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Section 24: Proportion of office-bearers to be connected with industry

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 23 All 104 Sections of Industrial Relations Code, 2020 Section 25

Legal Commentary & Landmark Judgments: Section 24

Section 24 of the Industrial Relations Code, 2020 regulates the inclusion of non-workers (outsiders) in Trade Union executives, mandating that the majority of leadership must be actual workers while strictly capping outside office-bearers to one-third or 5 in the organized sector, and permitting up to 50% in the unorganized sector.

  • Organized Sector Strict Outside Ceiling: Section 24(2) mandates that in industrial establishments other than the unorganized sector, not more than one-third of the total number of office-bearers or five, whichever is less, shall be persons not actually engaged or employed in the establishment or industry with which the union is connected.
  • Unorganized Sector 50% Threshold: Section 24(1) provides that in the unorganized sector, not less than one-half of the total number of office-bearers shall be persons actually engaged or employed in an establishment or industry, permitting up to 50% outside leadership to assist vulnerable, illiterate, or dispersed workforces.
  • Inclusion of Honorary Members in the Cap: Any honorary or temporary members admitted to the Trade Union under Section 8(f) to hold executive office are legally counted within the outside quota; any election exceeding the statutory ceiling renders the executive committee invalidly constituted.
Key Landmark Precedents:
  • Balmer Lawrie Workers Union v. Balmer Lawrie & Co. Ltd. 1985 Supp SCC 280: The Supreme Court held that the legislative object of restricting outside office-bearers is to foster internal leadership among workers and curb external political exploitation of collective bargaining.
  • State Bank of India Staff Association v. State Bank of India (1996) 4 SCC 378: The Supreme Court held that while outsiders may be lawfully elected as office-bearers within statutory caps, employers are entitled to insist that internal bipartite grievances be negotiated primarily by internal worker representatives.
  • Indian Bank v. Federation of Indian Bank Employees Union (2001) 2 LLJ 1406 (Mad): The Madras High Court affirmed that the executive composition of a Trade Union must strictly comply with statutory limits on outsiders, and an executive containing excess outsiders lacks legal validity.
Courtroom Practice & Strategic Litigation Guidance:

When structuring a Trade Union executive in an organized establishment, calculate the permissible outsider limit meticulously: for an executive of 12 office-bearers, one-third is 4, which is less than 5, so exactly 4 outsiders are permitted; for an executive of 18, one-third is 6, but the cap of 5 applies. Employers reviewing annual Form B returns must verify the employment status of all listed office-bearers, using any violation of Section 24 to challenge the executive's validity before the Industrial Tribunal under Section 23.

Section 23 All 104 Sections of Industrial Relations Code, 2020 Section 25