Strikes,Lock-out,Lay-off and Retrenchment

By LAKSHMI SURESH.K MBA S3 HR NO:16

Introduction
Every right comes with its own duties. Most powerful rights have more duties attached to them. Today, in each country of globe whether it is democratic, capitalist, socialist, give right to strike to the workers. But this right must be the weapon of last resort because if this right is misused, it will create a problem in the production and financial profit of the industry. This would ultimately affect the economy of the country.

Today, most of the countries, especially India, are dependent upon foreign investment and under these circumstances it is necessary that countries who seeks foreign investment must keep some safeguard in there respective industrial laws so that there will be no misuse of right of strike. In India, right to protest is a fundamental right under Article 19 of the Constitution of India. But right to strike is not a fundamental right but a legal right and with this right statutory restriction is attached in the industrial dispute Act, 1947.

Strikes and Lockout

Position in India
In India unlike America right to strike is not expressly recognized by the law. The trade union Act, 1926 for the first time provided limited right to strike by legalizing certain activities of a registered trade union in furtherance of a trade dispute which otherwise breach of common economic law. Now days a right to strike is recognized only to limited extent permissible under the limits laid down by the law itself, as a legitimate weapon of Trade Unions. The right to strike in the Indian constitution set up is not absolute right but it flow from the fundamental right to form union. As every other fundamental right is subject to reasonable restrictions, the same is also the case to form trade unions to give a call to the workers to go on strike and the state can impose reasonable restrictions. In the All India Bank Employees Association v. I. T. , the Supreme Court held,

 "the right to strike or right to declare lock out may be controlled or restricted by appropriate industrial legislation and the validity of such legislation would have to be tested not with reference to the criteria laid down in clause (4) of article 19 but by totally different considerations."

Thus, there is a guaranteed fundamental right to form association or Labour unions but there is no fundamental right to go on strike. Under the Industrial Dispute Act, 1947 the ground and condition are laid down for the legal strike and if those provisions and conditions are not fulfilled then the strike will be illegal.

STRIKES
It means the cessation of the work by a body f persons employed in any industry acting in combination or A concerted refusal of any number of persons who are or have been so employed to continue work or to accept employment;or A refusal under a common undertaking of any number of such persons to continue to work or to accept employment.

 Provision of valid strike under the Industrial Dispute Act, 1947Section 2(q) of said Act defines the term strike, it says, "strike" means a cassation 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 accept employment. Whenever employees want to go on strike they have to follow the procedure provided by the Act otherwise there strike deemed to be an illegal strike. Section 22(1) of the Industrial Dispute Act, 1947 put certain prohibitions on the right to strike.

 It provides that no person employed in public utility service shall go on strike in breach of contract: (a) Without giving to employer notice of strike with in six weeks before striking; or (b) Within fourteen days of giving such notice; or (c) Before the expiry of the date of strike specified in any such notice as aforesaid; or (d) During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

 It is to be noted that these provisions do not prohibit the workmen from going on strike but require them to fulfill the condition before going on strike. Further these provisions apply to a public utility service only. The Industrial Dispute Act, 1947 does not specifically mention as to who goes on strike. However, the definition of strike itself suggests that the strikers must be persons, employed in any industry to do work.

 Notice of strike Notice to strike within six weeks before striking is not necessary where there is already lockout in existence. In mineral Miner Union vs. Kudremukh Iron Ore Co. Ltd., it was held that the provisions of section 22 are mandatory and the date on which the workmen proposed to go on strike should be specified in the notice. If meanwhile the date of strike specified in the notice of strike expires, workmen have to give fresh notice. It may be noted that if a lock out is already in existence and employees want to resort to strike, it is not necessary to give notice as is otherwise required. In Sadual textile Mills v. Their workmen certain workmen struck work as a protest against the lay-off and the transfer of some workmen from one shift to another without giving four days notice as required by standing order 23. On these grounds a question arose whether the strike was justified. The industrial tribunal answered in affirmative.

 Against this a writ petition was preferred in the High Court of Rajasthen. Reversing the decision of the Tribunal Justice Wanchoo observed: " ....We are of opinion that what is generally known as a lightning strike like this take place without notice..... And each worker striking ......(is) guilty of misconduct under the standing orders ........and liable to be summarily dismissed.....(as)..... the strike cannot be justified at all. "

 General prohibition of strikeThe provisions of section 23 are general in nature. It imposes general restrications on declaring strike in breach of contract in the both public as well as non- public utility services in the following circumstances mainly: (a) During the pendency of conciliation proceedings before a board and till the expiry of 7 days after the conclusion of such proceedings; (b) During the pendency and 2 month's after the conclusion of proceedings before a Labour court, Tribunal or National Tribunal; (c) During the pendency and 2 months after the conclusion of arbitrator, when a notification has been issued under sub- section 3 (a) of section 10 A; (d) During any period in which a settlement or award is in operation in respect of any of the matter covered by the settlement or award.

 The principal object of this section seems to ensure a peaceful atmosphere to enable a conciliation or adjudication or arbitration proceeding to go on smoothly. This section because of its general nature of prohibition covers all strikes irrespective of the subject matter of the dispute pending before the authorities. It is noteworthy that a conciliation proceedings before a conciliation officer is no bar to strike under section 23.

 Illegal StrikeSection 24 provides that a strike in contravention of section 22 and 23is illegal. This section is reproduced below: (1) A strike or a lockout shall be illegal if, (i) It is commenced or declared in contravention of section 22 or section 23; or (ii) It is continued on contravention of an order made under sub section (3) of section 10 or sub section (4-A) of section 10-A.

(2) Where a strike or lockout in pursuance of an industrial dispute has already commenced and is in existence all the time of the reference of the dispute to a board, an arbitrator, a Labour court, Tribunal or National Tribunal, the continuance of such strike or lockout shall not be deemed to be illegal;, provided that such strike or lockout was not at its commencement in contravention of the provision of this Act or the continuance thereof was not prohibited under sub section (3) of section 10 or sub section (4-A) of 10-A (3) A strike declared in the consequence of an illegal lockout shall not be deemed to be illegal.

 Consequence of illegal Strike-

Dismissal of workmenIn M/S Burn & Co. Ltd. V, Their Workmen , it was laid down that mere participation in the strike would not justify suspension or dismissal of workmen. Where the strike was illegal the Supreme Court held that in case of illegal strike the only question of practical importance would be the quantum or kind of punishment. To decide the quantum of punishment a clear distinction has to be made between violent strikers and peaceful strikers. In Punjab National Bank v. Their Employees , it was held that in the case of strike, the employer might bar the entry of the strikers within the premises by adopting effective and legitimate method in that behalf. He may call upon employees to vacate, and, on their refusal to do so, take due steps to suspend them from employment, proceed to hold proper inquires according to the standing order and pass proper orders against them subject to the relevant provisions of the Act.

 Wagesit was held that in order to entitle the workmen to wages for the period of strike, the strike should be legal and justified. A strike is legal if it does not violate any provision of the statute. It cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether particular strike is justified or not is a question of fact, which has to be judged in the light of the fact and circumstances of each case. The use of force, coercion, violence or acts of sabotage resorted to by the workmen during the strike period which was legal and justified would disentitle them to wages for strike period.

 The constitutional bench in Syndicate Bank v. K. Umesh Nayak decided the matter , the Supreme Court held that a strike may be illegal if it contravenes the provision of section 22, 23 or 24 of the Act or of any other law or the terms of employment depending upon the facts of each case. Similarly, a strike may be justified or unjustified depending upon several factors such as the service conditions of the workmen, the nature of demands of the workmen, the cause led to strike, the urgency of the cause or demands of the workmen, the reasons for not resorting to the dispute resolving machinery provided by the Act or the contract of employment or the service rules provided for a machinery to resolve the dispute, resort to strike or lock-out as a direct is prima facie unjustified. This is, particularly so when the provisions of the law or the contract or the service rules in that behalf are breached. For then, the action is also illegal.

 Right of employer to compensation for loss caused by illegal strikeIn Rothas Industries v. Its Union , the Supreme Court held that the remedy for illegal strike has to be sought exclusively in section 26 of the Act. The award granting compensation to employer for loss of business though illegal strike is illegal because such compensation is not a dispute within the meaning of section 2(k) of the Act.

Lockout

It means temporary 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.

Notice of lock out: No employer carrying on any public utility service shall lock-out any of his workmen without giving them notice of lock-out as hereinafter provided, within six weeks before locking out; or within fourteen days of giving such notice; or before the expiry of the date of lock-out specified such notice as aforesaid; or during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

 The notice of lock-out shall be given by an employer in prescribed form. The notice shall be displayed conspicuously by the employer on a notice board at the main entrance to the establishment and in the manager's office: Provided that where a registered trade union exists, a copy of the notice shall also be served on the Secretary of the union. The notice of lock-out or strike shall not be necessary, where there is already in existence a strike or as the case may be lock-out in the public utility service, but the employer shall send intimation of such lock-out or strike on the day on which it is declared, to such authority as may be specified by the appropriate government either generally or for a particular area or for a particular class of public utility services.

Report of lock-out by employer If on any day an employer receives from any person employed by him any notice of strike or gives to any persons employed by him any notice of lock-out, he shall within five days thereof, and report to the appropriate government or to such authority as that government may prescribe the number of such notices received or given on that day. The report of notice of a strike or lock-out should be sent by registered post or given personally to the Assistant Labour Commissioner (Central) appointed for the local area concerned, with copy by registered post to concerned departments.

Lay off and Retrenchment

Lay off means failure, refusal or inability of employer on account of shortage of coal, power or raw materials or accumulation of stock or break down of machinery or natural calamity; to give employment to a workman on muster roll. - - Lay off means not giving employment within two hours after reporting to work. - - Lay off can be for half day also. In such case, worker can be asked to come in second half of the shift. [section 2(kkk)].

 A factory employing 50 or more but less than 100 employees on an average per working day can lay off the workmen, who have completed one year of service, by paying compensation equal to 50% of salary (basic plus DA) (section 25C of IDA). - Employer can offer him alternate employment, if the alternate employment does not call for any special skill or previous experience, and lay off compensation will not be payable if employee refuses to accept the alternate employment (section 25E).

 Above provisions of compensation for lay off do not apply to (a) Industrial establishments employing less than 50 workmen (b) seasonal industry (c) Establishments employing 100 or more workmen, as in their case, prior approval of Appropriate Government is necessary u/s 25M(1)

 Provisions for large industries for lay off large industries employing 100 or more workmen on an average for preceding 12 months cannot lay-off, retrench or close down the undertaking without permission from Government (sections 25M to 25-O of Industrial Disputes Act)..

 Retrenchment Retrenchment means termination by the employer of service of a workman for any reason, other than as a punishment inflicted by a disciplinary action. However, retrenchment does not include voluntary retirement or retirement on reaching age of superannuation or termination on account of non-renewal of contract or termination on account of continued ill-health of a workman. [section 2(oo)].

 Retrenchment means discharge of surplus labour or staff by employer. It is not by way of punishment. The retrenchment should be on basis of last in first out basis in respect of each category, i.e. junior-most employee in the category (where there is excess) should be retrenched first. [section 25G]. If employer wants to re-employer persons, first preference should be given to retrenched workmen. [section 25H]. A worker who has completed one year of service can be retrenched by giving one month notice (or paying one months salary) plus retrenchment compensation, at the time of retirement, @ 15 days average wages for every completed year of service (section 25F).

Meaning of continuous service Provisions of

compensation for lay off and retrenchment are applicable only to workman who is in continuous service for one year. As per section 25B, continuous service includes service interrupted by sickness, authorised leave, accident or strike which is not illegal, or lock-out or cessation of work which is not due to fault of workman. -- In Workmen v. Management of American Express AIR 1986 SC 548 = 1985(4) SCC 71, it was held that actually worked cannot mean only those days where workman worked with hammer, sickle or pen, but must necessarily comprehend all those days during which he was in the employment of employer and for which has been paid wages either under express of implied contract of service or by compulsion of statute, standing orders etc.

Procedure for retrenchment Section 25F, Industrial Disputes Act, provides that where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workman in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.

Difference between lock out and lay off

The concept of 'lock-out' is essentially differnt from the concept of 'lay-off' and so where closure of business amounts to a 'lock-out under S. 2(l), it would be impossible to bring it within the scope of 'lay-off' under S.2(kkk). The points of distinction between 'lay-off' and 'lock-out' may be broadly stated as follows: 1. 'Lay-off' generally occurs in continuous business, whereas 'lockout' is closure of business for the time-being. 2. In the case of 'lay-off' owning to the reasons specified in S. 2(kk), the employer is unable to give employment to one or more workmen, whereas in the case of 'lock-out' the employer deliberately closes the business and locks out the whole body of workmen for reasons which have no relevance to the causes specified in S. 2 (kkk).

3. In the case of 'lay-off', the employer may be liable to pay compensation as provided by Ss. 25C, 25D and 25E of the Act, but liability for compensation cannot be invoked in case of 'lock-out', as the liability of the employer in cases of 'lock-out would depend upon whether the 'lock-out' was justified and legal or not. 4. The provisions applicable to the payment of 'lay-off' compensation cannot be applied to cases of 'lock-out. 5. 'Lock-out' is resorted to by the employer as a weapon of collective bargaining and also ordinarily involves an element of malice or ill-will while 'lay-off' is actuated by the exigencies of the business.

Difference between strike and lockout

A strike is a temporary work stoppage effected by one or more groups of workers with a view to enforcing or resisting demands or expressing grievances, or supporting other workers in their demands or grievances. A lockout is a total or partial temporary closure of one or more places of employment, or the hindering of the normal work activities of employees, by one or more employers with a view to enforcing or resisting demands or expressing grievances, or supporting other employers in their demands or grievances.

 Workers involved in a strike: Workers directly involved in a strike are those who participated directly by stopping work. Workers indirectly involved in a strike are those employees of the establishments involved, or self-employed workers in the group involved, who did not participate directly by stopping work but who were prevented from working because of the strike. Workers involved in a lockout: Workers directly involved in a lockout are those employees of the establishments involved who were directly concerned by the labour dispute and who were prevented from working by the lockout. Workers indirectly involved in a lockout are those employees of the establishments involved who were not directly concerned by the labour dispute but who were prevented from working by the lockout

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