Penalties and Procedures of Trade Union: A Comprehensive Analysis

A trade union is an organised association of workers who aim to represent employees in the fields of equal wages, a decent working atmosphere, hours of service and other privileges that they should be entitled to because of their labour. They serve as a bridge between management and the workforce. While being recently founded institutions, they have become a dominant force due to their strong impact on the social and economic lives of workers. The supervision and administration of the work of these labour unions shall be controlled by separate laws governing the same criteria. In India, the Trade Union Act of 1926 is the primary legislation for regulating and handling the activity of trade unions.

“The trade union movement represents the organised economic power of the workers it is in reality the most potent and the most direct social insurance the workers can establish”

Samuel Gompers

The present article aims at doing a comprehensive analysis of penalties and procedures of trade union. It answer the questions like: What exactly is Trade union? What is the history of trade union in India? What is the importance of formation of trade union?  The development of trade union in India is also been discussed in the article. What are the Penalties and Procedures of Trade Union in India which being dealt in Section 31, Section 32 and Section 33 of Trade Union Act?


Prior to the advent of large-scale industrialisation, there were informal relations between employees and employers. As a result, no need for the creation of any mechanism regulating the relationship between employees and employers has existed until then. But since the development of a modern manufacturing sector, this partnership has lost its importance due to large-scale industrial development, which has forced manufacturers to increasing the cost of output in order to survive consumer competition and increase their earnings by using increasingly more advanced methods of production, which, in turn, has led to the emergence of a new class of workers. The disparity of interest between employees and bosses and the suffering of employees also contributed to the rise of numerous labour unions.

History of Trade Union in India

In India, trade unions have become a significant platform for addressing workers’ demands. They are indeed one of the most powerful pressure groups, an organisation that continues to control the government by enacting policies for the benefit of employees without trying to become part of the government. As a structured organisation, trade unionism took its formal form after the conclusion of the First World War. Trade unions in India are basically the result of recent large-scale industrial development and have not evolved out of any established social structures.

The development of the textile and milling industries at the beginning of the 19th century in the presidential cities of Bombay, Madras and Calcutta gave impetus to the creation of an agricultural labour union in India. Bombay Mill-Hands Association, founded by N.M. Lokhande was India’s first trade union in 1890. The subsequent years saw the rise and development of many other labour groups and unions in India, such as the Madras labour Union, the first legally documented trade union established by B.P Wadia. As the union adopted the principles of honesty and non-violence laid down by Mahatma Gandhi, it was able to provide the workers with justice in a civilised way without disturbing the unity of society. In the same year, the first All India Trade Union Congress (AITUC) trade union federation came to light, following observations made by the International labour Organisation, which illustrated the effect of politics on labour unions and alliances, and how the same is counterproductive to the development of every economy.

Indian Trade Union (Amendment) Act, 1947:

Labour force, especially those working in unorganised sectors, lacks the capacity to negotiate and this is becoming a major reason for their exploitation. The right to collective bargaining is granted only to those trade unions registered but, in India, there is legislation on the recognition of trade unions, but there is no single legislation on registration of trade unions. Recognizing the need for central legislation for registration of trade unions, the Parliament passed the Indian Trade Union (Amendment) Act in 1947. The said Act which set out the conditions for the compulsory recognition of any trade union. However, this Act has never been brought into force. Therefore, there is no compulsory recognition of trade unions under any law in force in India.[1]

Penalties and Procedure of Trade Union:

Section 31 to Section 33 of the Trade Union Act lays down the penalties and the procedure of its application upon a trade union which is subject to such penalty.

Section 31: Failure to submit returns

Section 31 provides that: when a trade union has been required to give any note, announcement or paper to the Registrar under the Act and where the law does not compel a single individual in the trade union to submit such material, the fine to be increased to five rupees shall be levied on each member of the executive in the event of default. In the event of continued failure, the fine can be extended to five rupees a week.

If any party deliberately makes or allows any false entry or omission to be made in the general statement provided by section 28 of the Act, the fine may be increased to 500 rupees.

Section 32: Supplying false information regarding Trade Unions

Section 32 offers as follows:

Anybody who, in try to deceive a member of a trade union or some other one who purports to be a member of a trade union, submits a copy of the contract under the presumption that it includes the rules of the trade union. Who knows or has cause to suspect that it is not a correct copy of those rules and changes, and any person with the same intent shall, with a fine which may extend to two hundred rupees, include a copy of any document purporting to be a copy of the rules of a registered trade union which in fact is a non-registered trade union.

Section 33: Cognizance of offences

Section 33 includes rules related to the prosecution of a crime. It states that no court which is inferior to a presiding magistrate or a first-class magistrate shall try an offence under the Act. The courts can consider crimes under the Act only in the following cases:

Where a lawsuit has been filed against the previous approval of the Registrar.

Where a person has been convicted under Section 32 of the Act, he or she shall be sentenced within six months of the execution of the alleged crime.

Collective Bargaining and Trade Disputes

When an organized body negotiates with the employer and fixes the terms of employment by means of bargaining is known as Collective Bargaining. The essential element of Collective Bargaining is that it is between interested parties and not from outside parties.

International labour organization in its manual in the year 1960 defined the meaning of collective bargaining as:

“Negotiations about working conditions and terms of employment between an employer, a group of employees or one or more employers organization on the other, with a view to reaching an agreement.” the terms of agreement are used to ascertain the rights and obligations by which each party is bound towards one another during the course of employment.[2]


The Trade Union Act of 1926 is a labour law that has been enacted to safeguard workers in the collective and unorganised sector from inhumane exploitation and defence of their civil rights. As such, the act includes provisions for membership, supervision, compensation and protection of labour unions. It’s going to help the staff.

Trade unions are crucial structures for the political progress of every society, as they address the interests and demands of workers through collective bargaining. Collective bargaining is an integral part of the employer-employee arrangement. However, collective bargaining is not given to all labour unions, but only to those trade unions which are recognised. The case for universal approval of labour unions, which was not granted under the Trade Union Act 1926, has also been addressed time and time again by workers. Today, the rise of the media has resulted in the mobilisation of labour unions, turning them into dominant advocacy groups not just in the manufacturing industries, but also in the agricultural and other related sectors.


  1. What is Trade Union Act?

–  A trade union is an organized association of workers who aim to represent employees in the fields of equal wages, a decent working atmosphere, hours of service and other privileges that they should be entitled to because of their labour. They serve as a link between management and employees

  • What does section 31 of Trade Union act deal with?

–   Section 31 deals with “Failure to submit returns”.

  • What does section 32 of Trade Union act deal with?

– Section 32 deals with “Supplying false information regarding Trade Unions”

  • What does section 33 of Trade Union act deal with?

Section 33 deals with “Cognizance of Offences”.

  • What is meant by collective bargaining?

– When an organized body negotiates with the employer and fixes the terms of employment by means of bargaining is known as Collective Bargaining.




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