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LABOUR LAW-1

Module I: Regulation of Trade Union & Unfair Labour Practices:


 History of Trade Union Movement in India and need to form Trade Union.
The six phases of trade union movement in India are as follows: A. Pre-1918 Phase B. 1918-
1924 Phase C. 1925-1934 Phase D. 1935-1938 Phase E. 1939-1946 Phase F. 1947 and Since.

Trade unionism is a world-wide movement. The evolution and growth of trade unionism has
been sine qua non with growth in industrialisation. Accordingly, the evolution of trade unionism
in India is traced back towards the latter half of the nineteenth century.

The origin and development of trade union movement in India may well be studied under distinct
phases with their distinguishing features from others.

A historical account of the various phases of trade union movement in India is presented
now:
A. Pre-1918 Phase:
The setting up of textiles and jute mills and laying of the railways since 1850 payed the way for
that emergence of industrial activity and, in turn, labour movement in India. Some researchers
have traced the origin of labour movement in India dated back to 1860. However, most of the
writers on the subject trace the history of labour movement in India since 1875.

The first labour agitation, under the guidance and leadership of Mr. S. S. Bengalee, a social
reformist and philanthropist, started in Bombay in 1875 to protect against the appalling
conditions of workers in factories, especially those of women and children and appealed to the
authorities to introduce legislation for the amelioration of their working conditions.

As a result, the first Factory Commission was appointed in Bombay in the year 1875 and the first
Factories Act was passed in 1881. Mr. N. M. Lokhande may be said to be the founder of
organised labour movement in India who founded the first trade union in the country, namely,
the Bombay Mill Hands Association (1890).

This was followed by a series of associations such as the Amalgamated Society of Railway
Servants in India (1897), The Printers’ Union of Calcutta (1905), The Madras and Calcutta
Postal Union (1907), and the Kamgar Hitwardhak Sabha (1910). All these unions aimed at
promoting welfare facilities for workers and spreading literacy among them.

The broad features of the labour movement during the pre-1918 phase may be subsumed
as:
(i) The movement was led mostly by the social reformers and philanthropists and not by the
workers.

(ii) There was, in fact, no trade union in existence in the true sense.
(iii) The labour movement was for the workers rather than by the workers.

(iv) The movement was confined to the revolt against the conditions of child labour and women
workers working in various industries under appalling conditions.

B. 1918-1924 Phase:
The phase 1918-1924 is considered as the era of formation of modem trade unionism in the
country. The trade union movement got momentum just after the close of the World War I. The
postwar economic and political conditions contributed to the new awakening of class
consciousness among the workers. This led to the formation of trade unions in the truly modem
sense of the term.

As a result, Ahmedabad Textile Labour Association (1917), led by Shrimati Ansuyaben


Sarabhai; the Madras Labour Union (1918), led by B. P. Wadia; Indian Seamen’s Union,
Calcutta Clerk’s Union; and All India Postal and RMS Association were formed.

The various factors that influenced the growth of trade union movement in India during
this phase may be briefly catalogued as follows:
1. The wretched conditions of workers on account of spiralling prices of essential commodities
during the post-World-War I led workers to form trade unions to improve their bargaining power
and, in turn, living conditions.

2. The political scenario characterized by the home-rule movement and the martial law in Punjab
made the politicians to recognize the workers movement as an asset to their cause. At the same
time, workers also needed able guidance and leadership from the politicians to settle their
grievances with the employers.

3. The Russian Revolution also swayed the labour movement in India showing a new social
order to the common man in the country.

4. The setting up of the International Labour Organisation (ILO) in 1919 also gave a big fillip to
the labour movement in India. India becoming a founder-member of the ILO required deputing
delegates to the ILO. Mr. N. M. Joshi for the first time was deputed as the representative from
India to International Labour Conferences and Sessions. It ignited workers’ anxiety to organize.
As a result, the All India Trade Union Congress (AITUC) was formed in 1920. By 1924, the
trade union movement in India proliferated to the extent of 167 trade unions with a quarter
million members.

This period in the history of trade union movement has been described as the Early Trade Union
Period.

C. 1925-1934 Phase:
With increasing hardships of workers, the signs of militant tendencies and revolutionary
approach in trade unionism got expression into violent strikes since 1924. The communists
gained influence in L trade union movement during this period. They split the Trade Union
Congress twice with their widening differences with the left-wing unionists.

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The moderate section under the leadership of Mr. N. M. Joshi and Mr. V. V. Giri seceded from
the Congress and set up a separate organization named the National Trade Unions Federation
(NTUF).

Another split in AITUC took place in 1931 at its Calcutta session when the extreme left wing
under the leadership of Messrs S. V. Deshpande and B T Randive broke away and formed a
separate organization, namely, the All India Red Trade Union Congress Two Years later, the
National Federation of Labour was formed to facilitate unity among all the left-wing
organizations of labour. As a result, the AITUF and NFL merged to form the National Trade
Union Federation (NTUF).

Another important feature of this period was the passing of two Acts, namely, the Trade Unions
Act 1926 and the Trade Disputes Act, 1929 which also gave a fillip to the growth of trade
unionism in India. The former Act provided for voluntary registration and conferred certain
rights and privileges upon registered unions in return for obligations. The later Act provided for
the settlement of trade unions. This phase of the Indian labour movement may be described as
The Period of Left Wing Trade Unionism.

D. 1935-1938 Phase:
The Indian National Congress was in power in seven provinces in 1937. This injected unity in
trade unions. As a result, the All India Red Trade Union Congress itself with the AITUC in 1935.
After three years in 1938, the National Trade Union Congress (NTUC) also affiliated with the
AITUC. Other factors that contributed to the revival of trade unions were increasing awakening
among the workers to their rights and change in the managerial attitude towards trade unions.

In 1938, one of the most developments took place was the enactment of the Bombay Industrial
Disputes Act, 1938. An important provision of the Act, inter alia, to accord compulsory
recognition of unions by the employers gave a big fillip to the growth of trade unionism in India.

E. 1939-1946 Phase:
Like World War I, the World War II also brought chaos in industrial front of the country. Mass
retrenchment witnessed during the post-World War II led to the problem of unemployment .This
compelled workers to join unions to secure their jobs. This resulted in big spurt in the
membership of registered trade unions from 667 in 1939-40 to 1087 in 1945-46.

Somuchso workers in the registered trade unions witnessed a phenomenal increase from 18,612
to 38,570 during the same period. The AITUC again split in 1941 when Dr. Aftab Ali, President
of the Seamen s Association, Calcutta disaffiliated his union from the Congress and formed a
new organization known as the “Indian Federation of Labour”.

The year 1946 was also marked by two important enactments, namely, the Industrial
Employment (Standing Orders) Act, 1946 and the Bombay Industrial Relations Act, 1946. Both
the Acts, through their provisions, contributed to strengthen the trade unionism in the country.

F. 1947 and Since:


Proliferation of trade unions in the pattern of proliferation of political parties has been a
distinguishing feature in the trade union history of India during the post-Independence period. In

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May 1947, the Indian National Trade Union Congress (INTUC) was formed by the nationalists
and moderates and was controlled by the Congress Party. Since by then, the AITUC is controlled
by the Communists.

The Congress socialists who stayed in AITUC at the time of the formation of INTUC
subsequently formed the Hind Mazdoor Sabha (HMS) in 1948 under the banner of the Praja
Socialist Party. Subsequently, the HMS was split up with a group of socialist and formed a
separate association, namely, “Bhartiya Mazdoor Sabha” (BMS) which is now an affiliate of the
Bhartiya Janata Party (B JP). Years after, the communist party split into various fractions
forming the United Trade Union Congress (UTUC) and the Center of Indian Trade Unions
(CITU).

Later again, a group disassociated itself from the UTUC and formed another UTUC—Lenin
Sarani. Of late, with the emergence of regional parties since 1960, most of the regional parties
have shown its inclination to a trade union wing, thus, adding to the proliferation of trade unions
in the country. Thus, it is clear that the origin and growth of trade union movement in India is
riddled with fragmented politicization.

At present, there are 8 central trade union organisations. Of these, four major federations
with their national network are:
1. All India Trade Union Congress (AITUC)

2. Indian National Trade Union Congress (INTUC)

3. Bhartiya Mazdoor Sangh (BMS)

4. Centre of Indian Trade Unions (CITU)

 Workers Right to form Union vis-à-vis Indian Constitution


 the Membership of Trade Union,
 Closed shop and Union shop
These are agreements between employers and unions.

In a closed shop agreement, the employer agrees that he will only hire employees who are
members of the union. If an employee ever leaves the union, the employer must fire the
employee. Closed shop agreements are prohibited by national law (called the Taft-Hartley Act)
in the United States.

Union shop agreements allow an employer to hire non-union members but require the employee
to join the union within a certain amount of time (usually after 30 days). In practice though,
employers are not allowed to fire employees who refuse to join the union, provided the
employees pay dues and fees to the union.

 Registration of Trade Union,

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 Remedies in case of non-registration and cancellation of registration of union
 Privileges and Protection of registered Trade Union form certain acts and omissions
 Unfair labour practices and victimization
Due to a surge in industrial activity in the later part of 19th century, the population of working
class increased. Since the employers were mainly interested only in profitability, workers were at
a mercy of the employers. Slowly, the concept of a union started taking hold in India. In 1890,
mill workers of Bombay associated under the name of Bombay Millhands Association. Although
it was not a trade union in a strict sense, it was nevertheless a start in India.
After the first world war the cost of living increased and the workers frequently agitated to
demand more pay. In the early 20th century Royal Trade Commission studied the condition of
workers and suggested the formations of Trade Unions. As per the recommendations of the
Royal Commission, Indian Trade Unions Act was passed in 1926. However, due to strong
opposition from employers, it was enforced only in 1927. The original act lacked teeth in the
sense that the formation of a Trade Union itself dependent on the recognition by the employer.
Later on several amendments were made to fix the issues. In 1947, the act was amended widely
as per the socialist inclination of the polity.

Definition
Section 2(h) of the Trade Unions Act 1926 defines Trade Union as a combination, temporary or
permanent, formed primarily for the purpose of regulating the relations between workmen and
employer, workmen and workmen, or employers and employers, or for imposing restrictive
condition on the conduct of any trade or business, and includes the federation of two or more
trade unions.

It is the object of the association or combination that determines whether it is a trade union or
not.
A society or authors, publishers, and other owners of copyright meant to protect their copyright
in music and songs, was held NOT to be a Trade Union by the House of Lords.
In the case of Tamil Nadu NGO Union vs Registrar, Trade Unions, AIR 1962, Madras
HC held that Tamil Nadu NGO Union, which was an association of sub magistrates of the
judiciary, tahsildars, etc., was not a trade union because these people were engaged in sovereign
and regal functions of the State where were its inalienable functions.
In the case of GTRTCS and Officer's Association, Bangalore and others vs Asst. Labor
Commissioner and anothers AIR 2002, Kar. HC held that the definition of workmen for the
purpose of Trade Unions is a lot wider than in other acts and that the emphasis is on the purpose
of the association rather than the type of workers and so it is a valid Trade Union.

The registration of a trade union is not necessary. However, upon registration, a trade union gets
several benefits including some immunities that are not available to an unregistered Trade
Union. In the case of Workers of B and C Co vs Labor Commissioner, AIR 1964 Mad it was
held that a Trade Union can raise or sponsor a trade dispute and represent on behalf of its
members in legal proceedings arising out of a trade dispute.
Section 13 specifies that upon registration, a trade union gets a legal entity status, due to which
it

 has perpetual succession and a common seal.


 can acquire and hold movable as well as immovable properties.

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 can contract through agents.
 can sue and can be sued.

Procedure of Registration

Section 3 (Appointment of the Registrar) : The appropriate government appoints a person to be


the registrar or trade unions for each state.

Section 4 (Mode of registration) says that to register a Trade Union,

 an application must be sent to the Registrar of Trade Unions appointed by an appropriate


government.
 the application must be made by seven or more persons who are engaged in the trade or
industry in connection to which the Trade Union is to be formed.
 all the applicants must subscribe their names to the rules of the Trade Union and comply
with the provisions of this act regarding registration.
 there must be at least 10% or 100, whichever is less, members who are engaged or
employed in the establishment or industry to which it is connected.
 there must be not be less than seven members who are engaged or employed in the
establishment or industry to which it is connected.

If more that half of the persons who applied for the registration cease to be members of the union
or expressly disassociate themselves from the application, the application will be deemed to be
invalid.

Section 5 (Application of Registration) gives the details of the application. It says that the
application should be sent to the registrar along with the copy of the rules of the trade union and
a statement of the following particulars

 The name, occupation, and addresses of the applicants.


 The name of the trade union and the address of its head office.
 The titles, names, ages, addresses, and occupations of the office bearers of the trade
union.
 If the trade union has been in existence for more than 1 yr, a general statement of its
assets and liabilities.

Section 6 (Provisions to be contained in the rules of a Trade Union) specifies the provisions that
should be contained in the rule book of the trade union. A copy of this rule book must be
supplied along with the application for registration of the trade union. This rule book details the
internal administration of the trade union and also determines and governs the relationship
between the trade union and its members. It must contain the rules for the following matters:

1. name of the trade union


2. the whole object of the trade union
3. the whole purposes for which the general funds can be used.

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4. the maintenance of the list of members and adequate facilities to inspect it by the
members of the trade union.
5. the membership of ordinary members who are actually engaged or employed in an
industry with which it is connected as well as the membership of the honorary or
temporary members.
6. the appointment of members of the executive body.
7. the membership or subscription fee, which shall not be less that 25 paisa per member per
month
8. the conditions under which a member can get the benefits or has to pay fines.
9. the safe custody of funds and provisions for inspecting or auditing the statements, or
other documents of the trade union.
10. dissolution of the trade union.

In the case of M T Chandersenan vs Sukumaran AIR 1974, SC held that if a member fails to
pay subscription fee, he cannot be considered a member of the trade union. However,
subscriptions cannot be refused under some pretext which results in the denial of membership.
In the case of Bokajan Cement Corporation Employees Union vs Cement Corporation of
India, 2004, SC held that membership of the union does not automatically cease upon
termination of the employment.

Under section 7, the registrar has the power to ask for further information from the trade union to
satisfy himself that the trade union complies with section 5 and is eligible to be registered under
section 6. The registrar can refuse to register the trade union until he receives the information.
Further, he has the power to ask to change the name of the trade union if a union with the same
name already exists or if he feels that the name could be deceiving or confusing to the public or
the members of the trade union.

Under section 8, upon satisfaction of all the requirements, the Registrar of the Trade Unions will
register the trade union. It is mandatory for the registrar to register a trade union if the union
satisfies all the technical requirements of this act.
In the case of re Indian Steam Navigation Workers Union AIR 1936 SC held that a Registrar
only has to see whether all the technical requirements are being fulfilled and not whether it could
be described as unlawful.
In the case of ACC Rajanka Limestone Quarries Worker's Union vs Registrar of Trade
Unions, AIR 1958, it was held that if the registrar does not register the trade union within 3
months of application, an appeal can be made to the High Court under art 226.

Under section 9, the registrar will issue the certificate of registration in the prescribed form,
which shall be a conclusive evidence that the trade union is registered under this act.

Procedure for amalgamation


Section 24 says that any two or more registered trade unions may become amalgamated together
into one trade union with or without dissolution or division of the funds of such trade unions or
either or any of them, provided that votes of at least one half of the members of each trade union
are recorded and at least 60% of the votes of each trade union are in favor of the proposal.
The notice of such amalgamation, signed by the secretary and seven members of each of the
trade unions, should be sent to the registrar of the state where the head office of the amalgamated
trade union is to be located. If the registrar is satisfied that all the provisions of this act have been

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complied with and the trade union formed thereby is entitled to registration under section 6, he
will register the new trade union under section 8 and the amalgamation will take effect from the
date of registration.

Cancellation of Registration
Under section 10, the Registrar of Trade Unions has the power to cancel the registration of a
trade union in the following conditions:

1. On the application of the trade union to be verified in the prescribed manner.


2. If the registrar is satisfied that registration was obtained by fraud or mistake.
3. If the trade union has ceased to exist.
4. If the trade union willfully, upon notice of the registrar, has contravened or allowed any
rule to continue in force, which is inconsistent with the provisions of this act.
5. If the trade union rescinds any rule providing for any matter, provision for which is
required to be made in section 6.
6. If the registrar is satisfied that a trade union of workmen has ceased to have the requisite
number of members.

In the case of Tata Electric Companies Officer's Guild vs Registrar of Trade Unions, 1994,
Bombay HC held that for a registrar to cancel the registration, willful neglect of the notice is a
must. If the trade union sends the account statement upon notice of the registrar, the registrar
cannot cancel the registration on the ground that the account statement was not filed earlier.

Under section 27, upon dissolution of a trade union, seven or more members must send a
notification to the registrar within 14 days of dissolution and the registrar shall register ir after
verifying that the dissolution has been done as per the provisions of this act. Further, if the rules
of the trade union do not provide for distribution of the funds upon dissolution, the registrar may
distribute the funds in such manner as may be prescribed.

Appeal against the decision of Registrar


Section 11 grants a limited right to appeal the decisions or orders passed by the registrar.

An appeal may be made to

1. the high court, if the head office of the trade union is located in a presidency town.
2. the labour court or industrial tribunal, if the head office of the trade union is located in its
jurisdiction.
3. if the head office of the trade union in any other location, to such court, not inferior to the
court of an additional or assistant judge of a principal civil court of original jurisdiction,
as the appropriate govt. may appoint in this behalf for that area.

An appeal must be made within 60 days of the date on which registrar passed the order against
which the appeal is made.
In the case of Registrar of Trade Unions, West Bengal vs Mihir Kumar Guha 1963, Cal, it
was settled that a trade union whose head office is in a presidency town has only a single chance
of appeal against the decision of the registrar, which is to the high court while a trade union

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whose head office is in muffasil has two chances of appeals, first in the local court and second in
the high court.

Liabilities of a registered Trade Union

A registered trade union must follow the provisions of the Trade Unions Act 1926. In particular,
the following are some restrictions in a registered trade union:

1. A Trade Union cannot spend the funds on anything the office bearers want. It can spend
funds only on the activities specified in Section 15. These include:
1. salaries of the office bearers.
2. expenses required for the administration of the trade union
3. compensation to workers due to loss arise of any trade dispute.
4. welfare activities of the workers including housing, clothing, or any such activity.
5. benefits to the workers or their dependents in the case of unemployment,
disability, or death.
6. publishing material for creating awareness in the workers.
7. legal expenses required for defending or bringing a suit.
8. education of workers or their dependents.
9. expenses for medical treatment of workers.
10. taking insurance policies for workers.

Mario Raposo vs H M Bhandarkar and others 1994 - Office bearers of a trade union invested
the money from general fund into shares of UTI. This was held invalid because it is a speculative
investment.

2. A trade union cannot force members to subscribe to political fund under section 16.
3. Under section 20 a trade union must make available all its record books of accounts and
list of membership for inspection upon request of any member or his representative.
4. Section 21 allows minors more than 15 yrs of age to be members of a trade union.
However, such minors cannot hold office.
5. Under section 21-A, a trade union cannot appoint a person who has been convicted of a
crime involving moral turpitude and has been imprisoned for 6 months or more within
last 5 years.
6. As per section 22, at least half of the office bearers of a trade union of workers of
unorganized sector must be engaged or employed in an industry to which the trade union
is connected. Also, while a union has a right to remove any office bearer, this power must
be used judiciously and rules of natural justice must be followed.
7. Under section 28, a general statement, audited in a prescribed manner, of all income and
expenses must be sent to the registrar every year.

Rights and Priviledges of a registered Trade Union

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1. As per section 13, upon registration, a trade union becomes a legal entity and as a
consequence, it gets perpetual succession and a corporate seal, it can acquire and hold
movable and immovable property, contract through agents, and can sue and get sued.
2. Under section 15 a registered trade union has a right to establish a general fund.
3. Under section 16, a registered trade union has a right to establish a political fund.
Subscription to this fund is not necessary for a member.
4. Under section 17, 18, and 19 a registered trade union gets immunity in certain criminal,
civil, and contractual proceedings.
5. Under section 24, trade unions have the right to amalgamate.
6. Under section 28-F, the executive of a registered trade union has a right to negotiate with
the employer the matters of employment or non-employment or the terms of employment
or the condition of labor of all or any of the members of the trade union and the employer
shall receive and send replies to letters and grant interviews to such body regarding such
matters. It further provides that the executive is entitled to post notices of the trade union
meant for its members at any premises where they are employed and that the employer
shall provide reasonable facilities for that.

Immunites available to a registered Trade Union

1. Section 17 confers immunity from liability in the case of criminal conspiracy under
section 120-B of IPC, committed by an office bearer or a member. However, this
immunity is partial in the sense that it is available only with respect to the legal
agreements created by the members for the furtherance of valid objects of a trade union
as described in section 15 of the act. The immunity cannot be claimed for an act that is an
offence. Registered Trade Unions have certain rights to do in furtherance of their trade
disputes such as calling for strike, persuading members.

In the case of West India Steel Company Ltd. vs Azeez 1990 Kerala, a trade union
leader obstructed work inside the factory for 5 hrs while protesting against the deputation
of a workman to work another section. It was held that while in a factory, the worker
must submit to the instructions given by his superiors. A trade union leader has no
immunity against disobeying the orders. A trade union leader or any worker does not
have any right by law to share managerial responsibilities. A trade union can espouse the
cause of workers through legal ways but officials of a trade union cannot direct other
workers individually or in general about how to do their work. They do not have the right
to ask a worker to stop his work or otherwise obstruct the work of the establishment. An
employer may deal with a person causing obstruction in work effectively.

2. Section 18 confers immunity from civil proceedings in certain cases to a trade union or
its office bears or members. In general, a person is liable in torts for inducing another
person to breach his contract of employment or for interfering with the trade or business
of another. However, a trade union, its officers, and its members are immune from this
liability provided that such an inducement is in contemplation or furtherance of a trade
dispute. Further, the inducement should be lawful. There is no immunity against violence,
threats, or any other illegal means.

In the case of P Mukundan and others vs Mohan Kandy Pavithran 1992 Kerala, it

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was held that strike per se is not an actionable wrong. Further, it was held that the trade
union, its officers, and its members are immune against legal proceedings linked with the
strike of workmen by the provisions of section 18.
In the leading case of Rohtas Industries Staff Union vs State of Bihar AIR 1963, it
was held that employers do not have the right to claim damages against the employee
participating in an illegal strike and thereby causing loss of production and business.
In the case of Simpson & Group Companies Workers & Staff Union vs Amco
Batteries Ltd 1992 Karn., it was held that physical obstruction of movement of
management officials, contractors, goods, or vehicles carrying raw materials, is not a
trade union right or a fundamental right under art 19. Immunity under section 18 cannot
be claimed for such activities. Right to picket is a very intangible right and it extends
only up to the right of free movement of others. The methods of persuasion are limited to
oral and visual and do not include physical obstruction of vehicles or persons.

3. Section 19 Enforceability of agreements - In India, an agreement in restraint of trade is


void as per section 25 of Indian Contract Act. However, such an agreement between trade
union members is neither void nor voidable. It is important to note that this right is
available only to registered trade unions. An unregistered trade union must follow the
principles of general contract law.

Problems with Trade Unions

1. Too many unions causes intra-union and inter-union rivalry and thus loss of precious
resources that can be used for worker's welfare.
2. Due to politicization of unions causes the union to overlook the true welfare and benefits
of the worker.
3. Outside Leadership causes unions to lose focus because such leadership does not
understand the problems of the laborers.
4. Closed Shop/Union Shop companies forces laborers to join the union and thus causes
monopoly. Close shops/Union Shops are now illegal in many countries.
5. Sometime the employers do not recognize unions.

Module II: Collective Bargaining:


 Concept and importance of collective bargaining,
Collective Bargaining is a term adopted for the negotiation process between workers, represent
by a Union such as a Trade Union, and their employer, represented by the management, for
issues related to the terms and conditions of their employment.such as wages, working hours,
benefits, and workload. An agreement arrived at by this negotiation process is called as
Collective Bargaining Agreement (CBA) or Collective Employment Agreement (CEA).
Practically, a worker and his employer are not on an equal footing because of the financial power
of the employer and as such, it is extremely difficult, if not impossible, for a single worker to
pressure his employer to provide equitable benefits for his work. Historically, this has proven to
be the main cause of dissatisfaction among workers, resulting in decreased productivity, and
poor condition of workers. The objective of collective bargaining is to mitigate the disadvantage

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of economic disparity between the worker and the employer by bargaining with the employer
collectively instead of individually.

What is Collective Bargaining


The National Labor Relations Act, or “NLRA,” was established in 1935. The Act set the
standards for U.S. labor laws, which guarantee employees certain basic rights, such as the right
to organize into trade unions, and the ability to engage in collective bargaining negotiations. The
Act requires officials elected to head a union to meet with the employer to negotiate conditions.
Specific rules in support of collective bargaining include:
 There is a limit of one representative for each unit of employees
 All representatives must promote the practice, and follow all procedures, of collective
bargaining
 Employers must bargain with the employees’ representatives
 Employees and their representatives have the right to discuss wage issues

Not all employers and employees are covered under the act. For example, independent
contractors and government workers are excluded from the NLRA. However, the Act does
stipulate that these workers cannot be prevented from joining labor unions if they wish to do so.

Unfair Labor Practices


Part of the National Labor Relations Act’s responsibilities includes ensuring employers do not
engage in unfair labor practices. Under the Act, employers are obligated to follow certain laws,
and are prohibited from certain actions, including:
 Interfering with, coercing, or restraining employees’ right to form, join, or assist in the
formation of labor organizations
 Dominating or interfering with the formation of any labor union organization
 Discrimination in hiring or tenure of employees in order to discourage participation in union
organization
 Discriminating against any employee who files charges or testifies against the employer
 Refusing to bargain with the employee’s representative

The National Labor Relations Board


The National Labor Relations Board (“NLRB”) was formed in 1935 to oversee compliance with
the National Labor Relations Act. This federal agency is charged with managing legal disputes
between employees and an employer. The agency is also responsible for taking action against
employers in violation of the NLRA.

Good Faith Bargaining


Both employees and employers are required to partake in good faith bargaining. While this term
may involve many issues, it typically includes (1) refusal of either party to meet and attempt to
bargain with the other party, (2) engaging in sham or misleading negotiations, and (3) making
changes to the terms of an existing CBA without consulting the other party. The NLRB helps
ensure all employers and employee representatives adhere to these conditions as, when principles
of good faith bargaining are not adhered to, the negotiation process between employer and
employees may be more difficult.

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Mandatory Bargaining Issues
Employers do not have to engage in good faith bargaining over every issue that arises as some
may be considered trivial and are not covered under the labor laws. There are some issues,
however, that are considered mandatory bargaining issues for which employers must participate
in collective bargaining, including wages, layoff procedures, and hours. When an employee
group desires changes to be made in an issue subject to collective bargaining, it must give
advanced notice to the employer. If the employer refuses to meet in collective bargaining over
the issue, it may be charged with unfair labor practices, and the NLRB may step in. This often
results in an investigation by the NLRB, and potentially in a labor strike.

Continuous Bargaining
Continuous bargaining is a method of collective bargaining in which ongoing negotiations
between the employer and the union representative take place. This may occur when the
employer and union representative have a good working relationship that enables them to
continually make small changes to ensure positive employment policies.

Concession Bargaining
Concession bargaining is a method of collective bargaining that sometimes takes place when the
employer is in distress. In this situation, the union may give the employer back a previous
agreement in exchange for job security for the largest number of employees. For example, a
union may give up paid time off in exchange for protection for layoffs.

Employer Duty to Supply Information


While the employer has an obligation to supply pertinent information to the union during the
collective bargaining process, only certain information is required to be supplied. For example, if
an employer claims it cannot grant a wage increase request due to financial problems, the union
has the right to request documents supporting the employer’s claims. The employer must also
provide the employees’ current salary rates and benefit information upon request.

Union Duty of Fair Representation


When an employee is a member of a union, the union has a duty to provide fair representation to
the employee. While the union is not required to act on every request that an employee makes, it
must treat each and every request fairly regardless of the employee’s race, age, sex, or education.
If an employee feels that the union has breached its duty of fair representation, he may follow
certain procedures to file a grievance. If there are no grievance procedures available, the
employee may hire an attorney to help ensure his rights are protected. Because employment law
can be complex, an attorney experienced with employment issues is best suited in this situation.

When a Deal is Not Reached


When a collective bargaining dispute cannot be resolved through ordinary means, the issue falls
into the hands of the NLRB. The board investigates the claims over which a deal was not
reached, and looks at information from both sides in determining whether future proceedings are
necessary. The NLRB may make a decision siding with either party, as long as fair labor laws
are not violated.

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Paying for Representation
In many states, employee union members are required to pay for a portion of the cost of
representation during the collective bargaining process. Employees may also be required to pay
monthly dues, which may be equal to 1% or 2% of their pay. In some jurisdictions, the dues may
not be used for representation during collective bargaining, while in other jurisdictions the dues
are specifically for such representation.

International Collective Bargaining


Collective bargaining is an international human right recognized in Article 23 of the Universal
Declaration of Human Rights. The right to international collective bargaining is promoted
through international labor standards, and though not all countries recognize the National Labor
Relations Act or National Labor Relations Board, many countries have their own associations or
agencies that oversee labor rights.

Approaches to Collective Bargaining

1. Traditional or Positional or Adversarial or Distributional or Win-Lose Bargaining - In


this type of bargaining both the parties, i.e. the union and the management, come out with their
own agenda with little or no understanding of each others problems. The process mostly involves
a give and take type of negotiation. This is the most common type of collective bargaining and is
used all over the world.

2. Principled or Mutual Gains or Integrative or Win-Win Bargaining - In this type of


bargaining both the parties understand the issues involved and they approach it to solve the
problems jointly. Thus, an equitable solution without any acrimony can be found. This process
works when there is not much disparity between the education level of both the parties, such as
in IT industry.

The principle of collective bargaining is recognized by International Labor Organization (ILO)


as well.

Bargaining Process

1. The process starts with the workers uniting to form an association in the form of a Trade
Union.
In the case of Workers of B and C Co vs Labour Commissioner, AIR 1964 Mad it
was held that a Trade Union can raise or sponsor a trade dispute and represent on behalf
of its members in legal proceedings arising out of a trade dispute.
2. Trade Union of registered and gets the power to represent the issues of the workers.
Though it is not necessary for a TU to be registered. In the same case mentioned above, it
was also held that an unregistered Trade Union that has the support of the majority of the
workers has a better claim to negotiation than a recognized trade union that does not have
majority support.

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3. The members of the trade union adopt a resolution to authorize the Trade Union to
represent them and put their issues across to the management.
4. Employer recognizes the Trade Union and gets ready to discuss the issues with the Trade
Union representatives.
5. The union representatives put their list of demands to the management and the
management discusses those with the representatives.
6. After a give and take either a mutually agreeable solution is found or pressurizing tactics
such as strike or lock-out are adopted.
7. If no solution is found, the matter could be referred to arbitration. If the solution is found,
it is implemented and the process ends.

Benefits of Collective Bargaining

Benefits for Workers

1. It provides uniformity and equality in conditions of labor for all laborers.


2. It ensures progress of workers and increases their importance and respect.
3. It prevents arbitrariness by owners regarding working conditions.
4. It preserves personal interest of workers.
5. It promotes welfare of workers.
6. A worker does not feel alone and helpless, on the contrary, he feels powerful.
7. It provides a check on employers and inspectors.

Benefits for Employers

1. It is cheaper, easier, and safer option.


2. It saves time and it benefits all the parties equally.
3. Compromises reached by this process are not only applicable to the parties but also to
those who are not a party.
4. Upon success of collective bargaining, industrial peace prevails and mutual
understanding and production increases.
5. Compromises done through collective bargaining are binding on all the parties.

Benefits in General

1. Helps in satisfactory solution of problems and allows old customs and traditions.
2. It reduces tension in parties and establishes a tradition of industrial peace.
3. It has been proved helpful in bringing social change.
4. Upon failure of the process, no party is insulted or hurt.
5. In the case of Virundhachalam vs Management, Lotus Ltd, Lord Roland said that it
ends the arbitrariness of inspectors by preventing them from becoming legal kings.

 Pre-requisites for collective bargaining,


Important Prerequisites for a Successful Collective Bargaining are listed below:

(1) The parties must attain a sufficient degree of organisation. If the workers’ organisation is
weak, employers can say that it does not represent the workers and will refuse to negotiate

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with it. Unless the workers are able to form strong and stable unions, collective bargaining
will not be successful.

(2) Freedom of association is essential for collective bargaining. Where there is no freedom
of association, there can be no collective bargaining. Freedom of association implies that the
workers as well as the employers will have the right to form an organisation of their own to
protect their interests.

(3) There should be mutual recognition between both the groups. Collective bargaining
cannot begin if the employers do not recognise the workers’ organisation. The conflict of
interests makes the two groups hostile to each other. They must recognise each other and
realise that adjustment and understanding is essential for the achievement of organisational
goals.

(4) There must exist a favourable political climate, essential for successful collective
bargaining. If the government encourages collective bargaining as the best method of
regulating conditions of employment, it will be successful. Where the governments restrict
trade union activities, there can be no collective bargaining.

(5) Agreement must be observed by those to whom they apply. The workers’ organisation
must be strong enough to exercise its authority over its members. If the trade union has no
power over its members, collective bargaining will not be effectively implemented.

(6) A give and take policy must prevail in the organisation. The difference between two
parties can be adjusted only by compromise so that an agreement can be reached. Neither
side should be too rigid on its demand.

Their attitudes should be flexible and both sides should be ready to give up some of its
demands. Unions should not rigidly insist upon unreasonable demands and should be ready
to reduce its demands to come to an agreement.

(7) Sometimes unfair labour practices are resorted to by both the employers and the trade
unions. These will restrict the development of collective bargaining. Unfair labour practices
should be avoided by both the sides, as this will create an atmosphere of goodwill.

 Process of administering collective agreement (Negotiation, Mediation, & Voluntary


arbitration & Compulsory Arbitration.),
However there are certain fundamental procedures and stages that are followed in the
organisations. That standardisation is as follows: Process of collective bargaining and
negotiation the process can be divided into four main phases:

I. Organising and Recognition. The first thing to be done by the employees is to form a group
of seven persons or more (as per Trade Unions Act, 1926) and get the trade union registered
under the Act. The registration of the union is advisable, because there are certain advantages
of getting the union registered. It can use its general funds for certain specified purposes; it
can create a separate fund for political purposes; it gets immunity from civil suit in certain

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cases; it can have representation of its members to the works committee; etc. After getting
the union registered, efforts should be made to increase its membership; it should enjoy the
support of the majority of workers in the plant. In case, it is not the only union in the plant,
efforts should be made to make it the most representative union so that it s is recognised as
the exclusive bargaining representative for all the employees within the specified bargaining
unit by the employers. Once the union is recognised as the bargaining agent, each worker is
covered by the negotiated contract as must abide by the governance.

II. Preparation for Negotiation. After a union has been recognised as the exclusive bargaining
agent, both the union and management begin preparation for negotiations. The preparation
for negotiation is basically composed of three activities:
a. Fact gathering
b. Goal setting
c. Strategy development.

Facts are gathered from both internal sources and the external sources. The internal
data would include things like:
• Grievance and accident record
• Employee performance report
• Overtime figures
• Reports on transfers
• Turnover
• Absenteeism etc.

External information should include:


• Statistics on the current economy
• Economic forecasts for short and intermediate terms
• Data on communities in which the company operates
• Industry labour statistics this information helps management in knowing its position and the
position of similar other organisations under the existing circumstances, and in anticipating
the same in the near future.

On the basis of these data, the management sets tentative goals for achieving in the
negotiations. Please understand that when the management has the above data in hand the
management is in a better position to develop a strategy for dealing with the union’s
demands. This includes assessing the union’s power and specific tactics. The degree of union
influence is affected by factors like the labour market, economic conditions, rates of
inflation, and recent contract settlements. Also understand in the process of negotiations,
management’s ability to tolerate a strike will also be crucial. If the company’s products are
highly demanded, the management will be against a strike, even for a short period. On the
other hand, if the sales have been low, management may be prepared even for a lengthy
strike, and, therefore, will be unwilling to concede to union’s demand.

There are four outcomes that can be achieved in negotiations. They are:
• Lose-Lose
• Lose-Win
• Win-lose
• Win-Win

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The first situation is where both the parties lose. In the second and the third situation, only
one party wins and the other one loses. The fourth situation is in which both the parties win.

III. Negotiation. For negotiating a contract, the first meeting between labour and
management negotiation teams usually establishes rules, policies, and schedules for future
meetings. Sometimes, at the first meeting, the representatives of labour formally present their
specific proposals for changes in the existing labour agreements. At succeeding meetings,
management submits counter-proposals. Both groups seek opportunities to suggest
compromise solutions in their favour until an agreement is reached. If labour and
management find it impossible to come to an agreement, a third-party (a fact finder, a
mediator, or an arbitrator) may be brought in from outside. If, even with the assistance of the
outsider, no viable solution can be found to resolve the parties’ differences, there may be a
strike or lockout. It should be clearly understood that strikes and lockouts should not be
resorted to! We have already seen the ill effects of these weapons. Weapons! , Now don’t
give that lost look! We have read this in Industrial disputes. This brings us to the last phase in
negotiations and that is contract administrational.

IV. Contract Administration. The final phase in the process of collective bargaining is
contract administration. Once a contract is agreed upon, it then must be administered. The
way it will be administered is included in the contract itself.

For effective administration of the contract and to have harmonious industrial relations in the
organisation, the contract must spell out a procedure for handling contractual disputes.
Almost all collective bargaining agreements contain formal procedures to be used in
resolving grievances over the interpretation and application of the terms of contract. I am
sure you will agree that the grievance procedures should be designed in such a way that
makes it possible to resolve grievances as quickly as possible and at the lowest level possible
in the organisation. The grievances should be referred to higher levels, and, ultimately, to
arbitration, only when they cannot be resolved at the initial level. This is essential for speedy
resolution of grievances and for creating and efficient and effective working climate in the
organisation.

 Duration and enforcement of bipartite Agreement (Secs. 18, 19, Industrial Disputes Act,
1947),
1. Bipartite Agreements: These are most important types of collective agreements because
they represent a dynamic relationship that is evolving in establishment concerned without
any pressure from outside. The bipartite agreements are drawn up in voluntary negotiation
between management and union. Usually the agreement reached by the bipartite voluntarily
has the same binding force as settlement reached in conciliation proceedings. The
implementations of these types of agreements are also not a problem because both the parties
feel confident of their ability to reach the agreement.

2. Settlements: It is tripartite in nature because usually it is reached by conciliation, i.e. it


arises out of dispute referred to the appropriate labour department and the conciliation officer
plays an important role in bringing about conciliation of the differing viewpoints of the
parties. And if during the process of conciliation, the conciliation officer feels that there is
possibility of reaching a settlement, he withdraws himself from the scene. Then the parties

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are to finalise the terms of the agreement and should report back to conciliation officer within
a specified time. But the forms of settlement are more limited in nature than bipartite
voluntary agreements, because they strictly relate to the issues referred to the conciliation
officer.

3. Consent Award: Here the negotiation takes place between the parties when the dispute is
actually pending before one of the compulsory ad judicatory authorities and the agreement is
incorporated to the authorities, award. Thus though the agreement is reached voluntarily
between the parties, it becomes part of the binding award pronounced by an authority
constituted for the purpose. The idea of national or industry-wide agreements and that to on a
particular pattern may appear to be a more ideal system to active industrial relation through
collective bargaining, but the experience of various countries shows that it is not possible to
be dogmatic about the ideal type of collective bargaining, because it largely depends upon
the background, traditions and local factors of a particular region or country.

Good faith bargaining a term that means both parties are communicating and negotiating and
those proposals are being matched with counterproposals with both parties making every
reasonable effort to arrive at agreements. It does not mean that either party is compelled to
agree to proposal. Bargaining in good faith is the cornerstone of effective labour management
relations. It means that both parties communicate and negotiate. It means that proposals are
matched with counterproposals and that both parties make every reasonable effort to arrive at
agreement. It does not mean that either party is compelled to agree to a proposal. Nor does it
require that either party make any specific concessions. As interpreted by the courts, a
violation of the requirement for good faith bargaining may include the following:

1. Surface bargaining. This involves merely going through the motions of bargaining without
any real intention of completing a formal agreement.

2. Concession. Although no one is required to make a concession, the courts’ definitions of


good faith suggest that willingness to compromise is an essential ingredient in good faith
bargaining.

3. Proposals and demands. This is considered as a positive factor in determining overall good
faith.

4. Dilatory tactics. The law requires that the parties meet and ‘confer at reasonable times and
intervals.’ Obviously, refusal to meet at tall with the union does not satisfy the positive duty
imposed on the employer.

5. Imposing conditions. Attempts to impose conditions that are as onerous or unreasonable as


to indicate bad faith will be scrutinized by the board.

6. Unilateral changes in conditions. This is viewed as a strong indication that the employer is
not bargaining with the required intent of reaching an agreement.

7. By passing the representative. An employer violates its duty to bargain when it refuses to
negotiate with the union representative. The duty of management to bargain in good faith
involves, at a minimum, recognition that this statutory representative is the one with whom

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the employer must deal in conducting bargaining negotiations.

8. Commission of unfair labour practices during negotiations. Such practices may reflect
poorly upon the good faith of the guilty party.

9. Providing information. Information must be supplied to the union, upon request, to enable
it to understand and intelligently discuss the issues raised in bargaining.

10. Bargaining items. Refusal to bargain on a mandatory item (one must bargain over these)
or insistence on a permissive item (one may bargain over these) is usually viewed as bad
faith bargaining.

 Pressurization: Strike, Go-Slow, wok to rule, Gherao and Lockout.


In common parlance, dispute means difference or disagreement of strife over some issues be-
tween the parties. As regards industrial dispute, since its settlement proceeds as per the legal
provisions contained in the ‘Industrial Disputes’ Act, 1947, hence it seems pertinent to study
the concept of industrial disputes from a legalistic angle.

According to Section 2 (k) of the Industrial Disputes Act, 1947, the term ‘industrial dispute’
means “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 and conditions of employment of any
person”.

The above definition is too broad and includes differences even between groups of workmen
and employers engaged in an industry. However, in practice, industrial disputes mainly relate
to the difference between the workmen and the employers.

Dispute differs from discipline and grievance. While discipline and grievance focus on
individuals, dispute focuses on collectivity of individuals. In other words, the test of
industrial dispute is that the interest of all or majority of workmen is involved in it.

The following principles judge the nature of an industrial dispute:


1. The dispute must affect a large number of workmen who have a community of interest and
the rights of these workmen must be affected as a class.

2. The dispute must be taken up either by the industry union or by a substantial number of
workmen.

3. The grievance turns from individual complaint into a general complaint.

4. There must be some nexus between the union and the dispute.

5. According to Section 2A of the Industrial Disputes Act, 1947, a workman has a right to
raise an industrial dispute with regard to termination, discharge, dismissal, or retrenchment of
his or her service, even though no other workman or any trade union of workman or any
trade union of workmen raises it or is a party to the dispute.

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Forms of Industrial Disputes:
The industrial disputes are manifested in the following forms:
Strikes: Strike is the most important form of industrial disputes. A strike is a spontaneous and
concerted withdrawal of labour from production. The Industrial Disputes Act, 1947 defines a
strike as “suspension or cessation of work by a group 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”.

According to Patterson “Strikes constitute militant and organised protest against existing
industrial relations. They are symptoms of industrial unrest in the same way that boils
symptoms of disordered system”.

Depending on the purpose, Mamoria et. al. have classified strikes into two types: primary
strikes and secondary strikes.

(i) Primary Strikes:


These strikes are generally aimed against the employers with whom the dispute exists. They
may include the form of a stay-away strike, stay-in, sit-down, pen-down or tools- down, go-
slow and work-to-rule, token or protest strike, cat-call strike, picketing or boycott.

(ii) Secondary Strikes:


These strikes are also called the ‘sympathy strikes’. In this form of strike, the pressure is
applied not against the employer with whom the workmen have a dispute, but against the
third person who has good trade relations with the employer.

However, these relations are severed and the employer incurs losses. This form of strike is
popular in the USA but not in India. The reason being, in India, the third person is not
believed to have any locus standi so far the dispute between workers and employer is
concerned.

General and political strikes and bandhs come under the category of other strikes:
Lock-Outs:
Lock-out is the counter-part of strikes. While a ‘strike’ is an organised or concerted
withdrawal of the supply of labour, ‘lock-out’ is withholding demand for it. Lock-out is the
weapon available to the employer to shut-down the place of work till the workers agree to
resume work on the conditions laid down by the employer. The Industrial Disputes Act, 1947
defined lock-out as “the temporary shutting down or closing of a place of business by the
employer”.

Lock-out is common in educational institutions also like a University. If the University


authority finds it impossible to resolve the dispute raised by the students, it decides to close-
down (or say, lockout) the University till the students agree to resume to their studies on the
conditions laid down by the University authority. Recall, your own University might also
have declared closure sometimes for indefinite period on the eve of some unrest / dispute
erupted in the campus.

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Gherao:
Gherao means to surround. It is a physical blockade of managers by encirclement aimed at
preventing the egress and ingress from and to a particular office or place. This can happen
outside the organisational premises too. The managers / persons who are gheraoed are not
allowed to move for a long time.

Sometimes, the blockade or confinements are cruel and inhuman like confinement in a small
place without light or fans and for long periods without food and water. The persons confined
are humiliated with abuses and are not allowed even to answer “calls of nature”.

The object of gherao is to compel the gheraoed persons to accept the workers’ demands
without recourse to the machinery provided by law. The National Commission on Labour has
refused to accept ‘gherao’ as a form of industrial protest on the ground that it tends to inflict
physical duress (as against economic press) on the persons gheraoed and endangers not only
industrial harmony but also creates problems of law and order.

Workmen found guilty of wrongfully restraining any person or wrongfully confining him
during a gherao are guilty under Section 339 or 340 of the Indian Panel Code of having
committed a cognizable offence for which they would be liable to be arrested without
warrant and punishable with simple imprisonment for a term which may be extended to one
month or with a fine up to Rs. 500, or with both.

Gherao is a common feature even in educational institutions. You might have seen in your
own University officers sometimes gheraoed by the employees / students to compel the
officers to submit to their demands. Here is one such real case of gherao.

Gherao of the vice chancellor:


The non-teaching employees of a Central University in the North-East India had some de-
mands with the University authority for quite some time. Non-confirmation of some of the
employees even after completion of six years service was one of the main demands. That the
Vice Chancellor was to resign on 31st October was known to all in the University.

As the last pressure tactic, the employees started Vice Chancellor’s gherao on 31st October at
11.00 a.m. They shut down the entrance gate of the administrative building at 3.00 p.m. to
block the egress and ingress from and to the office in the administrative building.

The Vice Chancellor was kept confined in his office chamber. He was humiliated throughout
the gherao by using abuses, disconnecting his telephone line, not allowing him food and
water and even not allowing him to answer “calls of nature”. This scene lasted for 18 hours
and was over only by 5 a.m. next day when some 50 C.R.P.F jawans with local police came
from the city which is about 20 kms. away from the University Campus.

They broke the entrance gate of administrative building, rescued the Vice Chancellor and
arrested 117 employees confining the Vice Chancellor under Section 340 of the Indian Penal
Code and kept them behind bars for a day.

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On 1st November, the Vice Chancellor handed over the charge of his office to the senior
most Professor of the University at his residence in the city. In the wee hours on 2nd
November, he left for where he came from. The aftermath of gherao created a tuneful
atmosphere in the University Campus for about two weeks.

Picketing and Boycott:


Picketing is a method designed to request workers to withdraw cooperation to the employer.
In picketing, workers through display signs, banners and play-cards drew the attention of the
public that there is a dispute between workers and employer.

Workers prevent their colleagues from entering the place of work and pursuade them to join
the strike. For this, some of the union workers are posted at the factory gate to pursuade
others not to enter the premises but to join the strike.

Boycott, on the other hand, aims at disrupting the normal functioning of the organisation.
The striking workers appeal to others for voluntary withdrawal of co-operation with the
employer. Instances of boycotting classes and examinations are seen in the Universities also.

Types of Industrial Disputes:


The ILO’ has classified the industrial disputes into two main types.

They are:
1. Interest Disputes

2. Grievance or Right Disputes.

They are discussed one by one:


1. Interest Disputes:
These disputes are also called ‘economic disputes’. Such types of disputes arise out of terms
and conditions of employment either out of the claims made by the employees or offers given
by the employers. Such demands or offers are generally made with a view to arrive at a
collective agreement. Examples of interest disputes are lay-offs, claims for wages and bonus,
job security, fringe benefits, etc.

2. Grievance or Right Disputes:


As the name itself suggests, grievance or right disputes arise out of application or
interpretation of existing agreements or contracts between the employees and the manage-
ment. They relate either to individual worker or a group of workers in the same group.

That’s way in some countries; such disputes are also called ‘individual disputes’. Payment of
wages and other fringe benefits, working time, over-time, seniority, promotion, demotion,
dismissal, discipline, transfer, etc. are the examples of grievance or right disputes.

If these grievances are not settled as per the procedure laid down for this purpose, these then
result in embitterment of the working relationship and a climate for industrial strife and
unrest. Such grievances are often settled through laid down standard procedures like the
provisions of the collective agreement, employment contract, works rule or law, or customs

23
/usage in this regard. Besides, Labour Courts or Tribunals also adjudicate over grievance or
interest disputes.

Generally, industrial disputes are considered as ‘dysfunctional’ and ‘unhealthy’. These are
manifested in the forms of strikes and lock-outs, loss of production and property, sufferings
to workers and consumers and so on. But, sometimes industrial disputes are beneficial as
well.

It is the dispute mainly which opens up the minds of employers who then provide better
working conditions and emoluments to the workers. At times, disputes bring out the causes to
the knowledge of the public where their opinion helps resolve them.

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Module III: Regulation of Industrial Disputes

 Define the concept of Industry, Industrial Dispute and workman,

Sec.2 (j) of the Industrial Disputes Act, 1947 defines ‘industry’ as any business, trade, undertaking,
manufacture, or calling of employers and includes any calling, service, employment, handicraft or
industrial occupation or avocation of workmen”.

An industry exists only when there is relationship between employers and employees, the former
is engaged in business, trade, undertaking, manufacture or calling of employers and the latter is
engaged in the calling, service, employment, handicraft or industrial occupation and avocation.

Sec. 2(j) gives the definition of industry, which was elaborated upon by the Supreme Court in the
Bangalore Water Supply and Sewerage Board v. R. Rajappa[i]. The term industry has been given
a wide scope and the judgment overruled several earlier decisions. The court held-

1. Any activity will be industry if it fulfills the ‘triple test’, as under:

 Systematic and organized activity


 With the cooperation between Employers and employees
 For the production and distribution of good and services whether or not capital has been
invested for this activity.

2. It is immaterial whether or not there is profit motive or whether or not there is capital.

3. If the organization is a trade or business it does not cease to be one because of philanthropy
animating the triple test, cannot be exempted from scope of definition of industry.

4. Dominant nature test – whether there is complex of activities, the test would be predominant
nature of services and integrated nature of departments. All departments integrated with industry
will also be industry.

5. The exceptions to industry are-

Casual activities (because they are not systematic).

Small clubs, co – operatives, research labs, gurukuls which have an essentially non employee
character.

Single door lawyer taking help from clerk (because there is no organized labour).

Selfless charitable activities carried on through volunteers e.g. free legal or medical service.

Sovereign functions – strictly understood, i.e., maintenance of law and order, legislative functions
and judicial function.

Charitable Institutions

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These fall into three categories –

(a) Those that yield profit, but the profits are not siphoned off for altruistic purposes;

(b) Those that make no profit but hire the service of employees as in any other business, but the
goods/ services which are the output, are made available at a low or no cost to the indigent poor;
and

(c) Those that are oriented on a humane mission fulfilled by men who work, not because they are
paid wages, but because they share the passion for the cause and derive job satisfaction.

The first two categories are industries, but not the third, on the assumption that they all involve co-
operation between employers and employees.

Hospitals

In State of Bombay v. Hospital Mazdoor Sabha,[ii] the Supreme Court held the State is carrying
on an ‘undertaking’ within Sec. 2(j) when it runs a group of hospitals for purpose of giving medical
relief to the citizens and for helping to impart medical education. The court observed as follows:

 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.
 It is the character of the activity in question which attracts the provisions of Sec. 2 (j), who
conducts the activity and whether it is conducted for profit or not, do not make a material
difference.

Thus, activities that have no commercial implications, such as hospitals carried on with
philanthropic motives would be covered by the expression ‘undertaking’. The mere fact that
Government runs such activity is immaterial. In case an activity is industry if carried on by a
private person, it would be so, even if carried on by the Government.

In Management of Safdarjung Hospital v. Kuldip Singh[iii], it was held that a place of treatment
of patients run as a department of the government was not an industry because it was a part of the
functions of the government. Charitable hospitals run by Government or even private associations
cannot be included in the definition of industry because they have not embarked upon economic
activities analogous to trade or business. If hospitals, nursing home or a dispensary is run as a
business in a commercial way, there may be elements of industry.

In Dhanrajgiri Hospital v. Workmen[iv] , the main activity of the hospital was imparting of training
in nursing and the beds in the hospital were meant for their practical training. It was held not to be
an industry, as it was not carrying on any economic activity in the nature of trade or business.

In Bangalore Water Supply v A. Rajappa[v], the Supreme Court overruled Safdarjung Hospital
and Dhanrajgiri Hospital cases, and approved the law laid down in Hospital Mazdoor Sabha case.
It was held that hospital facilities are surely services and hence industries. The government
departments while undertaking welfare activities cannot be said to be engaged in discharging
sovereign functions and hence outside the ambit of Sec.2(j) of the Act.

26
Therefore, a charitable hospital run by a private trust, offering free services and employing a
permanent staff is an industry as there is a systematic activity, a co – operation between employer
and employees and rendering of services which satisfies human wants and wishes. Further, the
services of employees are hired as in any other business.

Legal Firm

In National Union of Commercial Employees v. M.R. Meher,[vi] it was held that a solicitor’s firm
is not an industry, although specifically considered, it is organized as an industrial concern. The
court held that a person following a liberal profession does not carry on his profession in any
intelligible sense with the active co-operation of his employees, and the principal/sole capital
which he brings into his profession is his special and peculiar intellectual and educational
equipment. Subsidiary work which is purely incidental type and which is intended to assist the
solicitor in doing his job has no direct relation to the professional service ultimately rendered by
the solicitor. There is, no doubt, a kind of co-operation between the solicitor and his employees,
but that co-operation has no direct or immediate relation to the advice or service which the solicitor
renders to his client.

However this was overruled by Bangalore Water Supply case [vii], wherein it was held that in
view of the infrastructure of the offices of professional persons, the contribution to the success of
the institution comes not merely from the professional or specialist but from all those whose
excellence in their respective spheres makes for total proficiency.

Thus functional cooperation between employer and employees is essential for the total quality of
service. But in the categories of such and allied professions when such co-operation is missing
they are not industries.

A legal consultant firm employing two law graduates stenographer and a peon is an industry.

WORKMAN

The concept of workman is central to the concept of an industrial dispute as an industrial dispute
can be raised either by a "workman" or an "employer." Since the Industrial Disputes Act, 1947
("ID Act") is a piece of beneficial legislation, the courts have enlarged the scope and
applicability of this Act by giving wide interpretation to the term "workman." Section 2(s)
defines workman as any person (including an apprentice) employed in any industry to do
any manual, unskilled, skilled, technical, operational, clerical or supervisory work, for hire
or reward, terms of employment be express or implied and includes any such person who has
been dismissed, discharged or retrenched in connection with, or as a consequence of
dispute. It excludes persons employed in army/Navy/Air Force/Police and those employed
in mainly managerial or administrative, supervisory capacity and drawing wages of more
than INR 6500.

The Courts have interpreted this definition and have identified various determining factors to
know whether a person is "workman" or not. The factors which should be considered
are (a) whether there is a Master-Servant relationship;1 (b) when a person is performing various
functions which overlap in their characteristics, the nature of main function for which the
claimant is employed should be considered;2 (c) work is either manual, skilled, unskilled,

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technical operational, clerical or supervisory in nature, the mere fact that it does not fall within
the exception would not render a person to be workman; and (d) that the exceptions are not
applicable.3Further, designation, source of employment, method of recruitment, terms and
conditions of employment/contract of service, the quantum of wages/pay and the mode of
payment should not be considered while determining whether a person can be termed as
"workman."4

Over a period of time, courts have interpreted specific points of contention in the definition
under the ID Act which has enlarged the scope of the legislation. This note discusses some of the
important components of section 2(s) and their interpretation by the courts below.

1. Supervisory and Managerial work

1.1 A person working in purely managerial and/or supervisory capacity does not fall within the
definition of workman under ID Act. However, when a person performs multifarious functions,
the nature of the main function performed by the person has to be considered to determine if the
person is a "workman." The designation of a person is not a conclusive factor in determining the
nature of work. Even if a person is designated as supervisor, the employer has to prove that his
work and his duties were in nature of a supervisor.5

1.2 To squarely fall within the exception, the person must be (a) employed in a supervisory
capacity; (b) draw more than INR 6500 as wages; and (c) primarily perform the functions of
managerial nature. The emphasis really is to exclude those persons who are performing mainly
managerial work and are employed in supervisory capacity i.e. evaluating the work of their
subordinates. A managerial work includes powers and duties related to hiring and firing of new
employees, grant of leave to employees and actual participation in the policy of the business. The
managerial functions may not be performed as a consequence of a written contract but may be
implied from the powers vested in a person or the nature of his duties. A mere leader of a team
who makes checks and forwards it to seniors for consideration cannot be said to be covered
within the exception.6 Further, a supervisor earning less than 6,500/- may also raise an industrial
dispute for an increment in wages which may eventually exclude him from the definition of
workman.7

2. Skilled and Unskilled manual and operational work

2.1 Courts have not formulated an explanation as to who are considered as people employed in
"manual and operational work." Manual or operational work may be classified as one that
requires no special set of skills. It is mostly associated with physical labour. By way of
exception, the courts have excluded such works which need imaginative or creative quotient.
A work that requires training would imply that the work is of special nature and requires a
distinct application of mind. It is not considered a manual/clerical/operational work or technical
work. However, in a few cases the courts have deviated from strict interpretation and excluded
ancillary creative works while considering the definition of "workman." A person suggesting
ways to increase sale is using an imaginative minds and therefore, is out of the scope of this
definition. However, a person carrying out such ideas by distributing pamphlets or engaging in
door-to-door publicity will be covered as a "workman" under the ID Act.

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2.2 A salesperson may use various techniques to convince the consumers but that is not
considered as use of creative or imaginative faculty and such sales person, even if he goes
through a training to acquire knowledge about the product, will not be excluded from the
definition of a workman.8

3. Part Time and Full Time workman

The number of working hours is not considered while determining whether a person qualifies as
"workman" or not. However, there must exist a master-servant relationship between the
employee and his employer. An independent contractor cannot be termed as a workman. The
employer must be in a position to control the manner of employee‟s work.

The ID Act does not differentiate between part-time, full time, casual, daily wage,9 regular or
permanent workman. All such individuals are subject to ID Act if they fulfill the ingredients as
provided in section 2(s).10

Conclusion

To give effect to the objects of this Act, the courts have followed a purposive approach while
interpreting the term workman‟ and industrial dispute‟. The emphasis is laid on the nature of
duties and powers conferredon an employee rather than the designation.

INDUSTRIAL DISPUTE

Industrial Dispute is “any dispute of 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.”

Industrial dispute as defined under Sec. 2(k) exists between-

Parties to the dispute who may be

 Employers and workmen


 Employers and Employers
 Workmen and workmen

a) There should be a factum of dispute not merely a difference of opinion.

b) It has to be espoused by the union in writing at the commencement of the dispute. Subsequent
espousal will render the reference invalid. Therefore date when the dispute was espoused is very
important.

c) It affects the interests of not merely an individual workman but several workmen as a class
who are working in an industrial establishment.

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d) The dispute may be in relation to any workman or workmen or any other person in whom they
are interested as a body.

Chandrakant Tukaram Nikam and others vs. Municipal Corporation of Ahmedabad and another[i]:
It was held by the Supreme Court that the Jurisdiction of the Civil Court was impliedly barred in
cases of the dismissal or removal from service, The appropriate forum for such relief was one
constituted under Industrial Disputes Act, 1947.

Jadhav J. H. vs. Forbes Gobak Ltd.[ii]: In this case, it was held that, a dispute relating to a single
workman may be an industrial dispute if either it is espoused by the union or by a number of
workmen irrespective of the reason the union espousing the cause of workman was not the majority
of the union.

When An Individual Dispute Becomes An Industrial Dispute

Before insertion of Section 2-A of the Act an individual dispute could not per se be an industrial
dispute, but it could become one if taken up by the Trade Union or a number of workmen. The
Supreme Court and majority of Industrial Tribunals held that, a dispute raised by a dismissed
employee would not be treated as an industrial dispute, unless it is supported by a trade union or
by a body or Section of workman.

For an individual dispute to be declared as an Industrial Dispute, the following conditions are to
be satisfied:

1. A body of workmen (trade Union ) or a considerable number of workmen, are found to


have made common cause with the individual workman;
2. That the dispute (individual dispute) was taken up or sponsored by the workmen as a body
(trade union) or by a considerable Section of them before the date of reference.

Bombay Union of Journalists vs. The Hindu[iii]: A person working in ‘The Hindu, Madras’ was
terminated for claiming as full time employee. The Bombay Union of Journalist raised the dispute.
It was found that, there were ten employees of which seven in administrative side and only three
in journalism side. Of these three, only two were the members of the union. Therefore, the Supreme
Court held that the Bombay Union of Journalists is not competent to raise this dispute. Even if it
had raised, it could not have become an industrial dispute.

Workmen of Indian Express Newspapers Ltd. vs. Management Indian Express Newspapers[iv]: A
dispute relating to two workmen of Indian Express Newspapers Ltd, was espoused by the Delhi
Union of Journalists which was an outside union. About 25 percent of the working journalists of
the Indian Express were members of that union. But there was no union of the journalists of the
Indian Express. It was held that the Delhi Union of Journalists could be said to have a
representative character Qua the working journalists employed Indian Express and the dispute was
thus transformed into an industrial dispute.

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Thus, an individual dispute to fall within the definition of industrial dispute, it must be sponsored
by the Trade Union of the workmen or if there is no trade union, it must be sponsored by the
majority of the workmen or it must comply with the requirements of Section 2-A of the Industrial
Disputes Act, 1947.

Section 2-A provides that “where any employer discharges, dismisses, retrenches or otherwise
terminated the services of any individual workman, any dispute or difference between that
workman and his employer connected with, or arising out of such discharge, dismissal,
retrenchment or termination shall be deemed to be an industrial dispute, notwithstanding that no
other workman nor any union of workmen, is a party to the dispute.”

 Any workman may make an application directly to the labour court or Industrial Tribunal
for adjudication of such dispute after the expiry of 3 months when an application was made
before the conciliation officer. This has been done to prevent inordinate delay.

 The said application however should be made within 3 years of the date of dismissal,
discharge, retrenchment or termination of service.

 The court shall proceed to hear the matter as if it was referred to it U/S 10 of the ID Act.

Section 2A does not declare all individual disputes to be industrial disputes. It is only when a
dispute is connected with a discharged, dismissed retrenched or terminated workman that it shall
be treated as an industrial dispute. If the dispute or difference is connected with some other matter
e.g. payment of bonus/ gratuity etc. then it would have to satisfy the test laid down in judicial
decisions. Thus only a collective dispute could constitute an industrial dispute but collective
dispute does not mean that the dispute should either be sponsored by a recognized union or that all
or majority of the workmen of an industrial establishment should be parties to it. (State of Bihar
vs. kripa Shankar Jaiswal[v])

A dispute is an industrial dispute even where it is sponsored by a union which is not registered but
the Trade Union must not be on unconnected with the employer or the industry concerned.
(Express Newspapers (Private) Ltd. Vs. First Labour Court, West Bengal & Others[vi])

Where an individual dispute is espoused by union the question of the employee being a member
of the union when the cause arose is immaterial. Those taking up the cause of the aggrieved
workman must be in the same employment i.e., there must be community of interest when the act
complained against happened and not when the dispute was referred to.

Section 2 (k) compared with Section 2-A

An individual dispute even though not sponsored by other workmen or espoused by the union
would by deemed to be an industrial dispute if it covers any of the matters mentioned in Section
2-A. So far as the subject matter of the dispute is concerned 2-A does not bring about any change.
The provisions of Section 2(K) alone determine that question.

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The only change introduced by Section 2-A is that before its introduction, a dispute even though
was an industrial dispute from the perspective of subjects referred to in Section 2 (k) would not
have become an industrial dispute if it were only an individual dispute and it was not taken up
either by the union or by a substantial body or workmen. But after the introduction of Section 2-A
such a dispute would be an industrial dispute in respect of those matters specified in that Section
even though it is not sponsored by a union or a considerable number of workmen. Section 2-A can
be treated as an explanation to Section 2 (k).

 Power of Government to refer Industrial Disputes for adjudication: The


Adjudicatory Machinery, Award and its binding nature, Judicial review of Awards ,

Some of the major industrial dispute settlement machinery are as follows: 1. Conciliation 2.
Court of Inquiry 3. Voluntary Arbitration 4. Adjudication.

This machinery has been provided under the Industrial Disputes Act, 1947. It, in fact,
provides a legalistic way of setting the disputes. As said above, the goal of preventive
machinery is to create an environment where the disputes do not arise at all.

Even then if any differences arise, the judicial machinery has been provided to settle them
lest they should result into work stoppages. In this sense, the nature of this machinery is
curative for it aims at curing the aliments.

This machinery comprises following organs:


1. Conciliation

2. Court of enquiry

3. Voluntary arbitration

4. Adjudication (Compulsory arbitration).

1. Conciliation:
Conciliation, is a form of mediation. Mediation is the act of making active effort to bring two
conflicting parties to compromise. Mediation, however, differs from conciliation in that
whereas conciliator plays only a passive and indirect role, and the scope of his functions is
provided under the law, the mediator takes active part and the scope of his activities are not
subject to any statutory provisions.

Conciliation is the “practice by which the services of a neutral party are used in a dispute as a
means of helping the disputing parties to reduce the extent of their differences and to arrive at
an amicable settlement of agreed solution.”

The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by
appointing conciliation officers (permanently or for a limited period) or by constituting a
board of conciliation. This conciliation machinery can take a note of a dispute or apprehend
dispute either on its own or when approached by either party.

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With a view to expediting conciliation proceeding, time-limits have been prescribed—14
days in the case of conciliation officers and two months in the case of a board of conciliation,
settlement arrived at in the course of conciliation is binding for such period as may be agreed
upon between the parties or for a period of 6 months and with continue to be binding until
revoked by either party. The Act prohibits strike and lock-out during the pendency of
conciliation proceedings before a Board and for seven days after the conclusion of such
proceedings.

Conciliation Officer:
The law provides for the appointment of Conciliation Officer by the Government to
conciliate between the parties to the industrial dispute. The Conciliation Officer is given the
powers of a civil court, whereby he is authorised to call the witness the parties on oath. It
should be remembered, however, whereas civil court cannot go beyond interpreting the laws,
the conciliation officer can go behind the facts and make judgment which will be binding
upon the parties.

On receiving information about a dispute, the conciliation officer should give formal
intimation in writing to the parties concerned of his intention to commence conciliation
proceedings from a specified date. He should then start doing all such things as he thinks fit
for the purpose of persuading the parties to come to fair and amicable settlement of the
dispute.

Conciliation is an art where the skill, tact, imagination and even personal influence of the
conciliation officer affect his success. The Industrial Disputes Act, therefore, does not
prescribe any procedure to the followed by him.

The conciliation officer is required to submit his report to the appropriate government along
with the copy of the settlement arrived at in relation to the dispute or in case conciliation has
failed, he has to send a detailed report giving out the reasons for failure of conciliation.

The report in either case must be submitted within 14 days of the commencement of
conciliation proceedings or earlier. But the time for submission of the report may be
extended by an agreement in writing of all the parties to the dispute subject to the approval of
the conciliation officer.

If an agreement is reached (called the memorandum of settlement), it remains binding for


such period as is agreed upon by the parties, and if no such period is agreed upon, for a
period of six months from the date on which the memorandum of settlement is signed by the
parties to the dispute, and continues to be binding on the parties after the expiry of the period
aforesaid, until the expiry of two months from the date on which a notice in writing of an
intention to terminate the settlement is given by one of the party or parties to the settlement.

Board of Conciliation:
In case Conciliation Officer fails to resolve the differences between the parties, the
government has the discretion to appoint a Board of Conciliation. The Board is tripartite and
ad hoc body. It consists of a chairman and two or four other members.

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The chairman is to be an independent person and other members are nominated in equal
number by the parties to the dispute. Conciliation proceedings before a Board are similar to
those that take place before the Conciliation Officer. The Government has yet another option
of referring the dispute to the Court of Inquiry instead of the Board of Conciliation.

The machinery of the Board is set in motion when a dispute is referred to it. In other words,
the Board does not hold the conciliation proceedings of its own accord. On the dispute being
referred to the Board, it is the duty of the Board to do all things as it thinks fit for the purpose
of inducing the parties to come to a fair and amicable settlement. The Board must submit its
report to the government within two months of the date on which the dispute was referred to
it. This period can be further extended by the government by two months.

2. Court of Inquiry:
In case of the failure of the conciliation proceedings to settle a dispute, the government can
appoint a Court of Inquiry to enquire into any matter connected with or relevant to industrial
dispute. The court is expected to submit its report within six months. The court of enquiry
may consist of one or more persons to be decided by the appropriate government.

The court of enquiry is required to submit its report within a period of six months from the
commencement of enquiry. This report is subsequently published by the government within
30 days of its receipt. Unlike during the period of conciliation, workers’ right to strike,
employers’ right to lockout, and employers’ right to dismiss workmen, etc. remain unaffected
during the proceedings in a court to enquiry.

A court of enquiry is different from a Board of Conciliation. The former aims at inquiring
into and revealing the causes of an industrial dispute. On the other hand, the latter’s basic
objective is to promote the settlement of an industrial dispute. Thus, a court of enquiry is
primarily fact-finding machinery.

3. Voluntary Arbitration:
On failure of conciliation proceedings, the conciliation officer many persuade the parties to
refer the dispute to a voluntary arbitrator. Voluntary arbitration refers to getting the disputes
settled through an independent person chosen by the parties involved mutually and
voluntarily.

In other words, arbitration offers an opportunity for a solution of the dispute through an
arbitrator jointly appointed by the parties to the dispute. The process of arbitration saves time
and money of both the parties which is usually wasted in case of adjudication.

Voluntary arbitration became popular as a method a settling differences between workers and
management with the advocacy of Mahatma Gandhi, who had applied it very successfully in
the Textile industry of Ahmedabad. However, voluntary arbitration was lent legal identity
only in 1956 when Industrial Disputes Act, 1947 was amended to include a provision relating
to it.

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The provision for voluntary arbitration was made because of the lengthy legal proceedings
and formalities and resulting delays involved in adjudication. It may, however, be noted that
arbitrator is not vested with any judicial powers.

He derives his powers to settle the dispute from the agreement that parties have made
between themselves regarding the reference of dispute to the arbitrator. The arbitrator should
submit his award to the government. The government will then publish it within 30 days of
such submission. The award would become enforceable on the expiry of 30 days of its
publication.

Voluntary arbitration is one of the democratic ways for setting industrial disputes. It is the
best method for resolving industrial conflicts and is a close’ supplement to collective
bargaining. It not only provides a voluntary method of settling industrial disputes, but is also
a quicker way of settling them.

It is based on the notion of self-government in industrial relations. Furthermore, it helps to


curtail the protracted proceedings attendant on adjudication, connotes a healthy attitude and a
developed outlook; assists in strengthening the trade union movement and contributes for
building up sound and cordial industrial relations.

4. Adjudication:
The ultimate remedy for the settlement of an industrial dispute is its reference to adjudication
by labour court or tribunals when conciliation machinery fails to bring about a settlement.
Adjudication consists of settling disputes through intervention by the third party appointed by
the government. The law provides the adjudication to be conducted by the Labour Court,
Industrial Tribunal of National Tribunal.

A dispute can be referred to adjudication if hot the employer and the recognised union agree
to do so. A dispute can also be referred to adjudication by the Government even if there is no
consent of the parties in which case it is called ‘compulsory adjudication’. As mentioned
above, the dispute can be referred to three types of tribunals depending on the nature and
facts of dispute in questions.

These include:
(a) Labour courts,

(b) Industrial tribunals, and

(c) National tribunals.

The procedure, powers, and provisions regarding commencement of award and period of
operation of award of these three bodies are similar. The first two bodies can be set up either
by State or Central Government but the national tribunal can be constituted by the Central
Government only, when it thinks that the adjudication of a dispute is of national importance.
These three bodies are into hierarchical in nature. It is the Government’s prerogative to refer
a dispute to any of these bodies depending on the nature of dispute.

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(а) Labour Court:
A labour court consists of one person only, who is normally a sitting or an ex-judge of a High
Court. It may be constituted by the appropriate Government for adjudication of disputes
which are mentioned in the second schedule of the Act.

The issues referred to a labour court may include:


(i)The propriety or legality of an order passed by an employer under the Standing Orders.

(ii) The application and interpretation of Standing Orders.

(iii) Discharge and dismissal of workmen and grant of relief to them.

(iv) Withdrawal of any statutory concession or privilege.

(v) Illegality or otherwise of any strike or lockout.

(vi) All matters not specified in the third schedule of Industrial Disputes Act, 1947. (It deals
with the jurisdiction of Industrial Tribunals).

(b) Industrial Tribunal:


Like a labour court, an industrial tribunal is also a one-man body. The matters which fall
within the jurisdiction of industrial tribunals are as mentioned in the second schedule or the
third schedule of the Act. Obviously, industrial tribunals have wider jurisdiction than the
labour courts.

Moreover an industrial tribunal, in addition to the presiding officer, can have two assessors to
advise him in the proceedings; the appropriate Government is empowered to appoint the
assessors.

The Industrial Tribunal may be referred the following issues:


1. Wages including the period and mode of payment.

2. Compensatory and other allowances.

3. Hours of work and rest intervals.

4. Leave with wages and holidays.

5. Bonus, profit sharing, provident fund and gratuity.

6. Shift working otherwise than in accordance with the standing orders.

7. Rule of discipline.

8. Rationalisation.

9. Retrenchment.

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10. Any other matter that may be prescribed.

(c) National Tribunal:


The Central Government may constitute a national tribunal for adjudication of disputes as
mentioned in the second and third schedules of the Act or any other matter not mentioned
therein provided in its opinion the industrial dispute involves “questions of national
importance” or “the industrial dispute is of such a nature that undertakings established in
more than one state are likely to be affected by such a dispute”.

The Central Government may appoint two assessors to assist the national tribunal. The award
of the tribunal is to be submitted to the Central Government which has the power to modify
or reject it if it considers it necessary in public interest.

It should be noted that every award of a Labour Court, Industrial Tribunal or National
Tribunal must be published by the appropriate Government within 30 days from the date of
its receipt. Unless declared otherwise by the appropriate government, every award shall come
into force on the expiry of 30 days from the date of its publication and shall remain in
operation for a period of one year thereafter.

 The concept of lay-off, retrenchment and procedure and compensation relating to


lay-off and retrenchment.

Section 2(kkk) - Lay off


Lay-off means failure, refusal, or inability of a employer to give employment to a workman
whose name is on the muster rolls of his industrial establishment and who has not been
retrenched, on the account of lack of coal, lack of power, lack of raw material, over stocking of
output, failure of machinery, due to natural calamity, or due to any other connected reason.

Central India Spinning, Weaving, and Manufacturing Co. Ltd. Nagpur vs State Industrial
Court 1959 - Held that the words, "failure, refusal, or inability" are key to the definition and
means that the unemployment is due to a cause independent of any action or inaction of the
workmen.

Temporary
Due to reasons beyond employer's control
Due to economic reasons
non-intentional

Rights and Obligations Resulting from lay-off


Layoff is not a right conferred upon the employer but an obligation that the unemployment is
temporary in nature and in a reasonable time the laid off worker will be restored his position.
However, there is no indication regarding the time layoff will continue.

25C. RIGHT OF WORKMEN LAID OFF FOR COMPENSATION

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Whenever a workman (other than a badli workman or a casual workman) whose name is borne
on the muster rolls of an industrial establishment and who has completed not less than one year
of continuous service under an employer is laid off, whether continuously or intermittently, he
shall be paid by the employer for all days during which he is so laid off, except for such weekly
holidays as may intervene, compensation which shall be equal to fifty per cent of the total of the
basic wages and dearness allowance that would have been payable to him had he not been so laid
off :

Provided that if during any period of twelve months, a workman is so laid-off for more than
forty-five days, no such compensation shall be payable in respect of any period of the lay-off
after the expiry of the first forty-five days, if there is an agreement to that effect between the
workman and the employer :

Provided further that it shall be lawful for the employer in any case falling within the foregoing
proviso to retrench the workman in accordance with the provisions contained in section 25F at
any time after the expiry of the first forty-five days of the lay-off and when he does so, any
compensation paid to the workman for having been laid-off during the preceding twelve months
may be set off against the compensation payable for retrenchment.

Explanation : "Badli workman" means a workman who is employed in an industrial


establishment in the place of another workman whose name is borne on the muster rolls of the
establishment, but shall cease to be regarded as such for the purposes of this section, if he has
completed one year of continuous service in the establishment.

25M. PROHIBITION OF LAY-OFF. -


(1) No workman (other than a badli workman or a casual workman) whose name is borne on the
muster-rolls of an industrial establishment to which this Chapter applies shall be laid-off by his
employer except with the prior permission of the appropriate Government or such authority as
may be specified by that Government by notification in the Official Gazette (hereinafter in this
section referred to as the specified authority), obtained on an application made in this behalf
unless such lay-off is due to shortage of power or to natural calamity, and in the case of a mine,
such lay-off is due also to fire, flood, excess of inflammable gas or explosion.

(2) An application for permission under sub-section (1) shall be made by the employer in the
prescribed manner stating clearly the reasons for the intended lay-off and a copy of such
application shall also be served simultaneously on the workmen concerned in the prescribed
manner.

(3) Where the workmen (other than badli workmen or casual workmen) of an industrial
establishment, being a mine, have been laid-off under sub-section (1) for reasons of fire, flood or
excess of inflammable gas or explosion, the employer, in relation to such establishment, shall,
within a period of thirty days from the date of commencement of such lay-off, apply, in the
prescribed manner, to the appropriate Government or the specified authority for permission to
continue the lay-off.

(4) Where an application for permission under sub-section (1) or sub-section (3) has been made
the appropriate Government or the specified authority, after making such inquiry as it thinks fit

38
and after giving a reasonable opportunity of being heard to the employer, the workmen
concerned and the persons interested in such lay-off, may, having regard to the genuineness and
adequacy of the reasons for such lay-off, the interests of the workmen and all other relevant
factors, by order and for reasons to be recorded in writing, grant or refuse to grant such
permission and a copy of such order shall be communicated to the employer and the workmen.

(5) Where an application for permission under sub-section (1) or sub-section (3) has been made
and the appropriate Government or the specified authority does not communicate the order
granting or refusing to grant permission to the employer within a period of sixty days from the
date on which such application is made, the permission applied for shall be deemed to have been
granted on the expiration of the said period of sixty days.

(6) An order of the appropriate Government or the specified authority granting or refusing to
grant permission shall, subject to the provisions of sub-section (7), be final and binding on all the
parties concerned and shall remain in force for one year from the date of such order.

(7) The appropriate Government or the specified authority may, either on its own motion or on
the application made by the employer or any workman, review its order granting or refusing to
grant permission under sub-section (4) or refer the matter, or, as the case may be, cause it to be
referred, to a Tribunal for adjudication :

Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass
an award within a period of thirty days from the date of such reference.

(8) Where no application for permission under sub-section (1) is made, or where no application
for permission under sub-section (3) is made within the period specified therein, or where the
permission for any lay-off has been refused, such lay-off shall be deemed to be illegal from the
date on which the workmen had been laid-off and the workmen shall be entitled to all the
benefits under any law for the time being in force as if they had not been laid-off.

(9) Notwithstanding anything contained in the foregoing provisions of this section, the
appropriate Government may, if it is satisfied that owing to such exceptional circumstances as
accident in the establishment or death of the employer or the like, it is necessary so to do, by
order, direct that the provisions of sub-section (1), or, as the case may be, sub-section (3) shall
not apply in relation to such establishment for such period as may be specified in the order.

(10) The provisions of section 25C (other than the second proviso thereto) shall apply to cases of
lay-off referred to in this section.

Explanation : For the purposes of this section, a workman shall not be deemed to be laid-off by
an employer if such employer offers any alternative employment (which in the opinion of the
employer does not call for any special skill or previous experience and can be done by the
workman) in the same establishment from which he has been laid-off or in any other
establishment belonging to the same employer, situate in the same town or village, or situate
within such distance from the establishment to which he belongs that the transfer will not involve
undue hardship to the workman having regard to the facts and circumstances of his case,
provided that the wages which would normally have been paid to the workman are offered for
the alternative appointment also.

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Section 2(oo) - Retrenchment
Retrenchment means termination of service of an employee by an employer for any reason other
than as a punishment due to disciplinary action. This does not include - voluntary retirement,
superannuation, non-renewal of contract, termination on the ground of continued ill-health.

For any reason what so ever - surplusage, redundancy due to advanced machinery, slowdown in
business. Reason does not matter.

DC & G Mills vs Shambhu Nath 1978 - Due to reorganization, a few workers were made
redundant. Instead of retrenching them, they were absorbed in other places. One worker was
given employment in another dept. with same pay. However, due to lack of performance, he was
shifted to another dept. However, he refused to go to another dept. and asked for one more
chance. He was then removed from the rolls. This was held retrenchment.

Morinda Coop Sugar Mills vs Ram Kishen and others 1996 - Workers were employed in the
sugar mill only during the season and then they ceased to work. Held that it is not retrenchment
because it is only seasonal work.

Santosh Gupta vs SBI 1980 - A worker was removed after he failed a test that he was required
to pass for confirmation of service. SC held it to be retrenchment because termination for any
reason is retrenchment except if it is because of the reasons mentioned in the act.

VRS
Panjab National Bank vs Virendra Kumar Goel 2004 - SC held that employees who opted for
voluntary retirement and availed any part of retirement benefits were not eligible for retraction.

Ill-health
Lalit Mohan Puri vs Pure Drinks 1992 - A employee was asked to appear before ESI doctor to
prove ill health. He failed to appear. He was then removed. SC held merely refusal to appear for
medical examination should not be construed as ill health and held it to be retrenchment.

Contract of Employment (subclause bb)


In the case of Dilip Hanuman Shirke vs Zilla Parishad Yavatmal 1990 - Held that the sub
clause bb that allows an employer to not renew the employment contract must be read
restrictively. The duration of employment must be read as per the nature of work and not from
just the employment letter otherwise it will be abused by the employers.

Section 25F. CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN


No workman employed in any industry who has been in continuous service for not less than one
year under an employer shall be retrenched by that employer until -
(a) the workman has been given one month's notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been paid in lieu of such
notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be
equivalent to fifteen days' average pay for every completed year of continuous service or any
part thereof in excess of six months; and

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(c) notice in the prescribed manner is served on the appropriate Government or such authority as
may be specified by the appropriate Government by notification in the Official Gazette.

Section 25G. PROCEDURE FOR RETRENCHMENT


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 workmen 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.

Section 25N. CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN

1. No workman employed in any industrial establishment to which this Chapter applies,


who has been in continuous service for not less than one year under an employer shall be
retrenched by that employer until -
1. the workman has been given three months' notice in writing indicating the reasons
for retrenchment and the period of notice has expired, or the workman has been
paid in lieu of such notice, wages for the period of the notice; and
2. the prior permission of the appropriate Government or such authority as may be
specified by that Government by notification in the Official Gazette (hereafter in
this section referred to as the specified authority) has been obtained on an
application made in this behalf.
2. An application for permission under sub-section (1) shall be made by the employer in the
prescribed manner stating clearly the reasons for the intended retrenchment and a copy of
such application shall also be served simultaneously on the workmen concerned in the
prescribed manner.
3. Where an application for permission under sub-section (1) has been made, the
appropriate Government or the specified authority, after making such inquiry as it thinks
fit and after giving a reasonable opportunity of being heard to the employer, the workmen
concerned and the persons interested in such retrenchment, may, having regard to the
genuineness and adequacy of the reasons stated by the employer, the interests of the
workmen and all other relevant factors, by order and for reasons to be recorded in
writing, grant or refuse to grant such permission and a copy of such order shall be
communicated to the employer and the workmen.
4. Where an application for permission has been made under sub-section (1) and the
appropriate Government or the specified authority does not communicate the order
granting or refusing to grant permission to the employer within a period of sixty days
from the date on which such application is made, the permission applied for shall be
deemed to have been granted on the expiration of the said period of sixty days.
5. An order of the appropriate Government or the specified authority granting or refusing to
grant permission shall, subject to the provisions of sub-section (6), be final and binding
on all the parties concerned and shall remain in force for one year from the date of such
order.
6. The appropriate Government or the specified authority may, either on its own motion or
on the application made by the employer or any workman, review its order granting or
refusing to grant permission under sub-section (3) or refer the matter or, as the case may

41
be, cause it to be referred, to a Tribunal for adjudication :Provided that where a reference
has been made to a Tribunal under this sub-section, it shall pass an award within a period
of thirty days from the date of such reference.
7. Where no application for permission under sub-section (1) is made, or where the
permission for any retrenchment has been refused, such retrenchment shall be deemed to
be illegal from the date on which the notice of retrenchment was given to the workman
and the workman shall be entitled to all the benefits under any law for the time being in
force as if no notice had been given to him.
8. Notwithstanding anything contained in the foregoing provisions of this section, the
appropriate Government may, if it is satisfied that owing to such exceptional
circumstances as accident in the establishment or death of the employer or the like, it is
necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply
in relation to such establishment for such period as may be specified in the order.
9. Where permission for retrenchment has been granted under sub-section (3) or where
permission for retrenchment is deemed to be granted under sub-section (4), every
workman who is employed in that establishment immediately before the date of
application for permission under this section shall be entitled to receive, at the time of
retrenchment, compensation which shall be equivalent to fifteen days' average pay for
every completed year of continuous service or any part thereof in excess of six months.

Section 25H. RE-EMPLOYMENT OF RETRENCHED WORKMEN


Where any workmen are retrenched, and the employer proposes to take into his employment any
persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched
workmen who are citizens of India to offer themselves for re-employment, and such retrenched
workmen who offer themselves for re-employment shall have preference over other persons.

Section 2(l) - Lock Out


Lockout means temporary closing of the place of employment or suspension of work or refusal
by the employer to continue to employ any number of persons employed by him.

Used as a measure of coercion - Antithesis of strike.


due to a trade dispute.
intentional

4 ingredients of Lockout

1. Temporary closure of a place of employment by employer or suspension or work by the


employer, or refusal to employ any number of persons by the employer.
2. motivate by coercion
3. in an industry
4. due to a dispute in such industry.

Workmen of Itakhoolie Tea Estate vs Management 1952 - In lock out workmen are asked by
the employer to keep away from work and thus they are not under any obligation to present
themselves for work.

Section 2(q) - Strike


Strike means a cessation of work by a body of persons employed in any industry acting in

42
combination, or a concerted refusal, or a refusal under a common understanding, of any number
of persons who are or have been so employed to continue to work or to accept employment.

Indian Iron and Steel Co vs Its Workmen - Held that mere cessation of work is not strike
unless it is shown that it is due to an industrial demand.
Ram Sarup vs Rex - Mere absence from work is not enough but there should be a concerted
refusal to accept employment to call it a strike.
Patiala Cement Co. vs Certain Workers - Cessation of work for even half an hour can be a
strike.

Types of Strike - General, Go Slow, Work to Rule, Tools down/Stay In, Sympathetic, Hunger.

Section 22. PROHIBITION OF STRIKES AND LOCK-OUTS

1. No person employed in a public utility service shall go on strike in breach of contract -


1. without giving to the employer notice of strike, as hereinafter provided, within six
weeks before striking; or
2. within fourteen days of giving such notice; or
3. before the expiry of the date of strike specified in any such notice as aforesaid; or
4. during the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.
2. No employer carrying on on any public utility service shall lock-out any of his workmen
-
1. without giving them notice of lock-out as hereinafter provided, within six weeks
before locking-out; or
2. within fourteen days of giving such notice; or
3. before the expiry of the date of lock-out specified in any such notice as aforesaid;
or
4. during the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.
3. The notice of lock-out or strike under this section 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.
4. The notice of strike referred to in sub-section (1) shall be given by such number of
persons to such person or persons and in such manner as may be prescribed.
5. The notice of lock-out referred to in sub-section (2) shall be given in such manner as may
be prescribed.
6. If on any day an employer receives from any person employed by him any such notices
as are referred to in sub-section (1) or gives to any person employed by him any such
notices as are referred to in sub-section (2), he shall within five days thereof 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.

Section 25. PROHIBITION OF FINANCIAL AID TO ILLEGAL STRIKES AND LOCK-


OUTS

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

Section 26. PENALTY FOR ILLEGAL STRIKES AND LOCK-OUTS


(1) Any workman who commences, continues or otherwise acts in furtherance of, a strike which
is illegal under this Act, shall be punishable with imprisonment for a term which may extend to
one month, or with fine which may extend to fifty rupees, or with both.

(2) Any employer who commences, continues, or otherwise acts in furtherance of a lock-out
which is illegal under this Act, shall be punishable with imprisonment for a term which may
extend to one month, or with fine which may extend to one thousand rupees, or with both.

Section 2(j) - Industry


Industry means any trade, business, undertaking, manufature, or calling of service of employers
and includes any calling, service, employment, handicraft, industrial occupation, or avocation or
workers.
State of Bombay vs Bombay Hospital Mazdoor Sabha - Any activity systematically or
habitually undertaken for the production or distribution of goods or for the rendering of material
service to the community at large or a part of such community with the help of employees is an
industry.
Bangalore Water Suppy vs A Rajappa - Practially reiterated the principles in Bombay
Hospital Mazdoor Sabha case.

Triple Test -

1. Systematic Activity
2. organized by a cooperation of employer and employees
3. for the production and or distribution of goods or services calculated to satisfy human
wants and wishes.

The following points were also observed -

1. Does not include spiritual or religious services e.g. making, on a large scale, prasad. It
only includes material services and things.
2. Absence of profit motive or gainful objective is irrelevant be the venture public, private,
or joint.
3. The true focus is on the function and the decisive test is the nature of the activity with
special emphasis on employee-employer relationship.
4. If an organization is a trade or business, it does not cease to be an industry merely
because philanthropy is animating the undertaking.

Dominant Nature Test - If an undertaking includes several activities some of which are industry
and some not, the predominate nature of the business and the integration of the departments is
the true test.

Exceptions - Certain gurukuls, or research labs, or clubs operating on a small scale are not
industry.

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In the Bangalore Water Suppy case, Bombay Hospital Mazdoor Sabha case was rehabilitated and
Hospital is considered an industry.

DN Banerjee vs PN Mukherjee - Municipal Corporation is an industry.

Brahmo Samaj Education Society vs WB College Employees Associaltion - Whether a


University or Educational institution is an industry or not depends on the evidence in each case.
If the evidence points that there is no much importance of individual teachers and the focus is
mainly profit, it is an industry. In general Universities are industry even though its workers may
not be Workers as per the the act.

Clubs such as Cricket Club of India, Lawyers Office, Indian Standards Institute are all Industry.

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Module IV: Standing Orders

 Concept, Nature and scope of standing orders under Industrial Employment (Standing
Order) Act, 1946,
 Formulation of Standing Orders and its Certification process,
 Modification: Modification and temporary application of Model Standing Order,
Interpretation and Legal status of Standing Orders

Section 2(g) “Standing orders” means rules relating to matters set out in the Schedule;

‘Standing Orders’ means rules of conduct for workmen employed in industrial establishments.

The object of the Act is to require employers in industrial establishments to formally define
conditions of employment under them.

THE SCHEDULE
MATTERS TO BE PROVIDED IN STANDING ORDER UNDER THIS ACT

1. Classification of workmen, e.g. whether permanent, temporary, apprentices, probationers, or


badlis.

2. Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.

3. Shift working.

4. Attendance and late coming.

5. Conditions of procedure in applying for, and the authority which may grant, leave and holidays.

6. Requirement to enter premises by certain gates, and liability to search.

7. Closing and re-opening of sections of the industrial establishment, and temporary stoppages of
work and the rights and liabilities of the employer and workmen arising therefrom.

8. Termination of employment, and the notice thereof to be given by employer and workmen.

9. Suspension or dismissal for misconduct, and acts or omissions, which constitute misconduct.

10. Means of redress for workmen against unfair treatment or wrongful exactions by the employer
or his agents or servants.

11. Any other matter, which may be prescribed.

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47
[section 1(3)]. Applicability of the Act - The Act is applicable to all ‘industrial establishments’
employing 100 or more workmen.

Provided that the appropriate Government may, after giving not less than two month’s notice of
its intention so to do, by notification in the official Gazette, apply the provision of this Act to any
industrial establishment employing such number of persons less than one hundred as may be
specified in the notification.

‘Industrial establishment’ means (i) an industrial establishment as defined in section 2(i) of


Payment of Wages Act (ii) Factory as defined in section 2(m) of Factories Act (iii) Railway (iv)
Establishment of contractor who employs workmen for fulfilling contract with owner of an
industrial establishment. [section 2(e)].

The term ‘industrial establishment’ includes factory, transport service, construction work, mines,
plantation, workshop, building activity, transmission of power etc.

Nothing in this Act shall apply to.

(i) Any industry to which the provisions of Chapter VII of the Bombay Industrial Relations
Act, 1946 (Bombay Act II of 1947) apply; or

(ii) Any Industrial establishment to which the provisions of the Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 (Madhya Pradesh Act 26 of 1961 apply:

Provided that notwithstanding anything contained in the Madhya Pradesh Industrial


Employment (Standing Orders) Act, 1961 (Madhya Pradesh Act, 26 of 1961), the
provision of this Act shall apply to all industrial establishments under the control of the
Central Government.]

Section 14. Power to exempt

The appropriate Government may, by notification in the official Gazette, exempt


conditionally or unconditionally, any industrial establishment or class of industrial
establishment from all or any of the provisions of this Act.

“Wages” and “workman” have the meanings, respectively assigned to them in Sec. 2
of the Industrial Disputes Act, 1947 (14 of 1947).

Section 13B. Act not to apply to certain Industrial


establishments
Act not to apply to certain Industrial establishments. Nothing in this Act shall apply to an
industrial establishment in so far as the workmen employed therein are persons to
whom the Fundamental and Supplementary Rules, Civil Services (Classification,
Control and Appeal) Rules, Civil “Services (Temporary Service) Rules, Revised Leave
Rules, Civil Service Regulations, Civilians in Defence Service (Classification, Control

48
and Appeal) Rules or the Indian Railway Establishment Code or any other rules or
regulations that may be notified in this behalf by the appropriate Government in the
official Gazette, apply.]

Approval of Standing Orders - Every employer covered under the Act has to prepare
‘Standing Orders’, covering the matters required in the ‘Standing Orders’. Five copies of
these should be sent to Certifying Officer for approval. [section 3(1)]. ‘Certifying Officer’
means Labour Commissioner and any officer appointed by Government to be ‘Certifying
Officer’. [section 2(c)].

The Certifying Officer will inform the Union and workmen and hear their objections.
After that, he will certify the ‘Standing Orders’ for the industrial establishment. [section
5]. Till standing orders are certified, ‘Model Standing Order’ prepared by Government will
automatically apply. [section12A].

Standing order should be displayed in English and local language on special notice
boards at or near entrance of the establishment. [section 9]. Modifications of Standing
Order shall be done by following similar procedure. [section 10].

Once the ‘Standing Orders’ are certified, they supersede any term and condition of
employment, contained in the appointment letter. If there is inconsistency between
‘Standing Order’ and ‘Appointment Letter’, the provisions of ‘Standing Order’ prevail
- Eicher Goodearth Ltd. v. R K Soni - (1993)

Standing orders are binding on employer and employee. These are statutorily
imposed conditions of service. However, they are not statutory provisions themselves
(meaning that the ‘Standing Orders’ even when approved, do not become ‘law’ in the
sense in which Rules and Notifications issued under delegated legislation become after
they are published as prescribed.) - Rajasthan SRTC v. Krishna Kant - AIR 1995

Model Standing Orders - The Act has prescribed Model Standing Orders. These are
automatically applicable till employer prepares his own ‘Standing Orders’ and these are
approved by ‘Certifying Officer’. [section 12A].

Disciplinary Action - The most important use of ‘Standing Orders’ is in case of


disciplinary action. A workman can be punished only if the act committed by him is a
‘misconduct’ as defined under the ‘Standing Orders’. The ‘Model Standing Orders’ contain
such acts like insubordination, disobedience, fraud, dishonesty, damage to employer’s
property, taking bribe, habitual absence or habitual late attendance, riotous behaviour,
habitual neglect of work, strike in contravention of rules etc. as misconducts. The
‘Certified Standing Orders’ may cover other acts as ‘misconduct’, if approved by
‘Certifying Officer’.

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Subsistence Allowance – Where a workman is suspended by employer pending
investigation or enquiry into complaints or charges of misconduct against him, the
workman shall be paid subsistence allowance equal to 50% of wages for first 90 days of
suspension and 75% of wages for remaining period till completion of disciplinary
proceedings. [section 10A(1)]. - - ‘Wages’ has same meaning as under section 2(rr) of
Industrial Disputes Act. [section 2(i)].

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