Retired Employees can form Unions under Trade Union Act 1926: Madras High Court

Case Name: Karur Vysya Bank Retirees’ Association vs. Deputy Commissioner of Labour I DMS Compound

Case No.: Civil Miscellaneous Appeal No.2758 of 2019

Coram: Justice S.Vaidyanathan

India is a democratic country, where there is no restriction for the citizens to express their grievances to Government through Ahimsa and as such, preventing one sect of persons, namely, retired employees to form a Trade Union to espouse their cause to the Government cannot be permitted at any cost, by giving a different interpretation to the provisions of law. The word used under the Act, 1926 is “persons engaged or employed in an industry with which the Trade Union is connected” and it might be including all persons irrespective of whether they are in service or retired. 

Facts of the case

  • It is the case of the Association that the members of the Association had decided to form an Association to espouse their grievances, relating to pension and other benefits, as the existing Trade Union is not widely bringing out their grievances. It is the further case of the Association that the issue regarding the eligibility period for the purpose pension can be raised in the form an Industrial Dispute and it cannot be done by an individual or he cannot approach the Civil Court for the relief.
  • It is submitted that the individual is also barred from approaching this Court by way of Writ Petition, as the Court may shut the doors on the ground that the disputed question of fact cannot be gone into before this High Court, a reading of Section 2(g) of the Trade Unions Act, 1926 (in short ‘the Act, 1926’) shows that it authorizes any person, who was in employment to form an Association, which should be registered under the Act, 1926.
  • Though the employer, workmen and industrial dispute have not been defined under the Act, 1926, the Industrial Disputes Act alone can be invoked to raise a dispute concerning the issue falling under Section 2(k) of the Industrial Disputes Act, 1947.
  • It is stated by the learned counsel for the Appellant that the mandatory requirement is that a group of seven persons can only form an Association and in that event, it is obligatory on the part of the Authority to register the Trade Union, unless or otherwise there are any obstacles like reflection of very same name or any other issue concerned or that are prohibited under the 1926 Act.
  • Even though in the year 2002, an amendment to the Act, 1926 was brought in, it no way curbed retired employees or prohibited them to form an Association and the word employed/engaged has got to be interpreted in such a way that it will include not only persons, who are on the Roll but also were on the roll. Hence, the Court was in the view that the Authority is bound to register the Association formed by the retired employees unless there are any prohibited ground for non-registering the same.
  • In case the Authority finds that the object of formation of the Association is not for espousing the cause of its employees and deviates the conditions stipulated under the Act, 1926, then it is open to the Authority to refuse such registration, but not on the ground that the retired employees will not be entitled to form an Association, thereby discriminating them from the employees, who are on the roll.


  • Special Government Pleader appearing for the respondent has vehemently contended that the persons, who are on roll can only make such application for registration of the Association under the Act, 1926 and even after amendment in the year 2002, there was no deletion of any mandatory requirement. Further contended that a reading of the words used in Section 2 (e), (g) and 22 (1) & (2) makes it very clear that there shall be persons engaged or employed in an industry with which the Trade Union is connected and in the absence of such stipulation, the Authority is empowered to reject the application.
  • On the date of application, there should be a group of seven persons and in case the number is reduced, still, the Authority is empowered to register the Trade Union, but making an application with seven persons, who retired from service and are not connected with the employment on the date of application is not permissible in law and it will set a bad precedent for other similarly placed persons to knock at the doors of Registrar of Trade Unions to register their Association.

Key features

  • There are two judgments concerning registration of Trade Union, a judgment of Karnataka High Court in the case of Government Tool Room and Training Centre’s Supervisory and Officers’ Association, Bangalore and another vs. Assistant Labour Commissioner and Deputy Registrar of Trade Unions, Bangalore Division-I, Bangalore and others, and another judgment of the Bombay High Court inBajaj Auto Ltd., vs. State of Maharashtra out of these two judgments, though the finding of the Karnataka High Court does not support the case of the Respondent herein, the other judgment of the Bombay High Court is otherwise.
  • When the Act itself provides for a wider definition and for a wider meaning of that definition, the Courts cannot narrow it by its decision. That would be against the very object of the Trade Unions Act itself. It is a well-settled principle of law that two conditions are necessary for interpreting an earlier enactment in the light of the provisions of a later Act. They are:

a. The two Acts of the Legislature must be in pari materia, that is to say, that they form a system or code of Legislature; and 

b. The provisions in the earlier Act is ambiguous.  

Order of the court

  • The Appeal has been filed to set aside the order dated 26.10.2016 passed in O.M.A3/5794/16 Deputy Commissioner of Labour I, Chennai, who is the Authority under the Trade Unions Act, by which, the request of the Appellant Association (hereinafter referred to as ‘the Association’) to register its Association was negative by the Authority on the ground that the members of the Association are not in service. 
  • Admittedly, the retired employees will not be permitted to join hands with the Association of the current employees, as the nature of grievances being faced by either of them will be on a different path and both cannot be mingled together for espousing the same to the industry with which they are connected, unless or otherwise, the retired employees have a separate track/wing to espouse their grievances.
  • Therefore, in the considered opinion of this Court, the order dated 26.10.2016 passed by the Authority has no legs to stand is liable to be set aside. Accordingly, this Civil Miscellaneous Appeal is allowed and the order dated 26.10.2016 is set aside. The matter is remitted to the Authority for fresh consideration with a direction not to reject the request of the Appellant Association, reiterating the very same ground that they are all retired employees and no single employee is on the role of the establishment or industry with which it is connected. 
  • Even if seven employees were not on the roll, they are entitled to form an Association that has got to be registered under the Act, 1926 and the same cannot be refused to be registered on this score.
  • Though the existing Union with permanent employees can espouse the cause of retired employees or others, who were not in employment, on the ground of community of interest, consequent to the absence of such interest in the present days, there is nothing wrong in permitting the retired employees to have their Association under the Act, 1926, as Unions, having permanent employees on the Roll, are withering away and shirking from their moral responsibilities to espouse the cause of employees, who ceased to be on the roll. The Association with retired employees cannot, in any event, raise a dispute about the service conditions of employees on the rolls.

Edited by Vartika Gajendra Singh

Approved & Published – Sakshi Raje

I am Soma Singh from Sharda University School of Law, my interest areas are Corporate law, jurisprudence and ADR. I describe myself as an ambivert. Enjoys reading mythological tales