UNIT 3 UNION AND MANAGEMENT

RELATIONS
Structure
3.0

Objectives

3.1 .

Introduction

3.2

Trade Union
3.2.1
3.2.2
3.2.3
3.2.4
3.2.5
3.2.6

3.3

Collective Bargaining
3.3.1
3.3.2
3.3.3
3.3.4

3.4

Statutory Definition
Procedure for Registration
Cancellation of Registration of Trade Union
Immunity Against Criminal Conspiracy in Trade Disputes
Immunity from Civil Suits
Rights and Liabilities of Registered Trade Unions

Concept and Nature

Processes
Advantages
Disadvantages

Resolution of Industrial Disputes

3.4.1
3.4.2
3.4.3
3.4.4
3.4.5

Scope and Applicability of the of Industrial Disputes Act

Are Hospitals and Pharmacies Industry?
Coverage
Industrial Dispute and Individual Dispute
Dispute Settlement Machinery

3.5

Strikes and Lock-outs

3.6

Termination of Service and Domestic Enquiry

3.6.1
3.6.2

General
Statutory Protection

3.7

Sexual Harassment of Women at Work Place

3.8

Let Us Sum UP

3.9

Answers to Check Your Progress

3.10

Further Reading

3.0 OBJECTIVES
After going through this unit, you should be-able to:
8

define the trade union, explain the procedure for its registration, specify grounds
for cancellation, and describe the rights, liabilities and immunities of members and
officers of a registered trade union;
familiarise yourself about the concept, processes involved, advantages and
disadvantages of collective bargaining;

define "industrial dispute", "industry" and workman identity, proper dispute

redressal forum and their working;

distinguish between strike and lock-out, describe the prohibitions on strikes and
lock-outs and specify the effect of illegality; '

apply the norms while terminating the services of workmen and holding domestic
enquiry; and
follow the guidelines to ensure prevention of sexual harassment of women.

Human Resource Management

3.1 INTRODUCTION
Union Management relations is a dynamic social process. It denotes the relationship
between employers and workers organisation or union. The main objective of Union
Management rel$.ions is to develop harmonious relations between them and to minimise
industrial conflicts. Conflicts may be generated over determination of bargaining agent
and on issues connected with employment, non-employment, terms of employment such
as wages and monetary and fringe benefits and condition of seryice such as working
hours, holidays, leave, method of work, introduction of new technology, health, safety
and welfare. Such conflict could lead to strikes and lock-outs. Be that as it may
industrial conflicts affect the functioning of the establishment. The dispute may be
resolved by collective bargaining and voluntary arbitration or through adjudication.
India cannot afford a type of collective bargaining for resolution of industrial disputes.
It has adopted an adjudication system.
In this unit you will study the regulation of trade unions collective bargaining, strikes
and lock-out, kedressal of disputes and disciplinary action by the employer, and sexual
harassment at work place.

3.2 TRADE UNION

3.2.1 Statutory Definition
Section 2 (h) of the Trade Union Act, 1926 defines trade union as follows:
a)

Any combination, temporary or permanent

b) formed for the purpose of:

i)

regulating the relations between

*

-workmen

and employers, or

-workmen

and workmen; or

--employers and employers; or

ii)

imposing restrictive condition on the conduct of any trade or business

But it does not include:

i)

any agreement between partners as to their business; or

ii) any agreement between an employer and those employed by him as to such
employment; or
iii) any agreement in consideration of the sale of the goodwill of a business or
'instruction in any profession, trade or handicraft.

3.2.2 Procedure for Registration

For the purpose of registration any seven or more members of a trade union may apply
for registration by subscribing their names to the rules of trade Union (Section 4). If
however, more than half of the members who have applied for registration cease to the
members of the trade union or disassociate themselves from the application by giving a
notice in writing to the registrar before the registration is granted the application for
registration shall become invalid (Section 4).
An application for registration should be sent in FORM 'A'. It shall accompany with a
copy of the rules of trade union and a statement of the following particulars [Section 5
@)I.
a)

the names, occupation and addresses of the members making the applicatibn;

b) the name of the Trade Union and the address of its head office; and
C) the title, names, ages, addresses and occupations of the officer bearers.

The application for registration shall also accompany with a general statement of the
assets and liabilities of the trade union prepared in the prescribed form and containing
such particulars as may be required, if the trade union has been in existence for more
than one year before the making of an application for its registration.
The rule of a trade union must contain provisions relating to subjects mentioned in
Section 6 of the Act and unless it is complied with no registration can be allowed.

If after, examining appli'cation for registration the Registrar is not satisfied, he may call
for further information for the purpose of satisfying himself that the application
complies with the provisions of section 5 and 6 of the Act. Unless he is supplied with
the information demanded by him he may refuse to register the union (Section 7 (1)).
Where the name under which the trade union is proposed to be registered is identical
with any existing trade union or in the opinion of the Registrar, so nearly resembles
such name as to be likely to deceive the public or the members of either trade union.
he may require the applicants that the name of the Union should be altered and shall
refuse to register unless the name is altered (Section 7 (2)) .
The Registrar on being fully satisfied that the trade union has complied with all the
requirements needed for registration he shall register the trade union by entering in a
register maintained for this purpose in which the particulars relating to the trade union
contained in the statement accompanying the application for registration must be
entered into (Section 8). Once the condition for registration is complied with it is
obligatory on the Registrar to register b u n i o n . He will have no discretion in the
matter. Similarly where there is a rival group asking for registiation, he cannot decide
which is the real union for the purpose of registration.

After registering the trade union, the Registrar shall issue a certificate or registration
which shall be the conclusive evidence that the trade union has been registered.
(Section 9).

3.2.3

cancellation of Registration of Tkade Union

The registration of a trade union can be cancelled on its own application which is
approved by a general meeting of the Union or a majority of its members. It may also
be cancelled by the Registrar Trade Unions by a written notice of not less than two
months on any of the following grounds:
a) that the registration certificate has been obtained by fraud or mistake;
b) that the trade union has ceased to exist;
c) that it has willfully and after notice from the Registrar allowed any rule to
continue in force which is inconsistent with any provision of the Act.
d) that it has willfully and after notice from the Registrar contravened any provision
of the Act.
e) that it has rescinded any rule providing for any of the compulsory matters required
under the Act.
Where withdrawal or cancellation of the registration is to be effected it must be
preceded by a requisite notice as well an opportunity to show cause against the
proposed action.

Once the certificate of registration is cancelled the Registrar cannot withdraw his order
on the ground that the trade union has rectified its mistake. However he can withdraw
his order of cancellation if it was passed in violation of Statutory provisions.

3.2.4 Immunity Against Criminal Conspiracy in Trade Disputes

The office bearers and members of a registered trade union are given protection against
crininal proceedings for conspiracy under sub-section (2) of section 120 B of the
Indian Penal Code in respect of any agreement made between the members for the
purpose of furthering any such object of the trade union on which its general funds
may be spent unless the agreement is an agreement to commit an offence.
If the members of a registered trade union enter into an agreement to commit an

Union and Mauagement Relations

offence under the criminal laws ox' the country no immunity would be available to
them.
In order to achieve their.objective or to enforce their demands more often the unions
have to resort to strike against employer. The collective action of the members of
trade union in this form amounts to interference with the trade or business of the
employer or with the employment of other workers and amounts to conspiracy. A
strike in furtherance of a trade dispute is protected under section 17 of the Act. But if
it is accompanied with wrongful confinement, assault, mischief or criminal trespass to
person or property of the employer it would not be protected.

3.2.5 Immunity from Civil Suits

Section 18 of the Trade Unions Act affords protection to a registered trade union, its
office bearers or member against civil suits in respect of any act done in contemplation
or furtherance of a trade dispute if the ground is only that such act induces some other
person to break a contract of employment or that it is in interference with trade,
business or employment with some other person or with the right of some other person
to dispose of his capital or labour as he wills.
Protection is further given to a registered trade union against a suit or other legal
proceeding in any civil court in respect of any tortious act done in contemplation or
furtherance of a trade dispute by an agent of the trade union if it is proved that such
person acted without the knowledge of or contrary to express instruction given by the
executive of the trade union (Section 18 (2)). The immunity under this section is
available to both officers, members as well as unions.

3.2.6 Rights and Liabilities of Registered n a d e Unions

a)

Rights to spend general fund : A registered trade union has right to spend its
general funds for any or all of the purposes mentioned in section 15 of the Act.
This section enumerates as many as eleven times for which the funds may be
spent. But, if the fund is spent for any other purpose it will be illegal.

b) Right to constitute a separate fund for political purposes: A registered trade

union in case it decides to do so can constitute a separate fund from contributions
separately levied for or made to a fund for political objects. Payment may be
made from such fund for the promotion of civil and political interests of its
members in furtherance of the objects specified in the Act (Section 16).
c) Right to sue and be sued: A registered trade union may sue and be sued in its
registered name as well as in a representative action.
d) Right to vote: Being a legal entity it can vote through a person authorised by it
in this behalf.
e)

Right to acquire and dispose of property: A registered trade union can sue as a
pauper (having no capacity to pay court fee).

f) Right to acquire and dispose of property: A registered trade union has right to
acquire both movable and immovable property and to dispose of the same under its
registered name. The expenditures for this purpose shall be met from the fund of
the Union.
Liabilities
1) To spend its general funds only for the purposes mentioned in Section 15 of the
Act.
2) Not to compel any members of the trade union to contribute to the Political Fund;
and not to exclude any member who does not contribute to the said fund from any
benefits of the trade union or place him directly ,or indirectly under any disability
or disadvantage as compared to those who contribute to the political fund.

3) To give notice of every change of name or amalgamation to the Registrar.

4) To give notice of the dissolution of a registered trade union within 14 days of the
dissolution to the Registrar.

5) To submit returns, together with the general statement to the Registrar.

Union and Management Relations

Check Your Progress 1

1) What is the minimum number of members prescribed in applying for registration?

..........................................................................................................................................
2) Can the Registrar refuse to register a trade union applying for registration is
identical or nearly resembles with the existing trade union?

.........................................................................................................................................
3) Can the Registrar of trade union cancel the registration for allowing any rule to
continue in violation of the provisions of the Act without giving any prior notice?

..........................................................................................................................................
..........................................................................................................................................
4)

Can the officers of a registered trade union be punished for criminal conspiracy for its
trade union activities?

COLLECTIVE BARGAINING

3.3

3.3.1 Concept and Nature

Collective Bargaining is a method by which problems of wages and conditions of
employment are resolved amicably (although often reluctantly), peacefully and
voluntarily between labour and management. In short it is a technique for voluntary
regulation of industrial relations.
This system is highly developed in industrially advanced countries but in India still a
lot has to be done in this regard. The success of collective bargaining depends on
many factors such as that the Union should not be under the control or influence of the
employer, and employer and the trade union must stand on equal footing to carry on
negotiations. For its success it is necessary that workmen should be united and must be
in a. position to resist exploitation and unjust discrimination.

3.3.2

Processes

The process of collective bargaining is very complicated. It necessitates a great deal of

discussion with a full understanding of others view point. The negotiation in a
collective bargaining depend quite a bit on the ability, intelligence and maneuvering
capacity of the negotiators and on their skillful handling of the issue. He must enjoy
the confidence of his own people and he must be in a position to take a crucial
decision.

3.3.3 Advantages
This means of settling a dispute has the following advantages:
i)

It is quick and efficient

ii) It is democratic

iii) It produces harmonious relationship between employers and workmen.

313.4 Disadvantages
This means of settling a disputes has the following disadvantages:
i)

the ultimate sufferer i.e. consumer is not represented in the negotiation;

ii) it flows more from power politics than from rational thoughts;
iii) in case of failure of negotiations unpredictable consequences may follow.

39

-- -- -

Human Resource Management

Check Your Progress 2

1) Write one sentence to explain collective bargaining.
2) Enumerate one of the important advantages and disadvantages of collective
bargaining.

3.4

RESOLUTION OF INDUSTRIAL DISPUTES

3.4.1 Scope and Applicability of the Industrial Disputes Act

Labour Law plays an important role in regulating the relations between union and
management. Thus, the Industrial Disputes Act, 1947 seeks to ensure industrial peace.
The principal objects of the Act are:
1) the promotion of measures for securing and preserving amity and good relations
between the employer and workmen;

2) an investigation and settlement of industrial disputes, between employers and

employees, employers and workmen, 'or workmen and workmen, with a right of
representation by a registered trade union or a federation of associations of
employers;
3) prevention of illegal strikes and lock-outs;

4) relief to workmen in the matter of lay-off and retrenchment; and

5) collective bargaining.
The Act primarily regulates the relations of employers and workmen. It draws a
distinction between the workmen as such and the managerial or supervisory staff, and
confers benefit on the former only.
It is necessary, therefore, to take the Act as a whole and examine its salient provisions.
The long title shows that the object of the Act is "to make provisions for the
investigation and settlement of industrial disputes, and for certain other purposes:'.
The Act extends to the whole of India, and is applicable to every "industry". It is,
therefore necessary to know the definition of industry. Section 2 (f) defines "industry"
to mean:
Any business, trade, undertaking, manufacture or calling of employers and includes any
calling, service, employment, handicraft or industrial occupation or avocation of
workmen.
The aforesaid definition raises an issue whether hospitals and dispensaries are industry.

3.4.2 Are Hospitals and Pharmacies Industry?

State of Bombay v. Hospital Mazdoor Sabha, (1960) KLJ 251, constitutes a landmark
in labour law. In this case the Supreme Court not only declined to adopt the expression
"analogous to carrying out of a trade or business", but coined a new expression
"systematically" organised i.n a business or trade like manner. In this case J.J. Group of
Hospital (run by the State of Bombay) retrenched two of its ward servants. Against this
order the aggrieved workers moved to the Bombay High Court for the issuance of writ
of mandamus directing their reinstatement. The management i.e. the State of Bombay
contended that the hospital being not an "industry" the Industrial Disputes Act, 1947
was not applicable. 'The om bay' High Court held that the hospital was an "industry".
Aggrieved by this finding the State of Bombay filed an appeal before the Supreme
Court. One of the main issues before the Supreme Court was whether in running the
hospitals, the State was carrying an activity of an."'industry". The Court answered it in
affirmative:

We have yet to decide which are attributes the presence of which makes an activity
an undertaking within Section (j), on the ground that it is analogous to trade or
business. It is difficult to state these possible attributes definitely or exhaustively;
as a working principle it may be stated that an activity systematically or habitually
undertaken for the production or distribution of goods or for the rendering of
material services to the community at large or a part of such community with the
help of employees is an undertaking. Such an 'activity generally involves the cooperation of the employer and the employees and its object is the satisfaction of
material human needs. It must be organised or arranged in manner in which trade
or business is generally organised or arranged. It must not be casual nor must it be
for oneself nor for pleasure. Thus, the manner in which the activity in question is
organised or arranged, the condition of the co-operation between employer and the
employee necessary for its success and its object to render material service to the
community can be regarded as some of the features which are distinctive of
activities to which Section 2 (j) applies. Judged by this test there would be no
difficulty in holding that the State is carrying on an undertaking when it runs the
group of Hospitals in question.
In Lalit Hari Ayurvedic College Pharmacy v. Workers Union, AIR 1960 S.C. 126 the
Supreme Court applied the ratio of Hospital Mazdoor ~ a b k asupra. In this case Lalit
Hari Ayurvedic College was an educational institute in Indian indigenous medicines. It
was running a hospital for the practical training of its students and maintaining a
pharmacy where its students got some training in the preparation and manutacture of
medicines and organisation of Pharmacies. 30% of drugs produced by the Pharmacy
were consumed in the hospital and 70%of drugs worth about Rs. one lakh per annum
were sold in the market. The profits from the sale were apparently used in the
maintenance of the college and its other non profitable activities. On these facts, it was
held that the activity of the appellant in running the pharmacy and hospital was an
"undertaking" under Section 2(j) of the Industrial Disputes Act, 1947.
However, a larger Bench of the Supreme Court in Management of Safdarjung Hospital
v. Kuldip Singh Sethi, AIR 1970 SC 1407, disapproved the decision, in Hospital
.Mazdoor Sabha by holding that a hospital which was run and administered by the
Government was a part of its sovereign functions and, therefore, it was outside the
scope of "industry" and thereby unduly curtailed the scope of the t e n "industry". In
this case three appeals were heard toegether.
In the first appeal a dispute arose between the management of Safdarjung Hospital, a
Government owned and run hospital, and its employzes for the computation of amount
of salary due to workers consequent upon change in the grade. Thereupon the
employees made an application to the Labour Court under Section 33 C (2) of the
Industrial Disputes Act for the recovery of money due from the employer. The Labour
Court directed the hospitd to pay the money due to him. It is against this finding of
the Labour Court that an appeal was filed.
In the second appeal a dispute arose between the Tuberculosis Association of India, (a
research and training institution and its employees relating to pay scales and other
facilities of the employees. The Government referred the dispute to the Tribunal. The
Tribunal held that "neither the research carried out nor the training imparted nor the
existence of Tuberculosis Association of India with which the hospital is affiliated
makes any difference and the hospital is an industry within the meaning of the Act."
Against this order the appeal was filed to the Supreme Court.
In the third appeal the management of Kurji Holy Family Hospital, Patna (a wholly
charitable hospital maintaining some paid beds) took disciplinary action against two of
its employees. The dispute was referred by the State of Bihar to Labour Court under
Section 10 of the Act. The management raised the preliminary objection that they were
not engaged in "industry" and consequently Labour Court had no jurisdiction. Against
this a writ petition was made to the Patna High Court which held that it was an
"industry". It was against this decision that an appeal was filed to the Supreme Court.
The common question involved in all the three appeals was whether the activities
carried on by these hospitals were "industry"? The Court formulated the following test
to determine whether or not an activity is an "industry":

Unio"andManagementRe'atiom

Human Resource Management

i)

It is not necessary to view the definition in two parts. 'The definition read as a
whole denotes a collective enterprise in which employers and employees are
associated. It does not exist either by the employers alone or by employees alone.
It exists only when there is a relationship between employers a i d employees, the
former engaged in business, trade, undertaking, manufacture or calling of
employers and the latter engaged in any calling, service, employment, handicraft, or
industrial occupation or, avocation

ii) The word "Industry" in (the definition of 'workmen') must take its colour from the
definition (of industry) and discloses that a workman is to be regarded as one
employed in an "industry" if he is following one of the vocations mentioned in
conjunction with his employers engaged in the vocations mentioned in relation to
the employers.
iii)

... in the collocation of the terms and their definitions these terms have a definite
economic content of a particular type and on the authorities of this Court have
been uniformly accepted as excluding professions and are only concerned with the
production, distribution and consumption of wealth and the production and
availability of material services. Industry has thus been accepted to mean only trade
and business, manufacture, or undertaking analogous to trade or business for the
production of material goods or wealth and material services.

iv) Material services are not services which depend wholly or largely upon the
contribution of professional knowledge, skill or dexterity for the production of
result. Such services.. . are services no doubt but not material services. Material
services involve an activity carried on through co-operation between employers and
employees to provide the community with the use of something such as electric
power, water, transportation, mail delivery, and the like.. . the emphasis is.. . upon
the productivity of a service organised as an industry and commercially valuable. It
is the (commercial character of the activity and) the production of ... something (of
benefit to particular individuals rendered by all services) which is described as the
production of material services.
In the light of aforesaid test the court concluded that the Hospital Mazdoor Sabha
wrongly held: (i) that the "second part of the definition contained an extension of the
first part by including other items of industry", (ii) that economic activity was not an
essential part of the concept of industry; (iii) that an economic activity could not exist
without the presence of capital or profit making or both; (iv) that the test namely, "can
such activity be carried on by private individuals or group of individuals," applied to
the facts of the case.
The aforesaid principle was reiterated in Management of Hospital, Orissa v. Their
Workmen, 1971 Lab. I.C. 835. In this case a dispute arose regarding the conditions of
service of employees employed in hsopitals, sanatorium and infectious ward owned and
run by the government. The Government of Orissa made three references to the
Tribunal of adjudication. The Tribunal in all three cases held that the activities of the
hospitals, sanatorium and infectious ward were "industry". Against this finding the
management of the hospitals preferred an appeal before the Supreme Court. The
question arose whether the aforesaid activities run by the government were "industry"?
The Supreme Court following the decision in Safdarjung Hospital case held that the
aforesaid activities were not "industry" because it was being run as a part of the
functions of the Government and were being run as department. It further held that the
"mere fact that payment was accepted in respect of some beds.. . could not.. . (lead) to
the inference that the hospitals (were run as a business in a commercial way. Primarily,
the hospitals (were) meant as free service by the Government to the patient, without
any profit motive."
The principle enunciated in Safdarjung Hospital supra was once again followed and
applied by the Supreme Court in Dhanrajgiri Hospital v. Workmen, (1975) 2LLJ 409.
The hospital run by a Charitable Trust was engaged in imparting training in general
nursing and midwifery. There were good number of trainees in general nursing and
midwifery. There were also good number of trainqs beds in the hospital meant for
their practical training. The hospital was not distinct or separate from training nurses.
The patients were charged according to their financial conditions and there was no
42

regular charge fixed for a patient. On these facts the Supreme Court held that the
hospital was not engaged in any "industry" under the IDA.

Union and Management Relatiom

The seven Judge bench of the Supreme Court in Bangalore Water Supply and
Sewerage Board v. Rajappa after careful consideration of expressions used in the
definition of 'industry', traditional attributes of trade or busines i.e. capital and profit
motive, statements of International Labour Organisation in respect of industry, purposes
and provisions of the legislation as a whole. Indian as well as foreign rulings, keeping
in view the directive principles of State policy the following tests to determine the
scope of "industry".
.

I.

'Industry', as defined in Section 2 (j)has a wide import.

a)

Where (i) systematic activity. (ii) organised by'co-operation between

employer and employee (the direct and substantial element is chimerical),
(iii) for the production andlor distribution of goods and services calculated to
satisfy human wants and wishes (not spiritual or religious but inclusive of
material things or services geared to celestial bliss i.e., making. on a large
scale prusad or food) prima facie, there is an industry in that enterprise.

b)

Absence of profit motive or gainful objective is irrelevant, be the venture in

the public, joint, private or other sector.

c)

The true focus is functional and the decisive test is the nature of the activity
with special emphasis on the employer-employee relations.

d)

If the organisation is a trade or business it does not cease to be one because

of philanthrophy animating the undertaking.

11. Although Section 2 (j) uses words of the widest amplitude in its two limbs, their
meaning cannot be magnified to overreach itself.
a)

'Undertaking' must suffer a contextual and associational shrinkage as

explained in Banerji and in this judgment; so also, service, calling and the
like. This yields the inference that all organised activity possessing the triple
elements in I (supra), although not trade or business, may still be 'industry'
provided the nature of the activity, viz. the employer-employee basis, bears
resemblance to what we find in trade or business. This takes into the fold
'industry' undertakings, calling and services, adventures 'analogous to the
carrying on of trade or business'. All features, other than the methodology of
carrying on the activity viz., in organising the co-operation between
employer and employee, may be dissimilar. It does not matter, if on the
employment of terms there is analogy.

111. Application of these guidelines should not stop short of their logical reach in
invocation fo creeds, cults or inner sense of incongruity or outer sense of
motivation for or resultant of the economic operations. The ideology of the Act
being Industrial peace, regulation and resolution of industrial disputes between
employer and workmen, the range of this statutory ideology must inform the reach
of the statutory definition. Nothing less, nothing more.
a)

The consequences are (i) professions, (i3 clubs, (iii) educational institutions,
(iv) co-operatives. (v) research institutes. (vi) charitable projects, and (vii)
other kindred adventures, if they fulfil the triple tests listed in I (supra).
cannot be exempted from ths scope of Section 2 (i).

b)

A restricted category of professions, clubs, co-operatives and even gurukulas

and little research labs, may qualify for exemption if, in simple ventures,
substantially and going by the dominant nature criterion, substantively, no
employees are entertained but in minimal matters, marginal employees are
hired without destroying the non-employee character of the unit.

c)

If, in a pious or altruistic mission many employ themselves, free or for small
honoraria or like return, mainly drawn by sharing iy, the prupose or cause.
such as lawyers volunteering to run a free legal service, clinic or doctors
serving in their spare hours in free medical centre or ashramites working at
the bidding of the holiness, divinity or like central personality. and the
services are supplied free or at nominal c o g and those who serve are not

43

Human Resource Management

engaged for remuneration or on the basis of master and servant relationship,

then, the institution is not an industry even in stray servants, manual or
technical, are hired. Such elemosynary or like*undertakings alone are exempt
not other generosity, compassion, developmental passion or project.

IV. The dominant nature test:

a)

Where a complex of activities, some of which qualify for exemption, others

not, involves employees on the total undertaking, some of whom are not
'workmen' as in the University of Delhi case or some departments are not
productive of goods and services if isolated, even then, the predominant
nature of the services and the integrate nature of the departments as explained
in the Corporation of Nagput, will be the true test. The whole undertaking
will be 'industry' although those who are not 'workmen' by definition may
not benefit by the status.

b)

Notwithstanding the previous clauses, sovereign functions, strictly, understood

(alone) qualify for exemption, not the welfare activities or economic
adventures undertaken by government or statutory bodies.

c)

Even in departments discharging sovereign functions, if there are units which

are industries and they are substantially severable, then they can be
considered to come within Section 2 6).

i
iI
I
1

d)

Constitutional and competently enacted legislative provisions may well

remove from the scope of the Act categories which otherwise may be covered
thereby.

On the basis of principles laid down in the case the Supreme Court has overruled the
cases whose ratio runs counter to the principles enumerated in this case. However, the
.
State of Bombay v. Hospital Mazdoor Sabha has been rehabilitated.

3.4.3 Coverage

The Industrial Disputes Act, 1947 covers all persons employed in any industry to do
any skilled, or unskilled, manual, technical, operational, clerical or supervisory work are
workmen within the meaning of this Act. It includes any apprentice. They may be
employed for hire or reward and their contract of employment may be express or
implied. It has been expressly provided that for the purposes of any proceeding under
this Act such as conciliation proceedings etc. in relation to an industrial dispute it
includes any such person who has been dismissed, discharged or retrenched in
connection with or as a consequence of that industrial dispute or. whose dismissal,
discharge or retrenchment has led to that dispute. However, persons employed in
managerial and administrative capacities and those employed In Army, Air Force, Navy,
Police, Prison and Civil Service are excluded.

3.4.4 Industrial Dispute and Individual Dispute

The Industrial Dsiputes Act, 1947 seeks to resolve industrial disputes. Section 2 (k) of the
Industrial Dsiputes Act, 1947, defines "industrial dispute" to mean:
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.
The dimensions of the aforesaid definition determine the permissible area of both
community intervention in industrial relations as well as labour activity.
Stated broadly, the definition of "industrial dispute" contains two limitations (i) The
adjective "Industrial" relates to the dispuie of an industry as defined in the Act, and
(ii) it expressly states that not all sorts of dispute and differences but only those
which bear upon the relationship of employers and workmen regarding
employment, non-employment, terms of employment and conditions of labour are
contemplated.
44

The above definition covers only collective disputes or disputes supported by trade
unions or by substantial number of workmen. In Section 2A which came into force on

1st December, 1965 it is provided that dispute or difference between an individual

workman and his employer connected with or arising out of (i) discharge, (ii) dismissal,
(iii) retrenchment, (iv) or otherwise termination of service of an individual workman,
shall be deemed to be an "industrial dispute" even though no fellow workmen or any
union of workmen is a party to the said dispute. The net effect of Section 2A is that
by legislative action such a dispute is deemed to be an industrial dispute even where it
is not espoused by a trade union or appreciable number of workmen. Thus, the result
of the insertion of Section 2A $as that, what was not an "industrial dispute" as per the
interpretation of the Supreme Court would be deemed to be an "industrial dispute" in
the stated circumstances.

3.4.5 Dispute Settlement Machinery

Under the Industrial Disputes Act, 1947 the following authorities are mentioned:

II

1) The Works Committee;

2) Conciliation Officer;
3) Board of Conciliation;
4) Courts of Enquiry
5) Labour Courts;

6) Industrial Tribunals; and

7) National Tribunals

8) Voluntary Arbitration
I ) The Works Committee

In order to prevent industrial disputes the appropriate Government may, require the
employer employing one hundred or more workmen in the industrial establishment on
any day in the preceding twelve months to constitute a works committee. It consists of
the representatives of the employer and workman in the establishment who is required
to discuss the day to day matters in a cordial way. The duty of the works committee,
according to section 3 is to promote measures for securing and preserving amity and
good relations between the employer and his workmen. It can comment upon the
matter of common interest. Its primary duty, therefore, is to prevent the disputes.
2) Conciliation Officer
The appropriate Government is empowered to appoint as many conciliation officers as
it may think fit by a notification in the official Gazette. They shall be charged with
the duty of mediating in and promoting the settlement of Industrial Dispute. A
conciliation officer may be appointed for a specified area or for specified industries, in
a specified area for one or more industries. He may be appointed for a limited period
or permanently (Section 4). Where an Industrial Dispute exists or is apprehended
conciliation officer may, and if a dispute relates to a public utility service, in which a
notice of strike or lock-out has been given under Section 22, shall hold conciliation
proceeding in the manner prescribed without any delay. He will investigate the
dispute and all matters which may affect its merits. He may do all those things which
he may think proper for inducing the parties to come to a fair, and amicable settlement
of the dispute. He shall send a report to the appropriate Government if a settlement is
, arrived at;) He shall send a memorandum of the settlement, duly signed by him and by
the parties to the dispute. In the event of there being no settlement he shall forward a
full account in the shape of a report to the appropriate Government giving details of
the steps taken by him for bringing about a settlement thereof. He shall also state in
his report the facts and circumstances and the reasons on account of which the parties
could not come to a settlement. The report shall be submitted within fourteen days
from the'date of the commencement of the conciliation proceedings or within such
shorter period as may be fixed by the appropriate Government. Such period may be
extended by a written agreement between the parties. On receipt of such a report, the
appropriate government may make a reference to a Board, Court or ~ribunal.'~nthe
alternative, the Government shall record and communicate to the parties its reasons for
not making a reference.

Union and Management Relations

Human Resource Management

3) Board of Conciliatiorr
The appropriate Government may by notification in the Official Gazette, constitute a
Board of Conciliation for promoting the settlement of an industrial dispute (Section 5).
The Board shall investigate the dispute and all matters affecting the matters and right
settlement thereof, It may do all such things as it thinks fit for the purpose of
inducing the parties to come to a fair and amicable settlement of the dispute. If a
settlement is arrived at, the Board shall send a report to the appropriate Government,
together with a memorandum of settlement, signed by the parties to the disputes. If a
settlement could not be reached, the Board shall send a report to the appropriate
Government, with full details of the steps taken by it and the facts and circumstances
and the reasons why a settlement could not be arrived at. He shall also forward his
recommendation for the settlement of the dispute. Such a report should be submitted
within 2 months or within such shorter period as may be fixed by the Government.
This time may be extended by the parties or by Government as and when necessary.
On receipt of the report of the Board, the appropriate Government may make a
reference to a Court or a Tribunal for enquiry and adjudication. If such a report of the
Board is about a Public Utility Service, and the appropriate Government does not make
a reference to a Labour Court, Tribunal or National Tribunal, it shall record its reasons
and communicate them to the parties to the dispute.
4) Court of Inquiry
The appropriate Government may constitute a Court of Inquiry as occasion arises, for
inquiring into any matter appearing to be connected with or relevant to an industrial
dispute (Section 6). A Court of Inquiry shall inquire into the matters referred to it and
report thereon to the appropriate Government ordinarily within a period of six months
from the commencement of its inquiry (Section 14).
5) Labour Court-Constitution
Under Section 7 the appropriate government is empowered to constitute one or more
Labour Court for the same area and in that case their powers and functions shall be
determined by the appropriate government itself.
A Labour Court consists of one person who is known as the presiding officer of the
Labour Court. A person is not qualified for appointment as the presiding officer of the
Labour Court unless:

i)

he is or has been a judge of the High Court, or

ii) has been for a period of not less than three years, been a district judge or an
Additional District Judge; or
iii) he has held any judicial office in India for not less than seven years; or
iv) he has been the presiding officer of a Labour Court constituted under any
Provincial Act or the State Act for not less than five years.

Jurisdiction, Powers and Functions

The Labour Court is required to

i)

Adjudicate on industrial dispute relating to any matter specified in the second

schedule.

ii) Perfornl such other functions as may be assigned to them under the Act.
iii) Adjudicate on matter incidental to the matters enumerated in the second schedule.
The matters specified in the second schedule are as follows:

1) Propriety or legality of an order passed by an employer under the standing orders.

2) The application and interpretation of standing orders.
3) Discharge or dismissal of workmen including reinstatement of or grant of relief to
workmen wrongfully dismissed.

4) Withdrawal of any customary concession

01

privilege.

5)

Illegality or otherwise of strike or lock-out; and

Union and Management Relations

6) All matters other than those specified in the third schedule of the Act.
6) Industrial Tribunal
Under Section 7A of the appropriate government may by notification in the official
Gazette constitute one or more Industrial Tribunals for the adjudication of disputes. A
tribunal shall consist of one person only to be appointed by the appropriate
government. An Industrial Tribunal may be appointed for a limited period on an
ad hoc basis or permanently. A person is not qudified for appointment as the presiding
officer of a Tribunal unless:
a) he is or has been a judge of a High Court, or
b) he has for a period of not less than three years been a District Judge or an
Additional District Judge, or
c) he has been a presiding officer of a Labour Court for not less than five years,
or
d) he has held an office not lower than that of an Assistant Labour Commissioner for
not less than ten years and holds degree in law.
The Industrial Tribunal may be assisted, if the appropriate government may deem fit,
by two persons to be known as assessors to advise the Tribunal in the proceeding
before it.
Functions
The Industrial Tribunal exercises the following functions:
i)

to adjudicate industrial disputes relating to any matter whether specified in the the
third schedule of the Act.

ii) to adjudicate matters which are in the form of new demands giving rise to an
industrial dispute affecting the working of the establishment and referred to it.
iii) to adjudicate upon matters incidental to the matters specified in the third schedule.
Matters mentioned in the third schedule:
i)

Wages, including the period and mode of payment.

ii) Compensatory and other allowances.

iii) Hours of work and rest 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) Rationalisation.
x) Retrenchment of workmen and closure of establishment; and
xi) Any other matter that may be prescribed.
Disqualification for the presiding officer of the Labour Courts or Industrial
Tribunals:
No person can be appointed to or continue in the office of the presiding officer of a
Labour Court or Tribunal if:
a) he is not an independent person;
b) he has attained the age of sixty five years
Powers of Labour Court and Tribunals: The Labour Courts and Tribunals are
empowered to give relief to the aggrieved person in respect of matters enumerated in

47

Human Resource Management

the second or in the third schedule of the Act. For the purpose of giving relief these
authorities can exercise the following powers:
i)

it may follow such procedure as it may think fit;

ii) the presiding officer for the purpose may, after giving reasonable notice, enter the
premises occupied by any establishment to which the dispute relates;.
iii) it can exercise the powers of a civil court in respect of the following matters
namely:
a)

enforcing the attendance of any person and examining him on oath

b)

compelling the production of documents and material objects

C)

issuing commissions for examination of witness

d)

in respect of such other matters as may be prescribed

iv) it can appoint assessor or assessors to advise it in the proceeding before it.
7) National Tribunal
The powers to constitute a National Tribunal vest only with the Central Government
under Section 7 B. The pre-condition for co~stitutinga National Tribunal are two
namely: (i) the industrial dispute in question should involve questions of national
importance and (ii) the industrial dispute should be of such nature that industrial
establishments in more than one state are likely to be interested or affected bjr such
dispute. When a reference is made under Section 10, sub-section (7A) to a National
Tribunal, Labour Courts and Industrial Tribunals are barred from entertaining the
disputes and if any such dispute is pending before any Labour Court or Tribunal shall
be deemed to be quashed. Section 15 lays down that where an industrial dispute has
been referred by the Central Government to a National Tribunal for adjudication, it
shall hold its proceedings expeditiously and shall submit the award to appropriate
government as soon as possible.
The National Tribunal'is to consist of one person only 'to be appointed by the Central
Government. Under sub-section (4) of section 7B the power has been given to Central
Government in fit cases, to appoint two assessors to advise the National Tribunal in the
proceedings before it.
Qualifications for Appointment as Presiding Officer: A person who ;s or has been a
judge of a High Court is qualified to be appointed a presiding officer.
Disqualification: A person is disqualified to be appointed as presiding officer under
Section 7C, if:
a)

he is not an independent person; or

b)

he has attained the age of sixty five years

8) Voluntary Arbitrator

Under Section 10 A the employer and employee may agree to refer before a voluntary
arbitrator. But such reference must be made before a reference is made by the
appropriate government to the Labour Court, Tribunal of National Tribunal.

Check Your Progress 3

1) Is it necessary for employer to constitute works committee In indubtrid
establishment employing less then 100 workmen?

2 ) Is it mandatory for concilidtion office to intervene and hold concilidtron

proceedings where workers are on strike in a nnn-public utility concern'?
4Q

Union and Management Relations

3) Whether the law prescribes any time limit for submission of report by court
of inquiry7

3.5 STRIKES

AN^ LOCK-OUTS

Strike is most important weapon in the hands of the workmen to force the employers
to concede to their demands. It is a necessary safety value in industrial relations when
properly resorted.
Section 2 (q) of the Industrial Disputes Act, 1947 defines strike to mean:
a) Cessation of work by a body of persons employed in any industry acting in
combination; or
b) a coi~certedrefusal of any number of persons who are or have been employed in
industry to continue to work or to accept employment; or
c) a refusal under a common understanding of any number of persons who are or
have been employed in industry to continue to work or to accept employment.
Lock-out: The expression 'lock-out' is defined in Section 2 (1) of the Act. It means
the temporary closing of a place of establishment or the suspension of work or the
refusal by the employer to continue to employ any number of persons employed by
him.

The ingredients of a lock-out are:

i)

temporary closing of a place of employment by the employer; or

ii) suspension of work by the employers; or

iii) refusal by an employer to continue to employ any number of person employed by
him.
Prohibition on strikes and lock-out in public utility services
1) No person in a public utility service shall go on strike in breach of contract.

a) without giving notice of strike to the employer as here in after provided within
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 proceeding before a conciliation officer
and seven days after the conclusion of such proceedings.
2) Similarly no employer carrying on any public utility service shall lock-out any of
his workmen:
a) without giving them notice of lock-out within six weeks before locking out; 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 tendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.
3) But no notice of strike or lock-out shall be necessary whexe there is in existence a
lock-out or strike in the public utility service establishment. But the employer shall

49

Human Resource Management

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.
4) The notice of .strike or lock-out should be given by such number of persons to
such person or persons and in such manner as may be specified by the appropriate
Government.

5) If on any day an employer receives from any person employed by him any such
notices or gives to any persons employed by him any such notices, he shall within
five days thereof report to the appropriate Government or to such authority as that
Government any prescribe the number of such notices received or given on that
day.
The conditions specified in Section 22 are mandatory and non-observance of them will
render the strike or lock-out illegal.

General prohibition on strike or lock-out (Section 23)

No workman employed in any industrial establishment shall go on strike in breach of
contract and no employer of any such workman shall declare a lock-out:
a) during the pendency of conciliation proceedings before a conciliation Board and
seven days after the conclusin of such proceedings;
b) during the pendency of proceedings before .a Labour Court Tribunal or National
Tribunal and two months after the conclusion of such proceedings;
c) during the arbitration proceedings before an arbitrator and two months after the
conclusion of such proceedings where a notification has been issued under section
10A (3A); or
d) during any period in which a sittlement or award is in operation in respect of any
of the matters covered by the settlement or award.
The prohibitions mentioned in Section 23 are applicable to all the industrial
establishments whether it is a public utility service or otherwise.

Illegality of strike and lock-out (Section 24)

A strike or lock-out is illegal if:
1) i)
ii)

it is commenced or declared in contravention of Section 22 or Section 23; or

it is continued in contravention of an order made under sub-section (3) of
Section 10 or sub-section (4A) of Section 10A.

2) Where a strike or lock-out in pursuance of an industrial dispute has already

commenced and is in existence at the time of reference of the dispute to a Board,
an Arbitrator. Labour Court, Tribunal or National Tribunal, the continuance of
such strike or lock-out shall not be deemed to be illegal provided that such strike
or lock-out was not at its commencement in contravention of the provisions of the
Industrial Disputes Act or the continuance there of was not prohibited under
sub-section (3) of Section 10 or sub-section (4A) of Section 10A.
A lock-out declared in consequence of an illegal strike or a strike declared in
consequence of an illegal lock-out shall not be deemed to be illegal.

Prohibition of financial aid to illegal strikes and lock-out

No person shall knowingly expend or apply any money in direct furtherance or support
of any illegal strike or lock-out (Section 25).

Punishment for illegal strike or lock out

1)

50

i)

Any workman who commences, continues or otherwise acts in direct

furtherance of an illegal strike shall be punishable with imprisonment, which
may extend to one month or with fine which may extend to fifty rupees or
with both;

ii)

Any employer who commences, continues or otherwise acts in furtherance of

1
I

1
4
I

an illegal lock-out shall be punishable with imprisonment for a term which

may extend to one month or with a fine which may extend to one thousand
rupees or with both (Section 26).

Union and Management Relations

2) Any person who instigates or incites others to take part in or acts in furtherance of
a strike or lock-out which is illegal under this Act shall be punishable with
imprisonment for a term which may extend to six months or with a fine which
may extend to one thousand rupees or with both (Section 27).
3)

Anv person who knowingly expends or applies any money in direct furtherance or
support of any illegal strike or lock-out shall be punishable with imprisonment or a
term which may extend to six months or with a fine which may extend to one
thousand rupees or with both (Section 28).

Check Yoi~rProgress 4
1) Is it necessary to give notice of strike in public utility services?

2) Can a workman go on strike in a non-public utility service during the pendency

of conciliation officer?

3)

What is the penalty prescribed for illegal strike under the-Industrial Disputes
Act, 1947?

3.6 TERMINATION OF SERVICE AND DOMESTIC

ENQUIRY
3.6.1 General
Under the common law an employer had a right to discharge or dismiss an employee,
or what is popularly known in some countries as the right to "hire and fire". This right
has been subjected to statutory restrictions and judicial decisions. There are three
accepted fundamental principles, namely, (1) that an industrial worker must be placed in
such a position that the security of his service may not depend upon the caprice or
arbitrary will of the employer, (2) that industrial peace should be maintained, and
(3) that industry should be efficiently managed. These principles underlie the
Industrial Employment (Standing Order) Act, 1946, the Industrial Disputes Act, 1947
and other local statutes of a like nature. The former Act makes it obligatory on
employers of large establishments employing 100 workers or more to have standing
orders following a model pattern certified by the appropriate authority. They are to be
regarded as conditions of service by which both employers and employees are to be
governed. When the services of an industrial worker are terminated an industrial
dispute can be raised under the Industrial Disputes Act, for it would be a question of
"employment and non-employment" and it would be competent for the industrial
tribunal to determine whether the termination of service is justified.

3.6.2 Statutory Protection

The Model Standing Orders under Schedule-I of the Industrial Employment (Standing
Order) Central Rules, 1946 of inter alia, regulates termination of employment.
1) For terminating employment of a permanent workman, notice in writing shall be
given either by the employer or the workman--one month notice in the case of
monthly rated workmen and two weeks notice in the case of other workmen; one

51

Human ~ i s o u r c eManagement

month or two weeks pay, as the case may be, may be paid in lieu of notice.
2) No temporary workman whether monthly rated, weekly rated or piece-rated and
non probationer or badli shall be entailed to any notice or pay in lieu thereof if his
services are terminated, but the services of a temporary workman shall not be
terminated as a punishment unless he has been given an opportunity of explaining
the charges of misconduct alleged against him in the manner prescribed in
paragraph 14.

3) Where the employment of any workman is terminated, the wages earned by him
and other dues, if any, ihall be paid before the expiry of the second working day
from the day on which his employment is terminated.
Disciplinary action for misconduct
1) A workman may be fined up to two per cent of his wages in a month for the following
acts and omissions, namely: (The form here leaves blanks to be filled).
2) A workman may be suspended for a period not exceeding four days at a time, or
dismissed without notice or any compensation in lieu of notice, if he is found to be
guilty of misconduct.
3) The following acts and omissions shall be treated as misconduct:
Willful insubordination or disobediende, whether alone or in combination with
others, to any lawful and reasonable order of a superior,
Theft, fraud, or dishonesty in connection with the employer's business or
property.
Willful damage to or loss of employer's goods or property,
Taken or giving bribes or any illegal gratification,
Habitual absence without leave, or absence without leave for more than 10
days,
Habitual late attendance,
Habitual breach of any law applicable to the establishment,
Riotous or disorderly behaviour during working hours at the establishment or
any act subversive of discipline,
Habitual negligence or neglect of work,
Frequent repetition of any act or omission for which a fine may be imposed to
a maximum of 2 per cent of the wages in a month (see 14 (I) above).
Striking work or inciting other to strike work in contravention of the provision
of any law, or rule having the force of law.
Where a disciplinary proceeding against a workman is contemplated or is pending
or where criminal proceedings against him in respect of any offence are under
investigation or trial and the employer is satisfied that it is necessary or desirable
to place the workman under suspension, he may, by order in writing suspend him
with effect from such date as may be specified in the order. A statement setting
out in detail the reason for such suspension shall be supplied to setting out in
detail the reasons for such suspension shall be supplied to the workman within a
week from the date of suspension.

A workman who is placed under suspension shall be paid subsistence in accordance

with the provisions of Section 10A of the Act.
ba) In the inquiry, the workman shall be entitled to appear in person or to be
represented by an office-bearer of a trade union of which he is a member.
bb) The proceedings of the inquiry shall be recorded in Hindi or in English
or in the language of the state where the industrial establishment is
located, whichever is preferred by the workman.
bc) The proceedings of the inquiry shall be completed within a period of
three months.

Provided that the period of three months may, for reasons to be recorded in
writing, be extended by such further period as may be deemed necessary by
the inquiry officer.
c)

If on the conclusion of the inquiry or, as the case may be, of the criminal
proceedings, the workman has been found guilty of the charges framed against
him and it is considered, after giving the workman concerned a reasonable
opportunity of making representation on the penalty proposed, that an order of
dismissal or suspension or fine or stoppage of annual increment or reduction in
rank would meet the ends of justice, the employer shall pass an order accordingly.
Provided that when an order of dismissal is passed under this clause the
workman shall be deemed to have been absent from duty during the period of
suspension and shall not be entitled to any remuneration for such period, and
the subsistence allowance already paid to him shall be recovered:
Provided further that where the period between the date on which the
workman was suspended from duty pending the inquiry or investigation or
trial and the date on which an order of suspension was passed under this
clause exceeds four days, the workman shall be deemed to have been
suspended only for four days, or for such shorter period as is specified in the
said order of suspension and for the remaining period he shall be entitled to
the same wages as he would have received if he had not been placed under
suspension, after deducing the subsistence allowance paid to him for such
period.
Provided also that where an order imposing fine or stoppage of annual
increment or reduction in rank is passed under this clause, the workman shall
be deemed to have been on duty during the period of suspension and shall be
entitled to the same wages as he would have received if he had not been
placed under suspension, after deducting the subsistence a)lowance paid to him
for such period.
Provided also that in the case of a workman to whom the provisions of clause
(2) or Article 311 of the Constitution apply, the provision of that article shall
be complied with.
a

d)

If on the conclusion of the inquiry, or as the case may be, of the criminal
proceedings, the workman has been found to be not guilty of any of the charges
framed against him, he shall be deemed to have been on duty during the period
of suspension and shall be entitled to the same wages as he would have received
if he had not been placed under suspension after deducting the subsistence allowance
paid to him for such period.

e)

The payment of subsistence allowance under this standing order shall be subject
to the workman concerned not taking up any employment during the period of
suspension.

5) In awarding punishn;ent under this standing order, the authority imposing the punishment
shall take into account any gravity or the misconduct, the previous record, if any, of
the workman and any other extenuating or aggravating circumstances, that may exist.
A copy of the order passed by authority imposing the punishment shall be supplied to
the workman concerned.

6) A workman aggrieved by an order imposing punishment may within twenty one days
from the date of receipt of the order, appeal to the appellate authority.
Industrial Disputes Act, 1947
Under Section 11A of the Act the Tribunal has power in cases wherever necessary to
set aside the order of discharge or dismissal and direct reinstatement of the workman
on such terms and conditions, if any, 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 as the circumstance of the case may require. The Supreme Court while
delineating the contour of Section 11A laid down the following principles to regulate
the management's power to take disciplinary action.

Union and Management Relations

Human Resource Management

1) The right to take disciplinary action and to decide upon the quantum of punishment
are mainly managerial functions, but if a dispute is referred to a tribunal, the latter
has power to see if action of the employer is justified.
2) Before imposing the punishment, an employer is expected to conduct a proper
enquiry in accordance with the provisions of the Standing Orders, if applicable, and
principles of natural justice. The enquiry should not be an empty formality.

3) When a proper enquiry has been held by an employer, and the finding of
misconduct is plausible flowing from the evidence adduced at the said enquiry, the
Tribunal has no jurisdiction to sit in judgement over the decision of the employer
as an appellate body. The interference with the decision of the employer will be
justified only when the findings arrived at in the enquiry are perverse or the
management is guilty of victimisation, unfair labour practice or mala Ede.
4) Even if no enquiry has been held by an employer or if the enquiry held by him is
found to be directive, the Tribunal in order to satisfy itself about the legality and
validity of the order, had to give an opportunity to the employer and employee to
adduce evidence before it. It is open to the employer to adduce evidence for the
first time justifying his action, and it is open to the employee to adduce evidence
contra.

5) The effect of an employer not holding an enquiry is that the Tribunal would not
have to consider only where there was a prima facie caw. On the other hand, the
issue about the merits of the impugned order of dismissal or discharge is at large
before the tribunal and the latter, on the evidence adduced before it, has to decide
for itself whether the misconduct alleged is proved. In such cases, the point about
the exercise or managerial functions does not arise at all. A case of defective
enquiry stands on the same footing as no enquiry.
6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first
time in justification of the action taken only, if no enquiry has been held or after
the enquiry conducted by an employer found to be defective.
- '

7) It has never been recognised that the Tribunal should straight away, without
anything more, direct reinstatement or a dismissed or discharge employee, once it
is 'found that no domestic enquiry has been held or the said enquiry is found to be
defective.
8) An employer, who wants to avail himself of the opportunity of adducing evidence
for the first time before the Tribunal to justify his action, shohld ask for it at the
appropriate stage. If such an opportunity is asked for, the Tribunal has no power
to refuse. The giving of an opportunity to an employer to adduce evidence for the
first time before the Tribunal is in the interest of both the management and the
employee and to enable the Tribunal itself to be satisfied about the alleged
misconduct.

9) Once the misconduct is proved either inathe enquiry conducted by an employer or

by the evidence placed before a Tribunal for the first time, punishment imposed
cannot be interfered with by the Tribunal except in cases where the punishment is
so harsh as to suggest victimisation.
10) In a particular case, after setting aside the order of dismissal whether a workman
should be reinstated or paid compensation is, as held by this court in the
management of Panitole Tea Estate vs. The Workmen, 1971-1 SCC 742 = (AIR
1971 SC 2171) within the judicial decision of a Labour Court or Tribunal.

dheck Your Progress 5

1) Is it necessary for the employer to conduct proper managerial enquiry in the
accordance with the standing orders, if applicable before taking disciplinary action?

2) Is it necessary for the employer to follow the principles of natural justice before
taking disciplinary action?

.......................................................................................................................................

Union and Management Relations

.) Whether Tribunal has power to allow the parties to adduce fresh evidence if no

enquiry has been held?

3.7 SEXUAL HARASSMENT OF WOMEN AT WORK

PLACE
With the increasing awareness and emphasis on gender justice, there is increase in the
effort to guard against such violations and the resentment towards incidents of sexual
harassment is also increasing.
In Vishake v State of Rajasthan, 1992 LLR 991, the Supreme Court not only explained
the concept of sexual harassment but laid down the following guidelines to be observed
by the employers-in work places as well as other responsible persons or institutions to
ensure prevention of sexual harassment of women. According to the Court the
fundamental right to cany on any occupation, trade or profession depends on the
availability of a safe working environment. Right to life means life with dignity. The
primary responsibility for ensuring such safety and dignity through suitable legislation,
and the creation of a mechanism for its enforcement, is of the legislature and the
.
executive. When however, instance of sexual harassment resulting in violation of
fundamental rights of women workers under Article 14, 19 and 21 of the Constitution
are brought before us for redress under Article 32 of the Constitution an effective
redressal requires that some guidelines should be laid down for the protection of these
rights to fill the legislative vacuum. It is necessary and expedient for employers in
work places as well as other responsible persons or institutions to observe certain
guidelines to ensure the prevention of sexual harassment of women.
Duty of the employer or other responsible persons in work places and other
institutions
The Supreme Court ruled that it shall be the duty of the employer or other responsible
persons in work places or other institutions to prevent or deter the commission of acts
of sexual harassment and to provide the procedures for the resolution, settlement or
prosecution of acts of sexual harassment by taking all steps required.
While dealing with the third party harassment the court held that where sexual
harassment occurs as a result of an act or omission by any third party or outsider, the
employer and person in charge will take all steps necessary and reasonable to assist the
affected person in terms of support and prevention action.
Check Your Progress 6

1) Whether a man or woman would chair the complaint committee in case complaint
about sexual harassment is made?

.......................................................................................................................................
)

Is it necessary for the employer to prevent third party harassment'!

.) Is private employer also bound to follow the norms laid down by the Supreme

Court in regard to prevention of sexual harassment?

Human Resource Management

3.8

LET US SUM UP

From the above study, you may draw several conclusions. The Trade Unions Act,
1926, Industrial Disputes Act, 1947 and the Industrial Employment (Standing Orders)
Act, 1946 seek to regulate the union and management relations. Further the judicial
decisions seek to prevent sexual harassment of women workers.

3.9 ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress 1
1) 7
2) Yes
3) No
4) No
Check Your Progress 2
1) It is a technique for voluntary regulation of industrial relations.
2) The important advantage is that it is quick and efficient and the
disadvantage is that the ultimate sufferer is consumer.
Check Your Progress 3
1) Yes
2) No
3) One month imprisonment or fifty rupees fine or both
Check Your Progress 4
1) No
2) No
3) 6 months
Check Your Progress 5
1) Yes
2) Yes
3) Yes
Check Your Progress 6
1) Woman
2) Yes
3) Yes

3.10 FURTHER READING

Srivastava, S.C. (2000), Industrial Relations and Labour Law, 4th ed., Vikas Publishing
House: New Delhi.