Trade Unions in India

What is a trade union?

A trade union is an organisation of workers. Such an association is meant to achieve some common goals. Such as better work conditions and working hours. Another set of goals is health insurance and retirement plans.

The Trade Unions Act, 1926 regulates trade unions in India. As per the Act, trade unions regulate employer-employee relationships. Further, a federation of two or more trade unions is also a trade union.

Related: Grounds For Termination Of Employment In India

History of trade unions in India

During their rule, Britishers set up textile mills in Madras, Bombay, Surat and Calcutta.

A boom in the textile industry took place in late 19th century. This lead to massive recruitment in these mills. This gave rise to the need for a regulating law.

The British enacted the Factories Act in 1881. This act laid down some strict laws. These laws favoured owners over the workers.

As the First World War began, these textile mills faced more work. But more work did not mean more staff. Working conditions deteriorated further. That is how unionism in India started.

Related: Are You Working Overtime? Know the Overtime Laws in India

Laws governing trade unions in India

In India, trade unions are governed under national and state-specific legislations. The right to form and join a trade union, and engage in collective bargaining etc. are provided under these laws. Also, the Constitution of India guarantees a fundamental right “to form associations or unions.”

The Trade Unions Act, 1926 is the original act related to labour unions in India. The Act provides for formation and registration of trade unions and in certain respects to define the law relating to registered Trade Unions.

The Industrial Dispute Act, 1947, also deals with trade unions. It primarily regulates the rights of employers and employees in the investigation and settlement of industrial disputes.

Who can set up a trade union in India?

A minimum of seven persons can form and register a trade union under the Trade Union Act.

Such members must follow the trade union rules. Registration of trade unions is not compulsory.  But, it can be helpful in the long run.

Related: Maternity Leave: India v. Other Countries

What are the advantages of registering a trade union?

Registering a trade union means availing the following benefits:

  • Protection to trade union members and their interests.
  • The trade industry cannot lay-off all workmen at once. At least 10 percent or one hundred employees must always remain employed.
  • Registered trade unions are immune to civil and criminal liability. This immunity applies to any acts that further the union objectives.
  • Illegal actions are exempt from punishment. One example is a work strike. The only condition is that it should be in furtherance of objectives.

Related: Top 10 FAQs on Minimum Wages in India

What are the requirements for setting up of a trade union?

  • First of all, members of a trade union can apply for registration.
  • Such members should apply to the Registrar.
  • Every registered trade union must form its own rules.
  • A copy of such rules must form part of the application.
  • In addition to this, there are other rules that must be fulfilled before registration.

These rules are given under Section 6 of The Trade Unions Act, 1926.

What does a trade union do?

A trade union acts as a “lobby” that negotiates with the management. Negotiations may take place for a lot of relevant issues. Such as higher pay, better work conditions, or employee insurance. The primary goal of a trade union is to further worker interests and welfare.

Main functions of a trade union are:

  • Speaking on behalf of the members.
  • Providing guidance to members on work related problems.
  • Negotiating with employers and management on behalf of its members.

What are the problems with trade unions in India?

  • There are too many small unions instead of one large union.
  • This reduces their bargaining powers.
  • Moreover, small trade unions do have a conflict of interest.
  • In India, political parties support some large trade unions. This politicises them.
  • Politicisation means compromise with workers’ interests.
  • Most of the labour force is uneducated.
  • Lack of education among the labour force leads to an improper representation of the workforce.
  • Unregistered unions do not get protection from civil and criminal liability.
  • The trade unions act does not apply to the informal sector.
  • A large section of the workforce is not represented.
  • Trade unions are often under-financed.
  • This means that they do not function to their full potential.

Related: All You Need to Know About Sexual Harassment at Workplace


Traditionally, the function of trade unions in India was limited largely to collective bargaining for economic considerations. However, over time, trade unions have begun to play various other roles as well.

Besides aiming to improve the terms and conditions of employment, trade unions now play a critical role in employee welfare activities. Trade unions provide a forum to help facilitate better industrial relations and improve productivity as well.

Did You Like This Article?

Let us know what do you think by commenting below. Don’t forget to share it with your friends!
You can also like us on Facebook and follow us on Twitter to stay updated!

If you have any legal queries or looking for any legal help, please visit us at

1 comments On Trade Unions in India

  • Trade Unions play several roles on behalf of the Workmen. You have left out the most important role. Signing settlements under the ID Act. (Negotiation is only a process)

Leave a reply:

Your email address will not be published.

Sliding Sidebar