Immunity from Civil Suit

And the Constitution does not solve this. In All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that the right guaranteed by article 19(1)(c) extends only to the formation of an association or union and carries no concomitant right that the union shall achieve its objects; its activities, and the steps it may take to achieve them, are subject to such laws as may be framed, and those laws are not tested against article 19(4). Section 16 is therefore the source of the protection, and there is no other.

Some words this chapter uses

Tort is a civil wrong, other than a breach of contract, for which the remedy is damages.

Inducing a breach of contract is the tort committed by a person who knowingly persuades one party to a contract to break it, causing loss to the other party.

In contemplation or furtherance of an industrial dispute is the statutory formula fixing when the protection applies. "In contemplation of" covers acts done before the dispute breaks out, while it is being prepared; "in furtherance of" covers acts done to advance it once it exists.

Industrial dispute is defined in section 2(q). It is the dispute with the employer, and it is not the same as a Trade Union dispute under section 2(zm), which is a dispute between unions or among members.

Agent, in section 16(2), is a person acting on the union's behalf.

Executive, section 2(n), is the body to which the management of the union's affairs is entrusted.

Vicarious liability is the liability of one person for the wrong of another, typically an employer for an employee or a principal for an agent. Section 16(2) is a statutory limit on it.

Section 16(1): the three protected grounds

No suit or other legal proceeding shall be maintainable in any civil court against any registered Trade Union or any office-bearer or member thereof in respect of any act done in contemplation or furtherance of an industrial dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment or that it is an interference with the trade, business, or employment of some other person or with the right of some other person to dispose of his capital or of his labour as he wills.

The sub-section has four conditions and three protected grounds. An answer that separates them scores; one that runs them together does not.

The four conditions

One: the defendant must be a registered Trade Union, or an office-bearer or member of one. An unregistered combination has nothing here, however genuine.

Two: the proceeding must be in a civil court. The protection is against civil liability. A prosecution is a different question and is answered by section 17.

Three: the act must be done in contemplation or furtherance of an industrial dispute. An act unconnected with any dispute is unprotected.

Four: the dispute must be one to which a member of the Trade Union is a party. So a union cannot pick up somebody else's quarrel and claim the immunity for it. A member of the union must be a party to the dispute.

The three grounds

The suit is barred on the ground only that the act:

• induces some other person to break a contract of employment; or
• is an interference with the trade, business or employment of some other person; or
• is an interference with the right of some other person to dispose of his capital or of his labour as he wills.

The first ground answers the tort of inducing a breach of contract, and notice its precision: it is a contract of employment. Inducing a breach of a contract of supply, say by persuading a haulier not to deliver to the employer, is not within these words.

The second and third grounds answer the wider economic torts. The third is worth reading twice: "the right of some other person to dispose of his capital or of his labour as he wills". It protects the union against a claim by the employer whose capital is idled, and against a claim by a worker who wanted to work and was prevented, so far as the ground of that claim is only interference with his freedom to dispose of his labour.

"On the ground only", and why it is the whole section

Those three words limit the immunity to the grounds listed. The section does not say a registered union cannot be sued. It says a suit cannot be maintained on the ground only that the act had one of the three listed characteristics.

So a claim founded on something else is untouched. If, during the same strike, pickets assault a manager, damage machinery, trespass or defame the employer, the suit is founded on those wrongs and not merely on inducement or interference. Section 16 does not bar it.

The Supreme Court has said this in terms, of the identically drawn predecessor.

Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, (1976) 2 SCC 82, Krishna Iyer, Chandrachud and A.C. Gupta JJ.

Facts. In 1948 the workmen of Rohtas Industries struck. The strike was illegal under sections 23 and 24 of the Industrial Disputes Act 1947, and it arose out of rivalry between unions. The workmen were not paid wages for the strike period and the employers lost profit. During conciliation the parties agreed to refer both claims, the workmen's claim to wages for the strike period and the employers' claim to compensation for the loss caused, to the joint arbitration of two retired High Court judges and a retired member of a Labour Appellate Tribunal under section 10A of the 1947 Act. The arbitrators awarded the employers compensation. The union moved the High Court under article 226.

Held. The employers' claim failed, and the Court gave several reasons, of which three matter here.

On the tort of conspiracy, the Court held that the tort necessarily involves that the object of the combination be the infliction of damage on the plaintiff. A strike may be illegal, but if its object is to bring the employer to terms with the employees, or to bully a rival trade union into submission, there is no actionable combination in tort. Here the conceded object was inter-union rivalry, and the arbitrators had assumed that an illegal strike made the tort out; that was a clear lapse in the law on the face of the award.

On the employer's claim generally, an illegal strike is the creation of the statute and the remedy for it and its fall-out must be sought within the statute and not outside it; the employers' claim for compensation for loss of business is not an industrial dispute within section 2(k), so the arbitrators had no jurisdiction, and the consent of the parties could not create it. Krishna Iyer J observed that claims by employers against the workmen on grounds of tortious liability have not found a place in the pharmacopeia of Indian industrial law.

And on the immunity itself, the Court held that the High Court's view was wrong in supposing that section 18 of the Trade Unions Act 1926 gave strikers an implied immunity from all legal proceedings.

The Court also fixed the outer limit: where individuals wilfully destroy plant and machinery to cause loss to the employer, they are liable for the injury so caused. Sabotage, in the Court's words, is no weapon in workers' legal armoury.

Why it matters. It does three jobs. It shows how narrow the tort of conspiracy is where the defendants are workers pursuing their own interests. It disposes of the employer's instinctive remedy, a claim for the profits an illegal strike cost him. And it states expressly that the civil immunity is not a blanket immunity from all legal proceedings, which is exactly what the words "on the ground only" mean.

The case was decided under the Trade Unions Act 1926 and the Industrial Disputes Act 1947, both repealed by section 104(1) on 21 November 2025. Section 16 of the Code re-enacts the civil immunity in the same terms as section 18 of the 1926 Act, and the common law of conspiracy the case applies is not statutory at all, so the reasoning stands. What has changed is the surrounding law: sections 62 and 63 of the Code make far more strikes illegal than sections 22 and 23 of the 1947 Act did, so the protection now operates across a wider field of illegal strikes. That is a point worth making in an answer, and it belongs to the chapter on strikes in Module III, which is not yet written.

Section 16(2): the union's protection against its own agent

A registered Trade Union shall not be liable in any suit or other legal proceeding in any civil court in respect of any tortuous act done in contemplation or furtherance of an industrial dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union.

This sub-section does something quite different from sub-section (1), and students routinely treat them as one.

What the sub-section is for. Section 12 makes a union a body corporate, and a body corporate is ordinarily liable for the torts of those who act on its behalf. A union has hundreds of members and, in a strike, many people acting in its name across several sites. Without this sub-section a single agent's excess would fasten liability on the union itself.

The two escape routes are alternatives. The union escapes if the agent acted without the knowledge of the executive, or contrary to express instructions given by the executive. Either will do.

But the burden is squarely on the union. "If it is proved" means the union must establish it. And "express instructions" means express: a general exhortation to keep the strike peaceful may not be enough, whereas a recorded resolution of the executive directing that there be no obstruction of the gates is evidence of exactly the kind the sub-section contemplates.

Note also who is not protected by sub-section (2): the agent himself. The sub-section relieves the union. The agent remains personally liable for his own tort, subject only to whatever sub-section (1) gives him if he is a member or office-bearer and the suit is founded only on the three listed grounds.

A worked example

The facts. The Wada Packaging Workers' Union, registered, is in dispute with the employer over the wage rate. Members of the union are parties to the dispute. After notice, the workers strike. Five things then happen and the employer sues on each.

One: the union persuaded 90 workers to stop work, and each of them broke his contract of employment. The claim is founded only on the ground that the union's act induced other persons to break contracts of employment. Section 16(1) bars it. The union is registered, the act was done in furtherance of an industrial dispute, and members of the union are parties to it.

Two: the strike stopped production and cost the employer nine days' profit. Again the claim is founded only on interference with the employer's trade or business, and on interference with his right to dispose of his capital as he wills. Barred by section 16(1). And on Rohtas Industries the alternative framing in the tort of conspiracy also fails, because the object of the combination was to obtain a wage increase, not to inflict damage on the employer.

Three: two workers who wanted to work were persuaded not to. So far as their claim is founded only on interference with their right to dispose of their labour as they will, section 16(1) bars it, that being the third listed ground.

Four: on the sixth day pickets broke the gate lock and damaged two machines. Section 16(1) does not bar this. The claim is founded on damage to property, which is not one of the three grounds, and the words "on the ground only" therefore leave it untouched. On Rohtas Industries, individuals who wilfully destroy plant and machinery are liable for the injury caused.

Five: the same pickets are said to have been acting for the union, so the employer sues the union itself for the damage. Here section 16(2) is the union's answer, and it must prove its case: that the pickets were acting without the knowledge of the executive, or contrary to express instructions given by the executive. If the executive had passed and circulated a resolution directing members not to obstruct or damage anything, the union is likely to discharge that burden. If the executive knew and did nothing, it will not.

Change one fact. Suppose the union is not registered. It has none of section 16, and every one of the five claims proceeds on ordinary principles. That is the practical value of registration, and it is why [The Registrar and the Criteria for Registration] comes before this chapter.

Change another. Suppose the dispute is between two unions about which of them represents the workers, and the union's act induces workers to leave their jobs in the course of that quarrel. That is a Trade Union dispute under section 2(zm), not an industrial dispute under section 2(q), and section 16(1) protects acts done in contemplation or furtherance of an industrial dispute. The third condition fails.

What this does NOT mean

It does not mean a registered union cannot be sued. It means a suit cannot be maintained on the ground only that the act was one of the three listed things. Rohtas Industries holds expressly that the predecessor section did not give an implied immunity from all legal proceedings.

It does not protect violence, damage, trespass or defamation. Those found a claim on a different ground.

It does not protect an unregistered combination. Section 16 says "registered Trade Union".

It does not cover inducing a breach of any contract. The first ground is a contract of employment.

It does not give a right to strike. The right to strike, so far as it exists, is a matter of Chapter VIII, and All India Bank Employees' Association holds that article 19(1)(c) confers no such right. Section 16 removes a civil liability; it does not create a freedom.

It does not make the agent immune under sub-section (2). That sub-section relieves the union of liability for the agent's tort. The agent answers for his own.

Limits, criticism and amendments

The immunity is narrow by design and the criticism cuts both ways. Employers say that a union which calls a strike causing enormous loss cannot be made to pay for any of it, and that Rohtas Industries closed the alternative route as well by holding that such a claim is not an industrial dispute at all. Unions say the protection is illusory the moment a strike becomes effective, because effective picketing shades quickly into conduct founded on grounds outside the three, and the union then has to prove the section 16(2) defence.

The words "contract of employment" leave a real gap. Persuading a supplier or a transporter to withhold performance is a familiar industrial tactic and it is not within the first ground, though it may fall within the second.

The section is a re-enactment rather than a reform. It reproduces the substance of section 18 of the Trade Unions Act 1926, so the ninety-nine years of case law on that section continue to be the guide, provided the case is always cited as decided under the repealed Act.

And the surrounding law has moved against the protection. Because sections 62 and 63 of the Code make far more strikes illegal than the 1947 Act did, more industrial action now begins from a position of illegality, even though section 16 itself is unchanged.

Quick revision

• Section 16(1): no suit or other legal proceeding in any civil court against a registered Trade Union or its office-bearer or member, in respect of an act done in contemplation or furtherance of an industrial dispute to which a member of the union is a party, on the ground only that it (i) induces another to break a contract of employment, (ii) is an interference with the trade, business or employment of another, or (iii) is an interference with another's right to dispose of his capital or his labour as he wills.
• "On the ground only" is the whole section. A claim founded on assault, damage, trespass or defamation is untouched.
• Section 16(2): the union alone is not liable for any tortious act of an agent done in contemplation or furtherance of an industrial dispute if it is proved the agent acted without the knowledge of, or contrary to express instructions given by, the executive. The burden is on the union; the agent stays liable himself.
• Rohtas Industries, AIR 1976 SC 425: the tort of conspiracy needs the object of the combination to be the infliction of damage; an object of bringing the employer to terms or bullying a rival union is not actionable; an employer's claim for loss of business is not an industrial dispute, so arbitrators had no jurisdiction and consent could not create it; the High Court was wrong to find an implied immunity from all legal proceedings; and sabotage is no weapon in workers' legal armoury.
• All India Bank Employees' Association, AIR 1962 SC 171: article 19(1)(c) protects only formation, so the immunity is statutory or nothing.

Test yourself

1. State the protection in section 16(1) and its conditions. No suit or other legal proceeding is maintainable in any civil court against a registered Trade Union or any office-bearer or member of it, in respect of an act done in contemplation or furtherance of an industrial dispute to which a member of the union is a party, on the ground only that the act induces some other person to break a contract of employment, or that it is an interference with the trade, business or employment of some other person, or with the right of some other person to dispose of his capital or of his labour as he wills. The four conditions are that the defendant be a registered union or its office-bearer or member; that the proceeding be in a civil court; that the act be done in contemplation or furtherance of an industrial dispute; and that a member of the union be a party to that dispute.

2. Why are the words "on the ground only" the most important in the section? Because they confine the immunity to the three listed grounds. The section does not say a registered union cannot be sued; it says a suit cannot be maintained where the only ground relied on is one of those three. A claim founded on assault, damage to property, trespass or defamation is founded on a different ground and is not barred. Rohtas Industries states the point expressly, holding the High Court wrong to read the predecessor section as an implied immunity from all legal proceedings.

3. An employer sues a registered union for the profit lost during an illegal strike. Advise, with authority. The claim will fail. Section 16(1) bars a suit founded only on interference with the employer's trade or business or with his right to dispose of his capital as he wills. If the claim is reframed as the tort of conspiracy, Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, holds that the tort requires the object of the combination to be the infliction of damage on the plaintiff, and that where the object is to bring the employer to terms or to bully a rival union there is no actionable combination. The same case holds that an illegal strike is the creation of the statute so the remedy must be sought within it, and that an employer's claim for compensation for loss of business is not an industrial dispute, so it cannot be referred to adjudication or arbitration and consent cannot create that jurisdiction.

4. Distinguish section 16(1) from section 16(2). Section 16(1) protects the union together with its office-bearers and members, but only against a suit founded on three specified grounds, and only where the four conditions are met. Section 16(2) protects the union alone, against liability for any tortious act done in contemplation or furtherance of an industrial dispute by an agent, and it applies only if the union proves that the agent acted without the knowledge of the executive or contrary to its express instructions. The burden under sub-section (2) is on the union, and the agent remains personally liable.

5. During a strike some members damage the employer's machinery. Is the union liable? Section 16(1) does not bar the claim, because it is founded on damage to property and not merely on inducement or interference, and on Rohtas Industries the individuals who wilfully destroy plant and machinery are liable for the injury caused. Whether the union is liable turns on section 16(2): the union escapes if it proves that those acting for it did so without the knowledge of the executive, or contrary to express instructions given by the executive. Evidence of a recorded executive resolution forbidding such conduct is the kind of proof contemplated.

6. Does section 16 give workers a right to strike? No. It removes a civil liability that would otherwise attach to acts done in contemplation or furtherance of an industrial dispute; it does not confer a freedom. Whether a strike is lawful is governed by Chapter VIII, sections 62 and 63. And in All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that article 19(1)(c) of the Constitution protects only the formation of a union and carries no concomitant right that it shall achieve its objects, the union's activities being subject to such laws as may be framed.