Sections 16 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 16, 17 and 18 protect registered Trade Unions, their office-bearers and members in three ways. They bar certain civil suits for acts done in an industrial dispute, limit a criminal conspiracy charge, and stop an agreement among members from being void merely because it restrains trade. Each protection has limits, and the limits are the part employers and unions most often miss.
Section 16 bars civil suits against a registered Trade Union, its office-bearers or members for acts done "in contemplation or furtherance of an industrial dispute" to which a member is a party, where the only ground is that the act induces a breach of a contract of employment or interferes with another's trade or employment. Section 17 shields them from punishment under s.120B(2) of the Indian Penal Code for agreements furthering the s.15 objects, unless the agreement is to commit an offence. Section 18 says a members' agreement is not void or voidable merely because it restrains trade.
Section 16: immunity from civil suit
Section 16(1): the protected acts
No suit or other legal proceeding is maintainable in any civil court against a registered Trade Union, or any office-bearer or member, for an act done "in contemplation or furtherance of an industrial dispute to which a member of the Trade Union is a party". The immunity applies only "on the ground only" that the act:
- induces some other person to break a contract of employment; or
- interferes with the trade, business or employment of some other person; or
- interferes with the right of some other person to dispose of his capital or his labour as he wills.
Two limits are plain on the text. The immunity is for registered Trade Unions, so a union that has not been registered under s.9 does not get it. And it is tied to an industrial dispute in which a member is a party. The Code's definition of "industrial dispute" is in s.2; see our article on the definition. A protest with no dispute behind it is outside the protection.
The word "only" matters. Section 16(1) removes one ground of suit, that the act induced a breach or interfered with someone's business. It does not make the union immune if the act is unlawful on some other basis.
Example (invented). During a dispute over wage revision, union officials persuade workers in a supplier's unit to stop handling the employer's goods. The supplier sues the union in a civil court, saying the union induced its workers to break their contracts. If the act was done in furtherance of the industrial dispute and the dispute involved a union member as a party, s.16(1) bars the suit on that ground. The union still has to comply with the Code's rules on strikes; see section 62.
Section 16(2): acts of an agent
A registered Trade Union "shall not be liable in any suit or other legal proceeding in any civil court in respect of any tortuous act done in contemplation or furtherance of an industrial dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union". Note the burden: it must be proved that the agent acted without the executive's knowledge or against its express instructions. Keeping minutes and written instructions is the practical way to meet that.
For accountants and HR teams, the point is narrow. This is about liability of the union in a civil court. It does not stop the employer from using the remedies the Code itself provides, for example a complaint of contravention under the Code's later chapters, which we cover under sections 91 and 92 of this series. Employers and unions who are unsure how to position a dispute can ask our legal consultation team.
Section 17: criminal conspiracy
Section 17 says no office-bearer or member of a registered Trade Union "shall be liable to punishment under sub-section (2) of section 120B of the Indian Penal Code in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in section 15, unless such agreement is an agreement to commit an offence".
Read it in three parts:
- Who: an office-bearer or member of a registered Trade Union.
- What is protected: an agreement between members to further an object of the union "as is specified in section 15", that is, the prescribed objects of the general fund or the civic and political objects of the separate fund. See section 15.
- The exception: an agreement to commit an offence is not protected.
The Code cites the Indian Penal Code, 1860 as written. From 1 July 2024 the Indian Penal Code was replaced by the Bharatiya Nyaya Sanhita (BNS); we give no new section numbers here. Read the reference in s.17 as it stands in the text, and check the current corresponding provision before relying on it in a live matter.
Section 18: agreements in restraint of trade
Section 18 begins "Notwithstanding anything contained in any other law for the time being in force" and says an agreement between the members of a registered Trade Union "shall not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint of trade". That removes the common-law objection that a union agreement is unenforceable because it restrains trade.
The proviso narrows the protection. Nothing in s.18 enables any civil court to entertain legal proceedings "for the purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell their goods, transact business, work, employ or be employed". So the agreement is not void, but a civil court will not enforce it or award damages for its breach. The agreement can stand; the court route to enforce it is closed.
The three sections at a glance
| Section | Protects | Against | Limit |
|---|---|---|---|
| 16(1) | Registered union, office-bearers, members | Civil suit on the sole ground of inducing breach of employment contract or interfering with another's trade, business, employment or disposal of capital or labour | Act must be in contemplation or furtherance of an industrial dispute to which a member is a party |
| 16(2) | Registered union | Civil liability for a tort by an agent | Must be proved the agent acted without the executive's knowledge or against its express instructions |
| 17 | Office-bearers and members of a registered union | Punishment under s.120B(2) IPC for agreements furthering s.15 objects | Not if the agreement is to commit an offence |
| 18 | Members' agreements | Being void or voidable only because in restraint of trade | Courts will not enforce or award damages for agreements on when members sell goods, transact business, work, employ or are employed |
Practical pointers
- Register first. Every protection in these sections is for a registered Trade Union.
- Keep the dispute on record. Section 16 is tied to an industrial dispute, so keep the demand, the notice and any conciliation record together.
- Record instructions. To rely on s.16(2) the union must prove its executive did not know of, or forbade, the agent's act.
- Stay within the objects. Section 17 covers agreements furthering s.15 objects, not agreements to commit an offence.
Need help with a union dispute?
If you are an employer facing action by a union, or a union planning action, our legal consultation team can help you map the Code's protections and limits against the facts before anyone files or calls a stoppage.
Key takeaways
- Civil suits are barred only on the stated grounds and only for acts in furtherance of an industrial dispute (s.16(1)).
- A union escapes liability for an agent's tort only if the agent acted without the executive's knowledge or contrary to its express instructions (s.16(2)).
- s.120B(2) IPC liability does not attach to agreements furthering s.15 objects, unless the agreement is to commit an offence (s.17).
- Restraint of trade does not by itself void a members' agreement, but civil courts will not enforce specified conditions-of-business agreements (s.18).
Read next
- Section 15: general fund and separate fund of a Trade Union
- Section 19-21: inspection of books, minors and disqualification
- Section 9: registration and cancellation of a Trade Union
- Strikes: legal and illegal under the old Act
Disclaimer: Based on the Industrial Relations Code, 2020 (as enacted) and, where noted, the Industrial Relations (Central) Rules, 2026 (G.S.R. 342(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.