Section 18 of the Trade Unions Act, 1926: Scope of Immunity and Contemporary Judicial Interpretation

Section 18 of the Trade Unions Act, 1926: Scope of Immunity and Contemporary Judicial Interpretation

Introduction

Enacted during the colonial period, the Trade Unions Act, 1926 ( “TU Act” ) sought to legitimise collective action by conferring corporate personality and limited immunities upon registered trade unions. The cornerstone of these protections is Section 18, which restricts the maintainability of civil proceedings against a union or its office-bearers for acts done “in contemplation or furtherance of a trade dispute” where the alleged wrong consists only of inducing breach of contract or interference with trade. While the text appears categorical, subsequent jurisprudence has carved nuanced limitations. This article undertakes a critical examination of Section 18, integrating statutory analysis with leading Indian decisions and constitutional principles.

Legislative Context and Textual Elements

Section 18 traces its lineage to Section 3(1) of the English Trade Disputes Act, 1906, codifying parliamentary intent to insulate peaceful industrial pressure from common-law tort actions. The Indian provision employs four cumulative requirements:

  1. The defendant must be a registered trade union (or its office-bearer/member).
  2. The impugned act must be in contemplation or furtherance of a trade dispute (defined in Section 2(g)).
  3. The challenge must be confined to the grounds enumerated—inducement of breach of employment contract or interference with trade/business/labour.
  4. The plaintiff must approach a civil court; the bar does not, ex facie, extend to criminal prosecutions or specialised tribunals.

Analytical Framework

1. Nature of the Immunity – Absolute or Qualified?

Early Indian courts adopted a literal approach, reading Section 18 as an absolute bar. However, in M.P. Colliery Workers Federation v. United Collieries Ltd.[1] the Madhya Pradesh High Court, employing English precedents, clarified that immunity is lost where violence, intimidation, obstruction or other independent torts accompany the inducement. The court’s emphasis on the term “only” signals that Section 18 is a narrow shield, not a carte-blanche for unlawful conduct.

2. “Trade Dispute” and Illegality of Strike

Does an illegal strike (under the Industrial Disputes Act, 1947—“ID Act”) dissolve Section 18 protection? In Rohtas Industries Staff Union v. State of Bihar[2] the Patna High Court held that illegality under the ID Act is immaterial; the dispute remains a “trade dispute” under the TU Act, preserving the statutory immunity. The Supreme Court indirectly endorsed this view when affirming the High Court’s annulment of damages against workers in Rohtas Industries Ltd. v. Rohtas Industries Staff Union[3], stressing that compensatory claims for loss of profits lie outside the arbitration and statutory scheme.

3. Interplay with Fundamental Rights

Although Section 18 predates the Constitution, its application must now be harmonised with Articles 19(1)(a) to (c). In Kameshwar Prasad v. State of Bihar[4] and O.K. Ghosh v. E.X. Joseph[5], the Supreme Court vindicated the right of public servants to peaceful demonstrations and association, subject to reasonable restrictions. These decisions, while not directly construing Section 18, underscore that statutory immunities cannot justify state-imposed fetters on legitimate union activity but equally that such activity must remain peaceful and proportionate.

4. Civil Jurisdiction versus Specialised Fora

Employers frequently invoke civil remedies to restrain picketing, slogan-shouting, or obstruction. A consistent judicial thread restricts civil courts where Section 18 applies but permits injunctions against acts ultra vires the immunity:

  • Ambubhai & Diwanji v. Gujarat Mazdoor Panchayat[6] – Civil suit maintainable because allegations included coercive obstruction beyond inducement.
  • Simpson Workers Union v. Amco Batteries[7] – Karnataka High Court upheld injunction where blocking ingress/egress imperilled plant operations, holding no Section 18 shield for such conduct.
  • Central Bank of India v. Central Bank Officers’ Association[8] – Gujarat High Court recognised employees’ right to demonstrate but confined it to 200 metres from bank premises, balancing business continuity.

5. Section 18 Beyond Employer–Employee Paradigm

Section 18 immunity is circumscribed when consumer or public interests are implicated. The Bombay High Court in Tata Iron & Steel Co. Ltd. v. Maharashtra Mathadi Board[9] and the National Consumer Commission decisions (cited therein) rejected reliance on Section 18 to defeat consumer claims, noting that consumer fora are not “civil courts” within the meaning of the TU Act.

6. Registrar’s Powers and Procedural Safeguards

Union status is a pre-condition to immunity. The Andhra Pradesh High Court in MRF Mazdoor Sangh v. Commissioner of Labour[10] held that cancellation of registration must strictly follow Section 10 procedures; otherwise, constitutional due-process concerns arise. The decision underscores that Section 18 protection hinges on lawful registration.

Doctrinal Synthesis

Judicial exposition reveals a two-stage test:

  1. Threshold Inquiry: Is the defendant a registered trade union, and is the act connected to a trade dispute?
  2. Conduct Inquiry: Even if yes, does the conduct involve violence, intimidation, or other independent torts? If so, immunity lapses.

This architecture reconciles statutory purpose—facilitating collective bargaining—with competing interests in public order, property rights, and economic activity.

Critical Evaluation

The current doctrine, while pragmatically balanced, presents ambiguities:

  • Over-breadth of “only” Ground: Courts differ on what constitutes an “additional” ground removing immunity. A uniform standard would enhance predictability.
  • Fragmented Remedies: Separating civil, criminal, and specialised tribunal jurisdictions risks parallel proceedings. Legislative clarification—perhaps modelled on the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971—could consolidate dispute-resolution.
  • Consumer Impact: Post-liberalisation, industrial actions increasingly affect third-party consumers. Section 18’s century-old rationale warrants re-examination to accommodate these externalities.

Conclusion

Section 18 of the TU Act remains a vital statutory buttress for organised labour, securing space for peaceful economic pressure. Nevertheless, six decades of constitutionalism and industrial jurisprudence have converted its once-absolute wording into a qualified immunity, bounded by public interest, non-violence, and specialised labour statutes. Future reform should codify these judicially-crafted qualifications, ensuring clarity without diluting the fundamental right to collective action.

Footnotes

  1. M.P. Colliery Workers Federation v. United Collieries Ltd., 1969 MPLJ 78; 1972 MPLJ 78 (follow-up decision).
  2. Rohtas Industries Staff Union & Others v. State of Bihar & Others, 1962 SCC OnLine Pat 68.
  3. Rohtas Industries Ltd. v. Rohtas Industries Staff Union, (1976) 2 SCC 82.
  4. Kameshwar Prasad & Others v. State of Bihar & Another, 1962 SCC 1166.
  5. O.K. Ghosh & Another v. E.X. Joseph, AIR 1963 SC 812.
  6. M/s Ambubhai & Diwanji v. Gujarat Mazdoor Panchayat & Others, 1984 SCC OnLine Guj 152.
  7. Simpson & Group Companies Workers and Staff Union v. Amco Batteries Ltd., 1990 Kant HC.
  8. Central Bank of India v. Central Bank Officers’ Association, Gujarat, 1997 Guj HC.
  9. Tata Iron & Steel Co. Ltd. v. Maharashtra Mathadi & Unprotected Labour Board, 1997 Bom HC.
  10. MRF Mazdoor Sangh v. Commissioner of Labour, Andhra Pradesh HC, 2013.