Home  /  Industrial Relations Code, 2020  /  Section 19

Section 19: Enforceability of agreements

The Industrial Relations Code, 2020 (Act No. 35 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter III: Trade Unions
Competent Labour Forum
Act No. 35 of 2020
Section 18 All 104 Sections of Industrial Relations Code, 2020 Section 20

Legal Commentary & Landmark Judgments: Section 19

Section 19 of the Industrial Relations Code, 2020 validates agreements between members of a registered Trade Union notwithstanding that any object of the agreement is in restraint of trade, overriding Section 27 of the Indian Contract Act, 1872, while restricting civil court jurisdiction to enforce intra-union damages claims.

  • Statutory Override of Restraint of Trade Doctrine: Section 19(1) explicitly provides that an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason that any of the objects of the agreement are in restraint of trade, protecting strike compacts, wage solidarity pacts, and mutual collective agreements from Section 27 Contract Act invalidation.
  • Exclusion of Civil Court Enforcement for Intra-Union Restrictive Terms: Section 19(2) bars civil courts from entertaining legal proceedings instituted for the purpose of recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell goods, transact business, or be employed.
  • Preservation of Internal Constitutional Sanctions: While courts cannot award civil damages for breach of intra-union restrictive covenants, the union retains inherent disciplinary authority under its registered constitution to impose internal penalties, fines, or membership expulsion upon defaulting members.
Key Landmark Precedents:
  • Nizamuddin v. Subodh Gopal Bose AIR 1960 Cal 48: The Calcutta High Court held that Section 19 saves trade union collective covenants from the invalidating effects of Section 27 of the Contract Act, validating collective agreements among workers to maintain uniform wage demands.
  • Radhakishan v. Bombay Company Ltd. AIR 1943 Sind 166: Ruled that agreements between members regulating employment conditions are legally recognized, but courts cannot be utilized to enforce damages against individual workers who breach intra-union agreements.
  • Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha (1980) 2 SCC 593: The Supreme Court recognized the distinctive jurisprudence governing collective labor agreements, affirming that industrial solidarity covenants operate under specialized labor statutes rather than standard commercial contract law.
Courtroom Practice & Strategic Litigation Guidance:

Union leadership drafting membership solidarity pledges, strike commitments, or minimum wage protocols can rely on Section 19 to shield such covenants from challenge as illegal restraints of trade. However, should an individual member violate a union directive by working during an authorized strike, counsel must advise the union not to sue for damages in civil court, but to proceed through internal disciplinary inquiries leading to fines or expulsion as prescribed in the registered rules.

Section 18 All 104 Sections of Industrial Relations Code, 2020 Section 20