Meaning and Concept of Dissolution of Trade Union
Dissolution of a Trade Union refers to the legal termination of the existence of a registered trade union. It is governed by Section 27 of the Trade Unions Act, 1926. Dissolution may occur voluntarily by the members of the trade union or compulsorily as a consequence of cancellation of registration by the Registrar. When a trade union is dissolved, it ceases to function as a legal entity and loses all rights and privileges granted under the Act. The purpose of regulating dissolution is to ensure that the assets, funds, and liabilities of the trade union are properly settled and that the interests of members are protected. Dissolution does not automatically invalidate past lawful acts of the union but brings an end to its legal personality.
Procedure and Legal Provisions
The procedure for dissolution is laid down under Section 27 of the Trade Unions Act, 1926. When a registered trade union is dissolved, notice of such dissolution must be sent to the Registrar of Trade Unions within fourteen days. The Registrar then records the dissolution in the official register. In cases where the registration of a trade union is cancelled under Section 10, the dissolution follows as a legal consequence. The Act also requires that the rules of the trade union should specify how its funds and property will be disposed of upon dissolution. This statutory framework ensures transparency, accountability, and lawful distribution of assets.
Legal Effect and Importance
Once a trade union is dissolved, it loses its status as a body corporate under Section 13 of the Act. It can no longer sue or be sued, represent workers, or enjoy statutory immunities under Sections 17 and 18. However, liabilities incurred before dissolution may still be enforceable against the union’s assets. Dissolution is important from a legal perspective because it ensures orderly closure of trade union affairs and prevents misuse of union funds. Courts and authorities rely on proper compliance with dissolution procedures to protect members’ interests and maintain discipline in trade union administration.
Real-Time Practical Example
A registered trade union in a small manufacturing unit gradually loses its membership due to closure of the factory. The remaining members pass a resolution to dissolve the trade union as it can no longer function effectively. A notice of dissolution is sent to the Registrar of Trade Unions within the prescribed time. The Registrar records the dissolution, and the remaining union funds are distributed among members according to the union’s rules. This example shows how dissolution operates lawfully when a trade union becomes non-functional.
Mnemonic to Remember Dissolution of Trade Union
Mnemonic: “D.I.S.S.O.L.V.E”
D – Decision by members
I – Intimation to Registrar
S – Section 27
S – Settlement of assets
O – Official record updated
L – Loss of legal status
V – Valid closure
E – End of union existence
This mnemonic helps recall the concept, procedure, and legal effects of dissolution during examinations.
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