India saw the growth of industrialisation and capitalism during the initial years of the 20th Century. With the number of workers increasing with each passing day, it became important to safeguard and protect the rights of these workers and to formalize the groups thus formed. Therefore, for the registration and protection of these groups of workers, the Indian Trade Unions Act, 1926 (now known as Trade Unions Act, 1926) was enacted on March 25, 1926.
The Trade Unions Act, 1926 defines a trade union 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. A group of seven or more members of a trade union may apply for registration of a trade union with the concerned Registrar of trade unions. A registered trade union is a body corporate by the name under which it is registered, having perpetual succession and a common seal with the power to contract and to hold movable and immovable property. A trade union may sue or be sued in its name.
The Industrial Disputes Act, 1947 defines “Trade Union” as a trade union registered under the Trade Unions Act, 1926. Therefore, any Trade Union, which is not registered under the Trade Unions Act, cannot be treated as a Trade Union under the Industrial Disputes Act, 1947. An unregistered trade union has no manner of right whatsoever and the rights available under the Industrial Disputes Act, 1947 have been limited only to those trade unions which are registered under the Trade Unions Act, 1926.
It is often witnessed that workers form their own association without registering their union under the Trade Unions Act. Such unions negotiate bonus, incentives and other conditions of service with the employer and the employers also give their views due regard. On account of such recognition by the employers, the union of workers are often drawn into believing that they are a trade union having significant negotiation powers with the employer without realizing that their association or union does not enjoy the recognition as a trade union under law and thus the powers given to trade unions under the Industrial Disputes Act does not apply to them.
Though an unregistered trade union may function as a normal trade union defined under the Trade Unions Act, an unregistered trade union neither has the power to raise an industrial dispute, nor the power to represent an employee or be part of any proceedings under the Industrial Disputes Act. An unregistered trade union is also incapable of entering into a contract with the employer on behalf of the members or employees, and if it does so, the enforcement of the same by such an association or union in its name may not be possible.
To illustrate the differences further, a registered trade union is entitled to communicate the names of ‘protected workmen’ to the employer in accordance with the Industrial Disputes (Central) Rule, 1957 and the employer is bound not to change the conditions of service of such protected workmen during the pendency of any industrial dispute. However, an unregistered trade union has no power to name ‘protected workmen,’ and, if it proceeds to name certain workmen as protected, the same has no sanctity in law. In other words, the protection afforded to ‘protected workmen’ under Section 33 of the Industrial Disputes Act is not available to ‘protected workmen’ so named by an unregistered trade union.
Similarly, in the event of a dispute, Section 36 of the Industrial Disputes Act, 1947 entitles a workman who is a party to a dispute to be represented in any proceeding under the said Act by any member of the executive/office bearer of a registered trade union of which he is a member. However, the said benefit is not applicable in the case of an unregistered trade union.
The High Court of Calcutta in Calcutta Port Trust Union Vs. Haldia Shore Ship and Transport Handling Workers Co-Operative Construction Society Ltd. and Another has held that “any Trade Union, who is not registered under the Trade Unions Act, cannot be treated as the Trade Union under the Industrial Disputes Act, 1947”. The Court has further held that “Section 36 which deals with the representation of parties in clear terms stipulates that a workman is entitled to be represented in any proceeding under the Industrial Disputes Act by any member of the executive or other office-bearer of a Registered Trade Union.”
To summarize, if the intention of the workmen forming an association is to act as a trade union, it is necessary for them to register the trade union under the Trade Unions Act, 1926.
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