The Registered Trade Union as a Body Corporate

Common seal is the corporate body's formal signature, historically an actual seal pressed into wax.

Movable and immovable property: immovable property is land and things attached to the earth; movable property is everything else.

Office-bearer, section 2(zb), includes any member of the executive but does not include an auditor.

Moral turpitude is conduct that is inherently base or depraved, as distinct from an offence that is merely technical or regulatory.

Office of profit is a position under the Union or a State carrying remuneration.

Casual vacancy is a vacancy arising between elections, for instance on a death or resignation.

Section 12: what the union becomes

Every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.

Six attributes are packed into that sentence, and it is worth taking them one at a time because an exam answer that lists them scores.

Two consequences deserve to be spelt out, because they are what a problem question turns on.

The funds are the union's, not the members'. A member who resigns takes nothing with him. That is why section 25(2) has to provide expressly for what happens to the funds on dissolution: if the rules do not provide for their distribution, the Registrar divides them among the members in the prescribed manner. Without perpetual succession that provision would be unnecessary; with it, it is indispensable.

Suing in its own name protects the officers. Where a union is sued for an act done in furtherance of an industrial dispute, section 16(1) protects the union and its office-bearers and members. But even without immunity, incorporation means the plaintiff's judgment is against the union's assets rather than against the secretary's house.

Section 13: the four Acts that do not apply

The provisions of the following Acts, namely:

(a) the Societies Registration Act, 1860 (21 of 1860);

(b) the Co-operative Societies Act, 1912 (2 of 1912);

(c) the Multi-State Co-operative Societies Act, 2002 (39 of 2002);

(d) the Companies Act, 2013 (18 of 2013); and

(e) any other corresponding law relating to co-operative societies for the time being in force in any State,

shall not apply to any registered Trade Union and the registration of any such Trade Union under any of the aforementioned Acts shall be void.

The section has two limbs and the second is the sharp one. The first says those Acts do not apply. The second says that registration of a registered Trade Union under any of them shall be void.

Why Parliament bothered. Every one of those statutes is a general law for associations of persons, and a trade union answers each of their descriptions well enough to be arguable. A union is a society of persons associated for a common object; it collects subscriptions and pays benefits like a co-operative; and it is an association of more than a handful of persons carrying on an activity, which brought the older company law's provisions about unregistered associations into view.

If a union could be registered under one of those Acts, the whole of Chapter III could be circumvented in either direction. An employer-sponsored body could take the form of a society and claim to be the workers' organisation without meeting the section 6 membership test. Conversely a genuine union could be dragged into company or co-operative regulation designed for quite different bodies.

Section 13 therefore makes the Code the exclusive route. A registered Trade Union is a body corporate under section 12, not under the Companies Act, and it is governed by this Code alone.

Sections 19 and 20: the rights of members

Section 19: the right to inspect. The books of account of a registered Trade Union and the list of members shall be open to inspection by an office-bearer or member of the union at such times as may be provided for in the rules.

Two limits are built in. The right is given to office-bearers and members, not to the public or the employer. And it is exercisable "at such times as may be provided for in the rules", which is why section 7(d) requires the rules to provide for the list of members and adequate facilities for the inspection thereof, and section 7(j) requires them to provide adequate facilities for inspection of the account books. The Code confers the right; the rules make it workable.

Section 20: minors. Any person who has attained the age of fourteen years and is employed in a non-hazardous industry may be a member of a registered Trade Union, subject to any rules of the union, and may, subject as aforesaid, enjoy all the rights of a member and execute all instruments and give all acquittances necessary to be executed or given under the rules.

Read the conditions, because there are three. The person must be at least fourteen; the industry must be non-hazardous; and membership remains subject to the union's own rules, which may set a higher age.

And read the consequence, which is the point of the section. A minor member is not a second-class member. He enjoys all the rights of a member, and he has the capacity to execute the instruments and give the receipts that membership requires, notwithstanding the ordinary law about a minor's contractual capacity. Without the section, a fourteen-year-old member could not validly give a receipt for a benefit paid to him.

This section must be read with Article 24 of the Constitution, which prohibits the employment of a child below fourteen years in any factory or mine or in any other hazardous employment. Section 20's two conditions, fourteen years and a non-hazardous industry, track that prohibition.

Section 21: who may not be an office-bearer

Section 21(1) disqualifies a person for being chosen as, and for being, a member of the executive or any other office-bearer of a registered Trade Union if:

• (i) he has not attained the age of eighteen years;
• (ii) he has been convicted by a court in India of an offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release;
• (iii) the Tribunal has directed that he shall be disqualified for being chosen or for being an office-bearer of a Trade Union for a period specified in the direction.

Note the double phrase "for being chosen as, and for being". The disqualification bites both at election and continuously afterwards. A person who is convicted while in office becomes disqualified then and there.

Ground (ii) has three cumulative elements and students routinely drop one: a conviction by a court in India; of an offence involving moral turpitude; and a sentence of imprisonment. A fine alone does not disqualify. And the disqualification is not permanent: it lifts five years after release.

Section 21(2) adds a separate disqualification: no member of the Council of Ministers, and no person holding an office of profit in the Union or a State, shall be a member of the executive or other office-bearer of a Trade Union. There is an important exception inside the parenthesis: an engagement or employment in an establishment or industry with which the Trade Union is connected is not an office of profit for this purpose.

That exception is what makes the sub-section workable. A worker employed in a State-run undertaking holds his job from the State. Without the parenthesis he could not be an office-bearer of his own union.

And note the age contrast with section 20, because it is a favourite short question. Fourteen to be a member. Eighteen to be an office-bearer.

Section 23: how many outsiders may hold office

This section restricts the proportion of office-bearers who are not themselves workers in the establishment or industry concerned. It has two limbs with different arithmetic.

Section 23(1), the unorganised sector. Not less than one-half of the total number of office-bearers of every registered Trade Union in an unorganised sector shall be persons actually engaged or employed in an establishment or industry with which the union is connected.

A proviso allows the appropriate Government, by special or general order, to declare that the section shall not apply to any Trade Union or class of Trade Unions specified in the order.

An Explanation defines "unorganised sector" for this sub-section as any sector which the appropriate Government may, by notification, specify.

Section 23(2), everywhere else. Save as provided in sub-section (1), all office-bearers of a registered Trade Union, except not more than one-third of the total number of the office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the union is connected.

Work the arithmetic, because "whichever is less" appears again and is again reversed by students.

So the number of outsiders is capped at five, however large the executive.

The Explanation to section 23(2) is the provision to remember, and it connects this chapter to the last: for the purposes of the sub-section, an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office in a Trade Union.

That Explanation and Bokajan point the same way. In Bokajan Cement Corporation Employees' Union v. Cement Corporation of India Ltd., AIR 2004 SC 245, the Supreme Court allowed the union's appeal and held that the provision requiring the rules to provide for admission of members actually engaged or employed in the industry governs admission and not cessation, so that in the absence of a provision in the Act or in the union's own constitution a member does not cease to be a member on ceasing to be employed. That case was decided under the Trade Unions Act 1926, which section 104(1)(a) repealed on 21 November 2025, and the Code's section 7(e) is drawn the same way. The Explanation to section 23(2) now says expressly, for office-holding, what Bokajan reasoned for membership: the man who has lost his job is not thereby an outsider to his union.

Why the law tolerates outsiders at all is worth a sentence, because MU has asked it. A workforce that is illiterate, or in fear of dismissal, may have nobody within it able to negotiate, keep accounts or conduct litigation. Permitting a limited number of outsiders, typically lawyers or full-time union organisers, supplies that capacity. The criticism is the mirror image: outsiders may have political interests of their own, which is the phenomenon the Supreme Court described in Balmer Lawrie and which is worked in [Recognition: The Negotiating Union and Negotiating Council].

A worked example

The facts. The Wada Packaging Workers' Union is registered. Its executive has twelve members. Two of them are practising advocates who have never worked at the unit; one is Sudhir, a worker retrenched last year; one is Farhan, aged seventeen, employed at the unit; and one is Anil, convicted three years ago of an offence involving moral turpitude and sentenced to four months' imprisonment, released two years and eight months ago. The unit is not in a sector notified as unorganised.

The outsider arithmetic. Section 23(2) applies. One-third of twelve is four; five is five; whichever is less is four. So up to four office-bearers may be outsiders and at least eight must be persons actually engaged or employed in the establishment or industry.

Is Sudhir an outsider? No. The Explanation to section 23(2) provides that an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office. So the outsiders are the two advocates, which is within the permitted four.

Farhan, aged seventeen. He may be a member: section 20 permits any person of fourteen or more employed in a non-hazardous industry to be a member and to enjoy all the rights of a member. He may not be an office-bearer: section 21(1)(i) disqualifies a person who has not attained eighteen. His election to the executive is bad, and he must be replaced, the rules having to provide for the filling of casual vacancies under section 7(i).

Anil. Section 21(1)(ii) disqualifies a person convicted by a court in India of an offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release. Two years and eight months have elapsed. He is disqualified, and the words "for being chosen as, and for being" mean he cannot continue in office either. He becomes eligible again five years after his release.

A member asks to see the accounts. Section 19 gives an office-bearer or member the right to inspect the books of account and the list of members, at such times as the rules provide. The union must have such rules, because section 7(d) and (j) require them.

The union wants to buy a small office. It may. Section 12 gives it power to acquire and hold immovable property, in its own registered name, and the property will not be affected by changes in membership because the union has perpetual succession.

The union's treasurer suggests also registering it as a society, to look more respectable to a bank. He must be told plainly: section 13 provides that the Societies Registration Act 1860 does not apply to a registered Trade Union and that registration under it shall be void.

What this does NOT mean

It does not mean the union cannot be dissolved. Perpetual succession means membership changes do not end its existence. Section 25 provides how it is dissolved, and section 9(5) how its registration is cancelled.

It does not mean members own the union's property. They do not. That is why section 25(2) has to provide for the funds to be divided on dissolution, by the rules or, failing that, by the Registrar in the prescribed manner.

It does not mean a fourteen-year-old can be a secretary. Fourteen is the age for membership under section 20; eighteen is the age for office under section 21(1)(i).

It does not mean every conviction disqualifies. Section 21(1)(ii) requires a conviction by a court in India of an offence involving moral turpitude and a sentence of imprisonment, and the disqualification ends five years after release.

It does not mean outsiders are forbidden. They are limited: to not more than half in the unorganised sector under section 23(1), and elsewhere to not more than one-third or five, whichever is less, under section 23(2).

It does not mean the right of inspection is open to anyone. Section 19 gives it to an office-bearer or a member.

Limits, criticism and amendments

The outsider limits are the most debated provision in the Chapter. Restricting outsiders is defended as keeping unions in the hands of the workers whose interests they exist to serve, and attacked as depriving weak workforces of the professional help they most need. The Code's answer is a compromise: a stricter proportion where capacity is likely to be scarce, the unorganised sector, and a hard cap of five elsewhere.

The Explanation to section 23(2) is a genuine improvement over a position in which a retrenched worker was arguably an outsider in his own union at the very moment he most needed it.

Section 13's list will date. It names the Co-operative Societies Act 1912 and the Companies Act 2013 by year, and clause (e) catches corresponding State co-operative laws, but a new general statute for associations would need to be added by amendment.

And section 21(2) is drawn widely. Excluding every holder of an office of profit under the Union or a State from union office is a substantial restriction, softened only by the parenthesis that preserves employment in the establishment or industry the union is connected with.

Quick revision

• Section 12: a registered Trade Union is a body corporate by its registered name, with perpetual succession, a common seal, power to acquire and hold movable and immovable property, power to contract, and it sues and is sued in that name.
• Section 13: the Societies Registration Act 1860, Co-operative Societies Act 1912, Multi-State Co-operative Societies Act 2002, Companies Act 2013 and corresponding State co-operative laws do not apply, and registration under any of them is void.
• Section 19: books of account and the list of members open to inspection by an office-bearer or member, at the times the rules provide.
• Section 20: fourteen years and a non-hazardous industry to be a member, with all the rights of a member and capacity to execute instruments and give acquittances.
• Section 21(1): disqualified for being chosen as and for being an office-bearer if under eighteen; if convicted in India of an offence involving moral turpitude and sentenced to imprisonment, until five years after release; or if the Tribunal has so directed. 21(2): no Minister and no holder of an office of profit, but employment in the establishment or industry concerned is excepted.
• Section 23(1), unorganised sector: not less than one-half insiders; proviso allows exemption by order; the sector is what the appropriate Government notifies. 23(2), elsewhere: outsiders limited to one-third or five, whichever is less. Explanation: a retired or retrenched employee is NOT an outsider.

Test yourself

1. What does a union gain by being registered? List the attributes conferred by section 12. It becomes a body corporate by the name under which it is registered, with perpetual succession, a common seal, power to acquire and hold both movable and immovable property, power to contract, and the capacity to sue and be sued in that name. Practically this means the funds and property are the union's rather than the members', the union survives every change in its membership, and litigation is by and against the union instead of by and against named individuals.

2. Why does section 13 exist, and what is the effect of registering a trade union under the Companies Act 2013? It exists because a trade union answers the general description of a society, a co-operative and an association of persons well enough for those statutes to be arguable, and if a union could be registered under one of them the Chapter III scheme, in particular the membership test in section 6, could be circumvented. Section 13 makes the Code the exclusive route: those Acts do not apply to a registered Trade Union, and registration under any of them is void.

3. Distinguish the age for membership from the age for office. Section 20 permits a person who has attained fourteen years and is employed in a non-hazardous industry to be a member of a registered Trade Union, subject to the union's rules, and to enjoy all the rights of a member. Section 21(1)(i) disqualifies a person who has not attained eighteen years for being chosen as, and for being, a member of the executive or any other office-bearer.

4. A union's executive has fifteen members. How many may be outsiders, and does a retrenched worker count as one? Under section 23(2) the permitted outsiders are not more than one-third of the total or five, whichever is less. One-third of fifteen is five and five is five, so the permitted number is five, and at least ten must be persons actually engaged or employed in the establishment or industry. A retrenched worker does not count as an outsider: the Explanation to section 23(2) provides that an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office.

5. When does a criminal conviction disqualify a person from union office? Under section 21(1)(ii), when he has been convicted by a court in India of an offence involving moral turpitude and sentenced to imprisonment, and the disqualification lasts until five years have elapsed since his release. All three elements are required, so a fine without imprisonment does not disqualify, and the bar is temporary rather than permanent. The words "for being chosen as, and for being" mean the disqualification operates both at election and while in office.

6. Can a member of a State Council of Ministers hold office in a trade union? Can a worker in a State-owned mill? A member of the Council of Ministers cannot: section 21(2) excludes him, as it excludes any person holding an office of profit in the Union or a State. A worker in a State-owned mill can, because the parenthesis in section 21(2) excepts an engagement or employment in an establishment or industry with which the Trade Union is connected, and without that exception no worker in a public undertaking could hold office in his own union.