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18. Legal Framework

Of
Industrial Relations
Professor Debi S. Saini

Every IR system is
expected to provide
a legal framework
that reflects
societal values
and helps in meeting
reasonable expectations
of social partners

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Legal Framework of IR
Issues discussed in the presentation are:
Main laws affecting IR: IDAIESOATUA

IDA: Objectives, features, definitions

IR machinery: Conciliation, adjudication, Arbitration

IInd and IIIrd Schedules under the IDA

Standing Orders Act: Applicability & Features

TUA: Features, Rights & Obligations of union 3

Background
&
Salient Features of IDA

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Principal Laws Affecting IR

Basically 3 laws affect IR:

1. The ID Act, 1947

Lays down framework for ID resolution

2. The Industrial Employment (Standing Orders) Act, 1946

Promotes uniformity in employment. conditions

3. Trade Unions Act, 1926

Registration of TUs & protection for CB

The IDA: Structure & Background

Principal IR law: Applies to whole of India

IDA contains: 40 sections + 5 Schedules

Creates bodies: conciliatory/adjudicatory/administrative

Rules: ID (Central) Rules, 1947

80 Rules + Various formats provided
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Main Features of the ID Act 1947

1. Provides framework of CB for non-mgrl. WM

Defines ID (S. 2k); workman as non-mgrl. (S. 2s)

Prohibits parties to indulge in ULPs (Sch. V)

2. Provides a consultative/arb./adj. IR model

Consult: WC; CO; BOC; Court of Inquiry (Ss. 36)

Voluntary arbitration of indl. disputes (S. 10-A)
Adj. machinery: LCITNT (one-member bodies)
Though both conciliators/adjudicators need training
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Main Features of the ID Act 1947 contd

3. Provides re-instatement by LC/IT (S. 11-A/17-B)
4. Provides two sets of lab. adm: Cent./State (S. 2a)
5. Ensures Govt.s major control in IR/indl. peace
6. Notice for changing the service conditions (Ss. 9-A/33)
7. Regulates strikes/lockouts (for indl. Peace)

8. Provides for permission of app. Govt. in certain cases:

--For lay off/retrenchment/closure (Sections 25M, 25N, & 25O

9. Restricts lawyers in concil. & adjudi. (S. 36)

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Main Definitions
in the IDA:
Workman, and
Industrial Dispute

Who is a Workman under IDA [Sec. 2 (s)]

Any person (including apprentice)

employed in industry

to do any of the following work:

Manual/unskilled/skilled/tech./operational/clerical/supervisory

for hire or reward (with express or implied terms)

But does not include:

One who is subject to Army Act/Air Force Act/Navy Act
Employed in police/prison service
Employed mainly in managerial/administrative capacity
Employed as supervisor but draws salary of Rs. 10000+
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Who is a Workman under IDA [Sec. 2 (s)] contd

Person employed:
Contract of & for employment (Case: Dharagdhra Chemical Works)
Supervision & control
Former is an employee/WM; but latter is an independent contractor
Employer can require what/how; contractor only what is to be done

Designation not of great importance

Nature of duty is the essence
Mainly clerical & incidentally supervisory is clerical work & vice versa

Piece-rate can also involve masterservant relationship

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Workman contd.
Employed mainly in mgrl./administrative capacity
(Standard Vacuum Oil Co. v. Commissioner of Labour)

Held:
If an individual has officers subordinate to him
whose work he is required to oversee,
if he has to take decisions
and also is responsible for ensuring that
matters entrusted to him are efficiently conducted,
& an ascertainable section of work is assigned to him,
an inference of a position of mgt. would be justifiable
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What is an Industrial dispute? (S. 2 k.)

Any dispute or difference

between: employers & employers

employers & WM
WM & WM (workman)

which is connected with

employment, non-employment,
terms of employment, or conditions of labour
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Industrial dispute contd

Existence of dispute is central: demand+ rejection
Who can espouse the dispute:
Substantial no. of WM themselves or a union (even minority)
About 20% WM held as substantial
Community of interest is important (Rationale: CB promotion)

Individual dispute per se is not ID unless espoused as collective

Except termination disputes (Sec 2A); now 2010 amendment makes it so

Who can be Any person

--can even be a non-workman, if community of interest

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Authorities Under
the IDA

Authorities under the IDA

I. Preventive/Conciliatory Mechanism
1. Works Committee (Section 3)
To be constituted in industries with 100 or + WM
to promote measures for amity and good relations
& to that end comment on matters of common interest

Role as agreed by ILC (Indian Labour Conference):

Conditions of workSafetyWelfare fundRecreation
Adjusting of festival holidaysThrift & savings--Education

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Authorities under the IDA contd

2. Conciliation Officer (S. 4)
Can be appointed for an area or industry
Duty: Promoting the settlement of indl. disputes

3. Board of Conciliation: Constitution & Duty (S. 5)

Chairman + 2 or 4 members
Members represent both parties equally
Appointed by govt. on recommendation of parties
Duty: Promoting settlement

Authorities under the IDA contd

4. Court of Inquiry (S. 6)
To enquire into any matter connected or relevant to an ID

When appointed: App. Govt. appoints it as occasion arises

May consist of one independent person or more as specified

where 2 or more persons mentioned one to act as chairperson

Rationale: legitimacy to genuineness of claim

Also: in U.K.: Court of inquiry USA: Fact finding boards

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Authorities under the IDA contd

II. Adjudicatory Mechanism

5. Labour Court (LC) (Section 7)

App. Govt. may constitute one or more labour court/s
Done for adjudicating ID of any matter in 2nd Schedule
Or for performing such other functions, as specified
Constitution: Shall consist of One person only

Qualifications:
HC Judge/ADJ 3 yrs./Jud. Off. 7 yrs.
Or P.O. of LC under a State Act 5 yrs.

Authorities under the IDA contd

6. Tribunal (Sec 7-A) (Also called Indl. tribunal or IT)

App. Govt. may constitute one or more IT

Done for adjudicating any matter in Schs. II/ III

Constitution: Shall consist of One person only

Qualification: HC Judge/ADJ for 3 years

App. Govt. can appoint 2 assessors to assist IT

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After section 9B of the principal Act, for Chapter IIB,

the following Chapter shall be substituted, namely:
CHAPTER IIB

Grievance Redressal Machinery: Setting up of Grievance Redressal Machinery

9C. (1) Every indl. establishment with 20 or + workmen to have one or +

Grievance Redressal Committee for the resolving individual grievances.

(2) It shall consist of equal no. of members from the employer & workmen.

(3) Chairperson: From employer & WM alternatively on rotation every yr.

(4) Total no. of members of this Committee shall not exceed 6

Provided: one woman member if has 2 members;

and if more than it will increase proportionately.
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After sec. 9B of the principal Act, for Chapter IIB, the

following Chapter shall be substituted, namely: Contd

(5) Shall not affect WMs right to raise ID on same matter under IDA

(6) May complete proceedings: in 30 days on receipt of a written application.

(7) The workman may prefer an appeal to the employer

--Who will decide within within 1 month of receipt
--And send a copy of his decision to the workman

Amendment of section 11
(8) Thissec. not to apply to workmen for whom there is an
established Grievance Redressal Mechanism in the establishment
concerned.
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Major Schedules
in the
IDA

THE SECOND SCHEDULE

1. Propriety/legality of an order passed under SOs

2. Application & interpretation of standard orders (SOs)

3. Discharge/dismissal of WM including re-instatement

4. Withdrawal of any customary concession/privilege

5. Illegality of a strike or lockout

6. All matters other than those specified in 3rd Schedule

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THE THIRD SCHEDULE

1. Wages, including period & mode of payment
2. Compensatory & other allowances
3. Hours of work and rest intervals
4. Leave with wages & holidays
5. Bonus, profit sharing, PF & Gratuity
6. Shift working other than as per standing orders
7. Classification by grades
8. Rules of disciplines
9. Rationalisation
10. Retrenchment of WM & closure of establishment
11. Any other matter that may be prescribed

Trade Unions Act 1926

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T U Act 1926: Components

The Act consists of 33 sections: Deals with these:

Regis.Rights/liab.RegulationsPenalties/procedures

Extends to whole India: Provides registration/immunities

Act amended in 1948 to provide for recognition

But never notified by Government

Act amended in 2001: Checks multiplicity

Administered by appropriate government

Salient Features of TU Act 1926

1. Provides who can register a T.U.:
Any 7 or more WM employed in industry/ trade can
Later added: At least 10% or 100 whichever is less

2. Registrar of TUs: in each stateprocedure for regis. Appeal

3. Min. subscription: Rs. 1/ 3/ 12 p.a. (Rural/Unorganized/org. sectors)

4. Envisages general/political funds of a TU: Politicization

5. Outsiders permitted as TU members

6. Rights of TUs: Immunities to TU/members (Criminal/civil)

7. Obligation of TUs envisaged: Also to file returns

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Trade Union under TUA: Definition

2 (h) Trade Union means
any combination, whether temporary or permanent,
formed primarily for the purpose of
regulating the relations between
workmen and employers,
or between workmen and workmen,
or between employers and employers,
or for imposing restrictive conditions on
the conduct of any trade or business,
and includes any federation of 2 or more TUs:

Industrial Employment
(Standing Orders)
Act, 1946

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IE (SO) Act: Preliminary & Objectives

The Act seeks to regulate:
Classification of WMDischarge/dismissalShifts
Disciplinary actionAttendanceHolidays provides terms & condns

Preamble:
to define with sufficient precision
the conditions of employment
and to make the said conditions known to WM

What are St. Orders: Rulesrelate to matters in the schedule

Major features:
precision of working conditionsmake the condns. known
give WM a voice in themuniformity of conditions
regulation of: recruitment, leave, shift, discharge, dismissal
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IE (SO) Act: Salient features

1. Application:
Every est. with 100 or +WM; App. Govt. can extend: estab. 50 or +WM
Cent. Government has extended to estab. employing 50 or +

2. Clarify to WM: empl. conds. relating to matters in schedule

3. Meaning of certain major terms:

Wages/WM, same as in IDA
App. Govt. same except controlled industry

4. Certifying Officer can modify/add to SOs & adjudicate

Fairness, reasonableness

5. App. Govt. empowered to frame: Rules, model SOs

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IE (SO) Act: Salient features contd

6. Appellate Auth. to to hear/decide appeal

7. Provides for subsistence allowancesuspension

8. Provides for temporary application of SOs

9. Penalties providedFines only; no imprisonment

10. Model St. orders framed by Central Govt. 33

Thanks for Your Kind Attention 34

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