21. Legislation Concerning Settlement of Industrial Disputes – Industrial Relations, Trade Unions, and Labour Legislation, 2nd Edition

Chapter 21

Legislation Concerning Settlement of Industrial Disputes

Chapter Objectives

This chapter will enable the students to:

  1. Understand the background beading to the enactment of the Industrial Disputes Act, 1947
  2. Understand the meaning of various terms defined under the Act
  3. Describe the composition, powers and functions of various authorities under the Act
  4. Explain the provisions of the Act relating to prohibition of strikes and week-outs
  5. Describe the provisions of the Act relating to lay-off, retrenchment and closure
  6. Describe the unfair labour practices listed under the Act
  7. Present an assessment of the Act and suggest measures for improvement

Industrial Disputes Legislation Preceeding the Enactment of the Industrial Disputes Act, 1947

The first legislative measure dealing with the settlement of industrial disputes in India was the Employers and Workmen (Disputes) Act, 1860. The Act empowered magistrates to dispose of disputes concerning wages of workmen employed in railways, canals, and other public works, and made the breach of contract a criminal offence. The Act was repealed in 1932, though it had ceased to be used much earlier.

Indian Trade Disputes Act, 1929: After the outbreak of the First World War, there was a phenomenal increase in the number of industrial disputes resulting in frequent strikes and lock-outs. This necessitated the adoption of legislation for their effective settlement but no definite step was taken till 1929, when the Trade Disputes Act was passed. The Trade Disputes Act, which was patterned after the British Industrial Courts Act, 1919, and the Trade Disputes and Trade Unions Act, 1927, authorized the central and provincial governments to establish Courts of Inquiry and Boards of Conciliation, with a view to investigating and settling trade disputes, and rendered lightning strikes in public utility concerns, a punishable offence.

If a trade dispute actually existed or was apprehended, the provincial government or Governor General in Council (in case of central government department or a railway company), on the request of both the parties to a dispute, could refer the matter to a Court of Inquiry or a Board of Conciliation. A Board of Conciliation was to consist of an independent chairman and two or four other members who were to be either independent persons or persons appointed in equal numbers to represent the parties to the disputes. The Board was required to make a report to the appointing authority setting out, in the case of non-settlement a full account of the facts and the findings and its own Recommendations for an effective settlement of the dispute. A Court of Inquiry was to consist of an independent chairman and such other independent persons as the appointing authority considered fit. The Court of Inquiry was required to report on its findings to the appointing authority.

In the public utility services (including railways, postal, telegraph and telephone services; power light or water-supplying services; or any system of conservancy or sanitation), strikes and lock-outs without notice were prohibited. No workman employed in a public utility service was to go on strike in breach of contract, without having given to his employer within 1 month before striking, not less than 14 days’ previous notice in writing of his intention to go on strike. Similarly, no employer of a public utility service was to declare a lock-out without having given to his workmen within 1 month before such lock-out, not less than 14 days’ written notice of his intention to declare lock-out. The Act also prohibited strikes and lock-outs having any object other than the furtherance of a trade dispute and designed or calculated to inflict severe, general and prolonged hardship upon the community. Thus, political and general strikes were illegal under the Act. Applying money in the furtherance of an illegal strike or lock-out or inciting others to participate in such an illegal strike or lock-out was also prohibited.

Indian Trade Disputes (Amendment) Act, 1932: The Act of 1929 did not provide any protection to the members of a Board of Conciliation or a Court of Inquiry in respect of disclosure of confidential information relating to industrial establishments or trade unions. They could be sued and prosecuted in respect of disclosures whether wilful or accidental. In order to remedy the defect, the Indian Trade Disputes (Amendment) Act, 1932, was passed. The Act required persons desiring information to be kept confidential to make a request for the same. Members of a court or a board were liable to prosecution only in the case of wilful disclosure. In case of every prosecution, only presidency or first class magistrate could make a trial. Besides, a suit or prosecution could be instituted only on the previous sanction of the authority appointing the court or board.

Trade Disputes (Extending) Act 1934: The Trade Disputes Act, 1929, was experimental for 5 years and was due to expire on May 7, 1934. With a view to making the Act permanent, the Trade Disputes (extending) Act was enacted in April 1934.

Trade Disputes (Amendment) Act, 1938: The trade Disputes (Amendment) Act, 1938, was the direct outcome of the Recommendations of the Royal Commission of Labour. The Act empowered the central and provincial governments to appoint Conciliation Officers for ‘mediating in’ and ‘promoting’ the settlement of industrial disputes in any business, industry or undertaking. The Act enlarged the definition of public utility service so as to include power plants, tramway and water transport used for carrying passengers. Besides, the provisions regarding illegal strikes and lock-outs were made less restrictive, and the definition of trade dispute was enlarged.

Rule 81 (A) of the Defence of India Rules: During the Second World War period, the government adopted certain emergency measures to prevent the war efforts from being impeded by industrial strife. Rule 81 (A), which was added to the defence of India Rules in January 1942, empowered the government: (i) to prohibit strikes or lock-outs (by general or special order) in connection with any trade dispute unless a reasonable notice was given; (ii) to refer any dispute to conciliation or adjudication; (iii) to require employers to observe specified terms and conditions; and (iv) to enforce the decisions of the adjudicators. In pursuance of this Rule, the Government of India promulgated an order in August 1942, prohibiting strikes and lock-outs without 14 days’ previous notice, and during the pendency of conciliation or adjudication proceedings. The Rule remained in force till 1946, but the period of its operation was extended under the Emergency Powers (Continuance) Ordinance, 1946. Most provisions of the Rule were incorporated in the Industrial Disputes Act, 1947, which with subsequent amendments is still in force in the country.

INDUSTRIAL DISPUTES ACT, 1947

At the time the Industrial Disputes Acts, 1947 was being enacted, there was a considerable increase in industrial unrest owing to the ‘stress of post-war industrial re-adjustment’.1 The success of Rule 81A of the defence of India Rules during war-time had led the government to feel that the problem of industrial unrest could be effectively tackled if the main provisions of the rule were retained. Consequently, many provisions of the rule, particularly those relating to public utility services, were incorporated in the new legislation. The Act, which came into force on 1 April 1947, introduced the principle of compulsory conciliation and adjudication of industrial disputes in certain cases, and created two new institutions namely, Works Committee and Tribunal.

Subsequent Amendments

The Industrial Disputes Act, 1947, has been amended several times since it came into force. Thus, an amendment introduced in 1949 aimed at removing difficulties created by piece-meal adjudication of disputes in banking and insurance companies having branches in more than one state, and replaced the Industrial Disputes (banking and insurance companies) Ordinance, 1949. The Act was further amended by the Industrial Disputes (appellate tribunal) Act, 1950, which provided for the establishment of a Labour Appellate Tribunal, and introduced several amendments pertaining to enforcement of awards, power of the Tribunals to hear complaints regarding alteration in the service conditions of workers during pendency of proceedings, representation of parties, and recovery of money from employers. The Industrial Disputes (amendment and temporary provisions) Act, 1951, was enacted primarily as a result of the judgement of the Supreme Court which declared the award of the All India Industrial (bank disputes) Tribunal as void on the ground of defects in the constitution of the Tribunal. An amendment made in 1952 replaced the Industrial Disputes (amendment) Ordinance, 1951, and widened the powers of the government to refer industrial disputes to Board of Conciliation Court of Inquiry and Tribunal.

The Industrial Disputes (Amendment) Act, 1953, prescribed conditions under which workers might be laid-off and retrenched and the compensation to be paid to laid-off and retrenched workmen. An amending Act of 1954 extended the provisions concerning lay-off and retrenchment in respect of plantation workers. Later, the Industrial Disputes (Amendment) Act, 1956, specified the circumstances under which compensation for lay-off could be extended beyond the first 45 days of lay-off, and made special provisions in respect of workers’ right to compensation in the event of transfer of undertakings.

A number of amendments were introduced in 1964 and 1965. The important amendments in 1964 related to declaration of air transport services as a permanent public utility service; declaration of any industry as a public utility service by the central and state governments in their respective jurisdictions; appointment of an umpire in the event of differences of opinion between the arbitrators; and termination of an award or settlement by proper notice only by a majority of workmen. The amending Act of 1965 brought Indian Airlines and Air India Corporations and a few other Corporations of all-India importance within the jurisdiction of the central government. An important provision made available the machinery under the Act in cases of individual dismissals and discharges, which hitherto could not be taken up for conciliation, arbitration or adjudication unless they were sponsored by a union or a number of workmen.

The Industrial Disputes (Amendment) Act, 1971, widened the powers of Labour Courts, Tribunals and National Tribunals in the course of adjudication proceedings to review the orders of dismissal or discharge of workmen and, if necessary, set aside such order and direct reinstatement or give such other relief in lieu of dismissal and discharge as the circumstances of the case might require. The Act also provided for payment of full retrenchment compensation to workmen in the event of closing down of a mining undertaking due to exhaustion of its reserves subject to the condition that no retrenchment compensation was payable to the workmen concerned when the employer provided them with alternative employment with effect from the date of closure at the same remuneration as they were entitled to receive, and on the same terms and conditions of service as were applicable to them, immediately before the closure. The central government was made the appropriate government in relation to the industrial disputes concerning the Industrial Finance Corporation and the Life Insurance Corporation of India. Services in or in connection with the working of major parts and docks were included in the permanent categories of public utility service.

The Industrial Disputes (Amendment) Act, 1972, required an employer intending to close down his undertaking to serve, as least 60 days before the intended closure, a notice in the prescribed manner on the appropriate government stating clearly the reasons for the closure. The amendment did not apply to undertakings where less than 50 workers were employed on an average per working day in the preceding 12 months. No such notice was required to be served in case of undertakings set up for construction of buildings, roads, canals, dams and other construction projects.

An amendment of 1976 inserted a new chapter in the Act pertaining to special provisions relating to lay-off, retrenchment and closure in certain establishments.

The Act was comprehensively amended in 1982 by the Industrial Disputes (Amendment) Act of that year. The objectives of the Bill included ‘speedier resolution of industrial disputes by removing procedural delays and to make certain other amendments in the light of some of the Recommendations of the National Commission on Labour’. The main amendments introduced by the Act of 1982 related to the following:

  1. Removal of difficulties in the interpretation of the expression ‘appropriate government’
  2. Definition of the term ‘industry’
  3. Establishment of a time-bound grievance redressal procedure in every industrial undertaking employing 100 or more workmen
  4. Fixation of time-limit for adjudication of individual and collective disputes and also for disposal of claims, applications and other references
  5. Right of legal heirs
  6. Payment of wages to the workmen from the date of award till the final decision of the case by the Supreme Court or High Courts
  7. Lay-off without permission in mines
  8. Modifications of the provisions relating to closure of industrial establishments
  9. Extension of statutory protection concerning lay-off, retrenchment and closure to workmen in establishments employing 100 or more workmen
  10. Specifying unfair labour practices on the part of employers, workmen and trade unions and providing for penalties for those indulging in such practices.

The Act was further emended in 1984. The new amendments related to definition of retrenchment and special provisions relating to lay-off, retrenchment and closure of industrial undertakings. An amending Act of 1996 specified a few more organizations/corporations under the jurisdiction of the central government.

The Industrial Disputes (Amendment) Bill, 2009, was placed before the Rajya Sabha on 23 February 2009. The Bill inter alia seeks to provide for; (i) amendment of the term ‘appropriate government’ to amplify the existing definition; (ii) enhancement of wage ceiling of a workman from 1,600 per month to 10,000 per month; (iii) direct access for workman to the Labour Court or Tribunal in case of disputes arising out of dismissal, discharge, retrenchment or termination of service in other ways; (iv) expanding the scope of qualifications of presiding officers of Labour Courts or Tribunals; (v) establishment of Grievance Redressal Machinery in every industrial establishment employing 20 or more workmen for resolution of disputes arising out of individual grievances; and (vi) empowering the Labour Court or Tribunal to execute the awards, orders or settlements arrived at by Labour Court or Tribunal. The Bill is, however, yet to be passed.

BASIC ELEMENTS OF PUBLIC POLICY

The basic elements of public policy in regard to settlement of industrial disputes are described in the margin.

A piece of legislation is intended to reflect and execute the public policy in respect of the matters it deals with. The Industrial Disputes Act, 1947, with amendments is, therefore, a reflection of the public policy in regard to the settlement of industrial disputes in the country. It is worthwhile to have a brief glimpse of the public policy as embodied in this law. The basic elements of this policy are shown in Box 21.1.

Box 21.1

BASIC ELEMENTS OF PUBLIC POLICY IN REGARD TO SETTLEMENT OF INDUSTRIAL DISPUTES

  1. The parties to an industrial dispute are free to settle their dispute without any let or hindrance in any manner they like and determine the terms of the settlement, but without endangering industrial peace through industrial action.

  2. The state is prepared and has set up a machinery to assist the parties in the peaceful settlement of their dispute by providing conciliation service.

  3. If, in spite of this assistance, the parties fail to come to a settlement, the state expects and requires the parties to give it a reasonable time to make further efforts for a peaceful settlement before they go into industrial action.

  4. Yes again, if the parties still persist in their decision to resort to industrial action, the state reserves to itself the right to bring the matter before adjudication authorities, declare their awards binding and prevent industrial action resulting in work-stoppages.

  5. The state expects the parties to make reasonable efforts to prevent industrial disputes from arising and, therefore, requires the employers to constitute work committees in their enterprises.

The Act is designed to put this policy into practice. If, in spite of the existence of this Act, industrial actions have taken place, it is not so because the Act is deficient, but because the economic and political factors operating in the country are beyond the control of any industrial relations legislation. The widespread prevalence of strikes and lock-outs till recently is also an indication of the fact that industrial peace cannot be legislated into practice so long as the economic and political system permits the parties the right to industrial action for the settlement of the conflicting claims.

INDUSTRIAL DISPUTES ACT, 1947

Some Important Definitions

Industrial Dispute

Any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person [Sec. 2 (K)]. Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination is deemed to be an industrial dispute notwithstanding that no other workmen nor any union of workman is a party to the dispute [Sec. 2 (k), 2A].

Strike

A cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment [Sec. 2 (q)].

Lock-out

The closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him [Sec. 2 (I)].

Workman

Any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under the Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment had led to that dispute, but does not include any such person:

  1. Who is subject to the Army Act, 1950, or the Air Force Act, 1950, or the Navy Act, 1957
  2. Who is employed in police service as an officer or other employee of a prison
  3. Who is employed mainly in a managerial or administrative capacity
  4. Who, being employed in a supervisory capacity, or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature [Sec. 2 (s)].

Lay-off

The failure, refusal, or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or natural calamity or any other connected reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

Every workman whose name is borne on the muster rolls of the industrial establishment and who presents himself for work at the establishment at the time appointed for the purpose during normal working hours on any day and is not given employment by the employer within two hours of his no presenting himself, is deemed to have been laid-off for that day. However, if the workman, instead of being given employment at the commencement of any shift for any day is asked to present himself for the purpose during the second half of the shift for the day and is given employment, he is deemed to have been laid-off only for one-half of that day. In case he is not given employment even after so presenting himself, he is not deemed to have been laid-off for the second half of the shift for the day, and is entitled to full basic wages and dearness allowance for that part of the day [Sec. 2 (kkk)].

Retrenchment

The by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include: (i) voluntary retirement of the workman; or (ii) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; (iii) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (iv) termination of the service of a workman on the ground of continued ill health [Sec. 2 (oo)].

Settlement

A settlement, arrived at in the course of a conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties in the prescribed manner and a copy of the same has been sent to an officer authorized in this behalf by the appropriate government and the conciliation officer [Sec. 2 (p)].

Appropriate Government

Central Government: In relation to any industrial dispute concerning any industry carried on by or under the authority of the central government or by a railway company or concerning any such controlled industry as may be specified by the central government or in relation to an industrial dispute concerning a Dock Labour Board or Industrial Finance Corporation of India, or the Employees’ State Insurance Corporation, or the Board of Trustees under the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, or the central and state Boards of Trustees under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, or the Indian Airlines and Air India or the Oil and Natural Gas Corporation Ltd., or the deposit insurance and Credit Guarantee Corporation or the Central Warehousing Corporation or the Unit Trust of India or the Food Corporation of India or the Airports Authority of India, or a Regional Rural Bank or the Export Credit and Guarantee Corporation Ltd. Or the Industrial Reconstruction Bank of India Ltd. Or the National Housing Bank or an air transport service or a banking or an insurance company, a mine, an oil-field, a cantonment board or a major port.

State Government or Union Territory: In relation to any other industrial dispute, as the case may be.

Public Utility Service

(i) Any railway service or any transport service for the carriage of passengers or goods by air; (ii) any service in or in connection with the working of, any major port or dock; (iii) any section of an industrial establishment, on the working of which, the safety of the establishment or the workmen employed therein depends; (iv) any postal, telegraph or telephone service; (v) any industry which supplied power, light or water to the public; and (vi) any system of public conservancy and sanitation. The appropriate government may, on being satisfied that public emergency or public interest so requires, declare any of the industries specified in the first schedule of the Act as public utility service by notification in the official gazette for a period not exceeding 6 months, but it may be extended for a further period of up to 6 months at a time if public emergency or public interest so requires. The list of such industries is given in Box 21.2.

Box 21.2

INDUSTRIES WHICH MAY BE DECLARED PUBLIC UTILITY SERVICE BY THE GOVERNMENT

(i) Transport (other than railways) for the carriage of passengers or goods by land or water; (ii) Banking; (iii) Cement; (iv) Coal; (v) Cotton textiles; (vi) Foodstuffs; (vii) Iron and steel; (viii) Defence establishments; (ix) Service in hospitals and dispensaries; (x) Fire brigade service; (xi) India Government Mints; (xii) India Security Press; (xiii) Copper mining; (xiv) Lead mining; (xv) Zinc mining; (xvi) Iron ore mining; (xvii) Service in any oil field; (xviii) Service in uranium industry; (xix) Pyrites mining; (xx) Security Paper Mill; (xxi) Services in Bank Notes Press; (xxii) Phosphorite mining; (xxiii) Magnesite mining; (xxiv) Currency Note Press; (xxv) Manufacture or production of mineral oil (crude oil), motor and aviation spirit, diesel oil, kerosene oil, fuel oil, diverse hydrocarbon oils and their blends including synthetic fuels, lubricating oils and the like; (xxvi) Service in the International Airports Authority of India; and (xxvii) Industrial establishments manufacturing or producing nuclear fuel and components, heavy water and allied chemicals and atomic energy [Sec. 2 (n), First Schedule].

Industry

Any systematic activity carried on by cooperation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not (i) any capital has been invested for the purpose of carrying on such activity; or (ii) such activity is carried on with a motive to make any gain or profit and includes (i) any activity of the Dock Labour Board established under the Dock Workers (Regulation of Employment) Act, 1948, and (ii) any activity relating to the promotion of sales or business or both carried on by an establishment; but does not include the following:

  1. Any agricultural except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions) and such other activity is the predominant one
  2. Hospitals or dispensaries
  3. Educational, scientific, research or training institutions
  4. Institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service
  5. Khadi or village industries
  6. Any activity of the government relatable to the sovereign functions of the government including all the activities carried on by the departments of the central government dealing with defence research, atomic energy and space
  7. Any domestic service
  8. Any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than 10
  9. Any activity, being an activity carried on by a co-operative society or a club or any other like body of individuals, if the number of persons employed in relation to such activity is less than ten [Sec. 2 (j)].
AUTHORITIES AND REFERENCE OF DISPUTES

The authorities for prevention or settlement of disputes under the Act are mentioned in Box 21.3.

Box 21.3

AUTHORITIES UNDER THE INDUSTRIAL DISPUTES ACT, 1947

(i) Grievance Settlement Authority, (ii) Works Committee, (iii) Conciliation Officer, (iv) Board of Conciliation, (v) Court of Inquiry, (vi) Labour Court, (vii) Tribunal, (viii) National Tribunal and (ix) Arbitrator. The Labour Court, Tribunal and National Tribunal are authorities for adjudication of industrial disputes, whereas Conciliation Officer and Board of Conciliation are conciliation authorities. Cases of voluntary arbitration are referred to Arbitrator. Grievance Settlement Authority is intended to deal mainly with individual disputes. Works Committee is a machinery for the prevention of industrial disputes.

Grievance Settlement Authority

In every industrial establishment in which fifty or more workmen are employed or have been employed on any day in the preceding 12 months, the employer is required to constitute, in accordance with the rules framed in this regard, a Grievance Settlement Authority for the settlement of industrial disputes connected with an individual workman employed in the establishment. In case an industrial dispute connected with an individual workman arises in such an establishment, the workman or the trade union of which he is a member may refer the dispute in the prescribed manner to the Grievance Settlement Authority for settlement. The grievance settlement authority is to follow the prescribed procedure and to complete the proceedings within specified time. No reference of any dispute is to be made to conciliation and adjudication authorities or arbitrator unless the dispute has been referred to the grievance settlement authority and its decision is not acceptable to any of the parties to the dispute [Sec. 9C].

Works Committee

The appropriate government is empowered to make general or special order requiring the employer to constitute a Works Committee in any industrial establishment in which 100 or more workmen are employed or have been employed on any day in the preceding 12 months.

Constitution

A Works Committee is to consist of representatives of employers and workmen engaged in the establishment, so however, that the number of workers’ representatives is not less than that of employers’ representatives. This means that the number of workers’ representatives can exceed the number of employers’ representatives. The representatives of the workmen are to be chosen from amongst the workmen engaged in the establishment in consultation with their registered trade union, if any.

Functions

A Works Committee is required to promote measures for securing and preserving amity and good relations between the employers and workmen and, in order to achieve the end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters [Sec. 3] (see also Chapter 14).

Conciliation Officer

The appropriate government is empowered to appoint Conciliation Officers by notification in the official gazette for mediating in and promoting the settlement of industrial disputes. The number of Conciliation Officers to be appointed is to be determined by the appropriate government. A Conciliation Officer may be appointed for specified industries either permanently or for a limited period [Sec. 4].

Duties of Conciliation Officers

Where any industrial dispute exists or is apprehended, the Conciliation Officer may, or where the dispute relates to a public utility service and a notice of strike or lock-out as required under Section 22 of the Act has been given, must hold conciliation proceedings in the prescribed manner. He is required to investigate the dispute and all matters affecting its merits for promoting a right settlement. A Conciliation Officer may take appropriate steps for inducing the parties to a fair and amicable settlement of the dispute. If a settlement is arrived at during conciliation proceedings, he must send a copy of the report and the memorandum of settlement signed by the parties to the appropriate government or an officer authorized by it. In case no settlement is arrived at, he is required, as soon as possible after the close of investigation, to send to the appropriate government, full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about its settlement, and the reasons on account of which a settlement could not be arrived at. The Conciliation Officer is ordinarily required to submit his report within fourteen delays of the commencement of the conciliation proceedings, but the time for the submission of the report may be extended further on the written request of the parties to the dispute. Where a settlement is not reached, the appropriate government, after considering the report of the Conciliation Officer, may refer the dispute to a Board of Conciliation, Labour Court, Tribunal or National Tribunal and in case the government does not make any such reference, it has to communicate to the parties accordingly [Sec. 12].

Powers of Conciliation Officers

A Conciliation Officer is empowered, after giving a reasonable notice, to enter the premises occupied by any establishment for the purpose of inquiry into any existing or apprehended dispute related to the establishment. He may also enforce the attendance of any person for the purpose of examining him call for inspection any document relevant to the dispute or for verifying the implementation of any award. He enjoys the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, in respect of enforcing the attendance of any person and examining him and compelling the production of documents, and is deemed to be a public servant under the Indian Penal Code [Sec. 11] (see also Chapter 12).

Board of Conciliation

The appropriate government may, as occasion arises, constitute a Board of Conciliation for promoting settlement of industrial disputes.

Composition

A Board is to consist of an independent chairman and two or four members to be appointed in equal number representing the parties to the dispute. The members representing the parties are to be appointed on the Recommendations of the parties concerned; but in case of their failure to make such Recommendations, the appropriate government will appoint on its own, persons representing the parties. A Board may function notwithstanding the absence of the chairman, or any of its members or any vacancy in its number, but in case the appropriate government makes a notification to the Board that the services of the chairman or any of its members have ceased to be available, the Board is not to function so long as a new chairman or any such member, as the case may be, is not appointed [Sec. 5].

Reference of Disputes to Board of Conciliation

Where the appropriate government is of the opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing, refer the dispute to a Board of Conciliation for promoting a settlement. In case the parties to an industrial dispute make an application in the prescribed manner, whether jointly or separately, for a reference of the dispute to a Board of Conciliation, the appropriate government is required, on being satisfied that the persons making such an application represent the majority of each party, to make the reference accordingly. Where the dispute is referred to the Board, the appropriate government may prohibit the continuance of a strike or lock-out in connection with such dispute which may be in existence on the date of reference [Sec. 10].

Duties and Powers

When a dispute has been referred to the Board of Conciliation, it is required to endeavour to bring about a settlement and to investigate the dispute and all matters affecting its merit and right settlement. It may take suitable steps to induce the parties to come to a fair and amicable settlement. If a settlement is arrived at, the Board is required to send a report and a memorandum of the settlement signed by the parties to the dispute to the appropriate government. If no such settlement is arrived at, the Board is required, so soon as practicable after the close of the investigation, to send to the appropriate government a full report setting forth the proceedings and steps taken by the Board for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement, together with a full statement of such facts and circumstances and the reasons on account of which a settlement could not be arrived at, and also its own Recommendations for the determinations of the dispute.

The Board is required to submit the report within 2 months of the date of the reference of the dispute or within such shorter period as determined by the appropriate government. The appropriate government may extend the time of the submission of the report to a period not exceeding 2 months in the aggregate. The date of submission of the report may also be extended to such date as may be agreed to in writing by all the parties to the dispute. If the appropriate government, after the receipt of the report of the Board of Conciliation in respect of a dispute relating to public utility service, does not make a reference to a Labour Court, Tribunal or National Tribunal, it is required to communicate to the parties concerned the reasons for not doing so [Sec. 13].

The report of the Board of Conciliation is to be in writing and is to be signed by all the members of the Board but any member may record any minute of dissent from a report or from any of its Recommendations. Every report together with any minute of dissent has to be published by the appropriate government within a period of 30 days from the date of its receipt [Sec. 16–17].

A member of the Board of Conciliation may, for the purpose of inquiry into any existing or apprehended dispute, and after giving a notice, enter the premises occupied by the establishment to which the dispute relates. Every Board enjoys the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, in respect of enforcing the attendance of any person and examining him on oath, compelling the production of documents and material objects, issuing Commissions for the examination of witnesses, and in respect of other prescribed matters. An inquiry by a Board of Conciliation is to be deemed as judicial inquiry within the meaning of the Indian Penal code, 1860. All members of Board are public servants [Sec. 11] (see also Chapter 12).

Commencement and Conclusion of Conciliation Proceedings

Conciliation proceedings are deemed to have been commenced on the date on which a notice of strike or lock-out as required under Section 22 of the Act is received by the Conciliation Officer or on the date of the order referring the dispute to a Board of Conciliation. A conciliation proceeding is deemed to have been concluded when; (i) a memorandum of the settlement is signed by the parties to the dispute (in case a settlement is arrived at), or (ii) the report of the conciliation Officer is received by the appropriate government or when the report of the Board has been published (where no settlement is arrived at), or (iii) a reference is made to a court of Inquiry, Labour Court, Tribunal or National Tribunal during the pendency of conciliation proceedings [Sec. 20].

Period of Operation of Settlement

A settlement comes into operation on the date agreed upon by the parties to the dispute, and in case no date is agreed upon, on the date on which the memorandum of settlement is signed by the parties to the dispute. A settlement is binding for such period as is agreed upon by the parties and, if no such period is agreed upon, for a period of 6 months from the date on which the memorandum of settlement is signed by the parties to the dispute, and it is to continue to be binding on the parties till the expiry of 2 months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. No such notice is to have effect unless it is given by a party representing the majority of persons bound by the settlement [Sec. 19].

Persons on Whom Settlements are Binding

A settlement arrived at by the agreement between the employer and workmen otherwise than in the course of conciliation proceeding is binding on the parties to the agreement. A settlement arrived at in the course of conciliation proceedings under the Act is binding on: (i) all parties to the industrial dispute, (ii) all other parties summoned to appear in the proceedings as parties to the dispute (unless the Board of Conciliation records the opinion that they were so summoned without proper cause), (iii) where such a party is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates and (iv) where such a party is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute, and all persons who subsequently become employed in that establishment or its part [Sec. 18].

Court of Inquiry

The appropriate government is empowered to constitute a Court of Inquiry, as occasion arises, for the purpose of ‘inquiring into any matter appearing to be connected with or relevant to an industrial dispute’.

A Court of Inquiry may consist of either one independent person only or more persons but where it consists of two or more persons, one of them is to be appointed as the chairman. A Court of Inquiry may function notwithstanding the absence of the chairman or any of its members or any vacancy in its number but where the appropriate government makes a notification to the court that the services of the chairman has ceased to be available, the Court is not to Act until a new chairman is appointed. A Court of Inquiry is required to inquire into the matters referred to it and report to the appropriate government ordinarily within a period of 6 months from the commencement of its inquiry.

The report of the Court of Inquiry is to be in writing and signed by all its members but any of its members is free to record any minute of dissent from any of its Recommendations. Every report of the Court of Inquiry, together with any minute of dissent, is to be published by the appropriate government within a period of 30 days from the date of the receipt of the report. A member of a Court of Inquiry may, for the purpose of inquiry into any existing or apprehended dispute, enter the premises occupied by the establishment to which the dispute relates but a reasonable notice is necessary. Every Court of Inquiry has the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, in respect of enforcing the attendance of any person and examining him on oath, compelling the production of documents and material objects, issuing Commissions for the examination of witnesses and in respect of other prescribed matters. Every enquiry or investigation by a court of Inquiry is to be deemed as a judicial proceeding within the meaning of the Indian Penal Code, 1860. A Court of Inquiry may appoint one or more persons having special knowledge of the matter under consideration as assessor or assessors to advise it in the proceeding. All the members of a Court of Inquiry are deemed to be public servants under the Indian Penal code [Sec. 6, 11, 14, 16 and 17].

Labour Court

The appropriate government may constitute one or more labour courts for the adjudication of industrial disputes relating to any matter provided in the Second Schedule of the Act and performing such other functions as assigned under the Act. The Second Schedule includes: (i) the propriety or legality of an order passed by an employer under the standing orders, (ii) the application and interpretation of standing orders, (iii) discharge or dismissal or workmen, including reinstatement of, or grant of relief to, workmen wrongfully dismissed, (iv) withdrawal of any customary concession or privilege, (v) illegality or otherwise or a strike or lack-out, and (vi) all matters other than those mentioned in the Third Schedule which specifies the matters to be within the jurisdiction of Industrial Tribunals.

A Labour Court is to consist of one person only. A person is not qualified to be appointed as the presiding officer of a Labour Court unless: (i) he is or has been, a Judge of a High Court, or (ii) he has been a District Judge or an Additional District Judge for a period of not less than 3 years, or (iii) he has held any judicial office in India for not less than 7 years, or (iv) he has been the presiding officer of a Labour Court constituted under any provincial or state Act for not less than 5 years [Sec. 7, Second Schedule].

Tribunal

The appropriate government may constitute one or more industrial tribunals for the adjudication of Industrial disputes relating to any matter specified either in the Second Schedule (mentioned above) or in the Third Schedule which includes: (i) wages, including the period and mode of payment; (ii) compensatory and other allowances; (iii) hours of work and intervals; (iv) leave with wages and holidays; (v) bonus, profit-sharing, provident fund and gratuity; (vi) shift working otherwise than in accordance with standing orders; (vii) classification by grades; (viii) rules of discipline; (ix) rationalization; (x) retrenchment of workmen and closure of establishments; and (xi) any other matters that may be prescribed.

A Tribunal is to consist of one person only to be appointed by the appropriate government. A person is qualified for appointment as the presiding officer of a Tribunal only when: (i) he is or has been a Judge of a High Court, or (ii) he has been District Judge or Additional District Judge for a period of not less than 3 years. The appropriate government may also appoint two assessors so advise the Tribunal in the proceeding before it [Sec. 7A].

National Tribunal

The central government is empowered to constitute one or more National Industrial Tribunals for the adjudication of industrial disputes which, in its opinion, involve questions of national importance or are of such a nature that industrial establishments situated in more than one state are likely to be interested in or affected by such disputes. The National Tribunal is to consist of one person only to be appointed by the central government. A person is qualified for appointment as the presiding officer of National Tribunal if he is or has been a Judge of a High Court. The central government may also appoint two assessors to advise the National Tribunal in the proceeding before it [Sec. 7B].

Disqualifications for the Presiding Officers of Labour Courts or Tribunals

A person, who is not independent or has attained the age of 65 years, is not to be appointed or to continue as the presiding officer of a Labour Court, Tribunal, or National Tribunal [Sec. 7C].

Reference of Disputes to Adjudication Authorities

Where any industrial dispute exists or is apprehended, the appropriate government may, by order in writing, refer the dispute to a Labour Court, Tribunal, or National Tribunal for adjudication. As mentioned earlier, the Labour Court is empowered to adjudicate upon matters specified in the Second Schedule, and a Tribunal on those specified either in the Second or Third Schedule. However, where a dispute relates to a matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate government may refer it to a Labour Court. Where a notice of strike or lock-out has been given in a dispute relating to a public utility service, the appropriate government is required to refer the dispute to a Board of Conciliation or Labour Court or Tribunal ‘notwithstanding that any other proceedings under this Act in respect of the dispute any may have commenced’, unless it is of the view that the notice has been frivolously or vexatiously given or it is inexpedient to make such a reference.

In case a dispute involves any question of national importance or is of such nature that industrial establishments situated in more than one state are likely to be interested in or affected by the dispute, the central government may at any time refer the dispute or any relevant matter related to the dispute to the National Tribunal, even if it is not the appropriate government in relation to that dispute.

If the parties to an industrial dispute make a request in the prescribed manner to refer the dispute to a Labour Court, Tribunal or National Tribunal, the appropriate government is required to make such reference, but it may refuse to do so if it is satisfied that the persons applying for the reference do not represent the majority of the parties.

In case the points of dispute for adjudication have been specified by the appropriate government, the adjudication authorities are to confine their award to those points and the incidental matters only. Where any dispute has already been referred to an adjudication authority, the appropriate government, on the satisfaction of prescribed conditions, may also include other establishments (not originally covered) which are likely to be interested in or affected by that dispute, but such a reference is to be made before the award is submitted.

An order referring an industrial dispute to an adjudication authority is also to specify the period within which the adjudication authority has to submit its award. No such period is to exceed 3 months where the industrial dispute is concerned with an individual workman. However, in case the parties to an industrial dispute apply, whether jointly or separately, to the adjudication authority for the extension of the period, the adjudication authority concerned may get reasons recorded in writing extend the period further. In computing this period, the period for which the proceedings before the adjudication authority had been stayed by injunction or order of a civil court is to be excluded. No proceedings before the adjudication authorities are to lapse merely on the ground that any period specified above had expired without such proceedings being completed.

If a dispute involving any question of national importance or industrial establishments situated in more than one state has been referred to a National Tribunal, no Labour Court or Tribunal has jurisdiction to adjudicate upon any matter referred to the National Tribunal. The central government is empowered to refer an industrial dispute to a Labour court or Tribunal constituted by the state government, even when it is the appropriate government in relation to that dispute.

Where an industrial dispute has been referred to an adjudication authority, the appropriate government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which might have been in existence on the date of reference. No proceedings before an adjudication authority in relation to an industrial dispute are to lapse merely by reason of the death of any of the parties to the dispute being a workman [Sec. 10].

Arbitrators and Voluntary Reference of Disputes to Arbitration

In case an industrial dispute exists or is apprehended, the employer and the workmen may refer it to an arbitrator or arbitrators mutually agreed upon by them, but such a reference can be made before the dispute has been referred by the appropriate government to an adjudication authority. An arbitrator may also be appointed from amongst the presiding officers of Labour Courts, Tribunals or National Tribunals. In case an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, it must also provide for the appointment of another person as umpire. If the arbitrators are equally divided in their opinion, the award of the umpire is to prevail. An arbitration agreement is to be in the prescribed form and signed by the parties. A copy of the arbitration agreement must be forwarded to the appropriate government and the Conciliation Officer and must be published by the appropriate government in official gazette within 1 month of the receipt of the copy.

Where an industrial dispute has been referred to arbitration and the appropriate government is satisfied that the persons making the reference represent the majority of each party, it may issue a notification in the prescribed manner. When any such notification is issued, the employers and workmen who are not parties to the arbitration agreement but are concerned with the dispute will be given an opportunity of presenting their case before the arbitrators.

It is the duty of the arbitrator to investigate the dispute and submit to the appropriate government the arbitration award signed by him. Where an industrial dispute has been referred to arbitration and a notification has been issued, the appropriate government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which might have been in existence on the date of reference. The Arbitration Act, 1940 does not apply to arbitration of industrial disputes under this Act [Sec. 10A].

MISCELLANEOUS PROVISIONS RELATING TO PROCEDURES, POWERS OF ADJUDICATION AUTHORITIES AND AWARDS

Labour Courts, Tribunals and National Tribunals are authorized to lay down their own procedures. The presiding officer of a Labour Court, Tribunal or National Tribunal may enter the premises occupied by any establishment for inquiring into any existing or apprehended industrial dispute but a reasonable notice has to be given. These adjudication authorities have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, in respect of: (i) enforcing the attendance of any person and examining him on oath, (ii) compelling the production of documents and material objects, (iii) issuing Commission for the examination of witnesses, and (iv) in respect of such other matters as may be prescribed. Every inquiry or investigation by these authorities is to be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code, 1860. They may also appoint an assessor or assessors to advise them in the proceedings before them. A presiding officer of a Labour Court, Tribunal or National tribunal is deemed to be a public servant within the meaning of Section 21 of the Indian Penal Code and is also empowered to decide the costs of any proceedings and to determine the persons liable to pay the costs and the persons entitled to receive them. Every Labour Court, Tribunal or National Tribunal is deemed to be a civil court for the purposes of the Code of Criminal Procedure [Sec. 11].

In case an industrial dispute relating to discharge or dismissal of a workman has been referred to the Labour Court, Tribunal or National Tribunal for adjudication and in the course of the adjudication proceedings the authority is satisfied that the order of discharge or dismissal was not justified, it may by its award set aside the order. The authority may also direct the reinstatement of the workman on such terms and conditions as it thinks fit or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal. However, while dealing with cases of discharge or dismissal, the authority is required to rely only on the materials on record and is not to take any fresh evidence in relation to the matter [Sec. 11A]

The adjudication authorities are required to hold their proceedings expeditiously and to submit their awards to the appropriate government within the period specified in the order or within the extended period [Sec. 15].

Payment of Full Wages Pending Proceedings to Higher Courts

If, in any case, the adjudication authority by its award directs the reinstatement of any workman and the employer prefers any proceedings against the award in a High Court or Supreme Court, the employer is liable to pay to the workman during the period of pendency of the proceedings in the High Court or Supreme Court, full wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by the workman had been field to that effect. However, if the High Court or Supreme Court is satisfied that the workman had been employed and had been receiving adequate remuneration during such period, the court is not to order the payment of full wages to the workman [Sec. 17B].

Commencement and Conclusion of Proceedings

The proceedings before an arbitrator, the Labour Court or the Tribunal are deemed to have commenced on the date of the reference of the dispute for arbitration or adjudication, as the case may be. Such proceedings are deemed to have been concluded on the date on which the award becomes enforceable [Sec. 20].

Publication and Commencement of Award

An award of a Labour Court, Tribunal or National Tribunal is to be in writing and signed by the presiding officer. Every award of an arbitrator or an adjudication authority is to be published by the appropriate government within a period of 30 days from the date of its receipt [Sec. 17].

An arbitration or adjudication award comes into force on the expiry of 30 days from the date of its publication by the appropriate government. However, if the appropriate government is of the opinion that ‘it will be inexpedient on public grounds affecting national economy or social justice to give effect to the whole or any part of the award’, it may declare that the award will not become enforceable on the expiry of the period of 30 days as mentioned above. When such a declaration has been made the government may, within 90 days from the date of the publication of award, make an order rejecting or modifying the award. However, the award, together with a copy of the order, is to be laid on the first available opportunity before the legislature of the state (if the order has been made by the state government) or before the Parliament (if the order has been made by the central government). When an award is placed before the state legislature or Parliament, it is enforceable on the expiry of 15 days from the date on which it was so laid. In case no order is made by the government, the award is enforceable on the expiry of the period of 90 days as mentioned above. In case the government specifies a date on which the award is to come into force, it is enforceable from the date so specified, and in other cases, when it is otherwise enforceable [Sec. 17A].

Period of Operation of Awards

An award is ordinarily to remain in operation for a period of 1 year from the date on which it becomes enforceable, but such a period may be reduced by the appropriate government. The appropriate government, before the expiry of such period, may extend the period of operation of the award for not more than 1 year at a time, but the total period of the operation of the award is not to exceed 3 years from the date on which it comes into operation. The appropriate government may also refer an award or a part of it to any of the adjudication authorities constituted under the Act, for deciding the necessity of shortening the period of operation of the award, if it considers that there has been a material change in the circumstances on which the award was based. The decision made by the adjudication authority in this regard is final. Even after the expiry of the period of operation of an award, it is to continue to be binding on the parties until a period of 2 months has elapsed from the date on which notice is given by any party bound by the award to the other party intimating its intention to terminate the same. No such notice is, however, to have effect, unless it has been given by a party representing the majority of persons bound by the award [Sec. 19].

Persons on Whom an Award is Binding

An arbitration award, in respect of which no notification has been issued by the appropriate government, is binding on the parties to the agreement referring the dispute to arbitration. An arbitration award in respect of which a notification has been issued or an award of a Labour Court, Tribunal or National Tribunal is binding on: (i) all parties to the industrial dispute; (ii) all other parties summoned to appear in the proceedings unless the arbitrator or the adjudication authority records its opinion that they were so summoned without proper cause, (iii) where a party is an employer, his heirs, successors, or assigns in respect of the establishment to which the dispute relates: and (iv) where a party is composed of workmen, all persons who were employed in the establishment or its part (to which the dispute relates) on the date of dispute and all persons who subsequently become employed in that establishment [Sec. 18].

Certain Matters to Be Kept Confidential

When a trade union, person, firm or company carrying on a business requests any of the authorities constituted under the Act to treat certain information as confidential, such authorities are required to keep it confidential, unless the person concerned gives written consent to disclose such information. However, no such information may be kept confidential for the purpose of prosecution under Section 193 of the Indian Penal Code [Sec. 21, 30].

PROHIBITION OF STRIKES AND LOCK-OUTS

General Prohibition of Strikes

No workman employed in any industrial establishment is allowed to go on strike in breach of contract: (i) during the pendency of conciliation proceedings before a Board of Conciliation and 7 days after the conclusion of such proceedings; or (ii) during the pendency of proceedings before a Labour Court, Tribunal, or National Tribunal, and 2 months after the conclusion of such proceedings; or (iii) during the pendency of arbitration proceedings before an arbitrator and 2 months after the conclusion of such proceedings (if a notification prohibiting a strike has been issued by the government); or (iv) during any period in which a settlement or award is in operation in respect of any matter covered by the settlement or award, as the case may be [Sec. 23].

Prohibition of Strikes in Public Utility Services

The provision pertaining to general prohibition of strikes [Sec. 23] applies in respect of public utility service also. However, the Act imposes certain additional restrictions on strikes in the public utility services. These additional restrictions are as follows:

A person employed in public utility service must not go on strike in breach of contract; (i) without giving to the employer a notice of strike within six weeks before striking; or (ii) within 14 days of giving such notice: or (iii) before the expiry of the date of strike specified in the notice; or (iv) during the pendency of conciliation proceedings before a Conciliation Officer and 7 days after the conclusion of such proceedings. The notice of strike has to be given by such number of persons to such person and in such manner as may be prescribed by the appropriate government. If an employer receives a number of notices of strikes on any day, he is required to report the matter to the appropriate government or an authority specified by it within 5 days of the date of receipt of such notice. A notice of strike is not necessary where it is already in existence in the public utility service but, in this case, the employer is required to send intimation of such a strike to the authority specified by the appropriate government on the day on which it was declared [Sec. 22].

Prohibition of Lock-outs

The provisions regarding the prohibition of lock-outs are the same as those for the prohibition of strikes [Secs.22–23].

Illegal Strikes and Lock-outs

A strike or lock-out is illegal in the following cases:

  1. If it is commenced or declared in contravention of the provisions relating to general prohibition of strikes or lock-outs or those applying to public utility services [Sec. 22–23].
  2. If it is continued in contravention of an order made under Sub-section (3) of Section 10 which says, ‘Where an industrial dispute has been referred to a Board, Labour Court, Tribunal, National Tribunal, the appropriate government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which might have been in existence on the date of reference’.
  3. If it is continued in contravention of an order made under Sub-section 4A of Section 10A which reads, ‘Where an industrial dispute has been referred to arbitration and a notification has been issued … the appropriate government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which might have been in existence on the date of reference’.

Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at the time of the reference of the dispute to a Board of Conciliation, an arbitrator or an adjudication authority, the continuance of such strike or lock-out is not illegal, provided that it was at its commencement not in contravention of the Act or its continuance specifically prohibited. A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out is not illegal [Sec. 24].

Prohibition of Financial Aid to Illegal Strikes and Lock-outs

The Act prohibits expending or applying any money in direct furtherance or support of any illegal strike or lock-out [Sec. 25].

LAY-OFF, RETRENCHMENT AND CLOSURE

Lay-off

Application

The provisions of the Act in respect of lay-off do not apply to an industrial establishment: (i) in which less than fifty workmen on the average per working day have been employed in the proceeding calendar month, or (ii) which is of a seasonal character or in which work is performed only intermittently. The decision of the appropriate government in respect of the determination of the seasonal or intermittent character of an industry is to be final [Sec. 25A].

Right of Workmen Laid-off for Compensation

If a workman, other than a badli or casual workman, whose name is borne on the muster rolls and who has completed one year of continuous service, is laid-off, he is entitled to compensation which is to be equal to fifty per cent of the total basic wages and dearness allowance that would have been payable to him had he not been so laid-off, but no allowance is to be made for such weekly holidays that may intervene.

If, during any period of 12 months, a workman is laid-off for more than 45 days, no compensation is payable in respect of any period of lay-off after the expiry of first 45 days (if there is an agreement to that effect between the workman and the employer). However, it is lawful for the employer to retrench the workman at any time after the expiry of the first 45 days of the lay-off, and months may be set off against the compensation payable for retrenchment. For the purposes of the provisions concerning the right of laid-off workmen for compensation, ‘badli workman’ means, ‘a workman who is employed in an industrial establishment in place of another workman whose name is borne on the muster rolls of the establishment, but shall cease to be regarded as such … if he has completed one year of continuous service in the establishment’ [Sec. 25C].

Cases in Which Workmen are not Entitled to Lay-off Compensation

A workman is not entitled to compensation for lay-off under the following cases:

  1. If he refuses to accept any alternative employment in the same establishment from which he has been laid-off, or in any other establishment belonging to the same employer situated in the same town or village or situated within a radius of five miles from the establishment to which he belongs (if in the opinion of the employer, such alternative employment does not call for any special skill or previous experience and can be done by the workman), provided that wages which would normally have been paid to the workman are offered for the alternative employment also.
  2. If he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day.
  3. If such laying-off is due to a strike or slowing down of production on the part of workmen in another part of the establishment [Sec. 25E].

Retrenchment

Conditions Precedent to Retrenchment

The Act prohibits an employer from retrenching any workman employed in an industry who has been in continuous service for not less than 1 year, except under the following conditions:

  1. The workman has been given 1 month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of each notice;
  2. The workman has been paid at the time of retrenchment, compensation equivalent to 15 days’ average pay for every completed year of continuous service or any part of it in excess of 6 months;
  3. A notice has been served in the prescribed manner on the appropriate government or an authority specified by it by notification in the official gazette [Sec. 25F].

Compensation for Retrenchment in Case of Transfer of Undertakings

Where the ownership or management of an undertaking is transferred to a new employer every workman who has been in continuous service for not less than 1 year in that undertaking immediately before such transfer is entitled in a prescribed notice and compensation as if he had been retrenched. However, a workman is not entitled to compensation merely because of the change of employer, unless: (i) there has been an interruption in the service of the workman by reason of the transfer; (ii) the terms and conditions of service applicable to him after the transfer are less favourable to him than those applicable immediately before the transfer; and (iii) the new employer, under the terms of agreement or otherwise, is not legally liable to pay to the workman, retrenchment compensation on the ground that his service has not been continuous and has been interrupted by the transfer [Sec. 25FF].

Closure

Notice of Intention to Close Down an Undertaking

An employer intending to close down as undertaking is required to serve a notice in the prescribed manner on the appropriate government stating clearly the reasons for the intended closure at least 60 days before the closure is to become effective. Such a notice is, however, not necessary in an undertaking in which less than fifty workmen are employed or were employed on the average per working day in the preceding 12 months and an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work. The appropriate government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like, it is not necessary to apply these provisions of the Act, it may direct by order that these provisions will not apply for the specified period [Sec. 25 FFA].

Compensation to Workmen in Case of Closing Down of Undertaking

Where an undertaking is closed down for any reason, every workman who has been in continuous service for not less than 1 year in that undertaking immediately before the closure, is entitled to the prescribed notice and compensation, as if he had been retrenched. However, where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation is not to exceed his average pay for 3 months. An undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of indisposed stocks, or the expiry of the period of lease or the licence granted to it or exhaustion of minerals in a particular area, is not deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer. In case an industrial establishment set up for the construction of building, bridges, roads, canals, dams or other construction work is closed down on account of the completion of work within 2 years from the date of its establishment, no workman is entitled to retrenchment compensation, but where the work is not completed within 2 years, he is entitled to notice and compensation for every completed year of continuous service or any part in excess of 6 months.

In case an undertaking engaged in mining operations is closed down by reason merely of exhaustion of the minerals in the area in which such operations are carried on, no workman of the undertaking is entitled to notice or compensation if (i) the employer provides him with alternative employment with effect from the date of closure at the same remuneration as he was entitled to receive, and on the same terms and conditions of service as were applicable to him immediately before the closure; (ii) the service of the workman has not been interrupted by such alternative employment; (iii) the employer is, under the terms of such alternative employment or otherwise, legally liable to pay to the workman in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by such alternative employment [Sec. 25FFF].

Procedure for Retrenchment

In case any workman of an industrial establishment is to be retrenched, the employer is ordinarily required to retrench the workman who was the last person to be employed in that category unless the employer records the reasons for retrenching any other workman. The employer may also retrench any other workman in case there is an agreement between him and the employer in this regard [Sec. 25G].

Re-employment of Retrenched Workmen

In case an employer proposes to employ persons in an industrial establishment, he is required to give an opportunity to the retrenched workmen for re-employment. The retrenched workmen will have preference over other persons if they offer themselves for re-employment [Sec. 25H].

Definition of Continuous Service for the Purposes of Lay-off and Retrenchment Compensation

For the purpose of the provisions of the Act pertaining to lay-off and retrenchment, a workman is said be in continuous service for a period, if he is, for that period, in uninterrupted service, including service interrupted on account of sickness or authorized leave or an accident or a legal strike or a lock-out or a cessation of work which is not due to any fault on the part of the workman. A workman is also said to have been in continuous service for 1 year if, during a period of 12 months preceding the date with reference to which calculation is to be made, he has actually worked under the employer for not less than (i) 190 days in the case of a workman employed below ground in a mine, and (ii) 240 days in any other case. Similarly, he is deemed to have been in continuous service for 6 months if he has actually worked under his employer for not less than (ii) 95 days in case he is employed below ground in a mine, or (i) 120 days in any other case. For purposes of satisfying a continuous service of 1 year or 6 months, the number of days on which a workman has actually worked under an employer is to include the days on which: (i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 or under this Act, or under any law applicable to the industrial establishment; (ii) he has been on leave with full wages, earned in the previous years; (iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) in the case of a female, she has been on maternity leave for not exceeding twelve weeks [Sec. 25B].

Duty of an Employer to Maintain Muster Rolls of Workmen

The Act requires the employer of an industrial establishment to maintain a muster roll of workmen, and to provide for making of entries by workmen who may present themselves for work at the establishment at the appointed time during normal working hours [Sec. 25D].

Effects of Laws Inconsistent with the Provisions Concerning Lay-off and Retrenchment Under the Act

The provisions of the Act pertaining to lay-off and retrenchment are to have effect notwithstanding anything inconsistent with the provisions of any other law in force. However, where under the provisions of any other Act or rules, orders, or notifications issued under them or under any standing orders or under any award, contract of service or otherwise, a workman is entitled to benefits in respect of any matter which are more favourable to him than those to which he is entitled under this Act, he is to continue to get the more favourable benefits in respect of that matter. The rights and liabilities of employers and workmen relating to lay-off and retrenchment provided under the Act are also to apply in states where separate laws concerning settlement of industrial disputes are in force [Sec. 25J].

SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND CLOSURE

The special provisions relating to lay-off, retrenchment and closure of industrial undertakings were first incorporated in the Act in 1976 and further modified in 1982 and 1984. These special provisions apply to industrial establishments, other than those of seasonal character or those in which work is performed only intermittently, in which not less than one hundred workmen were employed on an average per working day during the preceding 12 months. When a question arises whether an industrial establishment is of seasonal character or whether work is performed therein only intermittently, the decision of the appropriate government will be final [Sec. 25K].

Special Provisions for Lay-off

No workman except a badli or casual workman whose name is borne on the muster-rolls of an industrial establishment in this category is to be laid-off by his employer except with the prior permission of the appropriate government or an authority specified by that government by notification in the official gazette. An application for permission has to be made by the employer in the prescribed manner stating clearly the reasons for the intended lay-off. A copy of the application is also to be served simultaneously on the workmen concerned in the prescribed manner.

Permission for lay-off is not necessary where it is due to shortage of power or to natural calamity and, in the case of mine, if it is also due to fire, flood, and excess of inflammable gas or explosion. However, in such cases, the employer is required to apply to the appropriate government or the specified authority in the prescribed manner within period of 30 days from the date of commencement of the lay-off for permission to continue it.

On receipt of application in either of the two cases, the appropriate government or the specified authority, as the case may be, after making an enquiry and giving an opportunity to the employer, workmen and other interested persons of being heard, may, having regard to the genuineness and adequacy of the reasons for lay-off, the interests of the workmen and all other relevant factors, by order, grant or refuse to grant such permission. A copy of the order is to be communicated to the employer and the workmen. In case a copy of the order is not communicated to the employer within 60 days from the date on which the application is made, the permission applied for is deemed to have been granted on the expiry of the said period of 60 days. The order of the appropriate government or the specified authority will be final and binding on all the parties concerned and is to remain in force for one year from the date of the order. The appropriate government or the specified authority is empowered to review its order and also to refer the matter to a Tribunal for adjudication. The Tribunal is required to give its award within 30 days from the date of reference.

In case an application for permission for lay-off or its continuance has not been made in time or such permission has been refused, the lay-off is illegal and the workmen are entitled to all the benefits under any law in force as if they had not been laid-off.

The provisions of the Act is regard to right of laid-off workmen for compensation also apply to cases of lay-off dealt with in this section. For the purposes of special provisions regarding lay-off, a workman is not deemed to have been laid-off by an employer if the employer offers him any alternative employment in the same establishment or in any other establishment belonging to the same employer situated in the same town or village or situated within such distance from the establishment to which he belongs that the transfer will not involve any undue hardship to the workman having regard to the fact and circumstances of his case. In the alternative employment also, the employer is required to offer to the workman wages which would have normally been paid to him.

If the appropriate government is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like it is not necessary to obtain prior permission for lay-off or its continuance, it may direct that the provisions of the Act in this regard will not apply [Sec. 25M].

Conditions Precedent to Retrenchment of Workmen

No workman employed in an industrial establishment covered under special provisions relating to lay-off, retrenchment and closure (see Sec. 25K above), who has been in continuous service for not less than 1 year under an employer is to be retrenched until: (i) the workman has been given 3 months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice, wages for the period of the notice; and (ii) prior permission of the appropriate government or an authority specified by it has been obtained on an application in this regard.

The special provisions of the Act regarding procedures of making application, giving opportunity to the parties to be heard, conduct of inquiry, grant or refusal of permission, time limit for taking decision, nature of the order, its review, reference of the matter to Tribunal, legality of retrenchment, exemptions, and so on, in the case of such retrenchment are the same as applicable in the case of lay-off as discussed above (see Sec. 25M). In case permission for retrenchment has been granted or presumed to have been granted, every workman who is employed in that establishment immediately before the date of application for permission is entitled to receive, at the time of retrenchment, compensation which is to be equivalent to 15 days’ average pay for every completed year of continuous service or any part in excess of 6 months [Sec. 25N].

Closure of Undertakings

An employer intending to close down an industrial establishment to which these special provisions relate (see Sec. 25K above) has to apply to the appropriate government at least 90 days before the date on which the intended closure is to become effective for prior permission to close down his undertaking. The application must state clearly the reasons for intended closure of the undertaking. A copy of the application is also to be served simultaneously on the representatives of the workers concerned. Permission for closure is not necessary in case of undertakings set up for the construction of buildings, bridges, roads, canals, dams or other construction work.

The special provisions pertaining to conduct of inquiry, opportunity to the parties to be heard, consideration of the reasons for closure, communication of the order, time limit for taking decision, nature of the order, review of the order, its reference to Tribunal, legality of the closure, exemptions, compensation payable to workmen, and so forth are similar to those applicable in the case of retrenchment (see Sec. 25N) [Sec. 25O].

In respect of an industrial establishment to which these special provisions apply, the appropriate government may direct the employer of an industrial undertaking closed down before the commencement of the Industrial Disputes (Amendment) Act, 1976, to restart the undertaking if it is of the opinion: (i) that such undertaking was closed down otherwise than on account of unavoidable circumstances beyond the control of the employer; (b) that there are possibilities of restarting the undertaking; (c) that it is necessary for the rehabilitation of the workmen employed in the undertaking before its closure or for the maintenance of supplies and services essential to the life of the community; and (d) that the restarting of the undertaking will not result in hardship to the employer. However, before issuing such an order, the government has to give an opportunity to the employer and workmen concerned to be heard. The order should specify the time, not being less than 1 month from the date of the order, for restarting the undertaking [Sec. 25P].

The general provisions relating to lay-off and retrenchment in respect of definition of continuous service (Sec. 25B), duty of the employer to maintain muster-rolls of workmen (Sec. 25D), compensation to workmen in case of transfer of undertakings (Sec25FF), procedure for retrenchment (Sec. 25G), re-employment of retrenched workman (Sec. 25H) and effect of laws inconsistent with the provisions of the Act (Sec. 25J) apply also to these special cases of lay-off and retrenchment.

As stated earlier in the chapter, the Union Cabinet recently decided to amend the Act requiring government’s prior permission for effecting lay-off, retrenchment and closure in industrial establishments employing not less than 1,000 workmen instead of the existing 100. It has also been decided to enhance the compensation from 15 days to 45 days of wages for every year of completed service. These decisions are yet to be incorporated in the Act.

UNFAIR LABOUR PRACTICES

The provisions relating to unfair labour practices were inserted by an amending Act of 1982. No employer or workman or a trade union whether registered under the Trade Unions Act, 1926 or not, is to commit any of the unfair labour practices specified in the Fifth Schedule of the Act [Secs.2 (ra), 25T]. These unfair labour practices are shown in Box 21.4.

Box 21.4

UNFAIR LABOUR PRACTICES UNDER THE INDUSTRIAL DISPUTES ACT, 1947

By Employers and Trade Unions of Employers (Employers’ Associations)

  1. To interfere with, restraint from, or coerce, workmen in exercise of their right to organize, form, join or assist a trade union or to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, that is to say:

    1. Threatening workmen with discharge or dismissal, if they join a trade union

    2. Threatening a lock-out or closure, if a trade union is organized

    3. Granting wage increase to workmen at crucial periods of trade union organization, with a view to undermining the efforts of the trade union at organization.

  2. To dominate, interfere with or contribute support, financial or otherwise, to any trade union, that is to say:

    1. An employer taking an active interest in organizing a trade union of his workmen

    2. An employer showing partiality or granting favour to one of several trade unions attempting to organize his workmen or to its members, where such a trade union is not a recognized trade union.

  3. To establish employer-sponsored trade unions of workmen.

  4. To encourage or discourage membership in any trade union by discriminating against any workmen, that is to say:

    1. Discharging or punishing a workman because he urged other workmen to join or organize a trade union

    2. Discharging or dismissing a workman for taking part in any strike (not being a strike which is deemed to be an illegal strike under this Act)

    3. Changing seniority rating of workmen because of trade union activities

    4. Refusing to promote workmen to higher posts on account of their trade union activities

    5. Giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to undermine the strength of their trade union

    6. Discharging office-bearers or active members of the trade union on account of their trade union activities.

  5. To discharge or dismiss workmen:

    1. By way of victimization

    2. Not in good faith, but in the colourable exercise of the employer’s rights

    3. By falsely implicating a workman in a criminal case on false evidence or on concorted evidence

    4. For patently false reasons

    5. On untrue or trumped up allegations of absence without leave

    6. In utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste

    7. For misconduct of a minor or technical character, without having any regard to the nature of particular misconduct or the past record or service of the workman, thereby leading to a disproportionate punishment.

  6. To abolish the work of a regular nature being done by workmen, and give such work to contractors as a measure of breaking a strike.

  7. To transfer a workman mala fide from one place to another, under the guise of following management policy.

  8. To insist upon individual workmen, who are on a legal strike, to sign on a good conduct bond, as a precondition to allowing them to resume work.

  9. To show favouritism or partiality to one set of workers regardless of merit.

  10. To employ workmen as ‘badlis’, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen.

  11. To discharge or discriminate against any workman for filing charges or testifying against an employer in any enquiry or proceeding relating to any industrial dispute.

  12. To recruit workmen during a strike which is not an illegal strike.

  13. Failure to implement award, settlement or agreement.

  14. To indulge in Acts of force or violence.

  15. To refuse to bargain collectively, in good faith with the recognized trade unions.

  16. Proposing or continuing a lock-out deemed to be illegal under this Act.

By Workmen and Trade Unions of Workmen

  1. To advise or actively support or instigate any strike deemed to be illegal under this Act.

  2. To coerce workmen in the exercise of their right to self-organization or to join a trade union or refrain from joining any trade union, that is to say:

    1. For a trade union or its members to picketing in such a manner that non-striking workmen are physically debarred from entering the work-places

    2. To indulge in Acts of force or violence or to hold out threats of intimidation in connection with strike against non-striking workmen or against management staff.

  3. For a recognized union to refuse to bargain collectively with the employer.

  4. To indulge in coercive activities against certification of a bargaining representative.

  5. To stage, encourage or instigate such forms of coercive actions as wilful ‘go slow’, squatting on the work premises after working hours or ‘gherao’ of any of the managerial or other staff.

  6. To stage demonstrations at the residences of the employer or the managerial staff members.

  7. To incite or indulge in wilful damage to employer’s property connected with the industry.

  8. To indulge in Acts of force or violence or to hold out threats of intimidation against any workman with a view to prevent him from attending work [Fifth Schedule].

OTHER PROVISIONS

Change of Conditions of Service During Pendency of Proceedings

In case any dispute is pending before a conciliation or adjudication authority or an arbitrator, the employer must not (i) alter to the prejudice of the workmen concerned in the dispute, the conditions of service applicable to them immediately before the commencement of the proceedings in regard to any matter concerned with the dispute, or (ii) discharge or punish any workmen concerned with the dispute for any misconduct connected with the dispute, unless he has been permitted by the authority to do so. However, the employer may, in accordance with the standing orders or the terms of the contract applicable to a workman concerned with the dispute (i) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to the workman immediately before the commencement of the proceedings; or (ii) discharge or punish the workman for any misconduct not connected with the dispute. Before the employer discharges or dismisses the workman, he must pay to the workman wages for 1 month and obtain the approval of the authority before whom the proceeding is pending. Where an employer makes an application to a conciliation or adjudication authority for the approval of action taken by him, the authority concerned must hear the application and pass an order within 3 months from the date of receipt of the application, but the period may be extended further by the authority [Sec. 33].

Change of Conditions of Service of Protected Workmen

A protected workman in relation to an establishment means a workman who, being a member of the executive or other office-bearer of a registered trade union concerned with the establishment, is recognized as such in accordance with the rules made in this behalf. In every establishment the number of protected workmen is to be one percent of the total number of workmen employed there, subject to a minimum of five and maximum of one hundred. The appropriate government may make rules providing for the distribution of protected workmen among various trade unions connected with the establishment and the manner in which they may be chosen and protected.

In case a dispute is pending before a conciliation or adjudication authority, no employer is allowed to take any action against any protected workman concerned in the dispute (i) by altering to his prejudice, the conditions of service applicable to him immediately before the commencement of the proceedings; or (ii) by discharging or punishing him, except with the express and written permission of the authority before whom the proceeding is pending [Sec. 33].

SPECIAL PROVISION FOR ADJUDICATION OF DISPUTES RELATING TO CHANGE OF CONDITIONS OF SERVICE

In case an employer contravenes the provisions pertaining to change of conditions of service during the pendency of proceedings before a conciliation or adjudication authority or arbitrator, the aggrieved employee may make a written complaint before the authority concerned. On receipt of the complaint, the authority is required to conciliate, adjudicate or arbitrate the complaint, as the case may be, as if it were a dispute referred to or pending before it [Sec. 33A]. The appropriate government is empowered to transfer a proceeding concerning change of conditions of service pending before one adjudication authority to another. On authorization of the appropriate government, the National Tribunal or Tribunal can transfer the proceedings under Sections 33 or 33A to a Labour Court.

Notice of Change

An employer, proposing to effect any change in the conditions of service applicable to a workman in respect of the following matters (Fourth Schedule of the Act), is prohibited to do so without giving a notice of the proposed change to the workmen affected by it and within 21 days of giving the notice:

  1. Wages, including the period and mode of payment
  2. Contribution paid, or payable, by the employer to any provident fund, pension fund or for the benefit of the workmen under any law for the time being in force
  3. Compensatory and other allowances
  4. Hours of work and rest intervals
  5. Leave with wages and holidays
  6. Starting, alteration or discontinuance of shift-working otherwise than in accordance with standing orders
  7. Classification by grades
  8. Withdrawal of any customary concession or privilege or change in usage
  9. Introduction of new rules of discipline, or alteration of existing rules, except in so far as they are provided in standing orders
  10. Rationalization, standardization or improvement of plant or technique which is likely to lead to retrenchment of workmen
  11. Any increase or reduction (other than casual) in the number of persons employed or to be employed in any occupation or process or department or shift, not occasioned by circumstances over which the employer has no control.

A notice of change is, however, not required: (i) where the change is effected in pursuance of any settlement or award or (ii) where the workmen likely to be affected by the change are the persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Services Regulations Civilians in Defence Services (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations as notified by the appropriate government, apply [Sec. 9A].

Where the appropriate government is of the opinion that application of these provisions pertaining to notice of change may cause serious repercussion on the industry concerned and that public interest so requires, it may issue exempting directions [Sec. 9B].

Protection of Persons

A person refusing to participate in an illegal strike or lock-out is not to be subjected to expulsion from any trade union or society or to any fine or penalty, or to deprivation of any right or benefit to which he is entitled, or be liable to be placed under any disability or disadvantage as compared with other members of the union or society. The civil court may order for payment of compensation or damages to the person in lieu of directing the restoration of his membership to the trade union or society [Sec. 35].

Representation of Parties

A workman who is a party to a dispute is entitled to be represented in any proceeding under the Act by (i) a member of the executive or other office-bearer of a registered trade union of which he is a member; or (ii) a member of the executive or other office-bearer of a federation of trade unions to which his trade union is affiliated; or (iii) where the worker is not a member of any trade union, by a member of the executive or other office-bearer of any trade union in the industry in which he is employed or any other workman in the industry. Similarly, an employer may be represented by (i) an officer of an association of employers of which he is a member (ii) an officer of a federation of associations of employers to which his association is affiliated; or (iii) where an employer is not a member of any association, by any association of employers connected with the industry or by any other employer in the industry. No party to a dispute is authorized to be represented by a legal practitioner in conciliation proceedings or proceedings before a Court of Inquiry. A party to a dispute before an adjudication authority may be represented by a legal practitioner with the consent of the other parties or with the leave of the authority concerned [Sec. 36].

Penalties

Penalties for various kinds of offences under the Act are explained in Box 21.5.

Box 21.5

PENALTIES FOR OFFENCES UNDER THE INDUSTRIAL DISPUTES ACT, 1947

  1. Participation by a workman in an illegal strike and acting in furtherance of illegal strike [Sec. 24] is punishable with imprisonment extending up to 1 month or fine up to 50 or both [Sec. 26 (1)].

  2. Declaring by an employer an illegal lock-out or acting in its furtherance [Sec. 24] is punishable with imprisonment up to 1 month or fine up to 1, 000 or both [Sec. 26 (2)].

  3. Any person who instigates or incites another person to take part in, or finances any illegal strike or lock-out [Sec. 25] is punishable with imprisonment which may extend to 6 months or with fine which may extend to 1,000 or both [Sec. 27–28].

  4. Any person who commits any unfair labour practice [Fifth Schedule] is punishable with imprisonment up to 6 months or with fine up to 1,000 or with both [Sec. 25U].

  5. Any person, who commits a breach of any term of a binding settlement or award is punishable with imprisonment up to 6 months or with fine or with both, and in the event of a continuing breach with an additional fine of 200 for every day of default, which may be partly or fully payable to the injured person by way of compensation [Sec. 29].

  6. Any person who wilfully discloses confidential information in contravention of Section 21 is punishable with imprisonment up to 6 months or with fine which may extend to 1,000 or with both [Sec. 30].

  7. Any employer who closes down an industrial undertaking in contravention of the provisions relating to notice to workmen of intention of closure [Sec. 25FFA] is punishable with imprisonment up to 6 months or with fine up to 500 or with both [Sec. 30A].

  8. Any employer who closes down an undertaking in contravention of the provisions relating to application for permission and serving a copy to the representatives of workmen [Sec. 25O] is punishable with imprisonment up to 6 months or with fine which may extend to 5,000 or with both [Sec. 25R].

  9. Any employer who contravenes an order refusing to grant permission for closure [Sec. 25O (2)] or direction of restarting a closed undertaking [Sec. 25P] is punishable with imprisonment up to 1 year or with fine up to 5,000 or with both and in the event of a continuing offence with a further fine of 2,000 for every day of the continuance of the offence [Sec. 25R (2)].

  10. Any employer who contravenes the provisions of the Act relating to the obtaining of permission of the government before laying-off [Sec. 25M] or retrenching workmen [Sec. 25N] is punishable with imprisonment up to 1 month or with fine up to 1,000 or both [Sec. 25Q].

  11. Contravention of provisions relating to change of conditions of service during pendency of proceedings [Sec. 33] is punishable with imprisonment up to 6 months or with fine which may extend to 1,000 or with both [Sec. 31 (1)].

  12. Contravention of any other provisions of the Act or any rule made under it is punishable with fine which may extend to 100 [Sec. 31 (2)].

Cognizance of Offences

No court is authorized to take cognizance of any offence punishable under the Act or of abetment of such an offence except on a complaint made by or under the authority of the appropriate government. An offence under the Act can be tried by a court not inferior to that of a presidency magistrate or a judicial magistrate of the first class [Sec. 34].

Power to Exempt

If the appropriate government is satisfied that adequate provisions exist for the investigation and settlement of industrial disputes in respect of workmen in an industrial establishment or undertaking carried on by a department of that government, it may, by notification in the official gazette. Exempt such establishment or undertaking from all or any provisions of the Act [Sec. 36B].

Power to Amend Schedules

The central and state governments are empowered to add to the First Schedule any industry in public interest. The central government is empowered to add to or alter or amend the Second Schedule or the Third Schedule. In both the cases notification in the official gazette is necessary [Sec. 40].

Recovery of Money Due from Employer

Where money is due to a workman from an employer under a settlement or award or under the provisions of the Act in regard to lay-off, retrenchment or closure, the workman himself or a person authorized by him or in the case of his death, his assignee or heir may make an application to the appropriate government for the recovery of money due. If the appropriate government is satisfied that money was actually due, it will issue certificate for the amount to the collector who will proceed to recover it as an arrear of land revenue. The application, however, is to be made within 1 year from the date on which the money became due [Sec. 33C].

Power to Make Rules

The appropriate government is empowered to make rules for the purpose of giving effect to the provisions of the Act. The rules made under the Act are to be laid before state legislature (in case the appropriate government is the state government), or before both Houses of Parliament (in case the appropriate government is the central government) for confirmation [Sec. 38].

STATE LAWS

In addition to the Industrial Disputes Act, 1947, many of the States have passed their own laws regulating industrial relations in their respective jurisdictions. In such states, both the central and state legislations are in operation. The important state legislations dealing with industrial relations and industrial disputes are; (1) the Bombay Industrial Relations Act, 1946, (2) the U. P. Industrial Disputes Act, 1947 and (3) the M. P. Industrial Relations Act.1960.

Bombay Industrial Relations Act, 1946

The main objective of the Act is to regulate industrial relations and to secure a speedier settlement of industrial disputes. The Act seeks to achieve this objective through the provisions of Joint Committees, Labour Officers, Conciliators, Labour Courts, Wage Boards and Industrial Court.

The Act requires the employers to constitute Joint Committees in industrial establishments to serve as a direct and continuous link between employers and employees. Labour Officers appointed under the Act are required to promote harmonious relations between employers and employees, to report to the government the existence of industrial disputes and to appear in any proceedings under the Act. Conciliators are required to make an endeavour for a speedy and expeditious settlement of industrial disputes. An agreement reached in the course of conciliation proceedings is binding on the parties. In case the parties fail to reach an agreement, the Conciliator is required to send a complete report to the Chief Conciliator. If, at any stage, the parties agree to submit the dispute to arbitration, the Conciliator is required to refer it accordingly.

Labour Courts, Wage Boards and the Industrial Court are adjudication authorities. Labour Courts are to deal with disputes relating to standing orders, changes in respect of certain specified matters (Schedule III of the Act) and to arbitrate upon disputes referred to by the government. Wage Boards function under the general supervision of the Industrial Court. The Industrial Court is the appellate authority. The Act authorizes giving retrospective effect to a registered agreement, settlement, award and others, and making them binding on all employees in the industry in the local area.

The Act further provides for the classification of trade unions as ‘representative unions’, ‘qualified unions’, ‘primary unions’ and ‘approved unions’. ‘Approved unions’ are authorized to refer any dispute to an Industrial Court for arbitration, they are entitled to appear before Labour Courts and the Industrial Court for specified purposes. A ‘representative union’ is the sole bargaining agency in all proceedings in which it entitled to appear. An agreement reached with such a union is effective and is ordinarily to be made binding by an award in terms of the agreement. The Act was also adopted by Gujarat after its separation from Maharashtra.

U. P. Industrial Disputes Act, 1947

The Act seeks to provide for the prevention of strikes and lock-outs and for the settlement of industrial disputes and other related matters.

The Act empowers the state government to issue orders in respect of the following matters:

  1. Prohibiting strikes or lock-outs generally in connection with any industrial disputes
  2. Requiring employers and workers to observe such terms and conditions of employment as may be specified in the order
  3. Appointing industrial courts
  4. Referring any industrial dispute for conciliation or adjudication
  5. Regulating or controlling the working of any public utility service
  6. Settling any other incidental or supplementary matters.

The Act provides for the adjudication of an industrial dispute affecting more than one industrial establishment by a Tribunal consisting of at least three persons (instead of only one as in the Industrial Disputes Act, 1947), one of whom is to be designated by the state government as the chairman. The Act empowers the state government to refer an award of a Labour Court or Tribunal for its reconsideration before publication. No office-bearer of a trade union is entitled to represent any party unless a period of 2 years has elapsed since its registration under the Trade Unions Act, 1926, and it has been registered for one trade only. The Act further provides that, in order to be binding, a settlement arrived at between the employer and the workmen otherwise than in the course of conciliation proceedings should be registered under the Act. An arbitration award is not enforceable if, in the opinion of the state government, it has been given or obtained through collusion, fraud or misrepresentation.

M. P. Industrial Relations Act, 1960

The Act is intended to regulate the relations between employers and employees and to make provisions for the settlement of industrial disputes and other connected matters.

The Act provides for the constitution of Joint Committees and appointment of Labour Officers, Labour Court, Industrial Court or Board of Arbitration and Courts of Inquiry generally on the lines of the Bombay Industrial Relations Act. It also deals with recognition of trade unions and employers’ associations, strikes and lock-outs and protection to employees in certain cases.

AN ASSESSMENT

The Industrial Disputes Act, 1947, has been a significant piece of regulative labour legislation reflecting the nature of governmental policy in regard to industrial relations, particularly prevention and settlement of industrial disputes. The elements of this policy in regard to prevention and settlement of industrial disputes have been mentioned in the beginning of the chapter. The provisions of the Act have their implications, also, in other areas of industrial relations such as strikes, lock-outs and other forms of industrial action; unfair labour practices; changes in the conditions of services; lay-off, retrenchment and closure; collective bargaining; standing orders; redressal of grievances; and workers’ participation in management. Intended primarily for ensuring industrial peace through the provision of a network of conciliation and adjudication authorities, the Act itself has widened the scope of litigation in industry. Of late, numerous disputes relating to the interpretation and application of certain provisions, for instance definitions of ‘industrial dispute’, ‘industry’ and ‘workman’ and application of clauses concerning ‘unfair labour practices’, ‘lay-off’ and retrenchment’ have taken place in the country. Many aspects of the working of the Act and its role in the field of industrial relations in the country have been dealt with in detail at appropriate places in the relevant chapters of the book. However, some of the glaring deficiencies of the Act experienced during the course of its working or from the consideration of its contribution to industrial relations situation of the country are explained in the following sections.

Extensive Governmental Intervention in the Field of Industrial Relations

The Act vests in the central and state governments extensive powers in regard to: reference of industrial disputes to adjudication authorities; strengthening the role of conciliation authorities; declaration of public utility services; granting or refusing permission for lay-off, retrenchment and closure; declaration of strikes and lock-outs as illegal; implementation of awards and settlements; amendment of Schedules of the Act; transfer of proceedings from one authority to another; and granting exemptions from the operation of the provisions of the Act. In practice, this power is often misused and, in many cases, the decisions of the government are influenced by the political party in power, especially where trade unions owing allegiance to a rival political party are involved. It was on account of the extensive government involvement in the settlement of industrial disputes and industrial relations that the first National Commission (on Labour1969) recommended the establishment of Industrial Relations Commissions at the centre and in the states. Similarly, second NCL (2002) recommended the establishment of Labour Relations Commissions and adoption of a comprehensive labour management relations law covering various aspects of industrial relations in an integrated way (see Chapter 12).

Limited Effectiveness of Authorities

Work Committees

The working of these Committees has been discussed in detail in Chapter 14. On the whole, this institution has proved a failure.

Conciliation Authorities

A large number of industrial disputes in the country are resolved through recourse to conciliation. In many cases the parties themselves arrive at agreements and get these converted into settlements for ensuring their legal applicability. However, in many others, formal conciliation proceedings are held, but the results of such proceedings have not been encouraging. For example, between 1988 and 2001, the percentage of conciliation under the Central Industrial Relations Machinery ending in failure varied between 48 (1990) and 82 (1997),2 In the country as a whole, the percentage of unsuccessful conciliation during the period 2002–07 was around 50 in most of the years under study.3

Adjudication Authorities

As explained in the beginning of the chapter, the provision of adjudication was initiated in 1942 by adding Rule 81 (A) to the Defence of India Rules as war-time measure. However, even in the teeth of opposition from V. V. Giri and many other trade union leaders, adjudication came to be retained on a permanent basis in the Industrial Disputes Act, 1947. A network of Labour Courts and Tribunals has come to be set up by central and state governments. During 1988–2001 the percentage of industrial disputes referred to central adjudication machinery varied between 20 and 28.4 The shortcomings working of the adjudication machineries have been discussed in detail in Chapter 12. The limitations of the adjudication machineries in resolving industrial disputes have been highlighted not only by trade unions and employers, but also by the government organizations and others.5

Voluntary Arbitration

This method has been used only in a very limited number of disputes.

Obstacle in the Development of Collective Bargaining

Although the Act leaves the parties free to resolve their differences by negotiations and bargaining, in practice, the nature of adjudication, conciliation and the role of the government is such that the parties find it difficult to resolve disputes on their own. A collective agreement arrived at otherwise than in the course of conciliation proceeding is binding only on the parties to the dispute. In view of the multiplicity of trade unions, where different trade unions take different stand in an industrial dispute, the government often refers the dispute for adjudication without regard to the stand of a large section of workmen represented by trade unions. There have also been instances where, in their quest for converting a collective agreement into settlement for ensuring its enforceability on a wider scale, the parties approach the conciliation officer to conciliate, but the conciliator often refuses to do so. The parties are also free to request the adjudication authority to give its award in terms of collective agreement reached between them but the authority has to be convinced that the parties represent majority of the parties. The determination of representativeness of the majority of the parties, both in adjudication and conciliation, often becomes a very difficult task. Besides, although the Act makes it an unfair labour practice for the employers and recognized trade union to bargain collectively with each other, in absence of any statutory obligation for the employer to recognize a representative union, this provision has little significance (see Chapter 9). All these have a deleterious effect on the growth of free collective bargaining in the country.

Frequent Violations of Provisions Relating to Strikes and Lock-outs

The provisions relating to restrictions on strikes and lock-outs in general or in public utility services are frequently violated. As explained in Chapter 11, most of the strikes taking place in country have been illegal under the Act. This is because of the complex procedures involved in deciding cases of violations and difficulties in establishing the participation of workmen in illegal strikes. Besides, the Act has not been able to reduce the number or frequency of strikes and lock-outs. The number of work-stoppages, number of workers involved and man-days lost in the country is much higher when compared to the corresponding figures of many countries of the world (see Chapter 11).

Opposition to the Provisions Relating to Lay-off, Retrenchment and Closure

The employers have been vigorously opposing the special provisions of the Act relating to lay-off, retrenchment and closure which make it mandatory for the employers to obtain prior permission of the government in respect of undertakings employing 100 or more workmen. With the initiation of new economic and industrial policies in 1991 emphasizing privatization, liberalization and globalization, this opposition has become more vigorous. The implementation of these policies resulting in fierce competition combined with rapid advancement of technology, have necessitated a reduction in work-force and the need for freedom to employers in these matters. During 1988–97, the number of workers laid-off was on the average 75,000 per year, the number retrenched about 3,000 per year and the number affected by closures averaged about 15,000 per year.6 During the period 1998–2007, the number of workers laid-off varied between 8,000 (2007) and 45,000 per year, remaining more than 25,000 in most of the years under reference. During the same period, the number of retrenched workers was around 2,500 per year, and the number of those affected by closures varied between 4,000 (2007) and 16,000 (1999).7 In majority of the cases, the government has been refusing to grant permission for lay-off, retrenchment and closure. The employers have been demanding the deletion of the provisions. Early in 2002, the Central Cabinet decided to raise the limit from 100 to 1,000 workmen for the prior permission and to provide compensation at the rate of 45 days’ wages in place of 15 days’ wages per year of completed service. These decisions have not been incorporated in the Act so far. It is also to be noted here that many employers have taken recourse to voluntary retirement scheme (golden hand-shake), compulsory retirement measures, casualization of work-force and making use of contract labour.

Exhaustive List of Unfair Labour Practices

The list of unfair labour practices for employers and their associations and workers and their trade unions, as specified in the Fifth Schedule of the Act, is much too exhaustive. As a matter of fact, numerous activities of the trade unions, workers and employers could be construed as unfair labour practices and punishable under the Act. In the United States, where the term ‘unfair labour practices’ originated and in United Kingdom, the laws have specified only a few unfair labour practices which can be clearly defined and interpreted. The list of unfair labour practices inserted in the Act in 1982 is entirely based on the list prepared by the Committee on ‘Unfair Labour Practices’, appointed by the Maharashtra Government in 1969.8 These practices should have been inserted in the Act after serious thinking and in consultation with central organizations of trade unions and employers.

Undue Protection to Individual Workmen

The Act contains provisions intended to afford protection to individual workmen in matters relating to discharge, dismissal, retrenchment, termination of service in other ways and change in the conditions of service, which has encouraged perpetuation of indiscipline in industry. Disputes relating to discharge, dismissal, retrenchment or termination of service in other ways are an industrial dispute involving cumbersome procedures of settlement. The protection afforded by the clauses has led to undesirable activities on the part of many workmen. When punished by the employers, they often succeed in getting reinstated by the adjudication authorities. Protected workmen enjoy additional safeguards in matters of changes in the conditions of service. All these have resulted in vitiating industrial relations environment in industrial undertakings and encouraged indiscipline and insubordination. The figures of industrial disputes cause-wise show that disputes relating to indiscipline and violence have been on high side since 1990 onwards (see Chapter 11).

The first National Commission on Labour, after examining various aspects of the working of the Act, the trade union and standing orders laws, and relevant tripartite resolutions, particularly Code of Discipline and Code of Conduct and other industrial relations situation in the country had suggested a thorough change in industrial relations laws in the country. The Recommendations of the Commission inter alia included: establishment of independent Industrial Relations Commissions at the centre and in the states entrusted with the responsibilities of (i) adjudication of industrial disputes, (ii) conciliation and (iii) certification of unions as representative unions. The Commission also made specific Recommendations relating to collective bargaining, voluntary arbitration, conciliation and adjudication, establishment of Labour Courts and unfair labour practices (see Chapter 12).

The initiation of the new economic and industrial policies characterized by privatization, liberalization and globalization has resulted in such industrial conditions which call for a thorough examination of industrial relations laws and their modifications. Some of the particular developments taking place with the implementation of these policies have been: substantial reduction in the coverage of industries for licensing and those hitherto exclusively reserved for public sector, disinvestment of equity of selected public sector undertakings, enhancing of the limits of foreign equity participation in domestic industrial undertakings, liberalization of trade and exchange-rate policies, and so forth. Separate measures in the form of specific packages have been introduced for the upliftment of small and export-oriented units (see Chapter 5). The measures have been adopted at a time when the country has been experiencing a sort of revolution in technology. These developments have a particular relevance from the considerations of accompanying competition, need for cost control, tackling the problem of redundancy, need for skill-development and augmenting productivity and enhancement of the efficiency of enterprises.

RECOMMENDATIONS OF THE SECOND NCL (2002)

It was in the context of the above developments that the second National Commission on Labour appointed in 1999, was asked inter alia ‘to suggest rationalisation of existing labour laws relating to labour in the organized sector so as make them more relevant and appropriate in the changing context of globalisation and opening of the Indian economy’. The Commission, which submitted its report in July 2002, has suggested significant modifications in the existing laws relating to industrial relations including machineries for the settlement of industrial disputes, lay-off, retrenchment, closure, trade unions, standing orders and workers’ participation in management. The Commission also worked out a comprehensive Bill for guidance in the adoption of a comprehensive industrial relations law in the country (see Chapter 12).

SUMMARY
  1. The Industrial Disputes Act, 1947, is a comprehensive piece of labour legislation intended to maintain industrial harmony in the country. The Act is enforced both by the central and state governments in respect of industries in their respective jurisdictions. It incorporates significant provisions covering several aspects of industrial relations such as machineries for the prevention and settlement of industrial disputes, strikes and lock-outs, lay-off, retrenchment and closure, change in the conditions of service during pendency of industrial disputes before authorities, unfair labour practices, and penalties and cognizance of offences.
  2. The authorities for the prevention and settlement of industrial disputes under the Act comprise: (i) Grievance Settlement Authority, (ii) Works Committee, (iii) Conciliation Officer, (iv) Board of Conciliation, (v) Court of Inquiry, (vi) Labour Court, (vii) Tribunal, (viii) National Tribunal and (ix) Arbitrator for voluntary arbitration. Of these, Labour Court, Tribunal and National Tribunal are adjudication authorities, and Conciliation Officer and Board of Conciliation are authorities for conciliation of industrial disputes. Works Committee is a machinery mainly for prevention of industrial disputes. The Grievance Settlement Authority is intended to deal with individual grievances. Court of Inquiry is a machinery for investigating into matters relating to industrial disputes. The Act contains detailed provisions in regard to appointment, composition, powers and functions of all these authorities.
  3. The agreement arrived at during the course of conciliation proceeding is known as ‘settlement’, whereas the decision of the adjudication authority and arbitrator is termed as ‘award’. The Act specifies in detail the manner of referring industrial disputes before the authorities, commencement and conclusion of proceedings, period of operation of settlement and award, and the nature and extent of their binding character.
  4. The Act also contains provisions relating to restrictions on strikes and lock-outs. These restrictions are of two categories. The first category of restrictions applies to all industries covered under the Act including public utility services. Some additional restrictions have been imposed in public utility services. The Act has specified the conditions under which strikes and lock-outs become illegal.
  5. The Act contains important provisions relating to lay-off, retrenchment and closure. Apart from the general provisions which apply to industrial establishments employing between 50 and 100 workmen, there are special provisions relating to establishments employing 100 or more workmen. There are detailed provisions in the Act relating to the conditions to be observed before laying-off and retrenching workmen and closing of undertakings, compensation to be paid to workmen, power of the government to grant permission and other related matters.
  6. The Act has enumerated a number of unfair labour practices on the part both of employers and workers and their organizations. These provisions intend to induce the employers and workers and their organizations to refrain from such practices which might disturb industrial peace and harmony.
  7. The Act imposes restrictions on changing the conditions of service of workmen, especially protected workmen during the pendency of proceedings before conciliation and adjudication authorities and specifies certain conditions to be observed in this regard.
  8. Penalties have been prescribed for various kinds of offences under the Act. Other provisions of the Act relate to cognizance of offences, power of the government to give exemptions and to amend the Schedules and the manner in which money due to workmen may be recovered.
  9. Some of the deficiencies of the legislation include: (i) extensive government intervention in the field of industrial relations, (ii) limited effectiveness of adjudication and conciliation for settling industrial disputes, (iii) obstacle in the growth of collective bargaining, (iv) limited effectiveness in checking illegal strikes and lock-outs, (v) wide opposition to clauses relating to lay-off, retrenchment and closure, especially after the adoption of economic and industrial policy of 1991, (vi) exhaustiveness of the list of unfair labour practices, (vii) undue protection to individual workmen, and (viii) encouragement to litigation in the settlement of disputes.
QUESTIONS FOR REVIEW
  1. Define the terms ‘industrial dispute’, ‘industry’, ‘workman’, ‘settlement’, ‘award’ and ‘public utility service’ as contained in the Industrial Disputes Act, 1947.
  2. What authorities have been provided under the Industrial Disputes Act, 1947, for the prevention and settlement of industrial disputes? Briefly describe their composition and functions.
  3. Explain the provisions of the Industrial Disputes Act, 1947, relating to appointment, composition, powers and functions of conciliation authorities along with the status of ‘settlement’ arrived at during the course of conciliation proceedings.
  4. Explain the provisions of the Industrial disputes Act, 1947, relating to appointment, composition, powers and functions of adjudication authorities along with the status of awards of these authorities.
  5. Describe the provisions of the Industrial Disputes Act, 1947, relating to prohibition of strikes and lock-outs. Have these provisions succeeded in checking the incidence of illegal strikes and lock-outs?
  6. How does the Industrial Disputes Act, 1947, regulate lay-off, retrenchment and closure in industries? Do you think that these provisions are compatible with the needs of Indian industries today? Give reasons for your answer.
  7. Briefly describe the unfair labour practices of employers and workmen and their organizations as contained in the Industrial Disputes Act, 1947.
  8. What are the provisions of the Industrial Disputes Act, 1947, relating to change in the conditions of service during the pendency of proceedings before conciliation and adjudication authorities? What are the provisions of the Act in regard to protected workmen? Explain.
KEY TERMS

 

Industrial dispute

Industry

Workman

Protected workman

Public utility service

Settlement

Award

Lay-off

Retrenchment

Unfair labour practices

Case Study 1

Does designation of an employee entitle him to be treated as ‘workman’ under Industrial Disputes Act, 1947?

Mr. Ajit Singh was appointed as Legal Assistant by M/s Sonepat Cooperative Sugar Mills. The qualification for the post was a degree in law with a practicing license. His duties included: preparing written statements and notices, recording enquiry proceedings, giving opinions to management on legal matters, drafting, filing and pleadings and representing management in different kinds of cases. He was also conducting departmental enquires in matters of indiscipline of workmen. He was on probation. The management took a decision to abolish the post, as a result of which, his services were terminated.

As an industrial dispute arose, the state government referred the matter to the Labour Court for deciding whether the termination of his service was justified. The management contended that Mr. Singh was not a ‘workman’ under the Industrial Disputes Act, 1947. The Labour Court held that the job of Mr. Singh was of ‘legal clerical nature’ and thus, he came under the purview of ‘workman’ and directed his reinstatement with continuity of service and payment of 50 per cent of back wages.

Both the management and Mr. Singh filed writ petitions before the Punjab and Haryana High Court placing their respective interests. A single Judge of the High Court upheld the finding of the Labour Court that Mr. Singh was a workman and awarded an amount calculated at 50 per cent of back wages from the date of termination of service to the date of award by way of compensation in lieu of his reinstatement in service. On appeal filed by Mr. Singh, the Division Bench of the High Court set aside the judgement of the Single Judge Court and restored the award of reinstatement passed by the Labour Court, but rejected the payment of full back wages.

On appeal by the management, the Supreme Court held that Mr. Singh was not performing any stereotyped job and his job involved creativity. He would not fall in the definition of workman. The Court set aside the award of the Labour Court and Judgement of the High Court. The Court, however, directed the payment of 50 per cent of back wages, a part of which had already been paid by the management (Management of M/s Sonepat Cooperative Sugar Mills Ltd. v. Ajit Singh (2005) SC LLR 309).

Questions

Could an employee of the mill employed on a permanent clerical job be treated as ‘workman’ for the purposes of Industrial Disputes Act, 1947?

Will you include a cane supervisor of the mill drawing, 1,000 per month in the category of ‘workman’ under the Industrial Disputes Act, 1947?

Is a dismissed employee engaged in unskilled work a ‘workman’ under the Industrial Disputes Act, 1947?

Case Study 2

What is the meaning of the expression ‘industry’ under the Industrial Disputes Act, 1947?

In the famous Bangalore Water Supply and Sewerage Board v. V. A. Rajappa and Others case, the Supreme Court held that the expression ‘industry’ as defined in Industrial Disputes Act, 1947, has wide import involving the following elements: (i) a systematic/organized activity; (ii) organized cooperation between employer and employee; and (iii) for the production and/or distribution of goods and services calculated to satisfy human wants/wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss to making on large scale, prasad or food). Absence of profit-motive or gainful objective is not relevant. The main focus should be on functional character and employer–employee relations. If the organization is engaged in trade or business, the objective of philanthropy does not have significance. While delivering the judgement the Court expressed difficulty in interpreting the term and suggested that legislature should take steps with a comprehensive bill to clear up the fog and remove doubts. The Court also suggested to refer the matter to a larger bench of the Supreme Court for evolving working formula to cover particular cases (Bangalore Water Supply and Sewerage Board v. V. A. Rajappa and Others (1978)-SC (2)-GJX-0427-SC).

Questions

Based on the Judgement, do charitable institutions engaged in trade having employer–employee relationship come under the purview of ‘industry’ under the Industrial Disputes Act, 1947?

What is the status of hospitals under the above Judgement?

Are research institutions outside the purview of ‘industry’?

Case Study 3

Should punishment for misconduct be in proportion to the severity of offence committed?

Two employees of a colliery belonging to Bharat Coking Cool Limited were dismissed for assaulting the General Manager and other officers, and for other Acts of misconduct after the domestic enquiry had proved their guilt. The matter came up before the Tribunal, which took cognizance of the guilt, but reduced the punishment of dismissal to reinstatement into service without back wages and a cut in increment.

The management challenged the award of the Tribunal and the matter ultimately reached the Supreme Court. The Supreme Court held that it was well established in law that in a given circumstance the Tribunal had the jurisdiction to interfere with the punishment awarded in the domestic enquiry for good and valid reasons. If the Tribunal decided to interfere with such punishment, it should have borne in mind the principle of proportionality between the gravity of the offence and the stringency of the punishment. Substituting the order of dismissal by withholding of one increment was wholly disproportionate to the gravity of misconduct and is unsustainable. Thus, the Court upheld the order of the management to dismiss the employees (Bharat Coking Cool Ltd. v. Bihar Colliery Kamgar Union Trough Workmen (2005) I LLJ-1135).

Questions

Is a Tribunal appointed under the Industrial Disputes Act empowered to reduce the punishment of a workman for his misconduct?

Which labour law is basically concerned with punishments to be inflicted on workmen for their misconduct?

Is a Tribunal empowered to deal with monetary relief to a retrenched workman?