Christ University

School of Law

Labour Law

An analysis of
Amalgamation and Dissolution
of Trade Unions

Vishvas Deo

BBA-LLB
 0916125

Contents
Trade Union Act, 1926 – An Overview

Trade Unions - A Necessity and its Realization in India

Amalgamation of Trade Union

The Institutional factors

The Ballot-Minimum standards to be met

Conclusion

Dissolution of Trade Union

Conclusion
Trade Unions Act, 1926

Trade union is a voluntary organization of workers pertaining to a particular trade, industry or a

 Secure fair wages for workers and improve their opportunities for promotion and
training.
 Safeguard security of tenure and improve their conditions of service.
 Improve working and living conditions of workers.
 Provide them educational, cultural and recreational facilities.
 Facilitate technological advancement by broadening the understanding of the workers.
 Help them in improving levels of production, productivity, discipline and high standard
of living.
 Promote individual and collective welfare and thus correlate the workers' interests with
that of their industry.

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 not apply to any registered trade union, and that the registration of any such trade
union under any such Act shall be void.

However, the Trade Unions Act 1926 has been amended from time to time and the most
important being the Trade Unions (Amendment) Act, 2001. This Act has been enacted in order
to bring more transparency and to provide greater support to trade unionism in India.

Hence, trade union legislation ensures their orderly growth, reduce their multiplicity and promote
internal democracy in the industrial organisation and the economy. The trade unions have thus
acquired an important place in the economic, political and social set up of the country.

Trade Unions - A Necessity and its

Trade Unions are the product of large scale industrialisation and concentration of industries.

Before the advent of industrialisation there were personal contracts between the employers

and the workers (as the industries were run in the homes and with the tools of the employer).

So there was no need to have any machinery for determining their relationship. But under the

modem factory system this personal contact lost its weight due to setting up of large scale

industrial units, with concentration in towns and with the heavy use of machinery. The lure

of employers, to reduce the cost of production, in order to withstand in the competitive market

and to maximize their profits enabled them to use more and more technologically advanced

devices of production and sophisticated machines which, in turn, have contributed in further

drying up the dampness of the personal relationship. Simultaneously it had given rise to a new
class of workers who were dependent on wages only for their livelihood and had come from

different parts of the country, for seeking employment in these industries.

Amalgamation of Trade Union

Under section 24. Of the Trade unions Act, 1926

Amalgamation of Trade Union - Any two or more registered Trade Unions may become
amalgamated together as one Trade Union with or without dissolution or division of the funds of
such Trade Unions or either or any of them, provided that the votes of at least one-half of the
members of each or every such Trade Union entitled to vote are recorded, and that at least sixty
percent of the votes recorded are in favor of the proposal.

The meaning of the term ‘to amalgamate’ is to merely merge and perform functions as earlier
however now with symbiotic relations and a single identity.
Here under section 24. of the Trade unions Act, 1926 it is expressly prescribed that two or more
registered trade unions may amalgamate to form one single trade union.

Firstly, it allows for amalgamation with or without dissolution,

That is the newly organized trade union may be identified as one entity after the dissolution of
either one, or in the likelihood of the functions being varied in nature as compared to the
amalgamated trade union, it may continue to exist.

To better illustrate; in the mining industry, there may exist two trade unions, one for the mine
workers, and the second for those operating the heavy machinery, in order to effectively seek
redressal with the management the two trade unions amalgamate, however the mine workers
union may still exist to address matters of their sole interest which is varied in nature as
compared to the community interest of the amalgamated trade union.
Secondly, it allows for amalgamation with or without division of funds,

Here under the Act, it is specified that the newly organized union may as they think fit (in its
own discretion) may amalgamate the funds of the individual unions or otherwise. By doing so
there will be no hierarchical setup amongst the two unions.

Thirdly, the votes of at least one-half of the members of each or every such Trade Union
entitled to vote are recorded, and that at least sixty percent of the votes recorded are in
favor of the proposal.

Here, after proposal for amalgamation is forwarded in every such trade union, the vote of atleast
half the total members of the said union is recorded by means of ballot, to continue with the
process of amalgamation at least 60% of those members who cast their vote must be in favour of
the amalgamation.

The Act merely provides for the mode of amalgamation, the procedure is subjected to

encumbrances of both the union workers and the employers.

The Institutional factors

Despite the apparently chaotic nature of union mergers and the lack of any discernible

organisational principles behind them, there are certain institutional factors which influence their

development Unions, like most institutions, are basically conservative in outlook. They are

reluctant to lose their individual character and consequently they will usually choose to merge in

such a way as to enable them to retain their original identity and protect their special interests, as

wellas the vested interests of full-time union officials.' The union structure which is best adapted
to resolve these problems is one with a trade group structure. Any small union merging with it is

able to join the appropriate trade group and feel that its particular trade interests are receiving

detailed consideration, whilst a largerunion can merge and form the basis of a new trade group.

The Ballot-Minimum standards to be met

The Act lays down minimum standards which are designed to ensure that every member has a
reasonable opportunity to vote and with knowledge of the relevant terms. The two aspects merit
separate consideration.

(i) Every member has a reasonable opportunity to vote

The Act specifically states that every member is entitled to vote, and both the Registrar and the
courts have stated that this includes all classes of members irrespective of their voting rights
under the union.

(ii) Ensuring knowledge of the terms

Each union carrying out a ballot must take " all reasonable steps to secure that not less than
seven days before voting on the resolution begins, every member is supplied with a notice in
writing approved for the purpose by the Registrar." This will either be the relevant instrument of
merger or a sufficiently detailed account of it

Conclusion

A number of tentative conclusions may be drawn from this study. First, in the vast majority of
cases the ballot does little more than formally to put the decision-making into the hands of the
members. Secondly, it is interesting that unions have rarely made use of the opportunity to
substitute their own provisions for those of the statute.

Whether this is intentional because they are content with the statutory norms or whether it arises
through default is not clear. But h is perhaps surprising that over half of those few unions who
did attempt to adopt their own provisions were unsuccessful because they failed to comply with
the statute. It may be that the unions are too ready to rely upon the Registrar to detect defects in
their rules.

Dissolution of Trade Union

Under section 27. Of the Trade unions Act, 1926

Dissolution of trade union -  (1) When a registered Trade Union is dissolved, notice for the
dissolution signed by seven members and by the Secretary of the Trade Union shall, within
fourteen days of the dissolution, be sent to the Registrar and shall be registered by him if he is
satisfied the dissolution has been effected in accordance with the rules of the Trade Union, and
the dissolution shall have effect from the date of such regulation.

(2) Where the dissolution of a registered Trade Union has been registered and
the rules of the Trade Union do not provide for the distribution and funds of the Trade Union on
dissolution, the Registrar shall divide the funds amongst the member in such manner as may be
prescribed.

The need for dissolution of trade union may arise in two instances;

(i) Winding up of the unit, that is if it the union was factory specific and not industry
specific.
(ii) If there is a proposal for amalgamation of two or more unions.

However in both these instances the acquired assets and liabilities are still existent, similar to the
winding up of companies incorporated under the Companies Act, 1956 the similar procedure is
adopted for the dissolution of the trade union.

Here representation of the union is by those seven members and the secretary of the union who
endorsed the dissolution of the trade union.
In the likelihood when the trade union in the rules adopted has not provided for the instance of
dissolution and the distribution of funds etc. the registrar within his discretionary authority may
award the funds.

Conclusion

As earlier stated the need for dissolution of trade union may arise in two instances;

(i) Winding up of the unit, that is if it the union was factory specific and not industry
specific.
(ii) If there is a proposal for amalgamation of two or more unions.

The procedure to be followed is prescribed Under section 27. Of the Trade unions Act, 1926, the
authority here is to a great extent unilateral on the registrar to facilitate the procedure of
dissolution.