 19(1)(c) (O.K. Ghosh), but they cannot register it as a trade union under the Code.

Conclusion. The Registrar’s refusal is justified. The appeal would lie to the Tribunal under section 10. If the union included workers in a severable commercial unit, for example a printing press run on commercial lines, the answer could differ for that unit.

How this is examined

The January 2026 paper asked a 10-mark question on registration and cancellation of trade unions under the 1926 Act, and the topic has come up repeatedly (December 2012, December 2014, December 2016, December 2017). Order the answer as follows: history in a paragraph, definition, who may apply and the membership threshold, rules, application, certificate and effects, cancellation grounds with the sixty-day notice, appeal. Give each provision as Code section with the 1926 section in brackets. The Raj Bhavan problem and “effects of registration” are common short answers.