Rights and Liabilities of Trade Unions.

A registered trade union must follow the provisions of the Trade Unions Act 1926. There are some rights and liabilities of trade unions.
A registered trade union must follow the provisions of the Trade Unions Act 1926. There are some rights and liabilities of trade unions.
Rights and Liabilities of Trade Unions
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A registered trade union must follow the provisions of the Trade Unions Act 1926. There are some rights and liabilities of trade unions. In particular, the following are some restrictions in a registered trade union: CHAPTER III of the Trade Union Act, 1926 enumerates the rights and liabilities of a registered trade unions.

Rights and Liabilities of Trade Union

Liablities :
Liablities regarding Genral Fund

An obligation is also imposed on the trade unions to spend the funds only for the purposes specified in the Act


The list of purposes of which the general funds of the union may be spent is as follows:

  1. Salaries of the office bearers.
  2. Expenses required for the administration of the Trade Union.
  3. Compensation to workers due to loss arise of any trade disputes.
  4. Allowances to members or their nominees on account of death, sickness, old age, accidents or unemployment of such members.
  5. Publishing material to create awareness among workers.
  6. Legal expenses required for defending or bringing a suit.
  7. A trade union cannot force members to subscribe to political fund under section 16.
  8. Under section 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.
  9. Section 21 allows minors more than 15 yrs of age to be members of a trade union. However, such minors cannot hold office.
  10. Under section 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 last 5 years.
  11. As per section 22, at least half of the office bearers of a trade union of workers of unorganized sector must be engaged or employed in an industry to which the trade union is connected. Also, while a union has a right to remove any office bearer, this power must be used judiciously and rules of natural justice must be followed.
  12. Under section 28, a general statement, audited in a prescribed manner, of all income and expenses must be sent to the registrar every year.

Taking insurance policies for workers. Mario Raposo vs H M Bhandarkar and others 1994 – Office bearers of a trade union invested the money from general fund into shares of UTI. This was held invalid because it is a speculative investment

Rights and Privileges of a registered Trade Union
  • A registered trade union is a body corporate with perpetual succession and a common seal. (Section 13 )
  • It can acquire, hold, sell or transfer any movable or immovable property and can be a party to contracts. (Section 13 )
  • A registered trade union can sue and be sued in its own name. (Section 13 )
  • No agreement between the members of a Registered TU shall be void or voidable merely on the ground that any of its objects is in restraint of trade.
  • Under section 15 a registered trade union has a right to establish a general fund.
  • Under section 16, a registered trade union has a right to establish a political fund. Subscription to this fund is not necessary for a member.
  • Under section 17, 18, and 19 a registered trade union gets immunity in certain criminal, civil, and contractual proceedings.
  • Under section 24, trade unions have the right to amalgamate.
  • Under section 28-F, the executive of a registered trade union has a right to negotiate with the employer the matters of employment or non-employment or the terms of employment or the condition of labor of all or any of the members of the trade union and the employer shall receive and send replies to letters and grant interviews to such body regarding such matters. It further provides that the executive is entitled to post notices of the trade union meant for its members at any premises where they are employed and that the employer shall provide reasonable facilities for that.
Immunities available to a registered Trade Union


  1. Immunity from liability in the case of criminal conspiracy under Section 120-B of the Indian Penal Code, committed by an office bearer or a member. Criminal Conspiracy is an agreement of 2 or more persons to do an unlawful act or to do a lawful act by unlawful means

However, this immunity is partial in the sense that it is available only with respect to the legal agreements created by the members for the furtherance of valid objects of a trade union as described in section 15 of the act.

The immunity cannot be claimed for an act that is an offence


Section 18 deals with the immunity from civil proceedings afforded to a Registered TU and to its members or office bearers

  • NO SUIT or LEGAL PROCEEDING is maintainable in any civil court against R.T.U in respect of any act done in contemplation or furtherance of a Trade dispute on any of the following grounds:
  • That such act induces other person to break a contract of employment.
  •  That such act interferes with the trade, business, or employment of some other person.
  • That such act interferes with the right of some other person to dispose of his capital or his labor as he wills.

Exceptions for Immunity :

  1. In order to secure immunity from civil liability, the Registered Tarde Union and its members have done the act in contemplation or furtherance of a trade dispute. The act done in furtherance must be lawful.
  2. There is no immunity against violence, cheats, or any other illegal means.

In the case of West India Steel Company Ltd. vs Azeez 1990 Kerala, a trade union leader obstructed work inside the factory for 5 hrs while protesting against the deputation of a workman to work another section. It was held that while in a factory, the worker must submit to the instructions given by his superiors. A trade union leader has no immunity against disobeying the orders. A trade union leader or any worker does not have any right by law to share managerial responsibilities. A trade union can espouse the cause of workers through legal ways but officials of a trade union cannot direct other workers individually or in general about how to do their work. They do not have the right to ask a worker to stop his work or otherwise obstruct the work of the establishment. An employer may deal with a person causing obstruction in work effectively.

In the case of P Mukundan and others vs Mohan Kandy Pavithran 1992 Kerala, it was held that strike per se is not an actionable wrong. Further, it was held that the trade union, its officers, and its members are immune against legal proceedings linked with the strike of workmen by the provisions of section 18.

In the leading case of Rohtas Industries Staff Union vs State of Bihar AIR 1963, it was held that employers do not have the right to claim damages against the employee participating in an illegal strike and thereby causing loss of production and business.

In the case of Simpson & Group Companies Workers & Staff Union vs Amco Batteries Ltd 1992 Karn., it was held that physical obstruction of movement of management officials, contractors, goods, or vehicles carrying raw materials, is not a trade union right or a fundamental right under art 19. Immunity under section 18 cannot be claimed for such activities. Right to picket is a very intangible right and it extends only up to the right of free movement of others. The methods of persuasion are limited to oral and visual and do not include physical obstruction of vehicles or persons.

  1. Section 19 Enforceability of agreements – In India, an agreement in restraint of trade is void as per section 25 of Indian Contract Act. However, such an agreement between trade union members is neither void nor voidable. It is important to note that this right is available only to registered trade unions. An unregistered trade union must follow the principles of general contract law.
Problems with Trade Unions
  1. Too many unions cause intra-union and inter-union rivalry and thus loss of precious resources that can be used for worker’s welfare.
  2. Due to politicization of unions causes the union to overlook the true welfare and benefits of the worker.
  3. Outside Leadership causes unions to lose focus because such leadership does not understand the problems of the laborers.
  4. Closed Shop/Union Shop companies forces laborers to join the union and thus causes monopoly. Close shops/Union Shops are now illegal in many countries.
  5. Sometime the employers do not recognize unions.



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