The rotary union of a spindle is mounted to the rear of the shaft and it permits the movement of liquid from a stationary point into the rotating shaft. Typically rotary unions are used for the transfer of coolant in through tool coolant applications. They can also be used to transfer lubricant to the bearings in through the shaft lubrication systems (typically Makino machines).
There are several manufacturers of rotary unions with as many designs. Typically they use two ceramic disks that are separated when not in use but are pushed together by the pressure of the liquid when needed. These surfaces eventually wear causing leaks. On vertical spindles this causes the liquid to drain onto the rear of the spindle potentially causing bearing failure from contamination. It is very important to check the rotary unions on a regular basis and especially during spindle installation.