Rights and Liabilities of Registered Trade Unions

Trade unions play a pivotal role in protecting the rights and interests of workers in the modern workforce. When these organisations are officially registered under relevant labour laws, they acquire specific rights and responsibilities. In this article, we will delve into the rights and liabilities of registered trade unions, shedding light on the legal framework that governs their operations.

The rights and liabilities of registered trade unions are discussed under Trade Unions Act, 1926.

Rights of Registered Trade Unions

The Trade Unions Act of 1926 confers several rights upon Registered Trade Unions. These rights can be categorised as follows:

Legal Personhood Rights

Upon registration, a Trade Union becomes a legal entity with the name under which it is registered. As such, it possesses the following rights:

(i) The right to maintain a common seal in its own name.

(ii) The right to acquire, hold and dispose of both movable and immovable property in its own name.

(iii) The right to enter into contracts in its own name.

(iv) The right to file lawsuits to protect its rights and likewise, any aggrieved party can sue the Trade Union in its registered name. These rights are pivotal, as they enable the Trade Union to enforce its rights effectively.

Spending General Funds

The Act mandates the creation of general and political funds, with certain limitations on the utilisation of general funds. Trade Unions are authorised to spend general funds for specific purposes, which include:

(a) Payment of salaries, allowances and expenses to office bearers.

(b) Administrative expenses, including audit costs.

(c) Legal proceedings’ prosecution or defense, with the aim of securing or protecting members’ rights against employers or others.

(d) Handling trade disputes on behalf of the Trade Union or its members.

(e) Compensating members for losses incurred during trade disputes.

(f) Providing allowances to members or their dependents for various reasons, such as death, old age, sickness, accidents or unemployment.

(g) Managing life insurance policies for members and insuring them against sickness, accidents or unemployment.

(h) Offering educational, social or religious benefits to members and their dependents.

(i) Publishing periodicals discussing employer-employee-related matters.

(j) Contributing to initiatives benefiting workers, provided that this expenditure does not exceed a quarter of the gross income accrued to the general funds during the financial year.

(k) Spending on other objectives notified by the appropriate Government in the Official Gazette, subject to specified conditions.

Establishment of a Separate Political Fund

The Trade Union Act prohibits the use of general funds for political purposes. If a Registered Trade Union wishes to engage in political activities, it may create a distinct political fund. Contributions separately collected for this fund can be used to promote the civil and political interests of its members.

Changing the Trade Union’s Name

Registered Trade Unions have the right to change their name, provided that at least two-thirds of their total members consent to the change and certain provisions outlined in Section 25 of the Act are followed.

Amalgamation of Trade Unions

Two or more Registered Trade Unions can merge into one without dissolving or dividing their funds. This process requires at least one-half of the members of each participating Trade Union to record their votes, with a minimum of 60 percent in favor of the amalgamation.

Rights Related to Industrial Matters

In addition to the rights granted by the Trade Unions Act, Trade Unions have specific industrial rights to protect the well-being of their members and the working class. These rights include:

(a) Representation of labour before employers, committees, conciliation/mediation processes, arbitrations, courts and labour departments.

(b) Negotiating and settling disputes with employers, signing and executing settlements.

(c) Holding meetings, conferences, posting notices and inspecting workplaces.

(d) Accepting legal notices and summons.

(e) Fulfilling formalities, such as attesting agreements.

(f) Obtaining legal assistance.

(g) Collecting fees on employer premises.

(h) Staging demonstrations and strikes, though subject to laws regulating strikes. This right is fundamental in labour activism.

Liabilities of Registered Trade Unions

The Trade Unions Act outlines various responsibilities and obligations imposed on registered trade unions. These include:

Obligation to Incorporate Specific Matters in Rules

The constitution of a Trade Union must include provisions for the matters listed in Section 6 of the Trade Unions Act, 1926. Some of these matters include defining the union’s objectives, specifying the purposes for which the general funds can be utilised, establishing criteria for admitting members and outlining the process for dissolving the Trade Union.

Requirement to Form an Executive Committee

Registered Trade Unions must establish their executive committee in accordance with the provisions outlined in Sections 21-A and 22 of the Act. These sections lay down specific requirements for the constitution of the executive committee.

Compliance with these duties is a prerequisite for the registration process, as failure to adhere to them may result in the Registrar refusing to register the proposed Trade Union.

Mandatory Utilisation of General Funds

Trade Unions are legally obligated to use their general funds in accordance with the guidelines set forth in Section 15 of the Act. This section delineates specific objectives for which the general funds can be expended and any expenditure outside these parameters is not permitted.

Establishment of a Distinct Political Fund

In the event that a Trade Union decides to promote the civil and political interests of its members, it must establish a separate fund, commonly known as a political fund, as per Section 16. This fund can then be utilised for the purposes specified within the Act.

Provision of Access to Union Books

Registered Trade Unions are required to grant access to their account books and membership lists for inspection by office bearers or members of the Trade Union, in accordance with the rules specified by the union.

Notification to the Registrar

Trade Unions have a duty to inform the Registrar in various circumstances, including changes in the union’s name, amalgamation with other unions, alterations to the head office’s address and the dissolution of the union.

Annual Reporting to the Registrar

Every Registered Trade Union must submit an annual general statement, duly audited as prescribed, to the Registrar. This statement should detail all income and expenditure incurred by the union during the year ending on December 31st, preceding the prescribed date.

Additionally, it should outline the assets and liabilities of the Trade Union as of the same date. The statement’s format and specific particulars to be included are determined by the applicable regulations.

Conclusion

Registered trade unions play an indispensable role in safeguarding the rights and interests of workers. Their rights grant them the legal capacity to negotiate, represent and protect their members effectively.

However, these rights are accompanied by duties that ensure transparency, prudent financial management and compliance with labour laws. Balancing the rights and liabilities of registered trade unions is essential for the functioning and credibility of registered trade unions in the contemporary labour landscape.