Trade Union: Meaning, Registration & Recognition
Updated 4 min read
Definition
A trade union is a group of workers, or of employers, formed mainly to regulate the relations between workers and employers.
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What Is a Trade Union?
Unions usually make the news over strikes, but most of the law is about how one registers and when it gets to bargain with the employer.
A trade union is a group of workers, or of employers, formed mainly to regulate the relations between workers and employers. In India, section 2(zl) of the Industrial Relations Code, 2020 defines it, and the Code sets the rules for registering one and for its right to negotiate with the employer.
The Code says “worker” here, not “employee”, and the difference counts. Managers and better-paid supervisors fall outside the word. So a union of workers can speak for factory, bank or hospital staff, but not for management.
How a Trade Union Is Registered
Registration is with the state’s Registrar of Trade Unions. Section 6 of the Industrial Relations Code sets two thresholds:
- To apply: any seven or more members can sign the union’s rules and apply.
- To register and stay registered: members must be at least 10% of the workers in that establishment or industry, or 100 workers if that is fewer, and never below seven.
The union’s rules must cover its name, its objects, its funds, an annual audit and the election of office-bearers at least once every three years.
Registered vs Recognised Trade Union
| Aspect | Registered | Recognised |
|---|---|---|
| Decided by | The Registrar | The employer, by the rules |
| Test | Rules and members | Support on the muster roll |
| Gives | Legal status | The right to negotiate |
| Lasts | Until cancelled | Three years, five at most |
The difference is the one employers trip over. Registration gives a union legal standing. Recognition under section 14 decides whether you must negotiate with it.
Trade Union Example
An electronics assembly plant in Bengaluru (an example) has 600 workers on its muster roll in July 2026. Three registered unions ask to be recognised, and their support is verified.
| Union | Members | Share |
|---|---|---|
| Union A | 330 | 55% |
| Union B | 150 | 25% |
| Union C | 120 | 20% |
Note: this is an invented example for illustration only. The plant, the unions and the numbers are made up.
Union A has 51% or more, so the employer must recognise it as the sole negotiating union. If no union had reached 51%, the employer would set up a negotiating council instead. Every union with at least 20% support would get a seat on it.
What an Employer Cannot Do to a Union
The Code lists unfair labour practices in its Second Schedule, and several are about unions. An employer may not:
- threaten workers with dismissal if they join a union
- set up a union of its own, or favour one unrecognised union over another
- discharge or punish a worker for urging others to join or organise
- refuse a promotion because of union activity
What catches managers out is the move that looks generous. A pay rise timed to undercut a union while it is organising is on the same list.
Union Fees and Your Payroll
Most of a union’s dealings run through HR, but two touch the monthly routine. Section 18 of the Code on Wages lets you deduct union fees from wages. You need the employee’s written consent first. And where the standing orders apply, a notice changing shift working also goes to the registered union’s secretary. Our standing orders format shows where that notice fits.
Attendo (formerly Petpooja Payroll) is a complete workforce management system for every kind of business. Its Other Deductions setting holds a fixed monthly amount, such as a union fee the employee has agreed to, so it is recovered the same way every month. To see how deductions sit in a pay run, explore Attendo.