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The Trade Union Act 1926

The trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful organisation of labour to enable collective bargaining. It also confers on a registered trade union certain protection and privileges.

The Act extends to the whole of India and applies to all kinds of unions of workers and associations of employers, which aim at regularising labour management relations. A Trade Union is a combination whether temporary or permanent, formed for regulating the relations not only between workmen and employers but also between workmen and workmen or between employers and employers.


Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can form a trade union and apply to the Registrar for it registration.

  • The application for registration should be in the prescribed form and accompanied by the prescribed fee, a copy of the rules of the union signed by at least 7 members, and a statement containing
  • the names, addresses and occupations of the members making the application, the name of the trade union and the addresses of its head office, and the titles, names, ages, addresses and occupations of its office bearers.
  • If the union has been in existence for more than a year, then a statement of its assets and liabilities in the prescribed form should be submitted along with the application. The registrar may call for further information for satisfying himself that the application is complete and is in accordance with the provisions, and that the proposed name does not resemble
  • On being satisfied with all the requirements, the registrar shall register the trade union and issue a certificate of registration, which shall be conclusive evidence of its registration.

Objectives of Trade Union:

The following are the objectives of trade union:

(1) To improve the economic lot of workers by securing them better wages.

(2) To secure for workers better working conditions.

(3) To secure bonus for the workers from the profits of the enterprise/organization.

(4) To ensure stable employment for workers and resist the schemes of management which reduce employment opportunities.

(5) To provide legal assistance to workers in connection with disputes regarding work and payment of wages.

(6) To protect the jobs of labour against retrenchment and layoff etc.

(7) To ensure that workers get as per rules provident fund, pension and other benefits.

(8) To secure for the workers better safety and health welfare schemes.

(9) To secure workers participation in management.

(10) To inculcate discipline, self-respect and dignity among workers.

(11) To ensure opportunities for promotion and training.

(12) To secure organizational efficiency and high productivity.

(13) To generate a committed industrial work force for improving productivity of the system.

Functions of Trade Unions:

(1) Collective bargaining with the management for securing better work environment for the workers/ employees.

(2) Providing security to the workers and keeping check over the hiring and firing of workers.

(3) Helping the management in redressal of grievances of workers at appropriate level.

(4) If any dispute/matter remains unsettled referring the matter for arbitration.

(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and medical facilities and other welfare schemes.

(6) To develop cooperation with employers.

(7) To arouse public opinion in favour of labour/workers.

Benefits of Trade Union:

Workers join trade union because of a number of reasons as given below:

  1. A worker feels very weak when he is alone. Union provides him an opportunity to achieve his objectives with the support of his fellow colleagues.
  2. Union protects the economic interest of the workers and ensures a reasonable wage rates and wage plans for them.
  3. Union helps the workers in getting certain amenities for them in addition to higher wages.
  4. Union also provides in certain cases cash assistance at the time of sickness or some other emergencies.
  5. Union organize negotiation between workers and management and are instruments for settlement of disputes.
  6. Trade union is also beneficial to employer as it organizes the workers under one banner and encourages them follow to peaceful means for getting their demands accepted.
  7. Trade union imparts self-confidence to the workers and they feel that they are an important part of the organization.
  8. It provides for promotion and training and also helps the workers to go to higher positions.
  9. It ensures stable employment for the workers and opposes the motive of management to replace the workers by automatic machines.
  10. Workers get an opportunity to take part in the management and oppose any decision which adversely effects them.


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