Registration of Trade Unions in India | Step-by-Step

Registration of Trade Unions in India | Overview

• Background
• Introduction
• Procedure for Registration of a Trade Union
• Mode of Registration
• Application for Registration
• Provisions to be contained in the rules of a Trade Union
• Power to Call for Further Particulars and to Require Alterations of Names
• Registration
• Certificate of Registration
• Minimum Number Of Members Required For A Trade Union (sec. 9-A)
• Appeal (Sec.11)
• Compulsory/Voluntary Registration
• Incorporation of Registered Trade Union (Sec.13)
• Certain Acts Not To Apply To Registered Trade Unions (Sec.14)
• Time Period for Registration of Trade Union
• Cancellation of Registration
• Legal status of a registered trade union
• Benefits of registration of trade unions
• Privileges of registered Trade Unions
• Immunities of registration of trade unions
• Difference between registration and recognition of trade unions
• National Labour Commission Reports on Registration of trade unions
• Industrial Relations Code, 2019 on Registration of Trade union
• Recommendations by the Standing committee

This article examines the provisions regarding the procedure for the registration of trade unions under the Trade Unions Act, 1926, privileges of registered trade unions and various benefits which arise out of registration. It further critically analyses the various National Labour Commission Reports and the recent Bill passed by the ministry of labour and employment regarding the registration of trade unions.

Registration of Trade Unions

Background

Trade unions developed as a result of industrialization. It is based on the principle of ‘united we stand, divided we fall’. It generally refers to an organisation of employees who have certain common goals to achieve. The conventional standpoint in the labour management relationship has changed due to the industrial revolution. Various social and economic evils made it necessary for the workers to devise effective means to deal with the employers in the form of trade unions. The growth of trade union was the result of a number of strikes, the deteriorating economic conditions of workers, low wages which could not keep pace with soaring prices and the shortage of labour.

In the words of Dale Yoder,

“A union is a continuing, long-term associations of employees formed and maintained for the specific purpose of advancing and protecting the interests of members in their working relationships.”[1]

I. Introduction

There was a spike in the number of trade unions during the end of 1925. They insisted on securing the rights of the workers, continuous industrial strikes and attempts in evolving machinery for settlement and prevention of industrial disputes. The exploitation of workers by the employers made it necessary to enact a law which can protect their interests. As a result in order to resolve the unrest among the workers and to fulfil their genuine demands ‘Trade Unions Act, 1926’ was enacted. It extended to the whole of India. The Act legalized the right to form and organize unions and thus, allowed the employees to form trade unions.

This Act has laid down detailed provisions for the procedure, formation, conditions for registration of trade unions, advantages of the procedure, advantages of registration and immunities available to the union leaders from civil and criminal laws for the activities of a registered trade union. Therefore, to provide certain advantages to a union registered under the Act, the Act has defined the Trade Union in the most comprehensive terms.

Indian Trade Unions Act, 1926 defines trade unions as

“any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions.[2]

Chapter II of the Trade Unions Act, 1926 deals with the provisions of the registration of trade unions.

II. Procedure for Registration of a Trade Union

The whole process of registration in the case of trade union registration is vested with the registrar of trade unions. Section 3 of the act provides for the appointment of the registrar of a trade union. The section authorizes the appropriate government to appoint additional and deputy registrars for each state if it thinks fit. The additional and deputy registrars are appointed where the registrar of a trade union is unable to discharge the powers and functions as prescribed. He may exercise such powers and functions of Registrar with a local limit as may be specified for this purpose.

Mode of Registration

Under Section 4 (1) of the Act, any seven or more persons who want to form a trade union can apply for its registration to the Registration of Trade Unions. In other words, there must be a minimum of seven members for the purpose of registration. The reason for the fixation of a minimum of seven members is to encourage the formation of more trade unions so that the trade union would grow. Therefore two conditions need to be fulfilled,

1. Any 7 or more members as signatories
2. Provided that there are 100 or 10% whichever is less is employed.

As per Section 4 (2) any application made under sub-section (1) for the registration of a Trade Union shall not be deemed to have become invalid merely by reason of the fact that, at any time after the date of the application, but before the registration of the Trade Union, some of the applicants, but not exceeding half of the total number of persons who made the application, have ceased to be members of the Trade Union or have given notice in writing to the Registrar dissociating themselves from the application.

The Supreme Court in Tirumala Tirupati Devasthanam[3] held that,

“any group of employees may be registered as a trade union under the Act for the purpose of regulating the relations between them and their employer or between themselves.”

The Court added:

“It cannot be disputed that the relationship between the appellant and the workmen in question is that of employer and employee. The registration of the association of the said workmen as a trade union under the Act has nothing to do with whether the said wings of the appellant are an industry or not.”

Application for Registration

As per Section 5 of the Act, every application for registration of a Trade Union shall be made to the Registrar. It should be accompanied by a copy of the rules of the Trade Union and a statement of the following particulars, namely:-

1. The names, occupations and address of the members making the application;
2. The name of the Trade Union and the address of its head office; and
3. The titles, names, ages, addresses and occupations of the office-bearers of the Trade Union.

Where a trade union has been in existence for more than a year, then a copy of the assets and liabilities of the Trade Union shall also be submitted along with the application for registration.

Provisions to be contained in the rules of a Trade Union

According to Section 6 of the Act, a Trade Union shall not be entitled to registration under the Act unless the executive committee has been established in accordance with the provisions of the Act and the rules provide for the following-

(a) The name of the Trade Union;

(b) The whole of the objects for which the Trade Union has been established;

(c) The whole of the purposes for which the general funds of the Trade Union shall be applicable, all of the purposes to which such funds are lawfully applicable under this Act;

(d) The maintenance of a list of the members of the Trade Union and adequate facilities for the inspection thereof by the office-bearers and members of Trade Union;”

(e) The admission of ordinary members who shall be persons actually engaged or employed in an industry with which the Trade Union is connected, and also the admission of the number of honorary or temporary members as office-bearers required under section 22 to form the executive of the Trade Union;

(ee) The payment of a subscription by members of the Trade Union which shall be not less than:

1. One rupee per annum for rural workers.
2. Three rupees per annum for workers in other unorganized sectors.
3. Twelve rupees per annum for workers in other cases.

In M. T. Chandrasennan[4] the court held that,

“The members of trade unions are members under section 6(ee). The payment of subscription by members to the trade union has been made compulsory under section 6 (ee) of the Act. The trade unions cannot refuse to receive subscription from its members.”

(f) The conditions under which any member shall be entitled to any benefit assured by the rules and under which any fine or forfeiture may be imposed on the members:

(g) The manner in which the rules shall be amended, varied or rescinded;

(h) The manner in which the members of the executive and the other office-bearers of the Trade union shall be appointed and removed;

(hh) The duration of the period being not more than three years for which the members of the executive and other office-bearers of the Trade Union shall be elected;

(i) The safe custody of the funds of the Trade Union, an annual audit, in such manner, as may be prescribed, of the accounts thereof, and adequate facilities for the inspection of the account books by the office-bearers and members of the Trade Union; and

(j) The manner in which the Trade Union may be dissolved.

Power to Call for Further Particulars and to Require Alterations of Names

Under Section 7,

1. The Registrar may call for further information for the purpose of satisfying himself that any application complies with the provisions of section 5, or that the Trade Union is entitled to registration under section 6, and may refuse to register the Trade Union until such information is supplied.
2. If the name under which the Trade Union is proposed to be registered is identical with that by which any other existing Trade Union has been registered or, in the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the public or the members of either Trade Union, the Registrar shall require the persons applying for registration to alter the name of the Trade Union stated in the application and shall refuse to register the Union until such alteration has been made.

Registration

Section 8 provides that, if the Registrar is satisfied that the Trade Union has complied with all the requirements of this Act in regard to registration, then he shall register the Trade Union.

In North Central Railway Employees Sangh and Ors.,[5] it has been held:

“Whether the registration is rightly given or not, can be examined only by the competent statutory authority established under the Trade Unions Act. The police authorities have no competence to give opinion on this aspect.”

In Inland Seam Navigation Workers’ Union,[6] a request for registration was made through an application by the workers’ union but it was turned down by the Registrar declaring it unlawful on the basis of its object to be for all practical purposes. The Justice Derbyshire said:

“In my view, the duties of the Registrar were to examine the application and to look at the objects for which the union was formed. If those objects were objects set out in the Act, and if those objects did not go outside the objects prescribed in the Act and if all the requirements of the Act and the regulations made thereunder had been complied with, it was his duty, in my view, to register the union.”

In R.K. Women’s Union,[7] there was a question as to the obligation of Registrar to hear before making an order under section 8. The Court answered and observed:

“Once, therefore, the Registrar is satisfied that the requirement of the statute have been complied with, it is obligatory upon him to enter in a register the applicant-union and he has no objection to hear the existing unions in the field before making the order under section 8.”

In ONGC Workmen’s Association,[8] the Court held that,

“Any order passed under Section 8 by the Registrar must be administrative in nature. The Registrar is not deemed to be a quasi-judicial authority to decide any disputed question of fact or law. He has no authority to ask for any of the parties to lead evidence and to give opportunity to the other party to cross examine any witness.”

Therefore, under section 8, the scope of inquiry by the registrar is very limited.

Certificate of Registration

The Registrar, on registering a Trade Union under section 8, shall issue a certificate of registration in the prescribed form under Section 9 of the Act. The certificate will act as conclusive evidence that the Trade Union has been duly registered under this Act.

“This finality is only for the purposes of the Act and cannot in any way affect the powers of the High Court under Article 226 of the Constitution as the provisions of the statute are always subjected to the jurisdiction of the Constitution.[9] ”

In Telco Workers’s[10] Case, the High Court has laid down,

“There is no provision in the Trade Unions Act, 1926 which confers a power on the Registrar, Trade Unions to adjudicate the inter se dispute between the parties. The Registrar has no power under the Act to entertain grievances of private members of the Trade Unions though, a complaint may become a source of information to the Registrar, for forming an opinion for issuing show cause notice under Section 10 of the Act.”

Minimum Number Of Members Required For A Trade Union (sec. 9-A)

A registered Trade Union of workmen shall at all times continue to have not less than 10% or 100 of the workmen, whichever is less, subject to a minimum of 7, engaged or employed in an establishment or industry with which it is connected, as its members.[11]

Appeal (Sec.11)

(1) Any person aggrieved by any refusal of the Registrar to register a Trade Union or by the withdrawal or cancellation of a certificate of registration may, within such period as may be prescribed, appeal-

1. where the head office of the Trade Union is situated within the limits of a Presidency town to the High Court, or
2. where the head office is situated in any area, to such Court, not inferior to the Court of an additional or assistant Judge of a principal Civil Court of original jurisdiction as the Appropriate Government may appoint in this behalf for that area.”

Compulsory/Voluntary Registration

The registration of trade union is not compulsory but is just voluntary under the Act. The question of voluntary registration is, however, debatable. Two conflicting views are discernible:

1. Compulsory registration would prove burdensome and expensive. It is felt that the present legal position should continue. The provisions of the Trade Union Act, 1926 itself affords legal status and protection to trade union members which will encourage trade unions to get themselves registered;
2. The registration of trade unions should be made compulsory because all the unions shall be governed by the provisions of the Act and the rules framed thereunder in a similar manner.” [12]

The National Commission of Labour too shared this view. The view of the Commission is that

“The registration of trade unions should be made compulsory because it will bring the application of same standards of obligation to all unions. The second view seems to be better. It will not only bring the application of uniform standards and obligation to all unions, but would prevent fraud, embezzlement or deception practiced upon members by unscrupulous persons. Further, it will result in qualitative improvement of their organization and functioning. Moreover, it will strengthen the trade union movement. This should however, be done in stages.”[13]

Incorporation of Registered Trade Union (Sec.13)

“Every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.”[14]

Certain Acts Not To Apply To Registered Trade Unions (Sec.14)

The following Acts namely-.

1. The Societies Registration Act, 1860 (21 of 1860)
2. The Co-operative Societies Act, 1912 (2 of 1912)
3. The Companies Act. 1956 (1 of 1956))

shall not apply to any registered Trade Union, and the registration of any such Trade Union under any such Act shall be void.

III. Time Period for Registration of Trade Union

No time period for the grant or refusal of registration has been mentioned in the Trade Unions Act, 1926. There is only a statutory duty of the Registrar to register a trade union if the requirements of the statute have been complied with. But there is no time limit for the grant or refuse the registration in case, any of the provision of the Act has not been complied with. Now the question arises whether the court may interfere in this regard.

In ACC Rajanka Lime Stone Quarries Mazdoor Union[15], the union filed a writ petition before the Patna High Court saying that no action was apparently taken under Sections 7 and 8 on the application for over 3 months. It prayed that the Registrar of Trade Unions be directed to perform his statutory duty of registering or refusing to register the trade union under the Act. The High Court of Patna held that,

“Section 8 imposes the statutory duty upon the Registrar to register a trade union on being satisfied that it had complied with the requirements of the Act. The court directed the Registrar of Trade Unions to perform the statutory duty imposed upon him under Sections 7 and 8 and to deal with the application of the trade union according to law at an early date.”

Cancellation of Registration

Under Section 10 – “A certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar-

1. on the application of the Trade Union to be verified in such manner as may be prescribed;
2. if the Registrar is satisfied that the certificate has been obtained by fraud or mistake or that the Trade Union has ceased to exist or has wilfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision or has rescinded any rule providing for any matter provision for which is required by section 6”

Provided that not less than two months previous notice in writing specifying the ground on which it is proposed to withdraw or cancel the certificate shall be given by the Registrar to the Trade Union before the certificate is withdrawn or cancelled otherwise than on the application of the Trade Union.

In the case of Solapur District Central Co-operative Bank Employees Union, Solapur, the Registrar cancelled the registration of the Union after single show-cause notice of two months. The Mumbai High Court held that generally, a second show-cause notice is required to be issued. However, it further held that where the contravention is of an aforesaid kind, one single notice of two months may be sufficient. Hence the cancellation of registration was valid.

IV. Legal status of a registered trade union

1. A trade union that has been registered is a body corporate which has a common seal and a perpetual succession.
2. It can hold, sell, acquire or transfer any property may be movable or immovable and can also be a party to the contract.
3. It can be sued and can also sue in its own name.
4. Also, no civil suit or any other legal proceeding can be brought against a registered trade union in respect of any act done in furtherance of a trade dispute under certain circumstances.

An agreement between the members of a trade union that has been registered shall not be voidable or void merely on the ground that the agreement or its object is in restraint of trade

V. Benefits of registration of trade unions

A registered trade union is considered to be a body corporate which gives it a status of legal entity which may hold and acquire the property. If can enter into contracts and can also sue others. As we have seen already, the registered trade union is immune from certain civil, criminal and contractual liability. The registration of trade unions is mandatory. It is only optional. The registration of trade unions under the said act does not automatically imply that a particular trade union has earned recognition status that has been granted by the employer generally.

It is a matter of agreement between the employer and a trade union unless different states in India have specific legal recognition of trade unions. Ideally, a trade union must obtain legitimacy through registration under the TU Act and then seek recognition as a sole bargaining agent either under the appropriate law or an employer-employee agreement.

Privileges of registered Trade Unions

The employers were given damages and the unions were made responsible for illegal conspiracies in the case of Buckingham and Carnatic mills. The Trade Unions Act, 1926 has made provisions for the members and office-bearers of a registered trade union from criminal and civil conspiracies during the strikes and causing any financial loss to the employer. The Trade Unions Act, 1926 seeks to insulate two types of protection only to a fraction of labour force, i.e., exemption from criminal conspiracy and exemption from civil suits under section 17 & 18.

VI. Immunities of registration of trade unions

1. Section 17 gives immunity from the criminal liability
2. Section 18 provides for immunity from the civil liability
3. Section 19 provides privilege to make agreements in restraint of trade.

The above-mentioned sections of the Trade Unions Act confer some special immunities to the trade unions that have been registered under the act.

VII. Difference between registration and recognition of trade unions

The most important difference between registration of trade unions and recognition of trade unions is that the former is done by the registrar and the latter is done by the management as a collective bargaining agent.

Both the registration and recognition is not compulsory under the trade unions act. It is purely the discretion of the management to recognise any such trade unions and it has no inherent right to be recognised. Once trade unions are recognised, they are conferred certain rights upon them.

VIII. National Labour Commission Reports on Registration of trade unions

National Labour Commission in 1969 reviewed many of the labour legislation and proposed many recommendations, it also reviewed the trade unions act 1929.

The Commission has, inter alia, strongly recommended that

1. Registration of trade unions must be made compulsory;
2. The registrar must be time-bound to decide the issue of registration.
3. Effective measures must be taken for cancellation if the unions do not comply with conditions regarding the filing of returns or membership;

In the sequel to the recommendations made in the report of the first national commission on labour series of labour, enactments were passed.

After the gap of almost 72 years, the Second National Labour Commission has been constituted and submitted its report in the year 2002 to the Government of India.

The Commission has recommended that union registration eligibility condition i.e. requirement of 10 per cent membership in an establishment shall not apply in the case of unions or associations in the unorganised sector; this recommendation is a clear recognition of the increasing importance of this sector and the difficulties in organising these workers. This will surely give the union movement its much needed legal incentives to enlarge its base. But one is not sure how far the unions of unorganised workers will be able to comply with the wide-ranging requirements attendant on registration. The union law in India regulates the internal affairs of the unions.[16]

Industrial Relations Code, 2019 on Registration of Trade union

In India, labour falls under the Concurrent List of the Constitution. Therefore, both Parliament and state legislatures can make laws regulating labour. Currently, there are over 100 state and 40 central laws regulating various aspects of labour such as the resolution of industrial disputes, working conditions, social security and wages.[17]

In this context, the Industrial Relations Code, 2019 was introduced in Lok Sabha by the Minister of Labour and Employment, Mr. Santosh Kumar Gangwar, on November 28, 2019. It was referred to the Standing Committee on Labour on December 23, 2019. The standing committee has given its report on April 23, 2020.

The Industrial Relations Code has said that the same criteria and conditions continue to apply for the registration of trade unions. It has not changed any provisions of the Trade Unions Act, 1926 regarding registration of trade unions.[18]

Recommendations by the Standing committee

The Committee notes that no time limit has been prescribed for the Registration of a Trade union under Clause 6(1) despite the long-standing demand of the Central Trade Unions for prescription of a definite time limit for the purpose. As a decision regarding the registration or otherwise of a Trade Union, after going through the due processes, within a specific time limit would bring in certainty and transparency, the Committee recommends that a time limit of 45 days be prescribed to process and finalise the application irrespective of the outcome of the scrutiny of the application. [13.40]

In view of the fact that at times someone may sign the application under force or duress or misjudgment, the Committee desire the Ministry to revisit the Clause 6 (3) and make suitable amendments so as to render the application invalid in case any signatory to the application, irrespective of the percentage of the total number of applicants, dissociates himself or themselves from the application, in writing before the registration. [13.42]

The Committee, urge the Ministry to modify the wordings of Clause 9 (1) so as to ensure that the registration is mandatory if all the requirements are complied with and the powers vested with the Registrar are in conformity with the principles laid down in the ILO Convention No. 87. [13.45]” [19]

In the Dissenting note by Shri M. Shanmugam, MP on the Industrial Relations Code, 2019, he has said that,

“Registration of Trade Unions: No time limit is fixed for registration of trade unions. But in the discussion with the Ministry, it was agreed that the trade union must be registered within 45 days; otherwise, it would be deemed to have been registered. That provision has been deleted in the present Code which is against the ILO Convention 87.”

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Further references

1. [First] National Commission on Labour (FNCL), (1969), The Report, Government of India.
2. HMS (2002), “Second Labour Commission’s Recommendations X-rayed”, HMS Bulletin, October.
3. Ramaswamy, E. A. (1988), Worker Consciousness and Trade Union Response, Oxford University Press, Delhi
4. Venkata Ratnam, C.S. (2000), “India and International Labour Standards”, Indian Journal of Industrial Relations, Vol.35, No.4, pp. 461-85

[1] Dale Yoder, “Personnel Management and Industrial Relations” (1974) p. 524, Prentice Hall, New Delhi.

[2] Sec. 2 (h) of the Trade Unions Act, 1926.

[3] (1995) Supp (3) SCC 653.

[4] AIR 1947 SC 1789

[5] (2017), MANU/UP/0365/2017

[6] AIR 1963 Cal 57

[7] (1968) AIR 335 (Calcutta).

[8] (1988) Lab. IC 555 at 560.

[9] Inserted by Act No. 31 of 2001 w.e.f. 9-1-2002.

[10] Telco Workers Union v. State of Jharkhand, 2015 II LLJ 448 (Jhar).

[11] Section 9-A inserted by the Trade Unions (Amendment) Act, 2001.

[12] K V Sridharan v. S Sundarmoorthy, 2009 LLR414.

[13] Govt. of India, “Report of the National Commission on Labour” (1969) p. 295.

[14] Kandan Textile Ltd. v. Industrial Tribunal, AIR 1951, Mad. 661.

[15] AIR 1958 Pat. 475.

[16] Shyam Sundar.K.R, ‘Second National Commission on labour and reform of industrial Relations system'(2006)pp.252,270

[17] “List of Central Labour Laws Under Ministry of Labour and Employment”, Ministry of Labour and Employment, Available Here

[18] The Industrial Relations Code 2019, India, available here (visited on May 18, 2020)

[19] Standing committee on labour, 8th report on Industrial Relations Code,2019 at p. 47

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1. Development of Labour Laws in India
2. Introduction to Labour Laws: Scope and Development