Trade Union Act, 1926 : An Overview

A trade union is an association which consists of workers who endeavor to help laborers in issues identifying with fairness in pay, long working hours, a good working environment and other advantages that they ought to be qualified for rather than their work. These organizations act as a link between the employers and the employees. Prior to the development of industrialization on an enormous scale, there was a personal agreement between the workers and managers. In this way, there was no need for the advancement of any machinery overseeing the relationship between the laborer and managers.

But as soon as the modern factory system was established, the relationship lost its significance due to massive-scale industrialization which lured employers to decrease the cost of production, in order to withstand the ferocious rivalry in the market and maximize their profit by utilizing a more technologically complex mode of production which brought about the ascent of another class of laborers who were totally depended on their wages for their endurance. This changed the existing employer and employee relation where workers were abused and exploited by their managers. The irreconcilable situation among laborers and managers, and the distress of the laborers brought about the development of different trade unions.


In India, the trade unions have evolved into a significant platform for setting up the requests of the laborers. They have likewise transformed into one of the most persuasive pressure groups and try to influence the Government to frame the legislation which is in favor of the workers without trying to become a part of the Government. Trade Unionism took its solid shape after the end of the First World War. The requirement for an organized trade union was acknowledged in 1875 by several social workers like Shri Sorabji Shapaji Bengali and Shri N.M. Lokhande whose endeavors brought about the development of trade unions like The Printer Union of Calcutta (1905), The Bombay Postal Union (1907), etc.

The first labor association of India was The Bombay Mill-Hands Association, which was founded by N.M. Lokhande in 1890. Following this, many other trade unions were formed like the Madras Labor Union, Ahmedabad Textile Laborers Association, etc.


Labor legislation has an impact on the evolution of industrial relations in India. The foundation of social equity has been the basis of all the labor laws in India. The foundation of the International Labor organization to elevate the state of work everywhere throughout the world gave further catalyst to the requirements for well-framed labor law-making in the nation. A few other internal factors like the Swaraj Movement of 1921- 24 and the Royal Commission on labor additionally prepared for different labor laws and furthermore energized the composers of the Constitution to include such laws in the Constitution which will profit the workers. Labor is a part of the concurrent list and therefore both the centre and state can make laws identified with it. The Trade Union Act, 1926 is one of the several labor legislations in the country.

The Trade Union Act, 1926 is associated with the registration and protection of the trade unions. Following are the objectives of the act:

  1. To protect the workers against exploitation by employers
  2. To represent the grievances of employees on behalf of them to the management
  3. To protect and safeguard the rights of the workers provided to them under the employment clause or labor laws.
  4. To increase participation for decision making
  5. To take disciplinary action against the workers doing in-disciplinary acts.

Let us look at some important concepts covered by this act-

  1. Trade Dispute [Section 2 (g)]– A trade dispute means any dispute between 1) employer and employee, 2) employee and employee, 3) employer and employer and employers concerned with employment or not employment or the working conditions provided.
  2. Registered Trade Unions [Section 2(e)]– A registered trade union simply means a trade union which is registered under the Trade Union Act, 1926 implementing all the clauses of the act. Some registered trade unions are- All India Trade Union Congress (AITUC), National Labor Organization (NLO), etc.


  1. Minimum 10% workmen out of total workmen’s from same industry should be members of the Trade union on the date of registration
  2. Minimum 7 workmen out of the total workmen from the industry should be members of the trade union on the date of registration
  3. Strength of the workmen in particular industry or establishment must be at least 70 to enable them to form a trade union and get registered under the Act.

Application for registration of Trade Union should contain- [Section 5]

  1. Name of 7 persons in Trade Union
  2. Occupation of persons
  3. Address of persons
  4. Place of work of persons
  5. Name of the trade Union
  6. Address of the Trade Union Head office

Features of the registered Trade Unions [Section 13]

  1. Registered Trade Unions have Perpetual Succession
  2. Registered Trade Unions have a common seal
  3. Registered Trade Unions can sue others
  4. Registered Trade Unions can be sued by others
  5. Registered Trade Unions can acquire and hold both movable and immovable property


A registered trade Union has the right to maintain a General Fund and a separate Political Fund.

General Fund and its Objectives [Section 15]

  1. Payment of salaries and allowances
  2. Payments of expenses for administration of Union including expenses spend on defending any legal proceeding by or against the union.
  3. Settlement of Trade Disputes
  4. Expenditure on Trade Union member for death, sickness or accidents.
  5. Providing educational, social, religious benefits to Trade Union members
  6. For any other unlikely uses of General Funds by Trade unions except the general-purpose use.

Political Funds and its Objectives [Section 16]

  1. Electoral meeting for the distribution of any document or literature supporting Electoral Candidate which might be a local authority or a member of legislative body according to the constitution.
  2. For Political Meeting or distribution of Political Literature or document of any kind.
  3. For maintenance of a member of the legislative body according to the constitution.
  4. No workmen are obligated for contributing in political fund.
  5. Non Payment or Payment of political fund can’t be considered as an important condition for Trade Union Membership.

Trade Union Act, 1926 is a government-assisted enactment which has been created to safeguard the laborers in both organized and unorganized sectors from barbaric treatment and to protect their human rights. As such the enactment contains the arrangements for the registration, regulation, benefits, and protection of the trade unions which, therefore, benefits the laborers.

This article is authored by Swaranjali Kapoor, Second-Year, B.A. LL.B student at JIMS School of Law, Greater Noida 

Also Read – Unfair Labour Practices on the Part of Employers and Trade Unions of Employers

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