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Political Fund Under Trade Union

A registered trade union is entitled to maintain two kinds of funds. They are: General Fund and Political Fund. The Trade Unions Act, 1926 imposes certain conditions on the Trade Unions to spend/utilize the funds only for some specific purposes as stated under Section 15 (General Fund) and Section 16 (Political Fund) of the act.

Political Fund
  • In 1946, based on the ideology that development of a group need involvement or support of political party directly or indirectly, concept of trade election and collection of political fund started.
  • Aim for use of this fund for political agenda like election expenses, campaigning and strengthen TU
  • Political fund deposition was made compulsory for all TU members to get related benefits

Amendment regarding Political fund
  • Under section 16(1) trade union for the purpose of spending on political cause must create a separate political fund. Contributions to such political funds should be collected separately.
  • In Trade Union Amendment 2019, deposition of political fund was made voluntary under section 16 clause 3.
  • Reason- To release pressure in labors politic. Moreover, politics is a matter of interest and it need not be compelled to all labors for participation.
  • According to 16(3):
    Contribution to the political fund cannot be compelled or made as compulsory or condition to admit a person as member of the trade union. a member who does not contribute to the said fund shall not be excluded from any benefits of the Trade Union. However, the control and management of the political fund can be vested exclusively to those members who contributed to the political fund.

Procedure for contribution in political fund- Notice Check-in Check-out process::
  1.  Notice:
    TU issue/publish application or notice for call for deposition of political fund
  2. Check in:
    Interested Trade union members having capacity to pay, fill check-in form and monthly amount on the name of political fund will be deducted from their salary account.
  3. Filled Check in form remains valid for 6 months, after which members need to fill new check-in form and enroll again for political fund.
  4. Check-out application:
    After lapse of check-in form, those members who wish to discoutinue this deposition may fill check-out applications.
  5. Time span for check-in form is only 6 months, the reason being financial situation of labor may change and may want to opt out of such deposition

Purpose of political fund
Section 16(2) of TUA ,1926 specifically states the purposes for which the political fund may be utilized with an aim to promote civic and political interests of its members. These are:
  1. The payment of any expenses incurred, either directly or indirectly, by a candidate or prospective candidate for election as a member of any legislative body or of any local authority, before, during, or after the election in connection with his candidature or election;
  2. Maintenance of any person who is a member of any legislative body or local authority;
  3. Registration of electors or the selection of a candidate for any legislative body or local authority;
  4. Conducting of political meetings or distribution of political literature and documents to the members of the trade union or to the general public.

It is important to note that the audit of this political funds shall be carried out along with the audit of the general account of the Trade Union and by the same auditor or auditors.

Political fund though not compulsory, but considered important for TU having political interests. Section 16(1) and (2) under TUA, 1926 explains about usage of political funds 16 clause 3 emphasize on voluntary creation of political fund without any loss of benefits under the act.

  1. Trade union act 1926
  2. The Trade Unions (Amendment) Bill, 2019

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