The Industrial Disputes Act, 1947 (strike, lockout, layoff and retrenchment of employees)




The objective of the Industrial Disputes Act 1947 is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations. This act deals with the retrenchment process of the employees, procedure for layoff, procedure and rules for strikes and lockouts of the company.

What is an industrial dispute?
According to Section 2A: Where any employer discharges, dismisses, retrenches  or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.

Industrial Disputes have adverse effects on industrial production, efficiency, costs, quality, human satisfaction, discipline, technological and economic progress and finally on the welfare of the society. A discontent labour force, nursing in its heart mute grievances and resentments, cannot be efficient and will not possess a high degree of industrial morale. Hence, the Industrial Dispute Act of 1947, was passed as a preventive and curative measure.

SCOPE AND OBJECT

The Industrial Dispute Act of 1947, came into force on the first day of April, 1947. Its aim is to protect the workmen against victimization by the employers and to ensure social justice to both employers and employees. The unique object of the Act is to promote collective bargaining and to maintain a peaceful atmosphere in industries by avoiding illegal strikes and lock outs. The Act also provides for regulation of lay off and retrenchment. The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.


DEFINITIONS

Appropriate Government [Sec. 2(a)]: Appropriate Government means the Central Government in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government, any industry carried on by a Railway Company, any controlled industry specified by the Central Government, The Unit Trust of India. Corporations under the Central Statutes, Banking company, Insurance company. Mines. Oil field, Cantonment board, Major ports, etc. In relation to any other industrial dispute, the appropriate Government is the State Government.

Award [Sec 2 (b)] means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under section 10A;

Industry [Sec. 2(j)]: Industry means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen.

Industrial Dispute [Sec. 2(k)]: 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 or with the conditions of labour, of any person.


PUBLIC UTILITY SERVICES

FIRST SCHEDULE

INDUSTRIES WHICH MAY BE DECLARED TO BE PUBLIC UTILITY SERVICES UNDER SUB-CLAUSE (VI) OF CLAUSE (N) OF SECTION 2
  1. Transport (other than railways) for the carriage of passengers or goods by land or water.
  2. Ports or Docks
  3. any postal, telegraph or telephone service; 
  4. any industry which supplies power, light or water to the public 
  5. any system of public conservancy or sanitation;
  6. Banking.
  7. Cement.
  8. Coal.
  9. Cotton textiles.
  10. Foodstuffs.
  11. Iron and steel.
  12. Defence establishments.
  13. Service in hospitals and dispensaries.
  14. Fire brigade service.
  15. India Government Mints.
  16. India Security Press.
  17. Copper Mining.
  18. Lead Mining.
  19. Zinc Mining.
  20. Iron Ore Mining.
  21. Service in any oil field.
  22. Omitted
  23. Service in uranium industry.
  24. Pyrites mining industry.
  25. Security Paper Mill, Hoshangabad.
  26. Services in Bank Note Press, Dewas.
  27. Phosphorite mining.
  28. Magnesite Mining.
  29. Currency Note Press.
  30. Manufacture or production of mineral oil (crude oil), motor and aviation spirit, diesel oil, kerosene oil, fuel oil, diverse hydrocarbon oils and their blends including synthetic fuels, lubricating oils and the like.
  31. Service in the International Airports Authority of India.
  32. Industrial establishments manufacturing or producing Nuclear Fuel and Components, Heavy Water and Allied Chemicals & Atomic Energy.


2(k) "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 or with the conditions of labour, of any person;

Settlement [Sec. 2(p)]:
Settlement means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between an employer and a workman arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised by the Appropriate Government and the Conciliation Officer.

Wages [Sec. 2(rr)]: Wages mean all remuneration capable of being expressed in terms of money, which would, if the terms of employment, express or implied were fulfilled, be payable to a workman in respect of his employment or of the work done in such an employment and includes:

(i) such allowances (including dearness allowance) as the workman is for the time being entitled to;

(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;

(iii) Any traveling concession. But the following are excluded:

(a) Any bonus.
(b) Any contribution paid or payable to any pension fund or provident fund, or for the benefit of the workman under any law for the time being in force.
(c) Any gratuity payable on the termination of his service.


2(n) "Public utility service" means -

(i) any railway service or any transport service for the carriage of passengers or goods by air;
(ia) any service in, or in connection with the working of, any major port or dock;
(ii) any section of an industrial establishment, on the working of which the safety of the establishment or the workmen employed therein depends;
(iii) any postal, telegraph or telephone service;
(iv) any industry which supplies power, light or water to the public;
(v) any system of public conservancy or sanitation;
(vi) any industry specified in the First Schedule which the appropriate Government may, if satisfied that public emergency or public interest so requires, by notification in the Official Gazette, declare to be a public utility service for the purposes of this Act, for such period as may be specified in the notification


DISPUTE SETTLEMENT AUTHORITIES UNDER THE ACT


The I.D. Act provides elaborate and effective machinery for the investigation and amicable settlement of industrial disputes by setting up the various authorities. These are:
  1. Works Committee;
  2. Conciliation Officer;
  3. Conciliation Board;
  4. Court of Enquiry;
  5. Labour Court;
  6. Industrial Tribunal;
  7. National Tribunal;
  8. Arbitrators;
  9. Grievances Settlement Authority.

DISMISSAL, ETC., OF AN INDIVIDUAL WORKMAN TO BE DEEMED TO BE AN INDUSTRIAL DISPUTE. [Sec 2A]


Difference in between the workman and his employer connected arising out of following activities shall be deemed to the industrial dispute.
  • Dismissal of workman
  • Discharge of workman
  • Retrenchment of the workman
  • Termination of workman from his services
[Sec 2A (2)]

Workman having the disputes can make a application to the conciliation officer to settle the dispute. After the expiry of 3 months of time conciliation officer fails to settle the dispute, workman can make a direct application to labour courts or tribunals for adjudication.

[Sec 2A (3)]

Workman should make an application to labour courts or tribunals for adjudication before the expiry of 3 years from the date of discharge, dismissal, retrenchment or otherwise termination of service of workman,

WORKS COMMITTEE [Sec. 3]: In the case of an industrial establishment in which 100 or more workmen are employed, the appropriate Government may require the employer to constitute a 'Work Committee'. It consists of equal number of representatives of employers and workmen engaged in the establishment. The representatives of the workmen shall be chosen from amongst the workmen engaged in the establishment and in consultation with the registered trade union, if any. Works committee deals with the workers problem arising day to day in the industrial establishment.

CONCILIATION OFFICER [Sec. 4]:
The appropriate Government is empowered to appoint any number of persons, as it thinks fit, to be conciliation officers. The conciliation officer having duty of mediating and acts as the mediators in between the parties to resolve the dispute.

In the case of public utility services matters like strikes and lockouts the conciliation officer can initiate the conciliation proceeding ad tries to settle the dispute in between the parties.

If the conciliation officer fails to resolve the dispute between the parties, he should report to the appropriate government. If necessary the dispute shall be referred to the Board, Labour Court, Tribunal or National Tribunal, by the appropriate government. [Sec 12 (5)]

Duties of conciliation officers. [Sec 12]
  • Hold conciliation proceedings relating to Strikes and lockouts procedural matters of public utility services.
  • Investigate the matters of the disputes.
  • Conciliation officers shall induce the parties to come to a fair and amicable settlement of the dispute.
  • Duty to send the report of settlement of dispute and memorandum of the settlement signed by the parties to the dispute to the government or his superior.
  • In case of failure of settlement of dispute in between parties, duty to send them to the government or his superior, report of facts and circumstances relating to the disputes and in his opinion, a settlement could not be arrived at,
  • Duty to send the report to the government or his superior within 14 days from the commencement of the proceeding. or within such shorter period as may be fixed by the appropriate Government .
CONCILIATION BOARD [Sec. 5]: as occasion arises appropriate Government is also authorised to constitute a Board of conciliation for promoting the settlement of an industrial dispute. It consists of a chairman who shall be an independent person, and two or four other members. The members appointed shall be in equal numbers to represent the parties to the dispute. 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 fair and amicable settlement.

If there are many parties relating to or in the dispute the government may appoint the conciliation board consisting of the above said members

According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the Conciliation Board and if government satisfies it shall make the reference to the Conciliation Board.

Duties of board. [Sec 13]
  • it shall be the duty of the Board to endeavor to bring about a settlement of dispute.
  • Investigate the matters relating to the dispute between parties and inducing the parties to come to a fair and amicable settlement of the dispute.
  • In case of failure of settlement of dispute in between parties, duty to send to the government the report of facts and circumstances relating to the disputes and board opinion, a settlement could not be arrived at,
  • The Board shall submit its report under this section within 2 months of the date on which the dispute was referred to it or within such shorter period as may be fixed by the appropriate Government.

COURT OF ENQUIRY [Sec. 6]: as occasion arises, Government can initiate a Court of Inquiry. This Court of Inquiry was to find out matters connected with or relevant to an industrial dispute. Where a Court consists of two or more members, one of them shall be appointed as the chairman.

A Court of Inquiry looks into only matters which are referred to it by Government and submits its report to the Government ordinarily within certain period from the date of reference.


ADJUDICATION


Labour Court [Sec. 7]: The appropriate Government is empowered to constitute one or more Labour Courts. Its function is the adjudication of industrial disputes relating to any matter specified in the Second Schedule.


MATTERS WITHIN THE JURISDICTION OF LABOUR COURTS.

SECOND SCHEDULE
  1. The propriety or legality of an order passed by an employer under the standing orders;
  2. The application and interpretation of standing orders;
  3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed;
  4. Withdrawal of any customary concession or privilege;
  5. Illegality or otherwise of a strike or lock-out; and
  •  According to [Sec 10 (1) (c)] matters specified in THIRD SCHEDULE, dispute not effecting more than 100 workers can be referred to labour court.
  • According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the labour court and if government satisfies it shall make the reference to the labour courts.
  • According to [Sec 10 (6)] no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal.
A Labour Court consists of one person only. A person is qualified to be appointed as presiding officer of a Labour Court, if:

(a) he is, or has been a judge of a High Court, or

(b) he has been a District judge or an Additional District judge for at least three years, or

(c) he has held the office of the chairman or any other member of the Labour Appellate Tribunal or of any Tribunal for at least two years, or

(d) he has held any judicial office in India for not less than seven years, or

(e) he has been the presiding officer of a Labour Court constituted under any Provincial Act or State Act for at least five years.

(f) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department , having a degree in law and at least 7 years’ experience in the labour department after having acquired degree in law including three years of experience as Conciliation Officer:

(g) as the case may be, before being appointed as the presiding officer; or (g) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.”


Industrial Tribunal [Sec. 7A]:
The appropriate Government may, by notification in the Official Gazette, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule and for performing such other functions as may be assigned to them under this Act.


SECOND SCHEDULE

1. The propriety or legality of an order passed by an employer under the standing orders;
2. The application and interpretation of standing orders;
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed;
4. Withdrawal of any customary concession or privilege;
5. Illegality or otherwise of a strike or lock-out; and

THIRD SCHEDULE

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 standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalisation;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.
  • According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the industrial tribunal and if government satisfies it shall make the reference to the industrial tribunal.
  • According to [Sec 10 (6)] no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal.
A Tribunal consists of one person only.

For appointment as the presiding officer of a Tribunal
  • he is, or has been, a Judge of a High Court; or
  • he has, for a period of not less than 3 years, been a District Judge or an Additional District Judge;
  • he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department, having a degree in law and at 7 seven years’ experience in the labour department after having acquired degree in law including three years of experience as Conciliation Officer:

Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner shall be appointed unless he resigns from the service of the Central Government or State Government, as the case may he, before being appointed as the presiding officer; or he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.”

National Tribunal [Sec. 7 (B)]: The Central Government may, by notification in the Official Gazette, constitute one or more National Industrial Tribunals. Its main function is the adjudication of industrial disputes which involve questions of national importance or affecting the interest of two or more States.

According to [Sec 10 (1-A)] dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State, whether it relates to any matter specified in the Second Schedule or the Third Schedule, the government will order in writing refer to National Tribunal for adjudication.

According to [Sec 10 (2)] when parties in the industrial dispute apply to the government to refer dispute to the National Tribunal and if government satisfies it shall make the reference to the National Tribunal.

The Central Government shall appoint a National Tribunal consisting of one person only.
  • A person to be appointed a presiding officer of a National Tribunal must be, or
  • must have been, a judge of a High Court or
  • must have held the office of the chairman or
  • any other member of the Labour Appellate Tribunal for a period of not less than two years.
The Central Government may appoint two persons as assessors to advise the National Tribunal.

ARBITRATION

Voluntary reference of disputes to arbitration. [sec. 10 (a)]:
an arbitrator is appointed by the Government. Whether the dispute is before Labour Court, or Industrial Tribunal or National Tribunal, the parties can go to arbitration by written agreement. The arbitrators conduct the investigation in to the dispute matters and give arbitration award (final decision or settlement or decree) as for making reference of an industrial dispute. If an industrial dispute exists or is apprehended and the employer and the workman agree to refer the dispute to an arbitration, they may refer the dispute to an arbitration. But such reference shall be made before the dispute has been referred under Sec. 19 to a Labour Court or Tribunal or National Tribunal by a written agreement. The arbitrator may be appointed singly or more than one in number. The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.

Grievance Settlement Authority [Sec. 9 (c)]: This Section is incorporated as a new chapter II B of the Act. As per this Section, the employer in relation to every industrial establishment in which fifty or more workmen are employed or have been employed on any day in the preceding twelve months, shall provide for, in accordance with the rules made in that behalf under this Act, a Grievances Settlement Authority.

9C. every industrial establishment employing 20 or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
  • The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.
  • The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.
  • The total number of members of the Grievance Redressal Committee shall not exceed more than 6: Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members and in case the number of members is more than two, the number of women members may be increased proportionately.
  • The Grievance Redressal Committee may complete its proceedings within forty-five days on receipt of a written application by or on behalf of the aggrieved party.
  • The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman concerned.
  • Nothing contained in this section shall apply to the workmen for whom there is an established Grievance Redressal Mechanism in the establishment concerned.”

AWARDS (decree) [Secs 16, 17, 17A]
  • The award of a Labour Court or Tribunal or National Tribunal shall be in writing and shall be signed by its presiding officer. [Sec 16(2)].
  • Every arbitration award and every award of a Labour Court, Tribunal or National Tribunal shall, within a period of 30 days from the date of its receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit. [Sec 17(1)].
  • The award published shall be final and shall not be called in question by any Court in any manner whatsoever. [Sec 17 (2)].
  • An award (including an arbitration award) shall become enforceable on the expiry of thirty days from the date of its publication [Sec 17A (1)].
  • where the award has been given by a National Tribunal, that it will be inexpedient (not advisable or not practicable) on public grounds affecting national economy or social justice to give effect to the whole or any part of the award, the appropriate Government, or as the case may be, the Central Government may, by notification in the Official Gazette, declare that the award shall not become enforceable on the expiry of the said period of thirty days. [Sec 17A (1) (b)].
  • The appropriate Government or the Central Government may, within 90 days from the date of publication of the award under section 17, make an order rejecting or modifying the award, to legislature of sate or parliament [Sec 17A (2) ]. And if no pursuance has made, the order become enforceable after the expiry of 90 days. [Sec 17A (3)].
  • Any award as rejected or modified laid before legislature of state or parliament, shall become enforceable on the expiry of 15 days from the date on which is so laid. [Sec 17A (3)].
  • Award declared becomes enforceable on the specified date if mentioned, if no date mentioned award becomes enforceable according to above rules.

PERIOD OF OPERATION OF SETTLEMENTS AND AWARDS. [Sec 19]
  • A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.
  • An award shall remain in operation for a period of one year from the date on which the award becomes enforceable under section 17A: Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit :
  • the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit, so however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.
Eg: if the court orders the employer to reinstate the workman in case of unreasonable removal or discharge , the employer is bind over for one year or in some cases, the period specified by the courts.



STRIKES AND LOCKOUTS

Strike [Sec. 2 (q)]: Strike means "a cessation of work by a body of persons employed in any industry acting in combination or a concerted 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". Mere stoppage of work does not come within the meaning of strike unless it can be shown that such stoppage of work was a concerted action for the enforcement of an industrial demand.

Lockout [Sec. 2(1)]: Lockout means "the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him". Lockout is the antithesis of strike.

  1. It is a weapon of the employer while strike is that of the workers.
  2. Just as a strike is a weapon in the hands of the workers for enforcing their industrial demands, lockout is a weapon available to the employer to force the employees to see his points of view and to accept his demands.
  3. The Industrial Dispute Act does not intend to take away these rights.
  4. However, the rights of strikes and lockouts have been restricted to achieve the purpose of the Act, namely peaceful investigation and settlement of the industrial disputes.

General Labour Unlon (Red Flag) ... vs B. V. Chavan And Ors on 16 November, 1984

Supreme Court of India expressed
"Imposing and continuing a lockout deemed to be illegal under the Act is an unfair labour practice."

PROCEDURE OF STRIKES

According to Sec. 22(1) No person employed in a public utility service shall go on strike in breach of contract-

(a) without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking; or

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of strike specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

Commentary

Subsection 1 is applicable to the workmen employed in public utility services and lays down that  "no person employed in a public utility service shall go on without following below said steps
  1. Notice of strike (with or without the date of strike) to the employer  by the employees is mandatory.
  2. If the date of strike  by the employees is not mentioned in the notice such notice is valid for six weeks only.
  3. If the date of strike is mentioned in the notice, the date of strike should not be before the expiry of 14 days from the date of notice of strike according to the clause (b).
  4. Therefore employees should not go on strike before the expiry of 14 days from the date of issue of notice of strike to the employer.
  5. Notice of strike without the date of strike is valid for six weeks only, if employees do not go on strike within six weeks, again a fresh notice of strike by employees is necessary if they want to go on strike.
  6. Employees should not go on strike during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

Significance of "within fourteen days & within six weeks":­

The clauses 'a' and 'b' appearing in sub-section (1) of Section 22 are significantly incorporated to prohibit the workmen from going on strike without giving a minimum of 14 days' notice to the employer, a copy of which is also served on the Conciliation Officer. The purpose is quite obvious. It intends to give some time for the employer to consider. over the demands of the workers who are now appeared to be more serious to go on strike in furtherance of their . demand. It also imposes statutory obligation on the Conciliation Officer to commence conciliation proceedings immediately so that the strife between the workmen and employer shall not result in stoppage of work and production.

The sub-section(l) also prohibits the workers from going on strike before the expiry of the date mentioned in the strike (clause (c)). It necessarily follows that such date can be fixed after the period of fourteen days during which workers cannot go on strike (clause b). Now in clause (a) the phrase “within six weeks before striking” is incorporated to determine the effectiveness of the notice given by the workmen. In other words the notice of strike given by the workmen in accordance with Section 22 will be effective only for a period of six weeks, after the expiry of which, another fresh notice would be required. This can be explained more clearly by an example. Suppose workmen give a notice of strike under Section 22 on 1.1.2001 and fix the date to go on strike as 20.1.2001. Now they cannot go on strike before 20.1.2001 as is required under clause c. They cannot fix any date in the notice in this case before 14.1.2001 as they are prevented from going on strike “within 14 days” of giving such notice by virtue of clause (b). Thus the requirements of both the clauses (b) and (c) arc complied with. Now suppose workmen do not go on strike on or after 20.1.2001, the date fixed by them in the notice of strike and kept quite for several months. Then suddenly they go on strike on any day after several months. This situation would defeat the very purpose of the I.D. Act to avert stoppage of
work. Therefore to avoid such situation it is laid down in clause (a) that the workmen cannot go on strike “without giving to the employer notice of strike within six weeks before striking”. It means that, in this example, the workmen cannot go on strike in consequence to their notice given on 1.1.2001 after the expiry of six weeks i.e. 15.2.2001, thus the effect of the notice is confined to a period of six weeks requiring the notice “within six weeks before striking”.

Lastly the workmen cannot go on strike during the period of pendency of any conciliation proceeding before the Conciliation Officer and seven days after the conclusion of such proceedings (clause d). 

Same conditions are incorporated under sub-section (2) relating to the employers who, too, cannot declare lockout without following the requirements laid down in clauses (a) to (d) of sub-section 2.

It must be noted .hat Section 22 of the I.D. Act does not totally prohibit the strike or lockout, but requires the parties engaged in Public Utility Service to give notice before resorting to the double-edged weapon of strike  or lockout. This was also clarified by Court in State of Bihar v. Deodhar Jha

Example:

Hi,
We are engineering industry, I am working as Plant HR. since last 2 months negotiations were going on on wage settlement with workers union. this union is registered but it is not recognised union as per MRTU & PULP Act. but yesterday all of sudden the committee members has walked out of meeting and stopped the work and went out side the gate and started shouting slogans against Management.

Given above scenario, please let me know,
How to handle this strike?
What preventive steps to be taken? and lastly how to break this strike?

Ans)Worker strike is illegal strike you can make notice against Union and submit the nearest labour office. after that labour officer is inspection on industry and discussed with management and union leader.


Facts [+]

New Delhi,2012: Air India pilots was called for strike on May 7 and continued till July 3, is the second longest strike Indian aviation history, has caused loss of Rs. 600 crores to Air India Management. The reasons behind commencement of strike by Air India pilots were irregularities and non-payment of salaries to pilots by Air India management. On this reason few pilots were dismissed from the services for not attending their duties to run flights and for causing loss to the management and Air India management approached the Delhi High Court requesting it to consider as illegal strike by pilots. Delhi High Court supported Air India management and declared it as illegal strike on the grounds of not following the procedure of strike. On July 4 Delhi High Court gave them  48 hours  to join duty and asked the management to consider their grievances. Pilots on strike have agreed to join duties and also demanded to reinstate dismissed pilots into the services.

PROCEDURE OF LOCKOUTS

According to Sec. 22(2)

No person employed in a public utility service shall go on Lockout in breach of contract-


(a) without giving to the employer notice of Lockout, as hereinafter provided, within six weeks before lockout; or

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of lockout specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

Commentary

Subsection 2 is applicable to the workmen employed in public utility services and lays down that  "no person employed in a public utility service shall go on without following below said steps
  1. Notice of lockout (with or without the date of lockout) to the employees  by their employer is mandatory.
  2. If the date of lockout by the employer is not mentioned in the notice, such notice is valid for six weeks only.
  3. If the date of lockout is mentioned in the notice, the date of lockout should not be before the expiry of 14 days from the date of notice of strike according to the clause (b).
  4. Therefore employers should not go on lockout before the expiry of 14 days from the date of issue of notice of lockout to the employees.
  5. Notice of lockout without the date of lockout is valid for six weeks only, if employer do not go on lockout within six weeks, a fresh notice of lockout by employer is necessary, if employer wants to go on lockout.
  6. Employers should not go on lockout during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

Notice of lock-out or strike
According to Sec. 22 (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.

Prohibits an employer from declaring a lockout in any of the eventualities mentioned therein [Section 22(2) of the Industrial Disputes Act 1947]

No employer carrying on any public utility service shall lock-out any of his workman

(a) without giving them notice of lock-out as hereinafter provided, within six weeks before locking-out; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of lock-out specified in any such notice as aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

legal strikes and Lockouts [Section 24 of ID Act 1947]

A strike or a lockout shall be illegal, if employers or worker who ever disobeys or fails to follow [Sec 22, 23, 10(3), 10-A (4-A)] for commencing strikes or
lockout, those strikes and lockout are said to illegal.

Section
            22     Prohibition of strikes and Lockouts (Notice is mandatory in public utility services)
            23     General prohibition of strikes and Lockouts (if said matter is pending before board, a Labour Court, Tribunal or national tribunal or arbitrator as                      mention under Sec 10 & 10A or settlement or about is in operation)
            10     Reference of disputes to Boards, courts or Tribunals
            10A  Voluntary reference of disputes to arbitration


(3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be illegal.

General prohibition of strikes and lock- outs [Section 23] of The Industrial Disputes Act, 1947,

General prohibition of strikes and lock- outs.- No workman who is employed in any industrial establishment shall go on strike in breach of contract and no employer of any such workman shall declare a lock- out--

(a) during the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings;
(b) during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal] and two months after the conclusion of such proceedings;
(bb)  during the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under sub- section (3A) of section 10A; or] [10A. Voluntary reference of disputes to arbitration]
(c) during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.

No notice of strike and lockout is necessary in industrial establishments except in public utility services.


Strike

lockout

Workers shall do the strike.

Employer or owner shall do the lockout.

Workers do the strike because of the grievance and for its solution.

Owners do the Lockout because of the disputes between owners and workers.

Prior notice should be given by the worker to the owner of the factory.

Prior notice should be given by the owner of the factory to the worker.


Threat to go on strike:- in State of Bihar v. deodhar Jha (All India Reporter 1958 Patna. 51), the Patna High Court examine the point as to whether or not threat go on strike is illegal. the court said that the actual resorting to strike cannot always be illegal, therefore threat to go strike is not illegal.

legal strikes and Lockouts [Section 24 of ID Act 1947]

A strike or a lockout shall be illegal, if employers or worker who ever disobeys or fails to follow [Sec 22, 23, 10(3), 10-A (4-A)] for commencing strikes or
lockout, those strikes and lockout are said to illegal.

Section
            22     Prohibition of strikes and Lockouts (Notice is mandatory in public utility services)
            23     General prohibition of strikes and Lockouts (if said matter is pending before board, a Labour Court, Tribunal or national tribunal or arbitrator as                      mention under Sec 10 & 10A or settlement or about is in operation)
            10     Reference of disputes to Boards, courts or Tribunals
            10A  Voluntary reference of disputes to arbitration


(3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be illegal.

Penalty for illegal strikes and lock-outs. [Section 26] of the Industrial Dispute Act 1947.

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.



Lay-Off And Retrenchment
Chapter V A & V B

Bombay High Court
Veiyra M.A. vs Fernandez C.P. And Anr. on 7 December, 1955
Author: Chagla
Bench: M Chagla, P Dixit
JUDGMENT Chagla, C.J.

In Veiyra v. Fernandez, the Court held that employer has an option for lay-off or retrenchment.



Lay-Offs


Non-applicability of layoff provisions to certain establishments

According to section 25A of chapter VA of Industrial Dispute Act 1947, certain establishments do not have any provisions relating to layoff of the employees by the employer. In such circumstances, layoff would be considered without any authority of law.

Such establishments are:
  1. Industrial establishments in which less than 50 workmen are employed, on an average per working day.
  2. Industrial establishments which are of a seasonal character and in which work is performed only intermittently.

Employees employed in the above said establishments do not have right for  laid-off compensation. However if there is any agreement between employer and employee for that purpose or on the grounds of social justice, laid-off competition can be paid.

In South India Corporation Ltd. v. All Kerala Cashewnut Factory Workers' Federation the Court held that if any establishment is not covered within the scope of this Chapter V-A, the Tribunal has no right to grant relief on the basis of any fanciful notions of social justice.

Except above said industrial establishments, all other industrial establishments ( 50 workmen and above industrial establishments which are not of seasonal character) have provisions relating to lay off of the employees by the employer.


Right of  Compensation by workmen laid-off 

[Right of workmen laid-off for compensation] Industrial Disputes Act,1947 Section 25-C
workman has right to lay-off compensation subject to the following conditions, they are:
  1. Workman name should be borne on muster rolls of the establishment and he/she is not a badli workman or a casual workman; and
  2. The workman should have completed not less than one year continuous service as defined under Section 25-B; and
  3. The workman should have laid-off, continuously or intermittently;
  4. Then the workman shall be entitled to lay-off compensation for all days during which he was so laid-off;
  5. However, the workman shall not be paid lay-off compensation for such weekly holidays as may intervene the period of lay-off.
  6. The lay-off compensation is equal to 50% of the total of the basic wages and dearness allowance that would have been payable to him, if he had not been so laid off.
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.

In Vijay Kumar Mills v. Labour Court,  the Madras High Court held that the badli workman is one whose name is not borne on muster rolls of the establishment. If his name is found on the muster roll, even if he is a badli workman, he is entitled to lay-off compensation.

Maximum days allowed to Layoff of employee by employer

According to section 25C of Industry and dispute Act 1947, maximum days allowed to Layoff of employee by employer is 45 days, for those days, employee who is laid-off is entitled for compensation equal to 50% of the total of the basic wages and dearness allowance that would have been payable to him,had he not been so laid off.

However, if this contingency is prolonging beyond a reasnable time, say 45 days, it would be matter of serious concern. both to the employer and to the workmen because both of them are put to a loss of 50% wages i.e. The employer is required pay lay-off compensation without extracting work from workmen and workmen too, would be losing 50% wages which he would have earned had he not been so laid-off. Therefore the parties can enter into an agreement not to continue lay-off after a period of 45 days in a year.

Compulsory permission from competent authority by employer to lay off of workmen
Section 25M of Industrial Dispute act 1947 

For Industrial establishments in which not less than 100 workmen are employed, on an average per working day and  are of not being seasonal character and in which work is performed only intermittently, have to seek prior permission from competent authority  by the employer to layoff workman. if the employer does not apply to seek prior permission or where such permission is refused by the competent authority specified above, to effect lay-off, such lay-off shall be considered as illegal and the workmen laid-off shall be entitled to all benefits as if they have not been laid-off.


Can an employer avoid the lay-off compensation?

Section 25A of Industrial Dispute act 1947  

Following e
stablishments  can avoid lay off compensation according to the Section 25E
  1. Industrial establishments in which less than 50 workmen are employed, on an average per working day, but not to industrial establishments  in which more than 100 workmen are employed.
  2. Industrial establishments which are of a seasonal character and in which work is performed only intermittently.
Workmen not entitled to compensation in certain cases [Section 25E] of Industrial Dispute act 1947
 

(i) if he refuses to accept any alternative employment in the same establishment from which he has been laid off, or in any other establishment belonging to the same employer situate in the same town or village or situate within a radius of five miles from the establishment to which he belongs, if, in the opinion of. the employer, such alternative employment does not call. for any special skill or previous experience and can be done by the workman, provided that the wages which would normally have been paid to the workman are offered for the alternative employment also;

(ii) if he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day;

(iii) if such laying-off is due to a strike or slowing-down of production on the part of workmen in another part of the establishment.



Retrenchment

Definition of retrenchment of employee
[Section 2(oo)]
"retrenchments" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include-

(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
43[(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation on that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued ill-health;]

In Duryodhan Naik v. Union of lndia, the Court held that the discharge of surplus labour by the employer· for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action is called retrenchment, but where the services of all workmen have been terminated by the employer on a real and bona fide closure of business or the undertaking is taken over by another employer, it has no application of retrenchment.

In Santosh Gupta v. State Bank of India, a female employee was discharged on the grounds that she failed to qualify herself in the prescribed test for confirmation of services. The Tribunal held that the termination does not amount to retrenchment. But the Supreme Court reversed the decision of the Tribunal and ordered reinstatement of the employee with full back wages. The Supreme Court further held that the expression “termination of service for any reason whatsoever” is wide enough to include every kind of termination of service except those which are expressly excluded by the proviso to the definition of retrenchment as given in Section 2(oo)|.

In Tatanagar Foundry Co. v. Their Workmen, it was held that employer cannot lay-off the workmen with mala fide intention or by way of victimisation.

Procedure for retrenchment [Section 25G]

The principle of 'last come; First go':-
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.

Re-employment of retrenched workmen [Section 25H]

Where any workmen are retrenched
, and the employer proposes to take into his employ 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.

Retrenchment conditions 

To an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than [50 but not more than 100] workmen were employed on an, average per working day for the preceding twelve months.
[Section 25A]

According to the Section 25F 
[Conditions precedent to retrenchment of workmen]
  1. Employee should have continuous service for not less than one year under an employer
  2. One month’s notice in writing indicating the reasons for retrenchment or payment for the period of the notice
  3. 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.
  4. Notice in the prescribed manner is served on the appropriate government

To an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than [one hundred] workmen were employed on an, average per working day for the preceding twelve months.[Section 25K]

According to the Section 25N
[Conditions precedent to retrenchment of workmen]
  1. Employee should have continuous service for not less than one year under an employer
  2. Three months notice in writing indicating the reasons for retrenchment or payment for the period of the notice
  3. 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.
  4. An application for permission to  specified authority for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.
  5. Compulsory permission from competent authority by employer retrenchment of workmen 
    For Industrial establishments in which not less than 100 workmen are employed, on an average per working day and  are of not being seasonal character and in which work is performed only intermittently, have to seek prior permission from competent authority  by the employer to layoff workman.
If no application seeking permission to retrench workmen is made by the employer or where such permission is refused, such retrenchment shall be
deemed to be illegal
and the workmen shall be entitled to all benefits as if they have not been given any notice. (sub-Section 7).

HSBC axes 200 employees from city offices


April 2012, HYDERABAD: HSBC India did a massive layoff exercise showing the door to as many as 200 employees ranging from assistant manager to vice presidents from its centres in Hyderabad alone.The axe had fallen on over 350 employees at HSBC's Pune centres. It is estimated that a total of 750 employees were asked to leave across locations and designations. So from assistant managers to vice presidents were summoned to the meeting room, asked to choose between termination or resignation, pack their bags and leave.

An "adequate" compensation (one month's salary for each year spent in the company plus three months salary) was part of the layoff deal. While the new entrants into the international bank are crying hoarse, the senior ones are taking solace in the cash with some having made Rs 8-15 lakh.


Penalty for lay-off and retrenchment without previous permission [Section5Q ]

This section applies to an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than [one hundred] workmen were employed on an, average per working day for the preceding twelve months.[Section 25K]

  • Compulsory permission from competent authority by employer to lay off of Workmen [Section 25M] of Industrial Dispute act 1947
  • Section 25N [Conditions precedent to retrenchment of workmen]
Any employer who contravenes the provisions of section 25M or section 25N 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.


DURING PENDENCY OF PROCEEDINGS [Sec 33]


During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before an arbitrator or a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, employer should not do the following-

  • for any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute,
  • Alter the term of contract according to standing orders.
  • Take action against the protected workman.

If employer wants to take above actions against the employee, employer should makes an application to a conciliation officer, Board, an arbitrator, a Labour Court, Tribunal or National Tribunal.

UNFAIR LABOUR PRACTICES

FIFTH SCHEDULE

I - On the part of employers and trade unions of employers


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

(a) threatening workmen with discharge or dismissal, if they join a trade union;

(b) threatening a lock-out or closure, if a trade union is organised; and

(c) granting wage increase to workmen at crucial periods of trade union organisation, with a view to undermining the efforts of the trade union at organisation.

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

(a) an employer taking an active interest in organising a trade, union of his workmen; and

(b) an employer showing partiality or granting favour to one of several trade unions attempting to organise his workmen or to its members, where such a trade union is not a recognised trade union.

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

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

(a) discharging or punishing a workman, because he urged other workmen to join or organise a trade union;

(b) discharging or dismissing a workman for taking part in any strike (not being a strike which it deemed to be an illegal strike under this Act);

(c) changing seniority rating of workmen because of trade union activities;

(d) refusing to promote workmen to higher posts on account of their trade union activities;

(e) giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to undermine the strength of their trade union;

(f) discharging office bearers or active members of the trade union on account of their trade union activities.

5. To discharge or dismiss workmen -

(a) by way of victimisation;

(b) not in good faith, but in the colourable exercise of the employer's rights;

(c) by falsely implicating a workman in a criminal case on false evidence or on concocted evidence;

(d) for patently false reasons;

(e) on untrue or trumpet up allegations of absence without leave;

(f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;

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

6. To abolish the work of a regular nature being done by workmen, and to give such work to contractors as a measure of breaking a strike.
7. To transfer a workman mala fide from one place to another, under the guise of following management policy.
8. To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a precondition to allowing them to resume work.
9. To show favouritis or partiality to one set of workers regardless of merit.
10. To employ workmen as "badlis" casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and
      privileges of permanent workmen.
11. To discharge or discriminate against any workman for filing charges or testifying against an employer in any enquiry or proceeding relating to any
      industrial dispute.
12. To recruit workmen during a strike which is not an illegal strike.
13. Failure to implement award, settlement or agreement.
14. To indulge in acts of force or violence.
15. To refuse to bargain collectively, in good faith with the recognised trade unions.
16. Proposing or continuing a lock-out deemed to be illegal under this Act.

II - On the part of workmen and trade unions of workmen


1. To advise or actively support or instigate any strike deemed to be illegal under this Act.
2. To coerce workmen in the exercise of their right to self-organisation or to join a trade union or refrain from joining any trade union, that is to say –
(a) for a trade union or its members to picketing in such a manner that non-striking workmen are physically debarred from entering the work places;
(b) to indulge in acts of force or violence or to hold out threats of intimidation in connection with a strike against non-striking workmen or against managerial staff.

3. For a recognised union to refuse to bargain collectively in good faith with the employer.
4. To indulge in coercive activities against certification of bargaining representative.
5. To stage, encourage or instigate such forms of coercive actions as willful "go slow", squatting on the work premises after working hours or "gherao" of
    any of the members of the managerial or other staff.
6. To stage demonstrations at the residences of the employers or the managerial staff members.
7. To incite or indulge in willful damage to employer's property connected with the industry.
8. To indulge in acts of force or violence or to hold out threats of intimidation against any workman with a view to prevent him from attending work.


PENALTIES

Sec

Reasons

Punishment

25U

unfair labour practice

punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to 1000/- rupees or with both.

26

Illegal Strikes

punishable with imprisonment for a term which may extend to one month, or with fine which may extend to 50/- rupees, or with both.

26

Illegal Lock-Outs

punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one 1000/- rupees, or with both.

27

Any person who instigates or incites others to take part in, or otherwise acts in furtherance of, a strike or lock-out which is illegal under this Act,

punishable with imprisonment for a term which may extend to 6 months, or with fine which may extend to one 1000/- rupees, or with both.

28

Giving Financial Aid To Illegal Strikes And Lock-Outs

punishable with imprisonment for a term which may extend to 6 months, or with fine which may extend to 1000/- rupees, or with both.

30

Disclosing Confidential Information

Punishable with imprisonment for a term which may extend to 6 months, or with fine which may extend to 1000/- rupees, or with both.

30A

Closure of establishment Without Notice

punishable with imprisonment for a term which may extend to 6 months, or with fine which may extend to 5000/- rupees, or with both.

31

contravenes the provisions of section 33

Punishable with imprisonment for a term which may extend to 6 months, or with fine which may extend to 1000/- rupees, or with both.