LABOUR LAW – I

TRADE UNION ACT, 1926

History of Trade Union Movement in India
The industrial revolution in India after 19th century brought about radical
changes in the western world. Significant changes in methods of production,
shipping and transport resulted in the change of social set-up. These significant
and technology developments in the industrial sector culminated in the
emergence of two classes namely, working class (wage earning class) and the
managerial class (entrepreneur class). Working class wanted higher wage and
better working condition while the managerial class wanted maximum
production at minimum wages.
The trade union movement in India emerged as a result of growing complex
economic structure, instability of labour force, lack of leadership, deprivation
of freedom of expression under the British rule.
After 1947, India got independence and formed the Welfare Legislations.
 The Workmen’s Compensation Act 1923
 The Trade Union Act 1926
 The Industrial Employment Standing Order Act 1946
 The Industrial Dispute Act 1947
 The Factories Act 1948
 The Minimum Wages Act 1948
 The Employees State Insurance Act 1948
 The Employees’ Provident Funds Act 1952
 The Maternity Benefit Act 1961
 The Payment Of Wages Act 1965
 The Payment Of Bonus Act 1965
 The Payment Of Gratuity Act 1972
OBJECT & SCHEME OF THE TRADE UNION ACT 1926
An individual dispute becomes an industrial dispute if it is represented through
a trade union, registered or not. Registration of trade union is not compulsory.
But a registered trade union enjoys certain privileges and immunities.
OBJECT – Provide machinery for registration of trade union and ensure
industrial harmony.
SCHEME – Trade Union Act 1926 consists of 33 sections divided into 5
chapters.
Chapter 1 – Section 1 & 2; Defines Trade Union, Workmen, Trade and Business.
Chapter 2 – Section 3 to 14; Provision for the registration of trade unions.
Chapter 3 – Section 15 to 28; Rights and liability of a trade unions.
Chapter 4 – Section 29 & 30; Delegates’ power on the appropriate government
to make regulations.
Chapter 5 – Section 31 to 33; Provides for the penalties and procedure.
Trade Dispute
Section 2(g) of the Trade Union Act, 1926 defines Trade dispute. It means any
dispute:
 Between employer and workmen or;
 Between workmen and workmen or;
 Between employers and employers.
Any such dispute must be connected with –
 The employment; or
 Non-employment; or
 The terms of employment; or
 The condition of labour of any person.
Meaning & Definition of Trade Union
Trade union means it’s a voluntary association of workers in a particular
industry or craft.
Sec.2 (h) of the Trade Union Act defines as “any combination, whether
temporary or permanent, formed primarily:
 For the purpose of regulating relation between:
I. Workmen and employers; or
II. Workmen and workmen; or
III. Employers and employers.
 Imposing respective condition on the conduct of any trade or business
and includes any federation of two or more trade unions, is called Trade
Union.
INGREDIENTS OF TRADE UNION
I. There must be combination of workmen or employers;
II. There must be trade or business; and
III. The main objective of the Union must be to regulate relations of
employers and employees or to impose restrictive conditions on the
conduct of any trade or business.
RECOGNITION OF TRADE UNION
A trade union which is statutorily recognized must be entitled to the following
additional privileges and rights compared to an unregistered union.
I. The right to sole representation of the workers in any collective
bargaining.
II. To raise issues and enter into agreements with employers on general
questions concerning the terms and conditions of employment;
III. To collect membership fees and subscription payable by members to the
union with the premises of the undertakings or demand check off
facility;
IV. To put up notice board in the premises of the undertaking and affix
notices relating to meetings, statements of accounts and other
announcement;
V. To discuss with employer the grievances of the workers;
VI. To nominate its representatives to the grievance committee or statutory
and non-statutory bipartite committees.
REGISTRATION OF TRADE UNION
Chapter II containing Sec. 3 to 14 of the trade union act, 1926 and central trade
union regulations, 1938 containing 17 rules and forms A,B,C provide for the
procedure for registration of the Trade Unions.
Section 3 empowers the appropriate government to appoint the registrar of
trade unions for each state. Section 4 provides for the procedure for the
registration of the trade union.
Every application for registration of a Trade Union shall be made to the
Registrar, together with the statement of the following particulars namely:-
I. Name, occupation and addresses of the members making the
application.
 II. The name of Trade Union and the addresses of its head office.
III. Tittles, names, ages, addresses and occupation of the office-bearers of
the trade union.
A Trade union is not entitled to registration unless the executive there of is
constituted in accordance with the provisions of the act and its rule provide for
the following matters:
a) Name of the trade union;
b) All the objects of its establishment;
c) The purpose for which the general funds of the union shall be spent
which shall be purposes for which such funds can be lawfully spend;
d) Maintenance of members list and adequate facilities for its inspection
by the office bearers and members of the Union;
e) The payment of minimum subscription by members of the Trade Union
which shall not be less than :-
 1 rupee per annum for rural workers;
 3 rupees per annum for workers in other unorganised sectors; and
 12 rupees per annum for workers in any other cases
Section 7 - Power of Registrar to call for further information;
Registration (Section 8) – the registrar on being satisfied, registers the Trade
Union by posting necessary entries in a Register and issues certificate to that
effect under Section 9 of the act.
Certificate of Registration (section9) – form-C is the prescribed form. The
certificate of registration is the conclusive evidence that the trade union has
been duly registered under this act.
Cancellation or withdrawal of Registration (section 10) –
a) If the certificate has been obtained by the trade union
 By means of fraud; or
 By mistake; or
b) If the trade union is not in existence; or
c) If the trade union has contravened any provisions of the act wilfully; or
d) If the trade union has incorporated any rule in its rules; or
e) If the trade union has rescinded any of its rule which is required by
Section 6 to be incorporated in the rules of the trade union.
Recognition of central trade union
 I. The union has a minimum of 5 lakh membership as on March, 1997.
II. The union must have members from at least 4 states.
III. The union must have membership at least in 4 industries
Privileges & Immunities of a Registered Trade Union
The Trade Union Act, 1926 provide certain privileges and immunities to the
members/leaders of the registered trade union so as to enable them to carry
out their legitimate trade union activities without any fear or threat of civil or
criminal action/liability.
 CIVIL LIABILITY (SEC.18)
I. Immunity from civil liability;
II. Immunity from Tortious Liability;
III. Immunity from agreements in restraint of trade.
 CRIMINAL LIABILITY (SEC.17)
Civil liability
1. Immunity from Civil Liability
 No suits or other legal proceeding shall be maintained in any civil court
against any registered Trade Union or any office bearer or members
thereof.
 A registered Trade Union shall not be liable in any suit or other legal
proceeding in any civil court in respect of any tortuous act done.
2. Immunity from Tortious Liability
A registered trade union is not liable for torts committed by its agents in
furtherance of trade dispute, if such agent acted:
 Without the knowledge of the executive committee of the trade
union; or
 Contrary to the express instruction of the executive committee.
3. Immunity from Agreements in Restraint of Trade
Every agreement by which any one is restrained from exercising a lawful
profession, trade, or business of any kind is to that extent void.
Criminal Liability
The officer bearers of the registered trade union are immune from criminal
lability for criminal conspiracy.
Criminal Conspiracy – When two or more person agree to do, or cause to be
done -
 An illegal act, or
 An act which is not illegal by illegal means, such an agreement is
designated as a criminal conspiracy.
Other Privileges
A registered Trade Union is regarded as a body corporate. It gets legal entity
and has perpetual succession and common seal. It can sue and be sued in its
own name.
Minor as a Member of Trade Union
Section 21 empowers a trade union to admit a minor who has attained the age
of 15 years, as a member of that trade union. But he is not entitled to become
office-bearer of the trade union, until he has attained the age of 18 years.
Collective Bargaining
Collective bargaining or Negotiation is one of the methods for settlement of an
industrial dispute. Collective bargaining is a process/method by which
problems of wages and conditions of employment are settled amicably,
peacefully and voluntarily between labour and management.
In collective bargaining, the parties to the dispute i.e., the employer and the
employees/workmen settle their disputes by mutual discussions and
agreements without the intervention of a third party. Such settlements are
called ‘bipartite settlement’.
Collective Bargaining Object
 To harmonize the relation between the employer and workmen;
 To promote industrial peace.
In Indian collective bargaining agreements are enforceable under section 18 of
the Industrial Dispute Act, 1947 by filing a petition in labour court or industrial
tribunal.
GENERAL FUND & POLITICAL FUND
Section 15 to 16 of the trade unions act, 1926 lay down the provisions relating
to the general fund and political funs respectively.
General Fund (Sec.15)
Members of the trade union have to contribute, to the general fund. Purposes
for which the general funds may be spend:
1. The payment of salaries, allowances and expenses to office bearer of
the trade union
2. The payment of expenses for the administration of the trade union
including audit of accounts of the general fund
3. The expenses in connection with prosecution or defence undertaken
for the purposes of securing or protecting any right of the trade
union.
4. The conduct of trade disputes on behalf of the union or any member.
Political Fund (Sec.16)
A registered trade union can create a separate fund for the purpose of
promoting civic and political interests of its members. Which are:-
1. The payment of any expenses incurred by a candidate or prospective
candidate for election as a member of any legislative body or any local
authority;
2. Holding of any meeting or distribution of any literature or documents in
support of such candidate or prospective candidate;
3. Maintenance of any person who is a member of any legislative body or
local authority
4. Registration of electors or the selection of a candidate for legislative
body or local authority
5. Holding of political meetings or distribution of political literature and
documents to the members of the trade union or to the general public.

THE INDUSTRIAL DISPUTES ACT, 1947

Introduction
The Industrial Disputes Act, 1947 is a comprehensive piece of legislation
envisaging elaborate machinery for prevention and settlement of industrial
disputes.
The main object of the Act is:-
 To harmonize the relation between the employer and employees so
as to maintain industrial peace and to ensure social justice.
  An investigation and settlement of Industrial disputes between;
I. Employers and Employers;
II. Employer and Workmen; and
III. Workmen and Workmen.
 Prevention of illegal strikes and lock-outs;
 Relief to Workmen in the matter of lay-off and retrenchment; and
 Collective bargaining.
Application of the Act
It applies to all industries establishment throughout India except the state of
Jammu and Kashmir. It applies to workmen employed in both the private and
public sector industries.
Scheme of the Act
The act contains 80 sections divided into 12 chapters apart from 5 schedules.
 Chapter I – Section 1 to 2-A; Short title, extent and commencement and
definition of appropriate government, award, employer, workman,
industry etc.
 Chapter II – Section 3 to 9 – provides for authorities under the act.
 Chapter II-A – Section 9-A & 9-B – provide for notice of change and
power of government to exempt respectively.
 Chapter II-B – Section 9-C – provides for setting up of grievances
settlement authorities and reference of certain individual disputes to
such authority.
 Chapter III – Section 10 and 10-A – reference of disputes to boards.
 Chapter IV – Section 11 to 21 – procedure, power and duties of the
authorities under the act.
 Chapter V – Section 22 to 25 – provisions relating to strikes and lock
outs.
 Chapter V-A – Section 25-A to 25-J – provision relating to lay off and
retrenchment.
 Chapter V-B – Section 25-K to 25-S – special provision for lay off,
retrenchment and closure.
 Chapter V-C – Section 25-T and 25-U – provision to deal with prohibition
of unfair practices.
 Chapter VI – Section 26 to 31 – provision to impose penalties.
 Chapter VII – Section 32 to 40 – Miscellaneous Provisions.
  First Schedule: Industries which may be declared to be public utility
services under sub- clauses of clause of section 2.
 Second Schedule: Matters within the jurisdiction of labour court.
 Third Schedule: Matters within the jurisdiction of Industrial tribunals.
 Fourth Schedule: Conditions of service for change of which notice is to
be given.
 Fifth Schedule: Unfair Labour Practices.
Appropriate Government
Section 2(a) of the Industrial Disputes Act, 1947 defines appropriate
government from the angle of central government and state governments
Section 2(a), which defines the appropriate Government runs as follow-
I. In relation to any industrial disputes concerning any industry carried on
by or under the authority of the central government; or
II. Any industry carried on by a railway company; or
III. A dock labour board; or
IV. The employees state insurance corporation; or
V. The life insurance corporation; or
VI. The unit trust of India; or
VII. A mine; or
VIII. An oil field etc.
Award (Sec.2 (b))
Award means an interim or a final determination of any industrial dispute or of
any question relating thereto any labour court, industrial court or national
industrial tribunal and includes an arbitration award made under the section
10-A.
Ingredients
1. An award is an interim or final determination of an industrial dispute.
2. It is an interim or final determination of any question relating to such
dispute.
3. Such interim or final determination is made by a labour court or by an
Industrial Tribunal or by a National Industrial Tribunal.
4. Award of arbitrators under section 10 –A is an award.
 5. By virtue of Sec.16(2) of the act the award of the labour court or tribunal
court or national tribunal shall be in writing and shall be signed by its
presiding officer.
6. By virtue of Sec17(1) of the act every arbitration award and award of a
labour court, tribunal or national tribunal shall, within a period of 30
days from the date of receipt by the appropriate government, be
published in official gazette.
7. An award shall become enforceable on the expiry of 30 days from the
date of its publication.
Settlement (Sec. 2 (p))
Settlement means a settlement arrived at in the course of conciliation
proceeding and include a written agreement between the employer and
workmen arrived otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties thereto is such
manner as may be prescribed and a copy thereof has been sent to an officer
authorized in this behalf by the appropriate government and the
conciliation officer.
Period of Operation of Award: Maximum 3 year and minimum 1 year.
Period of Operation of Settlement: A settlement shall come into operation
on the date agreed upon by the parties to the dispute. If no date is agreed
upon by the parties to the dispute, a settlement shall come into operation
on the date on which the settlement is signed.
Penalty for Breach of Settlement or Award: imprisonment which may
extend to 6 months or with fine or with both.
INDUSTRY (Sec.2 (j))
Industry means any business, trade, undertaking, manufacture or calling of
employers and include any calling, service, employment, handcraft or industrial
occupation or avocation of workmen.
Triple Test:
1. Systematic Activity,
2. Service or Production, and
3. Cooperation between Employer and Employees.
Definition
Industry means any systematic activity carried on by cooperation between an
employer and his workmen for the production, supply or distribution of goods
or services with a view to satisfy human wants or wishes, which are not merely
spiritual or religious nature, whether or not:
 Any capital has been invested for the purpose of carrying on such
activity; or
 Such activity is carried on with a motive to make any gain or profit.
STRIKE & LOCK-OUT (Sec.2 (q) & (l))
STRIKE (Sec.2 (q))
It means, stoppage of work or putting of work by employees in their economic
struggle with capital.
Essentials of Strike
1. Cessation of work;
2. Cessation of work by a body of persons employed in any industry;
3. Acting in combination;
4. The industry must be an “industry”;
5. Concerted refusal;
6. The refusal must be under common understanding to continue to work
or to accept the employment;
7. It must relate to employment, non-employment or term of employment
of employment or with the condition of labour of the workmen.
Classification of Strikes:
1. General Strike,
2. Stay-In-Strike,
3. Go Slow Strike
 Sympathetic Strike
 Hunger Strike
 Work to Rule
Based on Utility of Industries
1. Strike in Public Utility Services; and
2. Strikes in Non-Public Utility Services.
Lock-Out (Sec 2 (l))
Meaning to shut or to close. It refers to closure of an industrial establishment
for a particular period to suppress the prevailing situation in the industry.
Definition
Lock-out means the temporary closing of a place of employment, or the
suspension of work, or the refusal by an employer to continue to employ any
number of persons employed by him.
Prohibition of Strikes and Lock-outs in Public Utility Services
According to Sec.22 (l) of the Act, no person employed in Public Utility Services,
shall go on strike in breach of contract:
1. Without giving to the employer, notice of strike within 6 weeks before
striking; or
2. Within 14 days of giving such notice; or
3. Before the expiry of the date of strike specified in any such notice as
aforesaid; or
4. During the pendency of any conciliation proceeding before a conciliation
officer and 7 days after the conclusion of such proceedings.
PUNISHMENT AND PENALTY FOR ILLEGAL STRIKES OR LOCK-OUTS (SEC.26-31)
 Penalty for illegal strikes (Sec.26) – 1 month imprisonment or with a
fine of Rs.50 or with both.
 Penalty for illegal lock-outs (Sec.26) – 1 month imprisonment or with a
fine of Rs.1000 or with both.
 Penalty for Instigation (Sec.27) – 6 month imprisonment or with fine of
Rs.1000 or with both.
 Penalty for giving financial aid to illegal strikes and lock-out (Sec.28) – 6
month imprisonment or with fine Rs.1000 or with both.
 Penalty for breach of settlement or Award (Sec.29) – 6 month
imprisonment or with fine or with both.
 Penalty for disclosing confidential information (Sec.30) – 6 month
imprisonment or with fine of Rs.1000 or with both.
 Penalty for closure without notice (Sec.30-A) – 6 months imprisonment
or with fine of Rs.1000 or with both.
 Penalty for committing unfair labour practices (Sec.25-U) – 6 months
imprisonment or with fine of Rs.1000 or with both.
Lay off Sec.2 (kkk)
Retrenchment Sec.2 (oo)

METHODS OF SETTLEMENT ON INDUSTRIAL DISPUTES

1. Collective Bargaining;
2. Conciliation;
3. Voluntary Arbitration;
4. Adjudication
COLLECTIVE BARGAINING
Collective bargaining or Negotiation is one of the methods for settlement of an
industrial dispute. Collective bargaining is a process/method by which
problems of wages and conditions of employment are settled amicably,
peacefully and voluntarily between labour and management.
In collective bargaining, the parties to the dispute i.e., the employer and the
employees/workmen settle their disputes by mutual discussions and
agreements without the intervention of a third party. Such settlements are
called ‘bipartite settlement’.
Collective Bargaining Object
• To harmonize the relation between the employer and workmen;
• To promote industrial peace.
• It achieves the equality of bargaining power between the employer
and employees.
In Indian, collective bargaining agreements are enforceable under section 18 of
the Industrial Dispute Act, 1947 by filing a petition in labour court or industrial
tribunal.
Settlement Machinery or Authorities under the Act
1. Works Committees (Sec.3 (1))
2. Conciliation (Sec.4&5)
a. Conciliation Officer (Sec.4)
b. Board of Conciliation (Sec5)
3. Court of Inquiry (Sec.6)
4. Labour Court (Sec.7)
5. Industrial Tribunal (Sec.7-A) (l))
 6. National Tribunal (Sec.7-B) (l))
7. Arbitration Tribunal (Sec.10-A)
WORKS COMMITTEES (SEC.3 (L))
A committee comprising of representatives from both the parties to the
dispute. The main purpose of creating the works committee is to develop a
sense of a partnership between the employer and his workmen.
Duties & Functions (Sec.3 (2))
1. To maintain good relations between the employer and the workmen;
2. To comment upon the matters of common interest
3. To take steps of adjustment so that the situation may not turn into
industrial dispute.
The decisions of works committee are not conclusive or binding but
recommendatory.
CONCILIATION (Sec.4 & 5)
Conciliation is a process by which a third party persuades the parties to an
industrial dispute, to come to an equitable adjustment of claims.
There are two authorities designed for the process of conciliation as follows:-
• Conciliation Officer (Sec.4)
• Board of Conciliation (Sec.5)
Conciliation Officer
The appropriate Government may appoint one or more conciliation officers for
a specified area or for specified industries on permanent or temporary basis.
He has to mediate and promote the settlement of industrial disputes. The
conciliation officer is empowered to exercise all quasi-judicial powers of a civil
court.
Report: Under Sec.12 (6) the report of successful settlements or on failure
must be sent by the conciliation officer to the government within 14 days or
shorter period from the date of the beginning of the conciliation proceedings.
Board of Conciliation
It consists of a Chairman and 2 or 4 members. The board is appointed as and
when a dispute arises and to settle the same amicably.
Quorum
The quorum of the board is 3 if the members if 4. The quorum is 2 if the
number of members is 2.
Duties of Board
• To investigate without delay and to induce the parties to the dispute,
come to a fair and amicable settlement.
• Sending of detailed report to the government.
COURT OF INQUIRY (Sec.6)
The institution of court of inquiry, consists of one or more independent
persons. If it consists of two or more, one of them is appointed as a chairman.
Functions
• To enquire into the matter referred to it;
• To make a report to government.
Quorum
The quorum is 1 if the number of members is not more than two. The quorum
is 2 if the number of members is two but less than 5. The quorum is 3 if the
number of members is more than 5.
COMPULSORY ADJUDICATION
Labour Court (Sec.7)
It consisted of one person, appointed by the government. He is called the
presiding officer. It can decide disputes of certain specified matters of greater
importance when the number of the workmen affected is not more than 100
and when the appropriate government thinks fit.
Jurisdiction: Dismissal, retrenchment, strike, lock out etc.
Qualification for Appointment
1. Judge of a high court.
2. District judge or additional district judge for a period of not less than 3
years.
3. A person who held judicial office in India for not less than 7 years.
4. Presiding officer of a labour court acted for not less than 5 years.
Duties of Labour Court: The labour court has the same power of a civil court.
Functions
1. Adjudicating upon industrial disputes specified in second schedule of the
act.
2. Performing such other functions as may be assigned to it under the
Industrial Disputes Act.
INDUSTRIAL TRIBUNAL (Sec.7-A)
It may be constituted for a limited time or for any particular case. It is headed
by one person known as presiding officer.
Appointment of Accessors
The act made provision for the appointment of two accessors to assist the
tribunal.
Qualification of Presiding Officer
• He is or has been a judge of a high court, or
• He has, for a period of not less than 3 years, ben a district judge or an
additional district judge
• He should not be more than 65 years old.
Jurisdiction: Disputes Specified in the 2 and 3rd schedule of the act.

NATIONAL TRIBUNAL (Sec.7-B))

One or more national tribunals for the adjudicating of industrial disputes/
dispute of national importance or in respect of industrial establishment
situated in two or more state.
Constitution
Headed by one person only called presiding officer. Two or more accessors
may be appointed to assist the presiding officer.
Qualification of Presiding Officer (Sec 7-B (3)): Must be a Judge of High Court.
Duties of Tribunal: To hold adjudication proceedings expeditiously.
Object of Tribunal: Assure peace and harmony in the functioning of industry
with a view to achieve maximum industrial productivity.