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Unit 11: Trade Unions Act, 1926

The Industrial Employment (Standing Orders) Act, 1946 is regulatory in nature and is applicable Notes
to industrial establishments under the jurisdiction of central and state governments. By formally
defining conditions of employment, the act serves to reduce conflict and also be a communication
mechanism between management and labour.
Industrial establishments have to frame standing orders and apply for certifications for those as
well. Certifications will be done by designated certifying officer after inviting objections from
workmen or trade unions and considering the objections. In the absence of certified standing
orders, the model standing orders provided in the act automatically apply, except in Gujarat and
Maharashtra.

The primary tone of the Industrial Disputes (ID) Act of 1947 is regulatory since it puts restrictions
on the direct actions that can be taken by both the parties involved in the industrial dispute.
Different conflict resolution forums have been proposed, including works committees (Section
3), conciliation officers (Section 4) boards of conciliation (Section 5) courts of inquiry (Section 6)
and labor courts (Section 7) tribunals (Section 7A) and the national tribunal (Section 7B). The act
also allows the government to intervene in the interest of maintaining industrial peace. Since it
came to force, the act has been amended many times.
In the context of demand for labor reforms, the suitability of the different provisions of the act
has been questioned from the perspective of increasing employment productivity, and flexibility.
The debate on the ID act starts with the definition of the industry itself, which got widened by
the Supreme Court in the Landmark Bangalore Water Supply and Sewage Board v. Rajappa, (1978) case.

The act also requires organizations to give a notice of change (Section 9A) – and advance notice
of 21 days – if there is any change at the work place affecting the workers. However Section 9B
allows the government to exempt firms from Section 9 A in terms of public interest. Section 10
gives the government power to refer industrial disputes to boards, courts or tribunals for the
purpose of arriving at a settlement.
The act also places restrictions on employees in public utilities going on strike (sections 22, 23,
and 24) without appropriate notice (6 weeks and 14 days before giving the notice) or when any
conciliation effort is operational. It also has provisions for firms employing more than 50
workmen (Section 25 A) regarding layoffs, payment of layoff compensation (Section 25 C)
retrenchment of workmen after giving sufficient notice (Section 25F) and for closure of
undertaking (section 25 FFA).

11.1 Genesis of the Act

Trade union is a voluntary organization of workers pertaining to a particular trade, industry or
a company and formed to promote and protect their interests and welfare by collective action.
They are the most suitable organisations for balancing and improving the relations between the
employer and the employees. They are formed not only to cater to the workers’ demand, but
also for inculcating in them the sense of discipline and responsibility.
In India, the first organised trade union was formed in 1918 and since then they have spread in
almost all the industrial centres of the country. The legislation regulating these trade unions is
the Indian Trade Unions Act, 1926. The Act deals with the registration of trade unions, their
rights, their liabilities and responsibilities as well as ensures that their funds are utilised properly.
It gives legal and corporate status to the registered trade unions. It also seeks to protect them
from civil or criminal prosecution so that they could carry on their legitimate activities for the
benefit of the working class. The Act is applicable not only to the union of workers but also to
the association of employers. It extends to whole of India. Also, certain Acts, namely, the Societies
Registration Act, 1860; the Co-operative Societies Act, 1912; and the Companies Act, 1956 shall

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