Explanation of Section 15 of the Trade Unions Act: Objects on Which
General Funds May Be Spent
This provision restricts how a registered Trade Union can utilize its general funds.
The funds cannot be used for any purpose other than those explicitly mentioned in
the provision. The primary objective is to ensure that the funds are spent for the benefit
of the Trade Union and its members.
Permissible Uses of General Funds
1. Salaries and Expenses of Office-Bearers (Clause a)
o The Trade Union can use its funds to pay salaries, allowances, and
expenses of its office-bearers (such as the President, Secretary,
Treasurer, etc.).
o This ensures that union officials are compensated for their work.
2. Administrative Expenses (Clause b)
o Funds can be used for administration and management of the union,
including:
Office expenses
Audit of accounts
Any necessary operational costs
3. Legal Proceedings (Clause c)
o The union can finance legal expenses for itself or its members in cases
that:
Protect the union’s rights
Defend members' employment rights against employers
Defend members from disputes arising with employees under their
supervision
4. Handling Trade Disputes (Clause d)
o The union can fund trade disputes on behalf of itself or its members,
such as:
Negotiations with employers
Strikes and other collective bargaining efforts
5. Compensation for Loss Due to Trade Disputes (Clause e)
o Members who suffer financial losses due to involvement in trade disputes
(e.g., strikes) can be compensated.
6. Welfare Allowances for Members & Dependents (Clause f)
o Funds can be used to support members or their dependents in case of:
Death
Old age
Sickness
Accidents
Unemployment
7. Insurance for Members (Clause g)
o The union can take out insurance policies for its members, covering:
Life insurance
Health insurance
Accident insurance
Unemployment insurance
8. Educational, Social, or Religious Benefits (Clause h)
o Funds can be spent on:
Education programs for members
Social and religious benefits, including funeral and religious
ceremonies for deceased members
Purpose of This Provision
Ensures transparency and proper use of Trade Union funds.
Prevents misuse of funds for purposes not related to workers’ welfare.
Supports the collective strength of workers by allowing funds for legal aid, trade
disputes, and welfare schemes.
This section ensures that a Trade Union’s resources are used exclusively for the
betterment and protection of its members rather than for unrelated or personal
expenses.
Section 16- Explanation of Section 16 of the Trade Unions Act, 1926:
1. Separate Fund for Political Purposes:
A registered Trade Union is allowed to create a separate fund for political activities.
This fund must be separately levied or contributed to voluntarily by members and cannot
be sourced from the general funds of the Trade Union.
2. Permissible Uses of the Political Fund (Sub-section 2):
The funds collected can only be used for specific political purposes, such as: (a) Election
Expenses: Paying expenses for a candidate contesting elections to legislative bodies
(Parliament, State Legislatures, or Local Authorities).
(b) Campaign Activities: Holding meetings or distributing literature/documents to support a
candidate.
(c) Support for Elected Members: Providing financial assistance to a member who is elected
to a legislative body or local authority.
(d) Electoral Activities: Registering electors and selecting candidates for elections.
(e) Political Mobilization: Organizing political meetings or distributing political literature.
3. Protection of Members' Rights (Sub-section 3):
No member of the Trade Union can be forced to contribute to the political fund.
If a member chooses not to contribute, they cannot be deprived of any benefits of the
Trade Union.
Non-contributing members cannot be placed at a disadvantage, except in relation to the
control or management of the political fund.
Key Implications:
Trade Unions can engage in political activities, but their political expenses must be
funded separately from their general funds.
Voluntary Contributions: No member can be compelled to contribute, ensuring freedom
of political choice within the union.
Non-discrimination: A non-contributing member still enjoys all union benefits, ensuring
fairness in treatment.
This provision balances the role of trade unions in political activities while ensuring that
members have freedom of choice regarding political contributions.
Explanation of Section 17 of the Trade Unions Act, 1926
1. Protection from Criminal Conspiracy Charges:
This provision protects trade union members and office-bearers from being punished under
Section 120B(2) of the Indian Penal Code (IPC) for engaging in collective action, provided
their activities align with the lawful objectives of the trade union (as listed in Section 15).
2. Key Conditions for Protection:
The agreement between trade union members must be for legitimate trade union
activities, such as protecting workers' rights, conducting strikes, or negotiating better
conditions.
No punishment can be imposed unless the agreement involves committing a criminal
offence (e.g., violence, sabotage, or any act explicitly illegal under the law).
3. Exception – Agreements to Commit an Offence:
If trade union members conspire to commit an illegal act (e.g., destruction of property,
assault, or fraud), they lose protection under this section.
Such actions will be punishable under Section 120B(2) IPC, which deals with criminal
conspiracy.
4. Purpose of the Provision:
Encourages collective bargaining and legitimate union activities without fear of
prosecution.
Ensures that trade union members cannot misuse this immunity to justify unlawful acts.
Balances workers' rights with legal accountability.
Illustrative Example:
Protected Activity:
Union members agree to go on a peaceful strike demanding higher wages.
They hold a protest rally without resorting to violence.
They boycott work as a pressure tactic.
Not Protected (Punishable Under IPC Section 120B(2)):
Union members conspire to burn down the factory during a strike.
They plan to assault a manager who refuses their demands.
They agree to steal company property to protest wage cuts.
Conclusion:
Section 17 provides legal immunity for trade unions engaged in lawful collective action while
ensuring that unions do not misuse this protection to commit crimes.
Explanation of Section 18 of the Trade Unions Act, 1926
This provision grants immunity from civil liability to registered trade unions and
their members in certain cases related to trade disputes. The purpose is to protect
legitimate trade union activities from being unduly hindered by civil suits while
ensuring that unions remain accountable for wrongful acts done beyond their scope.
1. Protection from Civil Suits for Certain Acts (Subsection 1)
What is Protected?
A registered trade union, its office-bearers, or members cannot be sued in a civil
court for actions taken in contemplation or furtherance of a trade dispute if:
The action induces someone to break an employment contract (e.g.,
persuading workers to go on strike).
The action interferes with trade, business, or employment (e.g., blocking new
hires or suppliers from working with an employer).
The action interferes with another person’s right to use their labor or capital
freely (e.g., convincing workers not to work for certain wages).
What is Not Protected?
If the act goes beyond lawful trade union activities, like violence, destruction
of property, or coercion, the union loses its immunity and may be sued.
Example:
Protected: A trade union calls for a peaceful strike, leading to temporary
disruption of business operations.
Not Protected: A union forcibly prevents willing workers from entering the
workplace or damages the employer’s property.
2. No Liability for Certain Tortious Acts (Subsection 2)
A trade union is not liable for a tortious act (i.e., a wrongful civil act like
defamation, nuisance, or obstruction) committed by its agent if:
o The act was done in contemplation or furtherance of a trade dispute;
and
o The act was done without the knowledge or against the instructions of
the trade union executive.
However, if the union’s executive was aware of the act and allowed it, the
union can be held liable.
Example:
Not Liable: A union leader calls for a peaceful protest, but an individual member,
acting on his own, damages company property. If the union had no knowledge
or had instructed members against such acts, it is not liable.
Liable: If the union endorses or encourages damaging company property, it can
be held responsible.
Key Takeaways:
Encourages lawful trade union activities without fear of civil litigation.
Shields unions from employer retaliation via civil suits for lawful strikes and
protests.
Prevents misuse—unions remain liable for unlawful acts done with their knowledge or
approval.
Balances workers’ rights and employer interests—legitimate industrial action is
protected, but illegal actions are not.
This section is crucial in empowering trade unions while maintaining accountability
within the legal framework.
Explanation of Section 19 of the Trade Unions Act, 1926
This provision deals with the enforceability of agreements made between members
of a registered trade union, particularly those that might otherwise be considered in
restraint of trade under common law.
1. General Rule: Agreements Not Void Due to Restraint of Trade
Normally, under contract law, agreements that restrict trade or business
activities are considered void.
However, this section exempts trade union agreements from that general rule.
This means:
o Any agreement between members of a registered trade union cannot
be declared void or voidable merely because it restrains trade (e.g.,
agreements to call a strike, boycott certain businesses, or negotiate
collective wages).
o Why? Because such agreements are necessary for collective bargaining
and trade union activities, and banning them would weaken workers'
rights.
Example:
If members of a trade union agree not to work for a particular employer until
better wages are negotiated, this agreement cannot be declared void simply
because it restricts trade.
2. Limitation: Agreements Cannot Be Enforced in Civil Courts
While such agreements are not void, they cannot be legally enforced in a Civil
Court if they relate to:
Selling goods
Conducting business
Working, employing, or being employed
Example:
If a union agreement states that "No member shall work for Company X until
wages are raised," a member who violates this cannot be sued in court for
damages for breaking the agreement.
Key Takeaways:
Protects trade union agreements from being invalidated due to restraint of trade.
Encourages collective bargaining and protects workers’ rights.
Limits enforceability in civil courts to prevent legal disputes over union-imposed
conditions on trade and employment.
Balances freedom of contract with labor rights—agreements are valid but not
legally enforceable in courts.
This provision ensures that trade unions can function effectively while preventing
legal disputes that could arise from enforcing union agreements through the judiciary.
Explanation of Section 21 of the Trade Unions Act, 1926
This provision deals with the rights of minors (individuals below 18 years) to
become members of a registered trade union and the extent of their participation in
union activities.
1. Minors Can Become Trade Union Members
Eligibility: Any person who has attained the age of 15 years can become a
member of a registered trade union.
This provision ensures that young workers, such as apprentices or those
employed in industries, have the right to union representation.
However, the trade union’s internal rules may impose additional conditions or
restrictions.
Example:
If a factory worker aged 16 wants to join a trade union, he/she can do so,
provided the union’s rules do not specifically prohibit minors from membership.
2. Minors Have Full Rights as Trade Union Members
Once a minor (15 years or older) joins a trade union, he/she is entitled to all
rights that a regular member enjoys.
This includes:
o Participating in union activities (e.g., meetings, protests, or voting in
union matters).
o Executing necessary documents related to the union (such as signing
agreements or petitions).
o Receiving union benefits, if applicable.
Example:
A 17-year-old factory apprentice who is a union member can vote in union
elections, receive legal aid from the union, and sign union petitions.
Key Takeaways:
Empowers young workers (15 years and above) to join trade unions.
Provides minors with full membership rights, including participation in union
activities.
Union rules may impose restrictions, but the law permits membership.
Protects young workers’ interests by giving them collective bargaining power.
This provision recognizes the importance of trade unions in protecting workers of
all ages, including young workers, and ensuring their rights are represented in
employment matters.
