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Unit 11: Trade Union Act, 1926

(e) Trade Unions should be smart, IT savvy; on-line working to have connectivity to Notes
employees abroad as also International Trade Unions and other Trade bodies.
(f) Trade Unions have to adapt to new realities in new business environment. “The
simple notion of solidarity is now outdated, a narrow concept to encompass the
mutual support of those whose positions and interests are different.”
(i) (Zoll - 1996): Solidarity concept is getting diluted because of diversities in work
force and increasing individualisation.
(ii) In order to make members updated Trade unions must organise continuous
training and developmental programmes.
(iii) Future needs smart and responsive Trade Unions, if they have to survive and
thrive.
(g) The Trade Union Act should be amended in order to avoid dual membership in
central legislation also.

(h) There should be legal provision for the recognition of the representative union.
(i) Unions should not intervene in day-to-day matters. They must focus on important
issues affecting workers.

11.8 Trade Union Act, 1926

The Trade Union Act 1926 legalises the formation of trade unions by allowing employees to form
trade union. It allows trade union to get registered under the Act. Registration provides legal
status to the trade union and it becomes body corporate. It can hold moveable and immoveable
property and can enter into contract and can sue and can be sued. The Act also provides
immunities to the unions from civil and criminal prosecution for bona fi de trade union activities.
The Union can generate General Fund for the day-to-day activities and Political Fund for political
activities (For details - Refer Act).

Though labour organizations came into existence in India in the last decade of the 19th century, it
was only after the outbreak of First World War in 1914 that they appeared in the form of modern
trade unions. Subsequently, as their numbers increased, membership expanded and they became
active in seeking to promote and safeguard the interests of workers, they had to face the open
hostilities of the employers and the public authorities. In the absence of any special legislation
protecting their status, they received the same set-back under the Common law as their British
counterparts did much earlier. Thus, the interpretations given to section 120(B) of the Indian Penal
Code dealing with criminal conspiracy, raised considerable doubts regarding the legality of trade
unions. Besides, their activities could also be considered in restraint of trade under Section 27 of
the Indian Contract Act which provided, “Every agreement by which any one is restrained from
exercising a lawful profession, trade or business of any kind is to that extent void.”
The legal position of trade unions under the existing statutes and the Common Law became
clearer following a decision of the High Court of Madras in 1921, in a case between M/s. Binny and
Company (Managing Agents of the Buckingham Mills) vs. the Madras Labour Union. The court basing
its decision on the Common Law of England, considered the trade unions as illegal conspiracy and
issued injunctions on the leaders of the Madras Labour Union restraining them from instigating
workmen to break their contracts with their employer, and ordered their imprisonment. Though
the case was withdrawn, the attitude of the courts towards trade unions became obvious. The
decision aroused considerable resentment amongst the unionists, and it was rightly apprehended
that the history of legal prosecution of the British trade unions during their early days would be
repeated in India, also, if the Common Law was not adequately amended by a specifi c statute
guaranteeing to the workers the right to organize. Strong demands were made for a legislation
recognizing workers’ right to organize and to engage in concerted activities.

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