Trade Union Registration in India: Legal Framework, Procedures & Key Benefits

Introduction – Trade Union Registration

India’s industrial landscape is notably shaped by the presence and function of the Trade Unions across the country, which are critical to safeguarding workers’ rights and fostering industrial harmony. The Trade Unions in India operate under the comprehensive framework of the Trade Unions Act, 1926 (the “Act”), which is also supported by the Fundamental Right to Form Associations guaranteed by Article 19(1)(c) of the Indian Constitution.

The Trade Unions Act, 1926 provides the legal enforcement, operational principles, and the distinct advantages associated with a trade union’s registration and its recognition. Understanding these nuances is paramount for employers, employees, and legal professionals alike, as they define the rights, responsibilities, and liabilities within the realm of industrial relations.

While forming a trade union is a constitutional right and registration under the Act is not a legal prerequisite for its existence, the distinction between registered, unregistered, and recognized trade unions carries significant legal implications. An unregistered union, though not illegal, functions as a mere voluntary association of individuals, lacking corporate existence or legal personality. Consequently, it cannot sue or be sued in its name, limiting its ability to engage in formal legal proceedings or enforce collective rights. Conversely, registration provides a trade union with a distinct legal identity, confers certain immunities, privileges, and statutory rights that are unavailable to its unregistered counterparts. Furthermore, recognition by an employer, though not statutorily mandated in all states, elevates a registered union to a position of unique influence, granting it the right to sole representation in collective bargaining and other crucial prerogatives.

Procedure/Essential Conditions for Registration

Before a Union can be granted registration, it is required to comply with certain conditions, which include:

1. The union has to be sponsored by at least 7 members engaged in the trade/industry in connection with which the trade union is to be formed. Such members can apply by applying for registration to the Registrar of Trade Unions of the State in which the head office or registered office of the Trade Union is to be located. All the members applying for registration must subscribe their names to the rules of the Trade Union and also comply with the provisions of the Act relating to registration of Unions as per Section Sec. 4 of the Trade Unions Act, 1926.
2. The application for registration should be accompanied by a copy of the rules of the Trade Union, its head office, and particulars like the name of the members making the application and the addresses of the members making the application, and of the office-bearers of the Union as per Section 5. If the trade union has been in existence for more than 1 year, a general statement of its assets and liabilities has to be given. If more than half of the persons who applied for the registration cease to be members of the union or expressly dissociate themselves from the application, the application will be deemed to be invalid.
3. Section 6 lays down explicit requirements for the content of the union’s rules. A trade union is entitled to registration only if its rules make clear provisions for:
   • The name and objects of the union.
   • The purposes for which the general funds shall be applied.
   • The maintenance of a list of members.
   • The procedure for admission of ordinary and honorary members.
   • A minimum membership subscription of 25 paise per month.
   • The conditions under which members are entitled to benefits.
   • The procedure for amending rules.
   • The manner of the union’s dissolution.

The written rules framed by the Trade Union govern and determine the relationship between the Union and its members. They provide guidelines for the internal management of the Union affairs. According to Section 6, the rules of a trade union must provide for the whole of the objects for which the trade union has been established. It has been held by the Apex Court in the case of LT. Commissioner, W.B. v Indian Sugar Mills Assn., AIR 1975 SC 506, that the Court has no right to rewrite the rules of a registered trade union by deleting any of them even if in repugnancy between the two rules.

1. As per Sec. 22(1), at least half of the office bearers of a trade union of workers of the unorganized sector must be engaged or employed in an industry to which the trade union is connected. Provided that the appropriate Government may, by special or general order, declare that the provisions of this section shall not apply to any Trade Union or class of Trade Unions specified in the order. No member of the Council of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the Trade Union is connected), in the Union or a State, shall be a member of the executive or other office-bearer of a registered Trade Union as per Section 22(3).
2. The workmen of an establishment can form as many Unions as they like. There is nothing in the Act that bars the formation of rival Unions or requires a Union applying for registration to give notice to all existing Unions, as held in the case of Keshoram Rayon Workers Union v Registrar, AIR 1967 Cal 597.

When a Union seeks registration, all it has to do is to ensure that the provisions of the Act, Rules, and Regulations made thereunder relating to registration of Trade Unions have been complied with by the body of workers applying for registration.

Minimum Requirements for Membership in a Trade Union Registration

As per Section 9A of the Act, 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 seven, engaged/employed in the establishment/industry with which it is connected, as its members.

Cancellation of Registration – Trade Union Registration

The Registrar of Trade Unions possesses the power to withdraw or cancel the registration of a trade union under specific circumstances outlined in Section 10 of the Act. This power, however, is not absolute and is subject to stringent procedural safeguards. The Registrar can exercise this power in the following cases:–

1. On the application of the Trade Union.
2. If the Registrar is satisfied that the Certificate of registration has been obtained by fraud or mistake.
3. Where the Trade Union has ceased to exist.
4. If the Union has wilfully and after notice from the Registrar contravened any provisions of this Act or allowed any rule to continue in force which is inconsistent with the provisions of the Act, or has rescinded any rule providing for any matter for which it is required by Section 6.
5. If the Registrar is satisfied that a registered Trade Union of workmen ceases to have the requisite number of members.

The Act mandates that before withdrawing or cancelling a certificate (unless on the union’s application), the Registrar must provide not less than two months’ written notice, clearly specifying the grounds for the proposed action.

Regulation 9 of the Central Trade Union Regulations, 1938, provides that the Registrar on receiving an application for the cancellation of registration shall, before granting the application, satisfy himself that the withdrawal or cancellation of registration was approved by a general meeting of the Trade Union, or if it was not so approved, that it has the approval of the majority of the members of the Trade Union. For this purpose, he may call for such further particulars as he may deem necessary and examine any officer of the Union.

A Trade Union whose registration has been cancelled has remedies in the form of an appeal or to apply for fresh registration. If the appeal succeeds, the order of cancellation could be held to be void ab initio, and the Union would continue as if the order of cancellation had not been passed. If fresh registration is permitted, it would be effective from the date thereof. Once the Registrar cancels or withdraws the registration of a Union, he has no power to review it and thus cannot withdraw the order of cancellation because of subsequent events. In the case of Rashtriya Mukand Employees’ Union v Mukand Iron & Steel Works Ltd, it was held that the order of cancellation of the registration of a trade union cannot be withdrawn or revoked by the Registrar. The only remedy is to go in appeal or apply for re-registration.

Registered & Unregistered Trade Union

The Trade Union Act does not make it compulsory that every union or association must be registered under the Act. Unregistered unions or associations would not in any way be illegal (unless their object is illegal). This is emphatically so in the context of the fundamental right to form an association guaranteed by Art. 19(1)(c) of the Constitution of India.

However, if the Union is registered under the Act, it will get the immunities, privileges, and other rights contemplated under the Act, such as:

• It becomes a body corporate by the name under which it is registered.
• It gets perpetual succession and a common seal.
• It can acquire and hold both movable and immovable property.
• It can be contracted through agents.
• It can sue and be sued in its registered name.

In comparison to the registered trade union, an unregistered trade union remains a voluntary association, devoid of corporate existence or a distinct legal personality. It cannot be sued in its name, nor can its officials represent it in court as a legal entity. Any legal action against an unregistered union would typically require suing individual members who were personally involved in the alleged wrong. This severely limits its capacity for formal engagement in collective bargaining or legal recourse. Furthermore, the Supreme Court, in the case of B. Srinivasa Reddy v. Karnataka Urban Water Supply & Drainage Board Employees Assn. (2006), held that an unregistered trade union has no rights whatsoever under the Trade Unions Act. Even the rights under the Industrial Disputes Act, 1947, are generally restricted to unions registered under the Trade Unions Act as per Section 2(qq) of the Act.

Rights and Privileges of Registered Trade Unions

Registered trade unions enjoy a set of rights and privileges critical to their effective functioning and the protection of their members’ interests. Such rights and privileges includes:

1. Corporate Status and Legal Personality: As per Section 13 of the Act, upon registration, a trade union becomes a legal entity and, as a consequence, it gets perpetual succession and a corporate seal, it can acquire and hold movable and immovable property, contract through agents, and can sue and be sued.
2. Financial Autonomy: A registered trade union has the right to establish a ‘general fund’ for specific statutory purposes under Section 15 and a ‘political fund’ under Section 16. Membership subscription to the political fund is not mandatory, and non-contributors cannot be discriminated against.
3. Immunities from Certain Legal Proceedings: This is one of the most significant privileges. Registered trade unions receive:
   • Immunity from criminal conspiracy in certain trade dispute-related acts as per Section 17.
   • Immunity from civil suits in respect of acts done in contemplation or furtherance of a trade dispute, provided such acts would not be actionable if done by an individual as per Section 18.
   • Immunity from agreements in restraint of trade. While Section 25 of the Indian Contract Act declares agreements in restraint of trade as void, Section 19 of the Trade Unions Act explicitly exempts agreements between registered trade union members from this voidability, enabling unions to enforce internal rules or agreements that might otherwise be considered restrictive. This right is exclusive to the registered unions.
4. Change of Name: Any registered trade union may, with the consent of not less than two-thirds of the total number of its members and subject to the provisions of the Act, change its name. The change in the name of a registered trade union shall not affect any of its rights or obligations or render defective any legal proceeding by or against the union, and any legal proceeding which might have been continued or commenced by or against it by its former name may be continued by its new name.
5. Right to Amalgamate: Under Sec. 24, trade unions have the ‘right to amalgamate.’ 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 per cent of the votes recorded are in favour of the proposal.
6. Right to Negotiate: Under Sec. 28-F, the executive of a registered trade union has the right to negotiate with the employer the matters of employment or non-employment, or the terms of employment, or the conditions, and the employer shall receive and send replies to letters and grant interviews to such body regarding such matters.

Liabilities of a Trade Union Registration

While enjoying significant rights, a registered trade union is also bound by specific liabilities and restrictions under the Trade Unions Act, 1926:

1. Restricted Expenditure of General Funds: The general fund of a trade union cannot be spent arbitrarily. The trade union can spend funds only on the activities specified in the Section. 15. These include:
   • Salaries of office-bearers.
   • Expenses for union administration.
   • Compensation to workers for losses arising from trade disputes.
   • Welfare activities for workers.
   • Benefits to workers or their dependents in case of unemployment, disability, or death.
   • Publishing material for worker awareness.
   • Legal expenses for defending or initiating suits.
   • Taking out insurance policies for workers.
   • Speculative investments, such as investing in shares of UTI, have been held invalid as they fall outside the permitted activities (Mario Raposo v H.M. Bhandarkar, 1994).
2. No Compulsion for Political Fund Contribution: A trade union cannot force members to subscribe to political fund under Sec. 16. A member who does not contribute to the said fund shall not be excluded from any benefits of the trade union, or placed in any respect either directly or indirectly under any disability or at any disadvantage as compared with other members of the union because of his contribution to the said fund.
3. Mandatory Inspection of Records: Under Sec 20, a trade union must make available all its record books of accounts and list of membership for inspection upon request of any member or his representative.
4. Minors as Members: Section 21 allows minors more than 15 years of age to be members of a trade union. A minor enjoys all the rights of a member and executes all instruments and give all acquaintances necessary to be executed. However, such minors cannot hold office. Further, there should be no prohibition in the Rules of Trade Union on admitting any minor as its members. Normally, a person above 18 years of age is qualified to be a member of the trade union.
5. Disqualification of Office-Bearers: Under Sec 21-A, a trade union cannot appoint a person who has been convicted of a crime involving moral turpitude and has been imprisoned for 6 months or more within the last 5 years.
6. Proportion of Office-Bearers and Removal: As per Sec. 22, at least half of the office bearers of a trade union of workers of the unorganized sector must be engaged or employed in an industry to which the trade union is connected. Also, while a union has the right to remove any office bearer, this power must be used judiciously, and the rules of natural justice must be followed.
7. Annual Returns: Under Sec. 28, a general statement, audited in a prescribed manner, of all income and expenses must be sent to the Registrar every year.

Recognised & Unrecognised Trade Union

While registration grants a trade union legal personality and a range of immunities and rights, recognition by an employer confers an additional layer of privileges, particularly concerning collective bargaining. The Trade Unions Act, 1926, itself does not mandate compulsory recognition. The Trade Union (Amendment) Act, 1947, which aimed for compulsory recognition, was never brought into effect, and subsequent attempts (like the 1950 Trade Union Bill) also lapsed. Thus, recognition largely remains a matter of discretion or mutual agreement between the employer and the union.

The recognition of a Trade Union is different from its registration. A Trade Union registered under the Act is entitled to all the protections and rights contemplated by the Act even if it is not recognised by the employer, as held in the case of Sabhiyta Mandir Press v State of U.P. (1951) 1 LLJ 246. A recognised Union has certain additional privileges and rights compared to an unregistered Union:

• The right to sole representation of workers in collective bargaining.
• The right to raise general issues and enter into agreements with employers concerning terms and conditions of employment.
• The right to discuss workers’ grievances with the employer.
• The right to inspect the place of work.
• The right to nominate representatives to the grievance committee, as held in Shramik Utkarsh Sabha v Raymond Wollen Mills, 1995.

Despite the absence of a central statutory provision for compulsory recognition, some State laws, such as the Bombay Industrial Relations Act, 1946, and relevant Acts in Madhya Pradesh and Rajasthan, do provide for it. The National Commission on Labour has also advocated for compulsory union recognition under a central law for larger undertakings.

The Supreme Court’s landmark judgment in Chairman, SBI v All Orissa State Bank Officers’ Assn. (AIR 2002 SC 2279) provided a definitive comparison of rights between recognized and unrecognized unions. The Court held that an ‘unrecognized’ union is not a superfluous entity, and while their rights and privileges are limited compared to recognized unions, they are nonetheless entitled to:

• Meet and discuss with the management/employer about grievances of any individual member relating to their service conditions.
• Represent an individual member in domestic/departmental inquiries and proceedings before the Conciliation Officer/Labour Court/Industrial Tribunal.
• The management/employer cannot outrightly refuse such discussions with an unrecognized union.

This case clarified that statutory recognition of an unrecognized union is in the larger interest of industry and public policy. The fundamental freedom to form an association (Art. 19(1)(c)) does not inherently imply a right to recognition by an employer. Recognition, when conferred, brings with it specific rights, duties, and obligations, but its absence does not render an unrecognized union’s members inferior in their enjoyment of fundamental freedoms.

Conclusion – Trade Union Registration

The legal framework governing trade unions in India, primarily through the Trade Unions Act, 1926, establishes a nuanced system of rights, responsibilities, and legal standing. While the fundamental right to form associations ensures the existence of unions, registration under the Act is the pivotal step that transforms a mere voluntary association into a body corporate, bestowing upon it essential legal personality, the capacity to hold property, to contract, and, crucially, immunities from certain criminal, civil, and contractual liabilities. This distinction is not merely administrative; it defines a union’s ability to engage formally in the industrial relations landscape and access statutory protections. Beyond registration, the concept of recognition by an employer, though largely a matter of discretion or agreement outside universal statutory compulsion, confers additional, powerful privileges, particularly the right to sole representation in collective bargaining. The jurisprudence surrounding recognized and unrecognized unions clarifies that while only the former can negotiate on general issues affecting all workmen, the latter retain significant rights to represent individual grievances. For businesses operating in India, a comprehensive understanding of these multifaceted legal provisions, from the stringent requirements for union registration and the grounds for cancellation to the distinct rights and liabilities of both registered and recognized entities, is indispensable. Navigating this intricate legal terrain with precision ensures compliance, fosters fair industrial practices, and contributes to a stable working environment.

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