Page 213 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes Objectives

After studying this unit, you will be able to:
 Explain the genesis of the Act

 Discuss the authorities under trade union
 Get an overview of the registration of trade union
 Describe the amalgamation, dissolution and penalties in trade union

Introduction

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.
Beside the Bombay Industrial Relations Act, 1946, and the Maharashtra Recognition of Trade
Unions and Prevention of Unfair Labour Practices Act, 1971, Trade Unions Act, 1926 is the only
legal framework for the trade unions by conceding to workmen their right of association and
organising unions. It permits any seven persons to form their union and get it registered under
the Act Registration of unions is optional and not compulsory. The National Commission on
Labour (1969) recommended compulsory recognition of trade unions, but this recommendation
is still under the consideration of the Government. However, the (1982) amendment of the
Industrial Disputes Act, 1947, makes registration compulsory virtually by defining the term
“Trade Union”, for the purposes of this Act, as a Union registered under the Trade Unions Act,
1926. This gives Unions certain rights and immunities which unregistered Trade Unions do not
enjoy. Therefore, workers tend to be members of registered trade unions. Besides specifying the
procedure for registration of union, this Act lays down the guidelines for the day to day working
of the registered unions. The purpose of this unit is to enable the students to comprehend basic
expressions. At the end of this unit, you should be able to understand various concepts regarding
the Trade Union Act.
The Trade Unions Act was passed before independence to provide legal protection to employee’
collectives and regulate them. Under the act, trade unions are to be registered with the appropriate
government appointed Registrar of Trade Unions.
Maintaining smooth relations between management and labor has been one of the main objectives
of Indian Industrial relations. Laws falling under this domain are mainly regulative in nature.
They specify the dos and don’ts.

The Trade Unions Act, 1926 allows freedom for any seven employees to apply to register a trade
union, but a later amendment (2001) specified the minimum membership as 10% of union able
employees or 100 employees, which ever is less. The act does not make registration compulsory.
However, the registered trade union protection from certain civil and criminal actions.
The act does not specify any criterion or method for recognition of trade union by the employer
as the representative of employees. Various State Governments, like Maharashtra, have enacted
separate legislations to deal with recognition.

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