Labor Law 1 - LB 3032
{
The Trade Unions Act, 1926, The
Industrial Disputes Act, 1947, The Industrial Employment (Standing Orders) Act,
1946
}
Part A Trade Unions
Primary objective of trade unions is
to replace individual negotiation by collective bargaining with a view to
ensure uniform and reasonable terms of employment and conditions of labour
between the management and the representatives of trade unions in the interest
of workers which ultimately lead to lasting peace and harmony in the industry.
The fundamentals of trade unionism are :-
(i) Right to form association
(Guaranteed to workers and/or employers as a fundamental or an ordinary right
or both;
(ii) Right of a trade union to be
recognized as sole bargaining agent for the workers at the plant local or
national level
(iii) Right to collective bargaining
(as a statutory obligation to bargain in good faith on voluntary basis)
(iv) Right to permissible industrial
action for bringing the parties to a negotiating table
(v) Prevention of unfair labour
practices.
Right to form association - Artice
19(1)(c) of Constitution of India
Topic 1 - General - Evolution &
Growth of Trade Unions in India
Historical reasons for the formation
of combinations of workers, legal impediments;
Constitutional freedom to form
associations and unions - Constitution of India, Articles 19(1)(c), (4) and 33;
Article 19(4) Nothing in sub-clause
(c) of the said clause shall affect the operation of any existing law in so far
as it imposes, or prevent the State from making any law imposing, in the
interests of 4[the sovereignty and integrity of India or] public order or
morality, reasonable restrictions on the exercise of the right conferred by the
said sub-clause.
Article 33. Power of Parliament to
modify the rights conferred by this Part in their application to Forces, etc.
International Labour Organization -
its influence in bringing changes in national legislations.
(1) T.K Rangarajan v. Govt of TN (2003) 6 SCALE 84 – Held Government
servants have no right to go on strike. In the year 2002, the Govt of TN
terminated services of 2 Lakh employees’ u/ TN Essential Services Maintenance
Act, 2002 – Gov servants cannot hold society to ransom. - Held
(a) No fundamental right to go on
strike.- Right to collective bargaining – Radhey
Shyam Sharma v The Post Master General Central Circle Nagpur – Contended
that A3,4,5 of ESMA violative of A19(1)(a)&(b) – Court rejected contention
and held tht a perusal of A19(1)(a) shows that there is no FR2strike & all
that the Ordinance provided ws against illegal strike.
All India Bank employees association v National Industrial Tribunal –
even very liberal reading of A19(1)[c] cannot lead
to conclusion that TUs hv a guaranteed right to an effective collective
bargaining or to strike either as a right to strike or otherwise.
SC cited CPI(M) v Bharat Kr (Kerala Bandh case, Ker HC)– 17 "No
political party or organization can claim that it is entitled to paralyse the
industry and commerce in the entire State or nation and is entitled to prevent
the citizens not in sympathy with its viewpoints, from exercising their
fundamental rights or from performing their duties for their own benefit or for
the benefit of the State or the nation. Such a claim would be unreasonable and
could not be accepted as a legitimate exercise of a fundamental right by a
political party or those comprising it."
(b) (No legal/statutory right to go
on strike – (c) No Moral or equitable justification to go on strike.
(2) B.R. Singh v. UoI (1989) 4 SCC 710 – Fundamental right u/A 19(1)[c]
recognized to confer certain rights on TUs – Necessity to form union is
obviously for voices the demands n grievances of labour. TUs r mouthpieces of
labour.
Topic 2 - Trade Union - Definition,
Registration and Recognition
Definition of 'trade unions',
workman and trade dispute - The Trade Unions Act 1926 - Ss 2(g) & (h), 3 to
13, 15, 22
Definition of Trade
Union
To be a TU, the union in question
must satisfy the requirement of Section 2(h) of the Indian Trade Union Act ,
1926 (TUA). The Act has defined the TU in most comprehensive terms:
“Trade
Union means any combination, whether temporary or permanent, formed primarily
for the purpose of (a) regulating the relations between employer and workmen or
between workmen inter se or between
employers inter se or (b) for imposing restrictive conditions on the conduct of
any trade or business and includes any federation of two or more unions.”
Section 2(g) reads (part 2 of the
definition of trade dispute) : “Workmen” means all persons employed in trade or
industry whether or not in the employement of the employer with whom the trade
dispute arises.
The ITUA is based on British ITUA
with a material difference that that it uses the work 'Combination' whereas the
British Act uses the word 'Association', former has a wider implication than
the latter. The act applies to every establishment which is engaged in an
industry, sepcified in Schedule I (Trade Dispute Act?) and in which 20 or more
persos are employed.
'Trade' includes any gainful
occupation. Any one from a dustman to a highly skilled professional workers may
enter into a contract in restraint of trade restricting the manner in which he
can earn a living. The word 'impose' in the definition of Trade Union, connotes an agreement and
compulsion. 'Restrictive conditions' would mean to enter into a contract in
restraint of trade restricting the manner in which one can earn a living. Any
regulation of relations in employment would amount to imposing restrictive
conditions. Resgulation of employment, however is to be treated separately from
restrictive conditions on the conduct of trade or business.
Persons belonging to a number of
trades or to no trade at all may constitute a trade union. There may be a trade
union which is cmposed neither of workman nor masters, although it may be a
compination to regulate the relations between wrokmen and workmen or workmen
and masters. A union may consist both of morkmen and employers. The test of the
trade union is its objects and not its composition. The emphasis in Sect 2(h)
is on the purpose for which the Union is formed and not so much on the persons
who constitute the Union. (Hardei & Lane Ltd v Chillon (1928)).
Test to Determine whether a union is
a Trade Union.
(i) It is the principal object of a
combination which determines whether the combination is a Trade Union or not.
The object must be one connected with the regulation of relations between
workmen and employer etc or imposition of restrictive conditions on the conduct
of trade or business of its members.
(ii) However, it may noted that a
union of any persons will not become a
TU if they have the above mentioned objects. IT is also necessary that the
combination be formed either of 'workmen' or of 'employers', i.e. The persons
are equally important, besides the object. The memebers of a TU must be
'wrokmen' of employer engaged in the conduct of any trade or business in a
commercial undertaking, otherwise the definition in sec2(g) and 2(h) could not
apply to them and they could not raise a “trade dispute” nor form a TU. In
order to attract teh provisions of the Act both the conditions namely workmen
engaged or trade or business must be fulfilled.
Illustrationss /Cases
An association of authers and
proprietors of a dramatic work, the primary obejct of which was to acquire and
deal with the interest of its membners in their work, i.e., to enforce the
rights of members but not to impose restrictive conditions on the conduct of
their business was held not be TU [Performing Society v. London Theatre of
Varieties (1924)]
S2(g) “trade dispute” means any
dispute between employers and workmen or between workmen and workmen, or
between employers and employers which is connected with the employment or
non-employment, or the terms of employment or the conditions of labour, of any
person, and “workmen” means all persons employed in trade or industry whether
or not in the employment of the employer with whom the trade dispute arises;
and
S2(h) “Trade Union” means any
combination, whether temporary or permanent, formed primarily for the purpose
of regulating the relations between workmen and employers or between workmen
and workmen, or between employers and employers, or for imposing restrictive
conditions on the conduct of any trade or business, and includes any federation
of two or more Trade Unions
S3. Appointment of Registrars
S4. Mode of registration.—
(1) 7 or more members
Proviso
atleast 10% or 100 which ever is less
Proviso
not to be regd if less than 7
(2) application not to be deemed
invalid because some applicants (not more than half) ceased to be TU members
S5 Application for registration.
S6 Provisions to be contained in the
rule of a Trade Union.
S7 Power to call for further
particulars and to require alteration of name.
S8 Registration.
The Registrar, on being satisfied
that the Trade Union has complied with all the requirements of this Act in
regard to registration, shall register the Trade Union by entering in a
register, to be maintained in such form as may be prescribed, the particulars
relating to the Trade Union contained in the statement accompanying the
application for registration.
COMMENTS
Duty of Registrar
The duties of the Registrar were to
examine the application and to look at the objects for which the Union was
formed. If those objects were objects set out in the Act, and if those objects
did not go outside the objects prescribed in the Act and if all the
requirements of the Act and the regulations made thereunder had been complied
with, it was his duty, to register the Union; Inland Steam Navigation Workers
Union (in re:), 1936 IC 378.
Powers of Registrar
No provision of law provides for
holding of election under the supervision of Registrar, Trade Unions.
Therefore, the petitioner is right in submitting that there is no legal
authority for issuance of impugned orders under which the internal disputes
were referred for adjudication by the independent Board and upon its
recommendations, election is directed to be held under the supervision of
Registrar of Trade Unions; Tata Workers Union v. State of Jharkhand, 2002 LLR
806 (Jhar HC).
Question of fact or law
The Registrar is not a
quasi-judicial authority and cannot, therefore, decide any disputed question of
fact or law; O.N.G.C. Workmen’s Association v. State of West Bengal, (1988) 57
FLR 522 (Cal).
Scope
Provisions of this section relate to
only registration of a trade union. It is only a Civil Court which has
jurisdiction to decide that dispute since under the Trade Unions Act, there is
no provision permitting or empowering the Registrar to refer internal disputes
relating to office-bearer for adjudication to any other forum; R.N. Singh v.
State of Bihar, 1998 LLR 645.
S9 Certificate of registration.
S10 Cancellation of registration.
(a) on appl fr TU (b) Fraud/Mistake/Ceased to exist/willfully contravened
provisions of act (c) Does not have requisite number of people Proviso 2 Months
Notice, Grounds for cancellation, Opportunity
to be given
S11 Appeal.
S 12. Registered office
S 13. Incorporation of registered
Trade Union.— Body corporate, perpetual succession
S15. Objects on which general funds
may be spent.—
The general funds of a registered
Trade Union shall not be spent on any other objects than the following,
namely:—
(a) the payment of salaries,
allowances and expenses to 1[office-bearers] of the Trade Union;
(b) the payment of expenses for the
administration of the Trade Union, including audit of the accounts of the
general funds of the Trade Union;
(c) the prosecution or defence of
any legal proceeding to which the Trade Union or any member thereof is a party,
when such prosecution or defence is undertaken for the purpose of securing or
protecting any rights of the Trade Union as such or any rights arising out of
the relations of any member with his employer or with a person whom the member
employs;
(d) the conduct of trade disputes on
behalf of the Trade Union or any member thereof;
(e) the compensation of members for
loss arising out of trade disputes;
(f) allowances to members or their
dependants on account of death, old age, sickness, accidents or unemployment of
such members;
(g) the issue of, or the undertaking
of liability under, policies of assurance on the lives of members, or (under)
policies insuring members against sickness, accident or unemployment;
(h) the provision of education,
social or religious benefits for members (including the payment of the expenses
of funeral or religious ceremonies for deceased members) or for the dependants
of members;
(i) the upkeep of a periodical
published mainly for the purpose of discussing questions affecting employers or
workmen as such;
(j) the payment, in furtherance of
any of the objects on which the general funds of the Trade Union may be spent,
of contributions to any cause intended to benefit workmen in general, provided
that the expenditure in respect of such contributions in any financial year
shall not at any time during that year be in excess of one-fourth of the
combined total of the gross income which has up to that time accrued to the
general funds of the Trade Union during that year and of the balance at the
credit of those funds at the commencement of that year; and
(k) subject to any conditions
contained in the notification, any other object notified by the 2[appropriate
Government] in the Official Gazette.
State Amendment
S22 Proportion of office-bearers to
be connected with the industry.—(1) Not less than one-half of the total number
of the office-bearers of every registered Trade Union in an unrecognised sector
shall be persons actually engaged or employed in an industry with which the
Trade Union is connected:
Provided that the appropriate
Government may, by special or general order, declare that the provisions of
this section shall not apply to any Trade Union or class of Trade Unions
specified in the order.
Explanation.—For the purposes of
this section, “unorganised sector” means any sector which the appropriate
Government may, by notification in the Official Gazette, specify.
(2) Save as otherwise provided in
sub-section (1), all office-bearers of a registered Trade Union, except not
more than one-third of the total number of the office-bearers or five,
whichever is less, shall be persons acutally engaged or employed in the
establishment or industry with which the Trade Union is connected.
Explanation.—For the purposes of
this sub-section, an employee who has retired or has been retrenched shall not
be construed as outsider for the purpose of holding an office in a Trade Union.
(3) No member of the Council of
Ministers or a person holding an office of profit (not being an engagement or
employment in an establishment or industry with which the Trade Union is
connected), in the Union or a State, shall be a member of the executive or
other office-bearer of a registered Trade Union.]
COMMENTS
Object and scope
The returning officer is not a
statutory authority but an ordinary person in matter of election of office
bearers; O.P. Gupta v. Union of India, 2001 LLR 125 (Raj).
REGISTRATION OF TRADE UNIONS
TU may be registered. Three types of
TU:
a.
Recognised TU
b.
Registered TU
c.
Unregistered TU
Members of Registered and Recognized
TU enjoy such benefits as is not enjoyed by unregistered TU.
Procedure/ Essential Conditions for
Registration.
(i) It has to be sponsored by at
least 7 members who may apply by filling an application for registration to the
Registrar of TU of the state in which the head ofice or registered office of
the TU is to be located.
(ii) All the members applying for
registration must subscribe their names to the rules of he TU and also compy
with the provisions of the Act relating to registration of Unions (Sec.4)
(iii) The application for
registration should be accompanied with a copy of rules of the TU and a
statement of the particulars like name of the Union, its head office, address,
names occupations and addresses of members making the application and of the
office bearers of Union (Sec.5).
(iv) A TU is not entitled to
registration unless the executive thereof is constituted in accordance with the
provisions of the Act, and the rules of the Union provide for the following matters(
Sec.6) – name and objects of TU; the purposes for which the general funds of
the Union shall be applicable; the maintenance of a list of members of Union;
the admission of ordinary and honorary members; a minimum membership subscription
of 25 paise per month; the manner of the dissolution of TU, etc.
The written rules framed by the TU
made for the above matters generally govern and determine the relationship
between the Union and its member. They as a matter of fact provide guidelines
for the internal management of the Union affairs.
(v) Under the provisions of the Act,
at least 1/2 of the office bearers must be persons actualy engaged or employed
in the plant/ industry with which the Union is
concerned.
(vi) The workmen of an establishment
form as many Unions as they like. There is nothing in the act that bars the
formation of rivals Unions or requires a Union applying for registration to
give notice to all existing Unions. (Kehsarayon Workers Union v Registrar
(1967)).
When the Union
seeks registration, all that it has to do is to ensure that the provisions of
the Act, Rules and Regulations made thereunder relating to registration of TU
has been complied with by the body of workers applying for registration.
Duties and Powers of Registrar
The primary duty of the Registrar is
to examine the application made to him for registration and look at the objects
of the Unions for which it may be formed. On compliance with the statutory
conditions as provided in the Act, he shall grant registration certificate to
the Union (Sec 8 and 9).
The registration will be refused by
the Registrar if the name under which a Trade Union is proposed to be
registered is identical with that of any existing TU or so nearly resembles
such name as to be likely to deceive the public or the members of the either
TU. In such a case, the Registrar may require ther persons applying for such
registration to change the name of Union, and it shal be registered only after
such alteration. The Registrar may also ask for further information which he
thinks necesary for the purpose of satisfying himself that the application
complies with teh provision of Sec.5 and 6 of the Act (Sec.7).
Section 8 imposes a statutory duty
upon the Registrar to register the TU on being satisfied that the TU has
complied with the requirements of the Act. If the registration is unreasonably
delayed (viz. No action taken on applicaiton for more thatn 3 months), a writ
under At. 226 of the Constitution can be issued (ACC Ranjanka Lime Stone
Quarries Mazdoor Union v Registrar (1958)).
As a matter principle Registrar has
no power to declare the election of office bearer of a Union unconstitutional.
But where the petitioner has himself submitted to the jurisdiction of the
Registrar by requesting him to make an enquiry, he cannot subsequently be allowed to raise an objection that the
Registrar acted without jurisdiction (Mukund Ram v SI Raza, Registrar).
(3) Rangaswami v. Registrar of Trade Unions, AIR 1962 Mad 231
Employees of RajBhawan Case formed
into Madras Raj Bhawan Workers Union. Registrar refused registration on the
grounds that the employees were not workmen engaged in an Industry, trade or
business of the employer.
Court Held
(i) Sec 2(g) of TU Act defines
workmen as all persons employed in trade or industry. The term trade union
under Sec 2(h) contemplates the existence of the employer and the employee
engaged in the conduct of a trade or business. Reading these two secions
together industry should be one as would
amount to trade or business, i.e., a commercial undertaking.
(ii) The term industry as defined
under Sec. 2(j) of the Industrial Disputes Act 1947 (IDA) is of wider import
(any business, trade, undertaking, manufacture or calling of employers and
includes any calling, services, employment, etc.).
Thus, a non-commercial undertaking
would come within the scope of that enactment. However industrial peace and the
ohject of the TU Act is to render lawful the organization of labour and to
enable collective bargaining the benefits conferred by the TU Act are to be
enjoyed by a clearly defined category of unions.
It is therefore doubtful whether the
two acts can be read as pari materia (as forming one system and interpreting
one in the light of another). The definition of industry in the TDA should not be used be used in
interpreting the provisions of the TU Act.
(iii) Two distinctive features of an
industry are (a) the employer as well as the employees should be engaged in the
industry, and (b) there should be cooperation between both of them for
achieving the particular result. Further, there can be no industry where the
employer is not engaged in common with the employees with the definite
objective of the achievement of the material needs of humanity and that in an
organised manner.
In the present case, it cannot be
said that there was co-operation between the employer and employees for the
purpose of a trade or business. The services rendered by the employees of the
RajBhawan were of a personal nature since the employer was not carrying on any
trade or business. A mere personal service however much it might have been
organised, would possible be an undertaking within the meaning of the Act. The
order of the Registrar of TU rejecting the application of the petitioner is
therefore correct.
Similarly persons employed in Palace Administration
Board Hospital
(4) The Tamil Nadu Non-Gazetted Govt Offrs Union, Madras
vs The Registrar of Trade Unions, AIR 1962 Mad 234
IN this case the Tamil Nadu
Non-gazzetted Govt. Officer's Union (Amongst its members were sub-magistrates,
Tehsildars, sub-Treasuries, etc.) applied for registration under the TUA. The
Registrar refused registration on the ground that such an Associaton of
ministerial employees of the Administrative Departments of Govt. Offices could
not claim to be trade union at all. The Madras High Court also held that the Govt.
Servants cannot form a TU.
The court observed as follows:
(i) The civil servants engaged in
the task of sovereign and regal aspects of the State are not workmen within the
meaning of the Act. However wide the term trade might be, the SC has approved of
the dictum that those activities of hte Govt. Which should properly described
as legal or sovereign activities were outside the scope of industry. These are
functions which a constitutional Government can and must undertake for
governance, and which no private citizen can undertake, (State of Bombay v Hospital Mazdoor Sabha (1960)). Regal functions are inescapable and
inalienable (Nagpur Corpn v Its
Employees (1960)).
(ii) However, independent
corporations (quasi-governmental agencies) or subsidized undertakings, which
are purely industrial in character, would be industrial undertakings, e.g.,
Machine tools factory, Insurance Corporation, etc.
(iii) Further certain welfare,
educational or ameliorative departments of Government might or might not, be regarded
as liabel to exclusion; the employees in those departments might or might not
be regarded as workmen in an industry.
(iv) The concept of collective
bargaining, which is the rationale behind the TU movement, is wholly
inappropriate to Government Servants, whose terms and conditions of employment
are regulated by statute, and it obvious that statute cannot be altered by
contract. Thus, Government servants do not have freedom of contract.
(v) Among other reasons why
Government servants cannot form TU is that Sec.22 of the TU Act allows
permission by outsiders and Sec.16 allows participation in political activity,
both of which are not relevant to Government Servants.
(5) Registrar of Trade Unions v. Govt Press Employees Union (1976) Lab IC
280 (Mad.)
In Registrar of TU v Mihir
Kumar(1963) it was held that TU of employees of Employees State Insurance
Corp., can get registration under the Act. Similarly, employees working in a
Government Press carrying on business of printing have been held as workmen and
allowed to get their Union registered on the ground that printing press is an
industry (Registrar, TU v Govt. Press Employee's Union Pondicherry (1976) ).
(6) Tirumala Tirupati Devasathanam vs Commissioner of Labour (1995) Supp.
(3) SCC 653
held that the persons employed in TT
Devastha, a public religios institution, administered under the AP Charitable
and Hindu Religious Institution and Endowment Act 1966 can register themselves
into a TU. It was held that though the essential character of Insitution is
religious, it has to maintain several departments such as Electricity and water
Department to cater to the needs of the pilgrims, such departments being
Industry.
(7) Tirumala Tirupati Devasathanam
vs Gov of AP
(8) Delhi Police Non-Gazetted
Karamchari Sangh vs UoI AIR 1987 SC 379
(9) S.A. Sawant vs St of Mah AIR
1986 SC 617
(10) In Re Inland Steam Navigation Worker's Union, AIR 1936 Cal. 59
Registrar refused to register on
grounds that it was an attempt to have another Union. HE came to know that it
was IGN UNION under a different name. IGN was declared to be unlawful
association.
The Calcutta HC observed that
functions of the Registrar are laid down in Sec.8 – Registrar on being
satisfied that the TU has complied with all the requirements of this act, in
regard to registration, shall register the Union.
Court held as follows: It was the
duty of hte Registrar to examine the application and to look at the objects for
which the Union was formed. If these objects were those set out in the Act, and
if these objects did not go outside the objects prescribed, and if all the
requirements of the Act and regulations made there under had been complied with
it was his duty to register the TU. He was not entitled to go into the question
whether the Union was another Union which was registered and which was seeking
registration under a different name.
(11) Chairman SBI vs All Orissa
State Bank Offrs Associaion, AIR 2002 SC 2279
Topic 3 - Immunities - Criminal and
Civil
The Trade Unions Act Ss 17 & 18;
IPC Ss 120A, 120B
S17. Criminal conspiracy in trade
disputes.—
No 1[office-bearer] or member of a
Registered Trade Union shall be liable to punishment under sub-section (2) of
section 120B of the Indian Penal Code 1860 (45 of 1860) in respect of any
agreement made between the members for the purpose of furthering any such
object of the Trade Union as is specified in section 15, unless the agreement
is an agreement to commit an offence.
COMMENTS
Criminal conspiracy under agreement
Trade Unions have the right to declare strikes
and to do certain acts in furtherance of trade disputes. They are not liable
civilly for such acts or criminally for conspiracy in the furtherance of such
acts as Trade Unions Act permits, but there is nothing in the Act which apart
from immunity from criminal conspiracy allows immunity from any criminal
offences. Indeed any agreement to commit an offence would under section 17,
Trade Unions Act, make them liable for criminal conspiracy; R.S. Ruikar v.
Emperor, AIR 1935 Nag 149.
S18. Immunity from civil suit in
certain cases.—
(1) No suit or other legal
proceeding shall be maintainable in any Civil Court against any registered
Trade Union or any 1[office-bearer] or member thereof in respect of any act
done in contemplation or furtherance of a trade dispute to which a member of
the Trade Union is a party on the ground only that such act induces some other
person to break a contract of employment, or that it is in interference with
the trade, business or employment of some other person or with the right of
some other person to dispose of his capital or of his labour as he wills.
(2) A registered Trade Union shall
not be liable in any suit or other legal proceeding in any Civil Court in
respect of any tortious act done in contemplation or furtherance of a trade
dispute by an agent of the Trade Union if it is proved that such person acted
without the knowledge of, or contrary to express instructions given by, the
executive of the Trade Union.
COMMENTS
Availability of immunity to a trade
union leader
Immunity to a trade union leader
(such as the President) is not available when he is discharged after holding an
enquiry into his misconduct; West India Steel Co. Ltd. v. Azeez, 1990 LLR 142
(Ker).
Object
Immunity is provided to the
registered trade union from being sued by way of civil suit under section 18.
In respect of any act done in contemplation on furtherance of a trade dispute
to which a member of the trade union is a party on the ground only that such
act induces some other person to break a contract of employment or that it is
in interference with the trade, business or employment of some other person or
with the right of some other person to dispose of his capital or of his labour
as he wills; Standard Chartered Bank v. Hinudstan Engg. & General Mazdoor Union,
2002 LLR 254 (Del
Scope
It is manifest in the present case
that the striking workmen are not prevented from taking recourse to the
protection of section 18 of the Trade Unions Act mainly because the strike was
illegal under section 24(1) of the Industrial Disputes Act; Rohtas Industries
Staff Union v. State of Bihar, AIR 1963 Pat 1970.
The Act has not provided that period
of illegal strike would be treated as period of unauthorised absence or
relationship of “employer and employee” would cease; U.P. Rajya Setu Nigam
Sanyukt Karmachari Sangh v. U.P. State Bridge Corporation, Lucknow, 2000 LLR
151 (All).
It is not within the purview of the
civil court to prevent or interfere with the legitimate rights of the workmen
to persue their demands by means of strike or otherwise as also acts done in
furtherance of a trade dispute; Ahmedabad Textile Research Association v. ATRA
Employees’ Union, 1995 LLR 91 (Guj) DB.
Indian Penal Code S120A. Definition
of criminal conspiracy. S120B. Punishment of criminal conspiracy
Additional Notes: Complete immunity
has been provided from civil proceedings and tortious acts to a registered TU,
its office bearers and its members, of the offence of deliberately bringing
abut a breach of contract of employment between the employer and employee.
Similarly a union is protected from being sued for the offence of inducing a
person to break his contract of employment or interfering with the trade,
business or employment of some other person provided such inducement is in
contemplation or in furtherance of a trade dispute [Sec 18(1)].
The immunity extended to Union for
acts done by office bearers and members of Union only if done in contemplation
of furtherance of a trade dispute in the general interest of the working class
who are permitted legally to organise themselves into Tus. Further, Inducement
procurement or interference must be by lawful
means. And not by means which would be illegal or wrongful by other
provisions of law [RBI v Ashis Kusum (1969)].
If acts done in furtherance of a TD
involve any violence etc., then the immunity will no longer be available.
Protection under Sec.18 does not extend to libel actions.
Sec. 18(2) protects the Union for
tortious acts done in contemplation or furtherance of a TD by an agent of the
TU without the knowledge or contrary to the express instructions given by the
executive of the TU. This protects the corporate funds of the TU.
What actions are covered by Section
18 depend upon the facts and circumstances in each case: -
1. Peaceful picketing are protected.
Picketing described as “Marching to and fro before the premises of an
establishment involved in a dispute, generally accompanies by the carrying and
display of a sign or banner, etc. Picketing may be accompanied by a polite
request asking workers not to assist in the running of that establishment or
customers not to patronize that establishment (D Ganesh v Shate (1961)
2. Picketing ceases to be peaceful
the moment it results in a private or public nuisance. Intimidation or
indulging in Gherao or wrongful confinement of officer’s o the managerial staff
or other members of the public in premises of that establishment will be
unlawful.
3. Any show or threat of violence or
any other unlawful threat likely to create fear in the mind of a reasonable man
will render picketing unlawful. Pickets cannot force people to listen to them.
They cannot obstruct the passage of customers goods vehicles etc. Thus the
right to picket is closely limited by the equal right of others to go about
their lawful affairs free form obstruction molestation or intimidation (Simpson
& Group Co. Workers Union v Amco batteries(1992))
4.
Court amplified the scope of immunity provision adopting sociological
attitude:
(12) R S Ruikar vs Emperor AIR 1935
In R. S. Ruikar's case, the
appellant, president of Nagpur Textile Union. The textile workers on strike.
Police harassed two women picketers. The appellant brought his wife for
picketing in front of one of the gates, with instructions to beat with
slippers, any one who interfered with her. Court held that the offence u/s7 of
the Criminal Law (Amendment) Act 1932, which prohibits obstructing and use of
violence or intimidation and loitering etc., if done with the intent to cause
any person to abstain from doing, or to do any act which such person has a
right to do or abstain from doing, is an offence mentioned in Sec.17 of the
Act, there is no immunity if the act falls within the scope of Sec.7 of the
act.
Further observed. -
Right of the TU to do certain acts
in contemplation and furtherance of the TD, such as to declare strike, abstain
from work and persuade others to abstain from work. Sec.17 permits such acts
but apart from immunity from Criminal Conspiracy (120B IPC) it does not provide
immunity from any other offences like intimidation, molestation or violence
etc. Peaceful gathering is permitted, but resorting to unlawful confinement,
criminal trespass, or indulging in criminal force or criminal assault or
mischief to person or property is not protected from immunity under this
section.
(13) Rohtas Industries Staff Union vs State of Bihar AIR 1963 Pat 170
Question before Patna HC was:
Whether the employers have any right to claim damages against the employees
participating in an illegal strike and threby causing loss to production and
business?
Due to non-payment of bonus and
non-implementation of an existing award, the workers struck work. Withdrew the
strike on agreement to refer the matter to arbitration. Arbitrator inter alia
awarded that the strike was illegal and so the Union will not get any immunity
under Sec.18 of the Act and company entitled to compensation. HC however set
aside the award.
HC held that Conspiracy as a tort would become actionable
if the real purpose of the combination was to inflict damage as distinguished
from serving the bonafide and legitimate interest of those who so combine. If the object is of improving wage prospects
it will not become actionable even if it may affect the interest of the employer.
The right of the workmen to strike
is an essential element in the concept of collective bargaining and if the
predominant purpose of strike is lawful protection of any legitimate interest
of the combiners, it is not tortious conspiracy, even though it causes damage
to the employer.
Even though the strike may be
illegal under Sec.24 of the Industrial Dispute Act 1947, still workers are
entitled to immunity under Sec.18 of the TUA 1926. Legality or Illegality of
the strike has no bearing on the question of immunity furnished under Sec.18. The workers demonstration are protected so
long as they are peaceful.
(14) Std Chartered Bank vs Chartered Bank Employees Union (1997) 68 DLT
391 (Omitted from syllabus)
The plaintiff bank filed a suit against to get a decree of perpetual
injunction to restrain defendant employees from instigating and abetting other
employees and to resort to strike, holding of demonstations, shouting slogans,
resorting dharnas, gheraos and putting up loudspeaker, within radius of 500
meters of the Bank. The HC decreed the suit by restraining defendant union from
hoding demonstations, etc., within a 50 meters from the suit property. The
court observed: Even assuming the union is entitled to go on strike, it cannot
exercis the saids right to casue nuisance to the employer. The freedom of
speech and right to form association granted by the Constitution did not confer
a right to hold meeting and shout slogans at premises, legally occupied by
others.
(15) Common Cause vs UoI (1996) 1 C.C.C 242 (NCDRC) (Omitted from
syllabus)
Part B - Industrial Disputes
Topic 4 - Industry - Conceptual
Analysis
Industrial disputes Act 1947, Sec
2(j)
S2(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;
Definition of Industry (Section 2(j)
"industry" means any systematic
activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such
employer directly or by or through any agency, including a contractor) for the production, supply or
distribution of goods or services with a view to satisfy human wants or wishes
(not being wants or wishes which are merely spiritual or religious in nature),
whether or not,--
(i) any capital has been invested
for the purpose of carrying on such activity; or
(ii) such activity is carried on
with a motive to make any gain or
profit,
and includes--
(a) any
activity of the Dock Labour Board established under section 5A of the
Dock Workers
(Regulation of Employment) Act, 1948
(9 of 1948);
(b) any activity relating sales or business or both establishment. to
the carried promotion on by of an but does not include--
(1) any agricultural operation
except where such agricultural operation is carried on in an integrated manner
with any other activity (being any such activity as is referred to in the
foregoing provisions of this clause) and such other activity is the predominant
one.
Explanation.--For the purposes of
this sub-clause, "agricultural operation" does not include any
activity carried on in a plantation as defined in clause (f) of section 2 of
the Plantations Labour Act, 1951 (69 of 1951); or
(2) hospitals or dispensaries; or or
(3) educational, scientific,
research or training institutions;
(4) institutions owned or
organisations managed by wholly or substantially engaged service;or in any
charitable, social or philanthropic
(5) khadi or village industries; or
(6) any activity of the Government
relatable to the sovereign functions of
the Government including all the activities carried on by the departments of
the Central Government dealing with defence research, atomic energy and space;
or
(7) any domestic service; or
(8) any activity, being a profession
practiced by an individual or body or individuals, if the number of persons
employed by the individual or body of individuals in relation to such
profession is less than ten; or
(9) any activity, being an activity
carried on by a co-operative society or a club or any other like body of
individuals, if the number of persons employed by the co-operative society,
club or other like body of individuals in relation to such activity is less
than ten;
Before substitution the definition
of Industry stood as under
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.
Industry appears to mean a business – as a merchant, trade – as a
cutler or a carpenter, a manufacturer – as floor mill, undertaking – as gas
company, calling – as an Engineer, service – as a carrier, or an employment – a
general term covering vocations not covered in any of the rest.
Industry is something that the
employers create, or undertake. However that concept is gradually giving way to
the modern concept which regards industry as a joint venture undertaken by
employers and workmen, an enterprise which belongs equally to both. An industry
exists only when there is relationship between employers and employees, the
former engaged in business, trade, undertaking, manufacture or calling of
employers and the latter engaged in any calling, service, employment, handicraft,
or industrial occupation or avocation.
No problem AFA ascertaining the
meaning of the words ' business, trade, manufacturing or calling of employers;
is concerned. Difficulties cropped in giving meaning to ' Undertaking', a term
of very wide denotation. ‘Undertaking’ means anything undertaken, any business,
work or project which one engages in or attempts, or an enterprise. But all
decisions of the SC agree that an undertaking to be within the definition of Sec.2
(j) must be read subject to a limitation, namely it must be analogous to trade
or business. “As a working principle, it ay be stated that an activity
systemically 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 undertaking (Hospital Mazdoor Sabha Case 1960).
Judicial Trend from
1950 to 1963 – wide interpretation
to the word INDUSTRY
1963 to 1978 – a reversal of trend.
'
In 1978 this reversal was halted by
the SC 7 Judge Bench in Bangalore Water Supply and Sewerage Case v Rajappa
1978). In this case a very wide
interpretation was given the term Industry. And a seminal test was lad down to
determine whether an enterprise is an Industry or not. Krishna Iyer, J defined
Industry as continuity, an organized activity and a purposeful pursuit, not any
isolated adventure, desultory excursion or casual fleeting engagement
motivelessly undertaken.
Corporations and Municipal
Undertakings
Municipal Undertakings are generally
engaed in services which are of public utility in nature but some of the
activities may also be of thpe which are discharged by severign bodies. In case
the difficulties crop up in determination.
In D.N. Banerjee v PR Mukherjee
(1953) it was held that a public utility service or undertaking run by
Municipal Corporation constitute an industry even though it is carried on the
with the aid of taxation and no immediate mateial gain by way of profit is
envisaged., because there is co-operation between capital and labour and
rendering of material service to the public.
In Corporation of City of Nagpur v
Its Employees(1960) it was held that municipal functions are analogous to
business or trade and hence municipal functions held to be industry.
The court also made distinction
between the Regal functions and Municipal functions. The courts laid down the following principal:
(i) The regal/ sovereign function
described as primary and inalienable function. Such functions confined to
excercise of Legislative power, administration of law and judicial power.
Welfare activities of the Government not excluded from the definition of
Industry.
(ii) If service rendered by a an
individual or a private person would be classified as industry, in the hands of
the Government also this service would be an industry.
(iii) If a service rendered by a
corporation is an industry the employees in the department connected with the
service, whether financial, adiminstrative or executive would be entitled to
the benefits of the Act.
(iv) If a department of the
Municipality discharges many functions, some of which could be classified as
industry and other non industrial activities, the predominant functions of the
department shall be the criterial for the purpose of deciding whether that
department is industry or not.
Electricity, Fire Brigade Department
held to be industry but Octroi department not held to be an industry.
Supreme court in BWSS case approved
the law laid down in Corpn. Of the City of Nagpur
Clubs
Voluntary organisation formed by the
members for entertainment and pleasure. The functioning of such clubs are
governed by their bye laws framed for the purpose to regulate its mangement.
Employ large number of people also.
THE Cricket Club of India v Bombay
Labour Union (1969) held not to be an industry.
Not carrying any trade or Business.
Similary in Madras Gymkhana Member
case(1968) held not be an industry.
SC in BWSS case overuled the above
mentioned decisions.
(a) An activity systematically or
habitualy undertaken for the production or distribution of of goods or for the
rendering material services to the community at large or a part of such
community with the help of employees is an undertaking.
(b) It is the character of the
activitiy in question which attracts the provision of Sec2(j) who conducts the
activity and whether it is for profit or not do not make a material difference.
Thus activities which have no
commercial implications such as hospitals carried on with pholanthropic motives
would be industry. It does not matter if Government runs it.
Safadarjung Case: Held that a place
of treatment of patients run as a department of the Govt not an industry
because it is part of the functions of the Government.
Charitable Hospitals run by Govt or Private
associations cnnot be included inthe definition of industry.
In Dhanrajgiri Hospital v Workmen
(1975) it was held that the main activity of the Hospital was to impart
training to nurses and the beds in Hospital were meant for their practical
training. It was held not be an industry.
Both the judgment were overruled in
BWSS.
Is legal Firm an industry?
In National Union of Commercial
Employees v MR Meher(1962) held that Solicitor's firm not an industry as the
court held that in a person in liberal profession does not carry out his
profession in any intelligible sense with the cooperation of his employees.
Cooperation has to be immediate and direct.
In BWSS this decision was overruled.
Research Insitutes
In Ahmedabad Textile Industry's
Research Association v State of Bombay
In Asiatic Society v State of WB Asiatic
A meditation centre not held to be
industry.
In Management of Safadarjung vs
Kuldip Singh (1970) it was held that Holy Family Hospital was not industry
because it was a non-profit making body and its work was inteh nature of
training research and treatment. But in BWSS case SC overruled Safdarjung case.
ISRO held not to be an industry in
Harshit Takkar (1990) case having bearing on the Sovereign functions. However
in National Remote Sensing Agency held to be an industry as it does not perform
any sovereign function. Some important function of the Agency relate to
consultancy.
Central Research Institute for Yoga
held to be an Industry.
Other Activities
A society formed for the pupose of protection,
care and treatment of old, inform, and injured cows etc., also engaged in
activity of selling milk was held to be an industry. (Bombay Panjarapole V The
workmen (1971).
A place of worship (mandir) where
worship is done by Pujari on a regular wage basis and where it appars from teh
balance sheet that there remains a large surplus in the fund after expenses are
paid for making of Prasad, it is clear that the enterprise is of
commercialnature and for this reason, Mandir is an industry ( Workmen of
Baikuntha Nath Debasthan Trust V State of WB (1991).
Panchayat not industry but Panchayat
Samity providing drinking water by istalling hand pumps and arranging repairs
etc were held to be industry. Even a
Trade Union Dattatray Gopal Paranjape v Rashtriya Mill Mazdoor Sangh (1995)
held to be a industry.
Is Hospital an Industry
In
state of Bombay v Hospital Mazdoor Sabha (1960) SC held that the State
is carrying on an undertaking when it runs a group of Hospitals for purpose of
givnign medical relie to the citizens and for helping medical education.
Court Observed:
Are Educational Institute Industry
In
University
of Delhi Case
In Brahmo Samah Education Society
case the Calcutta HC observed that an under taking tat depends on the
intelligence or capacity of an individeal does not become an indutry.
(overruled by BWSS)
The above two cases overruled by
BWSS.
(16) Bangalore Water Supply and Sewarage Board vs A Rajappa, AIR 1978 SC 548
A seven judge bench approved the
Test laid down in the State of Bombay v Hospital Mazdoor Sabha Case
(1960). Held as follows:
(ii) Industry as defined in Sec.2(j)
of the Act has a wide import.
(iii) Triple Test – where there is
(i)
Systematic activity
(ii) organized by the co-operation
between employer and employee,
(iii) for the production /
distribution of goods and services calculated to satisfy human wants and
wishes, prima facie, there is an industry
in that enterprise.
(iv) Absence of profit motive is
irrelevant, be the venture be in public or private, joint or other sector. It
makes no difference whether the motive is profit or not or the public service
rendered by the undertaking is in public interest or not.
(v) The true focus is functional and
the decisive test is nature of the activity with sepcial emphasis on the
employer-employee relations.
(vi) If the organizations a trade or
business it does not cease to be one because of philanthrophi]y animating the
undertaking.
(vii) Although the section defining
the concept of industry, viz Sec.2(j) used the words of wide amplitude in its
two limbs, their meaning cannot be magnified to over-reach each other.
The word undertaking must suffer
contextual and associational shrinkage, so also must service, calling and the
like. The inference is that all
organized activity possessing the triple elements although not trade or
business may still be industry provided the employer -employee relations, bear
resemblance to what we find in trade or business.
(viii) The ideology of the Act being
industrial peace, regulation and resolution of industrial disputes between
employer and workmen, the range of this statutory ideology must inform the
reach of statutory definitions.
1. The consequences are:
(i)
Professions
(ii)
Clubs
(iii) Educational institutions,
(iv) Cooperatives
(v) Research Institutions
(vi) Charitable Projects
(vii) other adventures, if they
fulfill the triple test, cannot be exempted from scope of definition of indusry
under S 2(j).
(ix) The dominant nature test – The dominant character of the enterprise is
the sole criterion in the above categories of enterprises to decide whether
they are industries or not. Further, were a complex of activites some of which
may be industrial in nature and other not, involve employees of the total
undertaking some of whom are not workmen or some departments are not productive
or goods and services if isolated, even then the predominant nature of the
services and integrated nature of the department will be true test, the whole
undertaking will be industry although those who are no workmen by definition
may not benefit by the statute.
Similarly the activities that are
dominated by charitable motives are not excluded from the definition if the
dominant character is industrial and the relationship of employer and employees
result in the production of material goods and rendering of material services/
(x) Exceptions – A restricted
category of professions, clubs co-operatives, and even gurukuls and little
research laboratories may qualify u for exemption, if no employees are
employed but minimal employees are hired
without destroying the non-employee character of the unit.
If in a pious or altruistic mission,
many employ themselves free or for small honorarium, mainly drawn by sharing in
the purpose or cause, such as lawyers volunteering to run free legal services
or doctors serving in their spare hours in a free medical centre or ashramites working
at the bidding of the holiness, and the services are supplied free or at at
nominal cost and those who serve are not engaged for remuneration or on the
basis of master – servant relationship, then the institution is not an industry
even if stray servants are hired.
Sovereign functions strictly
understood alone qualify for exemption, not the welfare activities or economic
activities undertaken by the Government or statutory bodies. Department
discharging sovereign function, having units under them which are industries,
and they are substantially severable then they can come within the definition
of industry.
Constitutional and competently
enacted legislative provisions may well remove from the scope of IDA categories
which otherwise may be covered thereby.
SC expressed difficulty in defining
Industry and said that it cannot be strictly defined but can be described. Such
a rule however leaves too wide a door open for speculation and subjective
notions as to what is describable as an industry. It is best to look for a
rough rule of guidance by considering what the concept of industry must
exclude.
The problem is too policy oriented
to be satisfactorily settled by judicial decision.
Cases overruled: Decision of SC in
Management of Safdarjung Hospital v Kuldip Singh ( 1970), NUC Employees v
Industrial Tribunal (1962), University
of Delhi
Indian Parliament reacting to the
Rajappa's Case (Bangalore Watersupply case) amended the definition of Industy
in 1982. The amended definition has borrowed the triple test laid in Rajappa's
Case, but has excluded many activities like hospitals, dispensaries,
educational Institutions, etc. As amended definition has not been brought into
effect till date, definition as laid down in Rajappa's case continues to be valid.
Since 1978, courts have been consistently following it as a precedent. The
great merit of Rajappa's case lies in settling law on the issue and giving
certainty.
(17) General Manager Telecom vs A Srinivasa Rao (1997) 8 SCC 767
In this case it was held that
according to the test laid down in Bangalore Water Supply case, the
Telecommunication Department of the Union of India is an Industry because it is
engaged in a commercial activity and the Department is not discharging out any
Sovereign Function of the State.
The SC overruled the decision in the
Theyyam Joseph Case (1996) in which it was held that the functions of Postal
Department are part of the Sovereign functions of the State and therefore it is
not an industry. Bombay Telephone Canteen Employees Association (1997) decision
was also overruled in which it was held that the Telephone Nigam is not an
industry.
(18) Coir Board Ernakulam vs Indira
Devi, PS(I), AIR 1998 SC 2801
SC held that the Purpose of the
Board is to promote coir industry, open markets for it and provide facilities t
make the coir industry's products more marketable. It is not set up to run any
industry itself. Looking to the predominant purpose of which it is set up, it could
not be called an industry. However if one were to apply the triple test as laid
down by Bangalore Water Supply Case,
then it will have to be called an industry.
Court concluded “We do not think
that such a sweeping test was contemplated by the ID Act, nor do we think every
organization which does useful service and employs people can be labelled as
Industry”.
A bench of three Judges of SC, after
reconsidering the matter observed: The judgment delivered by a seven Judge
bench of this court in Bangalore Water Supply Case does not in our opinion
require any reconsideration on a reference being made by a two judge bench of
this court, which is bound by the Judgment of the larger bench.
(19) Coir Board Ernakulam, Kerala State
(20) M.G.T of Som Vihar Apartment Owners Housing Maintanence Society Ltd vs
Workmen AIR 2002 SC 2530
Question was whether a Society
formed to maintain the cleanliness in the apartments and to render certain
services personally to the appartment owners is an industry. Contentions: A
separate entity aprt from the apartment owners. It is not taking servvice for
itself. Services are rendered to owners. That the workers receive salary and
work under their control and supervision. And therefore the activities should
entitle them for an Industry Tag.
SC observed: The whole purpose of
the IDA is to focus on resolution of Industrial Disputes and regulations would
not meddle with every little carpenter or a blacksmith etc. The rationale which
all along the line applies to small profession would also apply to those
engaged by a group of flat owners for rendering personal services even if that
group is not amorphous but crystallised into an association or society. It is
clear that when personal services are rendered to the members of Society and
that society is constituted only for the purpose of those members to engage the
services of such employees, such activities could not be treated as an
industry.
(21) State of UP vs Jai Bir Singh (2005) 5 SCC 1
In this case interpretation of the
definition of industry as given by seven Judge bench in the Rajappa's case was
in issue. Apex court observed that there are compelling reasons more than one,
before the SC for making a reference onthe interpretation of the definition of
industry in Sec.2(j) of the IDA to a larger Bench and for reconsideration by
it, if necessary, of the decision in Bangalore Water Supply Case (BWSS)
The reasons are as under:
(i) The decision in BWSS case was
not unanimous.
(ii) Of the 5 judges, 3 had given a
common opinion but other 2 had given a separate and different opinion.
(iii) Majority opinion expressed the
view that their interpretation was only tentative and temporary till the
legislature stepped in and removed vagueness and confusion. Its difficult to
ascertain whether the said decision can be an authoritative precedent, in such
circumstances.
(iv) Worker oriented approach in the
definition. Unmindful of the interest of the employer and public who are the
ultimate beneficiaries. One sided approach and not in accordance with the Act.
The main aim of the statue is to regulate and harmonize relationships between employers
and employees for maintaining peace and harmony.
(v) A necessity to re-examine the
decision rendered in BWSS case was felt in COIR Board Case also. The experience
of last 2 decades not very happy. Instead of leading to Industrial peace, the
application of IDA might have done more damage not merely to the organizations
but also the employees by curtailing employment opportunities.
(vi) Overdue emphasis on the right
of workers and curtailment of rights of employers to organize their business
leading to large number of claims resulting in grant of awards of huge amounts
and back wages. Such burdensome awards sometimes lead the employer to close
down the business. IDA becomes a big Industrial Hazard rather for those engaged
in private enterprise.
(vii) Over expansive interpretation
of the definition of industry might be a deterrent to private enterprise in
India where public employment opportunities are scarce. The people should
therefore be encouraged towards self employment.
(viii) To embrace professions like
lawyers, doctors, architects, chartered accountants and the like, which are
occupations based on talent, skill etc, is experienced as a hurdle by
professional in their self pursuits. In carrying on their profession, if
employment is generated, then they should not be exposed to rigors of the Act.
(ix) Soverign funtions should not be
confined to its traditional concept but shoud be extended to welfare
activities.
(x) The 6 Judge bench in Safdarjung
Hospital Case (1970) rightly expressed the view that although “Profit Motive”
is irrelevant in order to encompass the activity within industry the activity
must be analogous to trade or business in a commercial sense and mere
enumeration of public utility services in Sec 2(n) read with the First Schedule
of the IDA should not be held decisive , unless the public utility service
answers the test of it being an industry as defined in Sec.2(j). The concept like the right of the workers
in activities like hospitals, education
or the employers right to close down and lay off are not contemplated because
they are services in which the motto is service to the community.
It is therefore for the larger bench
to consider interpretation of the definition clause in the present context with
the experience of all these years, and keeping in view the unenforced amended
definition of industry.
Topic 5 - Industrial Dispute vs
Individual dispute - Contrast
Industrial Disputes Act, 1947, Ss
2(k), 2A
S2(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 persons;
S2A Dismissal, etc., of an
individual workman to be deemed to be an industrial dispute. 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.]
2["(2) Notwithstanding anything contained
in Section 10, any such workman as is specified in sub-section (1) may, make an
application direct to the Labour Court or Tribunal for adjudication of the
dispute referred to therein after the expiry of forty-five days from the date
he has made the application to the Conciliation Officer of the appropriate
Government for conciliation of the dispute, and in receipt of such application
the Labour Court or Tribunal shall have powers and jurisdiction to adjudicate
upon the dispute, as if it were a dispute referred to it by the appropriate
Government in accordance with the provisions of this Act and all the provisions
of this Act shall apply in relation to such adjudication as they apply in
relation to an industrial dispute referred to it by the appropriate Government.
(3) The application referred to in sub-section
(2) shall be made to the Labour Court or Tribunal before the expiry of three
years from the date of discharge, dismissal, retrenchment or otherwise
termination of service as specified in sub-section (1)."]
INDUSTRIAL DISPUTE – Definition
Sec.2(k)
“Industrial Dispute”. Any dispute or
difference between employers and employers, employers and employees or
employees and employees which is connected with employment or non-employment or
terms of the employment or with conditions of labour of any person.
The definition has three parts
(a) Factum or real and substantial
dispute: There should be a dispute or difference.
(b) Parties to the Dispute – The
dispute should be between employers and employers or between employers and
workmen or workmen and workmen.
(c) Subject matter of the dispute
should connected with the employment or non-employment or terms of employment
or conditions of employment of any person. Any person in the definition means
that the person may not be a workman but he may be some one in whose
employment, terms of employment or conditions of labour the workmen as a class
have a true and substantial interest.
The term industrial dispute connotes a real and substantial difference
having some element of persistency and continuity till resolved and likely if
not adjusted, to endanger the industrial peace of the undertaking or the
community. Shambha Nath v Bank of
Baroda(1978).
Key Words: PERSISTENCY and
CONTINUITY
Any difference between employers and
employees which give rise to the occasion to move the machinery for resolving
the difference is covered by the definition of ID. Justification or other wise
of the controversy is a secondary consideration as the difference can arise
when a demand is made which may not be justified, or may be considered wholly
unjustified by the employers but nevertheless the machinery is put into action
to resolve the controversy. (Safdarjung Case)
Key Words: Justification or
otherwise
Demand before the Management and its
rejection. Cannot directly refer to Conciliator and then claim that it is an
industrual Dispute
Refusal to participate by an employ
does not make a difference to the status as Industrial Dispute
Union came into existence after the
dismissal of the workman and dismissed workman joined
it later, the dispute was held to be an Industrial
Dispute
Even if a Union withdraws support to
the workman whose cause they were espousing, the dispute remains an Industrial
Dispute.
Subject matter of the Industrial
Dispute may be bonus, DA, any matter connected with the conditions of
employment, or some general questions on which group is bound. Employment /Non
employment covers a wide range of subject which can form the subject of the
dispute.
All disputes relating to thte
matters specified in Sch.I and Sch.II
Disputes regarding the workers
employed by the contractor also ID
ID cannot exist between employer and
the person seeking employment.
(22) Workmen of Dimakuchi Tea Estate vs Management of Dimakuchi Tea Estate
AIR 1958 SC 353
Dr KP Banerjee Asst Medical Officer.
– Discharged given no reason – Q whether Dr ws a workman?
Principle Objects of IDA as analyzed
as follows:
1) The promotion of measures for
securing amity and good relations between the employer and workmen;
2) An investigation and settlement
of industrial disputes between employers and employers, employers and workmen
or workmen and workmen.
3) Prevention of illegal strikes and
Lockouts;
4) Relief to workmen in the matters
of lay – off, retrenchment, and closure of an undertaking.
5) Collective Bargaining.
SC held as folows:
Having regard to the scheme and
object of the Act, and its other provisions, any person in Sec.2(k) must be
read subject to limitation and qualification as arise from CONTEXT
(i) One such limitation is dispute
must be real and substantial. Any person therefore cannot mean a person w.r.t
whom the employer is in no position to give any relief.
(ii) Principle of Solidarity of
labour movement. Can raise a dispute about a person only in employment or
non-employment who have direct and substantial interest. Workman need not be
necessarily a workman,
(iii) Community of interest cannot
exist unless the person is a past or present workman.
(iv) Ordinarily it is the aggrieved
party who can raise a dispute but an ID is put on collective basis, because it
is now settled law that an industrial dispute not espoused by others of the
class to which the aggrieved party belongs is not ID within the meaning of the
Sec.2(k).
Held that Dr KP Banerjee was
not a workman within the meaning of the act. Hence dispute not an industrial
dispute within the meaning of the act.
(23) Bongolgaon Refinery &
Petrochemicals Ltd vs Samijuddin Ahmed AIR 2001 SC 3507
‘ benevolent employment scheme’ of
employment to candidates whose land had been acquired by the company – got job
concealing the fact that his 2 brothers had already been given employment by
the company – fact became known before joining of appellant and appointment was
cancelled & joining refused – SC – the respondent had not entered the
employment of the appellant hence referring a dispute u/ IDA based on
assumption that the respondent had entered the service of the appellant and was
removed from service suffered from material infirmity and was therefore
vitiated.
(24) Municipal Corporation of Delhi
vs Female Workers (Muster Roll) AIR 2000 SC 1274: (2000) 3 SCC 224
Demand for maternity leave – MCD
contended such leave only available to regular female workers & not daily
wagers as per Maternity Benefit Act, 1961. SC held that activity of MCD wud
fall under the def of industry – the workmen or for that matter those employed
on muster roll for carrying on these activities would therefore be workmen and
the dispute between them and the MCD to be tackled as an industrial dispute.
(25) J.H Jadhav vs Forbes Gokak Ltd
(2005) 3 SCC 202
In the order that a dispute relating
to a single workman may be an industrial dispute, it must either be espoused by
the union of workmen or by a number of workmen – further dispute should be
connected with employment or non-employment of a workman – Present case the
individual dispute was espoused by the union and the appellant employee raised
the dispute as to denial of promotion. – Objection in this case was that the
union espousing the cause of workman was not the majority union but that
objection was rightly rejected by the tribunal & wrongly accepted by the HC
– SC held union includes minority and outside unions. The union merely
indicates the union to which the employee belongs even though it may be a union
of majority of employees in the establishment or the union of another
establishment belonging to the same industry. In the latter case it would be
open to the union to take up the matter of a workman if it is sufficiently
representative of those workers. Court also pointed out that there is no
particular form prescribed to effect such espousal. Normally union must express
itself in the form of a resolution which should be proved if in issue. However
the proof of support by the union may also be available in other ways. Depend
on facts of each case. SC held HC erred in upsetting findings of the Tribunal
w/o holding that the conclusion was irrational or perverse.
Topic 6 - Concept of Workman
Distinction bw contract for services (independent) and contract of
service (master-servant)
Contracts of Service
Employer – employee relationship
(Leaves, fixed working hours, cannot send a substitute for work)
Usually a continuous relationship
A duty of care is owed to employees,
as the employer
The employer is generally liable for
the vicarious acts of employees
Protective legislation applies to
the contract
Contract for Service
Employer-independent contractor
relationship exists
A relationship organised around the
completion of a once-off piece of work
A duty of care, arising from
occupiers liability
The employer is generally not liable
for the vicarious acts of independent contractors
Due control and supervision test
For distinguishing between an
independent contractor and a servant, the test would be whether or not the
employer retains the power not only of directing what work is to be done but
also of controlling the manner of doing the work. If a person can be
overlooked, beholden and directed in regard to the manner of doing his work,
that person is not a contractor and it makes no difference that his work is
piece work.
Predominant nature of duty test
Whether or not an employee is a
workman under s.2(s) of the Industrial Disputes Act 1947, is required to be
determined with reference to his principal nature of duties and functions, the
facts and circumstances of the case and materials on record; and it is not
possible to lay down any strait-jacket formula which can decide the dispute as
to the real nature of duties and functions being performed by an employee in
all cases
The designation of an employee is
not of much importance and what is important is the nature of duties being
performed by the employee. The determinative factor is the main duties of the
employee concerned and not some works incidentally done. In other words, what
is, in substance, the work which employee does or what in substance he is
employed to do.
If the employee is mainly doing
supervisory work but incidentally or for a fraction of time also does some
manual or clerical work, the employee should be held to be doing supervisory
work. Conversely, if the main work is of manual, clerical or of technical
nature, the mere fact that some supervisory or other work is also done by the
employee incidentally or only a small fraction of working time is devoted to
some super super-visory work, the employee will come with in the purview of
workman as defined s.2(s) of the Act. A manager or an Administrative Officer is
generally invested with the power of supervision in contradistinction to the
Stereo type work of a clerk.
Industrial disputes act 1947, Sec 2(s)
S2(s) “Workman” means 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, whether the terms of employment be express or implied, and for the
purposes of any proceeding under this Act in relation to an industrial dispute,
includes any such person who has been dismissed, discharged or retrenched in
connection with, or as a consequence of, that dispute, or whose dismissal,
discharge or retrenchment has led to that dispute, but does not include any
such person-
(i) Who is subject to the Air Force
Act, 1950 (45of l950),or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957
(62 of 1957); or
(ii) Who is employed in the police
service or as an officer or other employee of a prison; or
(iii) Who is employed mainly in a
managerial or administrative capacity; or
(iv) Who, being employed in a
supervisory capacity, draws wages exceeding 55[ten thousand rupees] per mensem
or exercises, either by the nature of the duties attached to the office or by reason
of the powers vested in him, functions mainly of a managerial nature.].
(26) Dharangadhra Chemical Works Ltd vs State of Saurashtra AIR 1957 SC 264
Facts: Appellants were lessees
holding a license for the manufacture of salt on the demised lands. The salt was manufactured by a class of professional
labourers known as agarias from rain water that got mixed up with saline matter
in the soil. The work was seasonal in nature and commenced in October after the
rains and continued till June. Thereafter the agarias left for their own villages for cultivation work. The demised lands
were divided into plots called Pattas and allotted to the a-arias with a sum of Rs. 400/- for each Patta to meet the
initial expenses. Generally the same patta was allotted to the same aigaria
every year and if a patta was extensive in area, it was allotted to two agarias
working in partnership. After the manufacture of salt the agayias were paid at
the rate Of 5 as. 6 pies per maund. At the end of each season the accounts were
settled and the agarias paid the balance due to them. The agarias who worked
themselves with the members of their families were free to engage extra labour
on their own account and the appellants had no concern therewith. No hours of
work were prescribed, no muster rolls maintained, nor were working hours
controlled by the appellants. There were no rules as regards leave or holidays
and the agarias were free to go out of the factory after making arrangements
for the manufacture of salt. The question for decision was whether in such circumstances the agarias could be
held to be workmen as defined by S. 2(s) Of the Industrial Disputes Act of
1947, as found by the Industrial Tribunal and agreed with by the High Court or
they were independent contractors and the reference for adjudication made by
the Government competent under s. 10 of the Act.
Held, that the finding of the
Industrial Tribunal that the agarias were workmen within the meaning of S. 2(S)
of the Industrial Disputes Act of
1947 was correct and the reference was competent.
Supreme Court held that the test of
supervision and control may be taken as prima facie test for determining the
relationship of employment. Since the nature or extent of control varied from
business to business it became impossible to precisely define the extent of
control and supervision. The judicial dicta therefore suggested that correct
method of approach, would be to consider whether having regard to the nature of
work, there was due control and supervision by the employer. It means the
greater the amount of direct control exercised over the persons rendering
services by the persons contracting for them, the stronger would be the logic
for holding it to be a contract of service.
(27) Mangolore Ganesh Bidi Workers vs UoI (1974) 4 SCC 43
Provisions of the Beedi & Cigar
Workers(Conditions & Employment) Act, 1966 were challenged and
unconstitutional, being violative of the freedom of trade & biz guaranteed
u/A 19(1)(g). Contended that act imposes
unreasonable burdens in cases where a manufacturer or TM holder of beedi has no
master & servant relationship and no effective control on independent
contractors or home workers – Manufacturer/TM Holder rendered liable as the
principle employer of contract labour
Held that where the manufacturer or
TM holder himself employs labour there is direct relationship of master &
servant & therefore liability attracted by reason of that relationship –
there cannot be any question of unreasonableness in such a case – when the
manufacturer or TM holder engages contract labour through a contractor he
becomes the principal employer – though such labour may be engaged by a
contractor with or without the knowledge of the manufacturer or TM holder this
contract labour is engaged for the principal employer who happens to be the
manufacturer or TM holder – This contractor being an agent of the principal
employer for manufacturing beedis is amenable to the control of principal
employer – Thus principal employer is the real master of the business. He has real
control of the business – He is held liable because he exercises the
supervision & control over the labour employed for and on his behalf by the
contractor. – It’s only when the contractor employs labour for or on his own
behalf and supplies the finished goods to the manufacturer that he will be the
principal employer (independent contractor) in relation to such labour and the
manufacturer will not be responsible for implementing the provisions of the Act
with regard to such labour employed by the contractor. The court clarified that
if the right of rejection rests with the manufacturer or TM holder then in such
a case the contractor who prepares beedis through the contract labour will find
it difficult to establish that he is the ‘independent contractor’. If it is a
genuine sale transaction by the contractor to the manufacturer or TM holder it
will point in the direction of an independent contractor.
(28) Indian Banks Association vs Workmen of Syndicate Bank, AIR 2001 SC 946:
(2001) 3 SCC 43
Deposit collectors of banks were not
regular employees but held to be workmen under the act – Commission received by
them were held to be ‘wages’ and the master servant relationship existed
between them and the bank – S/10 of Banking regulation act did not bar employment
of persons on commission – the proviso allowed commission to non employees – No
question of absorption of Deposit collectors as regular employees – held beyond
the scope of the case as there was no demand for the same.
(29) Hussainbhai vs Alath Factory Tezhilali Union AIR 1978 SC 1410
The petitioner a factory owner,
manufacturing ropes had entered into agreements with intermediate contractors who
had hired the respondent union's workmen. In an industrial dispute raised by the respondent union the petitioner
contended that no direct employer-employee vinculum juris existed between him
and the workmen. However, the Tribunal gave an award in favour of the workmen
which was affirmed by both the single Judge as well as a Division Bench of the
Kerala High Court.
Held by the Apex Court indicated the
true test. Where a worker or group of workers labours to produce goods or
services and these goods or services are for the business of another, that
other is, in fact, the employer. He has economic control over the workers'
subsistence, skill, and continued employment. If he, for any reason, chokes
off, the worker is, virtually, laid off. The presence of intermediate
contractors with whom alone the workers have immediate or direct relationship
ex contractual is of no consequence when, on lifting the veil or looking at the
conspectus of factors governing employment, we discern the naked truth, though draped in different perfect
paper arrangement, that the real employer is the Management, not the immediate
contractor. Myriad devices, half-hidden in fold after fold of legal form
depending on the degree of concealment needed, the type of industry, the local
conditions and the like, may be resorted to when labour legislation casts
welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and
43-A of the Constitution. The
court must be astute to avoid mischief and achieve the purpose of the law and
not be misled by the maya of legal appearances.
If the livelihood of the workmen
substantially depends on labour rendered to produce goods and services for the
benefits and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious
intermediaries or the make-believe trappings of detachment from the Management
cannot snap the real-life bond. The story may vary but the inference defies
ingenuity. The liability cannot be shaken off.
Of course, if there is total
dissociation in fact between the disowning management
and the aggrieved workmen, the
employment is, in substance and in real-life terms, by another. The
Management's adventitious connections cannot ripen into real employment. Here,
on the facts, the conclusion is correct and leave must be refused. Appeal
dismissed.
(30) A Sundarambal vs Govt of Goa, Daman & Diu AIR 1988 SC 1700
Imparting of education which is the
main function of teachers
cannot be considered as skilled or unskilled manual work or supervisory work or
technical work or clerical work. Imparting of education is in the nature of a mission or a noble
vocation. A teacher educates children; he moulds their character, builds up
their personality and makes them fit to become responsible citizens. Children
grow under the care of
teachers. The clerical work, if any they may do, is only incidental to their principal work of teaching. We agree with
the reasons given by the High Court for taking the view that teachers cannot be
treated as 'workmen' as defined under the Act. It is not possible to accept the suggestion that having regard to the object
of the Act, all employees in an
industry except those falling under the four exceptions (i) to (iv) in section
2(s) of the Act should be treated as workmen. The acceptance of this argument
will render the words 'to do any skilled or unskilled manual, supervisory,
technical or clerical work’ meaningless. A liberal construction as suggested
would have been possible only in the absence of these words. Held that teacher is
not a workman even though school is an industry.
(31) H.R. Adyanthaya vs Sandoz (India) Ltd (1994) 5 SCC 737
Whether the 'medical
representatives' as they are commonly known, are workmen according to the
definition of 'workman' under Section 2(s) of the industrial Disputes Act, 1947
Word ‘skill’ has to be construed ejusdem generis and thus construed,
would mean skilled work whether manual or non-manual, which is of a genre of
the other types of work mentioned in the definition – Work of promotion &
sales distinct & independent of S2(s). Thus a medical rep not a workman.
(32) S.K Maini vs M/s Carona Sahu Co Ltd (1994) 3 SCC 510
Shop Manager/In-charge of a local
shop of a big company discharging duties of administrative and managerial
nature. He is not a workman though either incidentally he is required to do
some clerical work and is not vested with power to appoint or discharge
employees under him. It should be home in mind that an employee discharging
managerial duties and functions may not, as a matter of course, be invested
with the power of appointment and discharge
of other employees. It is not unlikely that in a big set-up such power is not
invested to a local manager but such power is given to some superior officers
also in the management cadre at divisional or regional level. The unit in a
local shop may not be large
but management of such small unit
may fulfill the requirements and incidences of managerial functions.
(33) GB Pant University of
Agriculture & Technology, Pant Nagar, Nanital vs St of UP (2000) 7 SCC 109(Omitted
from syllabus)
Topic 7 - Strike & 'Lock Out'
Concepts, legality and justification
- The industrial disputes act 1947, Ss 2(q), 2(l), 2(n), 10(3), 10A(3A), 22 -
28
The Industrial Employment (Standing
Orders) Act 1946
The Essential Services Maintenance
Act 1981
S2(q) “Strike” means a cessation of
work by a body of persons employed in any industry acting in combination, or a
concerted refusal, or a refusal, under a common understanding of any number of
persons who are or have been so employed to continue to work or to accept
employment;
S2(l) “Lock-out” means the
40[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
S2(n) “Public utility service”
means-
(i) Any railway service 42[or any transport
service for the carriage of passengers or goods by air];
43[(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
44[First Schedule] which the appropriate Government may, if satisfied, that
public emergency or public interest so requires, by notification in the
Official Gazette, declared to be a public utility service for the purposes of
this Act, for such period as may be specified in the notification:
Provided that the period so
specified shall not, in the first instance, exceed six months but may, by a
like notification, be extended from time to time, by any period not exceeding
six months, at any one time if in the opinion of the appropriate Government public
emergency or public interest requires such extension;
S10(3) Where an industrial dispute
has been referred to a Board, 6[Labour Court, Tribunal or National Tribunal]
under this section, the appropriate Government may by order prohibit the
continuance of any strike or lock-out in connection with such dispute which may
be in existence on the date of the reference.
S10A(3A) Where an industrial dispute
has been referred to arbitration and the appropriate Government is satisfied
that the persons making the reference represent the majority of each party, the
appropriate Government may, within the time referred to in sub-section (3),
issue a notification in such manner as may be prescribed; and when any such
notification is issued, the employers and workmen who are not parties to the
arbitration agreement but are concerned in the dispute, shall be given an
opportunity of presenting their case before the arbitrator or arbitrators
S22 Prohibition of Strikes and
Lock-Outs
(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.
(2) 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.
(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 lockout 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 persons 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.
S23 General Prohibition of Strikes
and Lockouts
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
1[a Labour Court, Tribunal or National Tribunal] and two months, after the
conclusion of such proceedings; 2[* * *]
3[(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]
(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.
S24 Illegal Strikes and Lock-Outs
(1) A strike or a lock-out shall be
illegal if-
(i) It is commenced or declared in contravention
of section 22 or section 23; or
(ii) It is continued in contravention of an
order made under sub-section(3) of section 10 1[or sub-section (4A) of section
10 A].
(2) Where a strike or lock-out in pursuance of
an industrial dispute has already commenced and is in existence at the time of
the reference of the dispute to a Board, 1[an arbitrator, a] 2[Labour Court,
Tribunal or national Tribunal], the continuance of such strike or lock-out
shall not be deemed to be illegal, provided that such strike or lock-out was
not at its commencement in contravention of the provisions of this Act or the
continuance thereof was not prohibited under sub-section (3) of section 10 1[or
sub-section (4A) of section 10A].
(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.
S25 Prohibition of Financial aid to
illegal strikes and lock-outs: No person shall knowingly expend or apply any
money in direct furtherance or support of any illegal strike or lock-out.
S25A Application of Sections 25C to
25E not to apply to factory – mines - plantation
S25B Definition of Continuous
service - includes service interrupted by sickness, authorized leave, accident
or strike which is not illegal, or lock-out or cessation of work which is not
due to fault of workman.
S25C Right of Workmen Laid off for
Compensation
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
S25D Duty of an Employer to maintain
muster rolls of workmen
S25E Workmen not entitled to
Compensation in certain cases
No compensation shall be paid to a
workman who has been laid-off-
(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.
S25F 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; 1[* * * * *]
(b) The workman has been paid, at
the time of retrenchment, compensation which shall be equivalent to fifteen
days’ average pay 2[ for every completed year of continuous service] or any
part thereof in excess of six months; and
(c) Notice in the prescribed manner
is served on the appropriate Government 3[for such authority as may be
specified by the appropriate Government by notification in the Official
Gazette].
S25FF Compensation to Workmen in
case of transfer of undertakings
Compensation to workmen in case of
transfer of undertakings. Where the ownership of management of an undertaking
is transferred, whether by agreement or by operation of law, from the employer
in relation to or that undertaking to a new employer, every workman who has
been in continuous service for not less than one year in that undertaking
immediately before such transfer shall be entitled to notice and compensation
in accordance with the provisions of section 25F, as if the workman had been
retrenched :
Provided that nothing in this
section shall apply to a workman in any case where there has been a change of
employers by reason of the transfer, if-
(a) The service of the workman has not been
interrupted by such transfer;
(b) The terms and conditions of service
applicable to the workman after such transfer are not in any way less
favourable to the workman than those applicable to him immediately before the
transfer; and
(c) The new employer is, under the terms of
such transfer or otherwise, legally liable to pay to the workman, in the event
of his retrenchment, compensation on the basis that his service has been
continuous and has not been interrupted by the transfer.
S25FFA Sixty Day's notice to be
given of intention to close down any undertaking
(1) An employer who intends to close
down an undertaking shall serve, at least sixty days before the date on which
the intended closure is to become effective, a notice, in the prescribed
manner, on the appropriate Government stating clearly the reasons for the
intended closure of the undertaking:
Provided that nothing in this section shall
apply to-
(a) An undertaking in which-
(i) Less than fifty workmen are employed, or
(ii) Less than fifty workmen were employed on
an average per working day in the preceding twelve months,
(b) An undertaking set up for the construction
of buildings, bridges, roads, canals, and dams or for other construction work
or project.
(2) Notwithstanding anything
contained in sub-section (1), the appropriate Government, may, if it is
satisfied that owing to such exceptional circumstances as accident in the
undertaking or death of the employer or the like it is necessary so to do, by
order, direct that provisions of sub-section (1) shall not apply in relation to
such undertaking for such period as may be specified in the order.]
S25FFF Compensation to workmen in
case of closing down of undertakings
(1) Where an undertaking is closed
down for any reason whatsoever, every workman who has been in continuous
service for not less than one year in that undertaking immediately before such
closure shall, subject to the provisions of sub-section (2), be entitled to
notice and compensation in accordance with the provisions of section 25F, as if
the workman had been retrenched:
Provided that where the undertaking
is closed down on account of unavoidable circumstances beyond the control of
the employer, the compensation to be paid to the workman under clause (b) of
section 25F, shall not exceed his average pay for three months.
1[Explanation.
An undertaking which is closed down
by reason merely of-
(i) Financial difficulties
(including financial losses); or
(ii) Accumulation of indisposed
stocks; or
(iii) The expiry of the period of
the lease or licence granted to it; or
(iv) In case where the undertaking
is engaged in mining operations, exhaustion of the minerals in the area in
which operations are carried on,
Shall not be deemed to be closed
down on account of unavoidable circumstances beyond the control of the employer
within the meaning of the proviso to this sub-section.]
2[(1A) Notwithstanding anything
contained in sub-section (1), where an undertaking engaged in mining operations
is closed down by reason merely of exhaustion of the minerals in the area in
which such operations are carried on, no workman referred to in that
sub-section shall be entitled to any notice or compensation in accordance with
the provisions of section 25F, if-
(a) The employer provides the
workman with alternative employment with effect from the date of closure at the
same remuneration as he was entitled to receive, and on the same terms and
conditions of service as were applicable to him, immediately before the
closure;
(b) The service of the workman has
not been interrupted by such alternative employment; and
(c) The employer is, under the terms
of such alternative employment or otherwise, legally liable to pay to the
workman, in the event of his retrenchment, compensation on the basis that his
service has been continuous and has not been interrupted by such alternative
employment.
(1B) For the purposes of
sub-sections (1) and (IA), the expressions minerals’ and ‘mining operations”
shall have the meanings respectively assigned to them in clauses (a) and (b) of
section 3 of the Mines and Minerals (Regulation and Development) Act, 1957 (67
of 1957).]
(2) Where any undertaking set-up for
the construction of buildings, bridges, roads, canals, dams or other
construction work is closed down on account of the completion of the work
within two years from the date on which the undertaking had been set-up, no
workman employed therein shall be entitled to any compensation under clause (b)
of section 25F, but if the construction work is not so completed within two
years, he shall be entitled to notice and compensation under that section for
every 3[completed year of continuous service] or any part thereof in excess of
six months].
S25G 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.
S25H Re-Employment of Retrenched
Workmen
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 1[to the retrenched workmen
who are citizens of India to offer themselves for reemployment, and such
retrenched workmen] who offer themselves for reemployment shall have preference
over other persons.
S25-I Recovery of moneys due from
employers under this chapter
S25-J Effect of Laws inconsistent
with this chapter
(1)Notwithstanding effect –Proviso
more favorable laws (2) Nothing in this act shall effect any State in law in
force.
S25K Application of Chapter V-B
(1) The provisions of the chapter
shall apply 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 1[one hundred] workmen were employed on an average per working
day for the preceding twelve months.
(2) If a question arises whether an industrial
establishment is of a seasonal character or whether work is performed therein
only intermittently, the decision of the appropriate Government thereon shall
be final.
S25L Definitions
Insdustrial estb = factory – mine –
plantation – n/w anything in SubCl(ii) of Cl(a) of S2 in relation to any
company where Gov has > 51% share. In relation to any corporation not being
a corporation referred to in sub-clause (i) of clause (a) of section 2
established by or under any law made by Parliament, the Central Government shall
be the appropriate Government.
S25M 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 1[with 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), 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 layoff is due also to fire, flood, excess of inflammable gas or
explosion].
2[(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 subsection (I) 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 subsection (3) has been made, the
appropriate Government or the specified authority, after making such enquiry 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 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 subsection (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 subsection (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.]
3[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.
S25N 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, -
(a) 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
(b) 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 enquiry as it thinks fit and after
giving a reasonable opportunity of being heard to the employer, the workmen
concerned and the person 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 subsection (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
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 subsection (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.]
S25-O Procedure for Closing down an
undertaking
(1) An employer who intends to close
down an undertaking of an industrial establishment to which this Chapter
applies shall, in the prescribed manner, apply, for prior permission at least
ninety days before the date on which the intended closure is to become
effective, to the appropriate Government, stating clearly the reasons for the
intended closure of the undertaking and a copy of such application shall also
be served simultaneously on the representatives of the workmen in the
prescribed manner:
Provided that nothing in this
sub-section shall apply to an undertaking set up for the construction of
buildings, bridges, roads, canals, and dams or for other construction work.
(2) Where an application for
permission has been made under sub-section (1) the appropriate Government,
after making such enquiry as it thinks fit and after giving a reasonable
opportunity of being heard to the employer, the workmen and the persons
interested in such closure may, having regard to the genuineness and adequacy
of the reasons stated by the employer, the interests of the general public 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.
(3) Where an application has been
made under sub-section (1) and the appropriate Government 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.
(4) An order of the appropriate
Government granting or refusing to grant permission shall, subject to the
provisions of sub-section (5), be final and binding on all the parties and
shall remain in force for one year from the date of such order.
(5) The appropriate Government 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 (2) or refer the matter 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.
(6) Where no application for
permission under sub-section (1) is made within the period specified therein,
or where the permission for closure has been refused, the closure of the
undertaking shall be deemed to be illegal from the date of closure and the
workmen shall be entitled to all the benefits under any law for the time being
in force as if the undertaking had not been closed down.
(7) 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 undertaking 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 undertaking for such period as may be
specified in the order. (8) Where an undertaking is permitted to be closed down
under sub-section (2) or where permission for closure is deemed to be granted
under subsection (3), every workman who is employed in that undertaking
immediately before the date of application for permission under this section,
shall be entitled to receive 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.]
S25P Special provision as to
restarting of undertakings closed down before commencement of The Industrial
Disputes (Amendment) Act, 1976
If the appropriate Government is of
opinion in respect of any undertaking or an industrial establishment, to which
this Chapter applies and which closed down before the commencement of the
Industrial Disputes (Amendment) Act, 1976 (32 of 1976)-
(a) That such undertaking was closed down
otherwise than on account of unavoidable circumstances beyond the control of
the employer;
(b) That there are possibilities of restarting
the undertaking;
(c) That it is necessary for the
rehabilitation of the workmen employed in such undertaking before its closure
or for the maintenance of supplies and services essential to the life of the
community to restart the undertaking or both; and
(d) That the restarting of the undertaking
will not result in hardship to the employer in relation to the undertaking,
It may, after giving an opportunity
to such employer and workmen, direct, by order published in the Official
Gazette, that the undertaking shall be restarted within such time (not being
less than one month from the date of the order) as may be specified in the
order.
S25Q Penalty for Lay-Off and
retrenchment without previous permission (1 mon or INR 1000 fine or both)
S25R Penalty for Closure
1) Any employer who closes down an
undertaking without complying with the provisions of sub-section (1) of section
250 shall be punishable with imprisonment for a term, which may extend to six
months, or with fine, which may extend to five thousand rupees, or with both.
(2) Any employer, who contravenes 1[an order
refusing to grant permission to close down an undertaking under sub-section (2)
of section 25O or a direction given under section 25P], shall be punishable
with imprisonment for a term which may extend to one year, or with fine which
may extend to five thousand rupees, or with both, and where the contravention
is a continuing one, with a further fine which may extend to two thousand
rupees for every day during which the contravention continues after the
conviction.
S25S Certain Provisions of Chapter
V-A to apply to an Industrial establishment to which this Chapter Applies
The provisions of sections 25B, 25D,
25FF, 25G, 25H and 25J in Chapter VA shall, so far as may be, apply also in
relation to an industrial establishment to which the provisions of this Chapter
apply
S25T Prohibition of Unfair Labour
Practice No employer or workman or a trade union, whether registered under the
Trade Unions Act, 1926 (16 of 1926), or not, shall commit any unfair labour
practice.
S25U Penalty for Committing unfair
Labour Practices (6 months imprisonmen +
or fine upto INR 1000 or both)
S26 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.
S27 Penalty for Instigation, Etc. (6
months imprisonmen + or fine upto INR 1000 or both)
S28 Penalty for giving Financial Aid
to Illegal Strikes and Lock-Outs (6 months +
fine up to INR 1000 or both)
(34) Management of Chandramalai Estate vs Its Workmen, AIR 1960 SC 902
The management having refused to comply with
some of the demands raised
by workmen, the matter was referred
for conciliation. Efforts at
conciliation failed on
November 30, 1955. on the
very next day the union gave a strike notice and actually went on strike with
effect from December 9, 1958. On January 3, 1956, the Government referred the dispute to the Industrial
Tribunal and the strike was called off on
January 5, 1956. The question as to whether the workmen
were entitled to get wages for the period of the'
strike was along with some
other grounds referred to the Tribunal. The Tribunal took the view that both
the parties were to blame for the
strike and that the workmen were entitled to get 50% of the emoluments for the
period of strike:
Held, that on the facts of the case
the strike was unjustified and that the workmen were not entitled to any wages
for the period.
When conciliation attempts failed it
was reasonable for the union to take the normal and reasonable course provided
by law to settle the dispute by asking . the Government to make a reference to
the Industrial Tribunal before it decided to strike. A strike which is a
legitimate weapon in the hands of the workmen would not be ordinarily justified
if hastily resorted to without exhausting reasonable avenues for peaceful
achievement of the object.
(35) Gujarat Steel Tubes Ltd vs Gujarat Steel Tubes Mazdoor Sabha (1980) 2
SCC 593: 1980 1 LLJ 137 (SC)
The appellant manufactures steel
tubes in the outskirts of Ahmedabad city. It started its business in 1960, went
into production since 1964 and waggled from infancy to adulthood with smiling
profits and growling workers, punctuated by smouldering demands, strikes and
settlement until there brewed a confrontation culminating in a head-on
collision following upon certain unhappy happenings. A total strike ensued
whose chain reaction was a
whole-sale termination of all employees followed by fresh recruitment of
workmen defacto breakdown of the strike and dispute over restoration of the
removed workmen.
As per the last settlement between
the management and the workmen of 4th August, 1972, it was not open to the
workmen to resort to a strike till the expiry of a period of five years; nor
could the management declare a lock out till then. Any dispute arising between
the parties, according to the terms arrived at were to be sorted out through negotiation or, failing that by
recourse to arbitration. The matter was therefore, referred to an arbitrator
and the arbitrator by his award
held the action cf the management warranted. The respondent challenged the decision of the arbitrator under
Article 226/227 of the Constitution and the High Court of Gujarat reversed the award and
substantially directed reinstatement. Hence
the appeals both by the Management and the workmen.
Dismissing the appeals and modifying
the awards substantially, the Court Held
(i) The basic assumption is that the
strike was not only illegal but also unjustified.
(ii) The management did punish its
853 workmen when it discharged them for reasons of misconduct set out in
separate but integrated proceedings; even though with legal finesse, the formal
order was phrased in harmless verbalism.
(iii) The action taken under the general law or the standing orders, was
illegal in the absence of individualized charge sheets, proper hearing and personalized
punishment if found guilty. None of these steps having been taken, the
discharge orders were still born. But, the management could, as in this case it
did, offer to make out the delinquency of the employees and the arbitrator had,
in such cases, the full jurisdiction to adjudge de novo both guilt and
punishment.
(iv) Section 11A of the Industrial
Disputes Act, 1947 does take in an arbitrator too, and in this case, the arbitral reference, apart from section 11A is
plenary in scope.
(v) Article 226 of the Constitution,
however restrictive in practice Is a power wide enough in all conscience, to be
a friend in need when the summons comes in a crisis from a victim of injustice;
and more importantly this extra-ordinary reserve power is unsheathed to grant
final relief without necessary recourse to a remand. What the Tribunal may in
its discretion do the High Court too under Article 226, can, if facts compel
so.
(vi) The Award, in the instant case,
suffers from a fundamental flaw that it equates an illegal and unjustified
strike with brazen misconduct by every workman without so much as
identification of the charge against each, after adverting to the gravamen of
his misconduct meriting dismissal. Passive participation in a strike which is
both illegal and unjustified does not ipso facto invite dismissal or punitive
discharge. There must be active individual excess such as master-minding the
unjustified aspects of the strike, e.g., violence, sabotage or other
reprehensible role. Absent such gravamen in the accusation, the extreme
economic penalty of discharge is wrong. An indicator of the absence of such
grievous guilt is that the management, after stating in strong terms all the
sins of workmen, took back over 400 of them as they trickled back slowly and
beyond the time set, with continuity of service, suggestive of the dubiety of the inflated
accusations and awareness of the minor role of the mass of workmen in the
lingering strike. Furthermore, even though all sanctions short of punitive
discharge may be employed by a Management, low wages and high cost of living,
dismissal of several hundreds with disastrous impact on numerous families is of
such sensitive social concern that, save in exceptional situations, the law
will inhibit such a lethal step for the peace of the industry, the welfare of
the workmen and the broader justice that transcends transient disputes. The
human dimensions have decisional relevance. The discharge orders though
approved by the Arbitrator are invalid.
(36) BR Singh vs UoI (1989) 4 SCC 710
The strength of a trade union
depends on its membership. The right to demonstrate and, therefore, the right
to strike is an important weapon in the armoury of the workers. But the right
to strike is not absolute under our industrial jurisprudence and restrictions
have been placed on it under sections 22 and 23 of the I.D. Act, 1947. Where no
proceedings were pending before conciliation board, labour court or arbitration
tribunal nor any settlement or award touching the striking workmen was in
operation during the strike period, it was held that the strike was not illegal
(37) Syndicate Bank vs K Umesh Nayak (1994) 5 SCC 572
Unless the strike is legal and
justified, workmen are not entitled to wages.
(38) Essorpe Mills Ltd vs PO ; Labour
Court
Topic 8 - 'Lay off' 'Retrenchment' & Closure
Analysis of the concepts, Pre-requisites, The IDA1947 Ss 2(cc),
2(kkk), 2(oo) Chapters VA, VB, The industrial Employment (Standing Orders) Act
1946
‘Closure’ means permanent closing
down of a place of employment or part thereof. [section 2(cc)]
’Lay off’ means failure, refusal or
inability of employer on account of shortage of coal, power or raw materials or
accumulation of stock or break down of machinery or natural calamity; to give
employment to a workman on muster roll. ‘Lay off’ means not giving employment
within two hours after reporting to work. - - Lay off can be for half day also.
In such case, worker can be asked to come in second half of the shift. Section
2(kkk)
S2(oo) “Retrenchment” 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
46[(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 in that behalf contained therein;
or]
(c) Termination of the service of a
workman on the ground of continued ill-health;]
(39) Mohan Lal vs The Management of M/s Bharat Electronics Ltd AIR 1981 SC
1253
The appellant was employed with the respondent as Salesman at its Delhi Sales
Depot on a salary of Rs. 520/- per month from 8th December, 1973. His service
was abruptly terminated by letter dated 12th October, 1974 with effect from
19th October, 1974. Consequent upon his termination, an industrial dispute was
raised and referred to the Labour Court, Delhi, on 24th April, 1976.
Held: The termination of service of
the appellant was ab initio void and inoperative. His case not being covered by
any of the excepted or excluded categories referred to under section 2(oo) and
he has rendered continuous service for one year, the termination of his service
would constitute retrenchment. The pre-condition for a valid retrenchment has
not been satisfied in this case and therefore he will be entitled to all
benefits including back wages etc.
Termination by the employer of the
service of a workman for any reason whatsoever in section 2(oo) of the
Industrial Dispute Act, would constitute retrenchment except in cases excepted
in the section itself. The excepted or excluded cases are where termination is
by way of punishment inflicted by way of disciplinary action, voluntary
retirement of the workman, 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, and termination of the
service of a workman on the ground of continued ill health.
(40) Punjab Land Development and
Reclamation Corporation Ltd vs Presiding Officer, Labour Court (1990) 3 SCC 682
Whether retrenchment under the act
meant termination of services of workmen as surplus labour for any reason
whatever or it meant termination by the employer of services of workmen for any
reason whatsoever otherwise than as punishment inflicted by way of disciplinary
action and those expressly excluded by the definition? Scope & ambit.
Retrenchment means the termination
by the employer of the service of a workman for any reason whatsoever except
those expressly excluded in the section. Section 2(oo) (bb) should be
harmoniously construed with Sections 25-F, 25-G and 25-H.
Wide literal meaning is more
preferable to the natural, contextual and narrow meaning viz. discharge of
surplus labour.
Even if the wide literal
interpretation may result in affecting the employer’s rights u/ Standing Order
or under the contract of employment, in respect of termination of service, that
would be justified by reason of social policy involved in S2(oo) r/w S25F
imposing additional social obligation.
(41) State of Rajasthan vs Rameshwar Lal Gahlot AIR 1996 SC 1001
The undisputed facts are that
respondent was appointed for a period of three months or till the regularly
selected candidate assumes office. He was appointed on January 28, 1988 and his
appointment came to be terminated on November 19, 1988. When the writ petition
was filed, the learned single Judge held that since he had completed more than
240 days, the termination is in violative of Section 25F of the Industrial
Disputes Act, 1947 (for short, `the Act') and directed to make fresh
appointment of the respondent. When appeal was filed against the latter part of
the order, the Division Bench set aside the latter part of the order and directed
reinstatement with back wages. Appeal filed in SC.
The controversy now stands concluded
by a Judgment of this Court reported in M. Venugopal vs. Divisional
Manager,LIC., [(1994) 2 SCC 323]. Therein this Court had held that once an
appointment is for a fixed period. Section 25F does not apply as it is covered
by clause (bb) of Section 2 (oo) of the Act.
When the appointment is for a fixed
period, unless there is finding that power under clause (bb) of Section 2 (oo)
was misused or vitiated by its mala fide exercise, it cannot be held that the
termination is illegal. In its absence, the employer could terminate the
services in terms of the letter of appointment unless it is a colourable
exercise of power. Unfortunately, neither the learned single Judge nor the
Division Bench recorded any finding in this behalf. Therefore, where the
termination is in terms of letter of appointment saved by clause (bb), neither
reinstatement or fresh appointment could be made. Since the appellant has not
filed any appeal against the order of the learned single Judge and respondent
came to be appointed afresh on June 27, 1992, he would continue in service,
till the regular incumbent assumes office as originally ordered. The question
then is whether the respondent is entitled to payment of back wages. Since the
order is found to be in terms of letter of appointment, respondent is not
entitled to back wages. The Division Bench was incorrect in directing payment
of back wages.
(42) Uptron India Ltd vs Shammi Bhan AIR 1998 SC 1681
Respondent 1 was appointed as an
operator (Trainee) on 13.6.1980 in the petitioner's establishment. On
completion of training, she was absorbed on that post with effect from
13.7.1981 and was confirmed on 13.7.1982. She thus acquired the status of a
permanent employee.
With effect from 7th of November,
1984, respondent 1 proceeded, and remained till 29th January, 1985, on
maternity leave. Thereafter, she allegedly remained absent with effect from
30.1.1985 to 12.4.1985 without any
application for leave and consequently, by order dated 12th April, 1985, the
petitioner informed respondent 1 that her services stood automatically
terminated in terms of Clause 17 (g) of the Certified standing Orders.
Respondent 1 raised an Industrial Dispute and made prayer to the State
Government in 1985 that her case may be referred to the Industrial Tribunal for
adjudication. Her application, filed before the Deputy Labour Commissioner,
Lucknow, was registered as C.B. Case No. 310-1985. The State Government, by its order dated 18.7.1990, referred the following
question for adjudication
to the Industrial Tribunal, Lucknow: "Whether the termination of the
services of female Smt. Shammi Bhan, operator, daughter of C.N. Kaul, by the
management by its letter dated 12.4.1985 is proper and legal. If not, the
relief which the employee will be entitled to?"
The Tribunal, by its Award dated
21st July, 1992, held that the termination of services of respondent 1 amounted
to "Retrenchment" within the meaning of Section2(oo) of the Industrial
Disputed Act and since all other legal requirements had not been followed, the
termination was bad and consequently she was entitled to reinstatement as also
fifty per cent of back wages from the date of termination till reinstatement.
This Award was challenged by the
petitioner through a Writ Petition in the Allahabad High Court (Lucknow Bench)
and the High Court, by the impugned judgment dated 28.10.1997, dismissed the
writ petition upholding the findings of the Tribunal that termination of respondent's
services was "retrenchment". The High Court further held that while
invoking the provisions of
Clause 17(g) of the Certified Standing Orders, the petitioner ought to have
been given an opportunity of hearing to respondent.
SC observed “It would be seen that
the respondent was a permanent employee of the petitioner. There was no
fixed-term contract of service between
them. There was, therefore, no question of services being terminated on the
expiry of that contract. In the absence of a fixed-term contract between the
parties, the question relating to
the second contingency, namely, that the termination was in pursuance of a
stipulation to that effect in the contract of employment, does not arise.
The contract of employment referred
to in the earlier part of Clause (bb) has to be the same as is referred to in
the latter part. This is clear by the use of words "such contract" in
the earlier part of this Clause. What the clause, therefore, means is that
there should have been a contract of employment for a fixed-term between the
employer and the workman
containing a stipulation that the services could be terminated even before the
expiry of the period of contract. If such contract, on the expiry of its
original period, is not renewed and the services are terminated as a
consequence of that period, it would not amount to "Retrenchment".
Similarly, if the services are terminated even before the expiry of the period of contract but in
pursuance of a stipulation contained in that contract that the services could
be so terminated, then in that case also, the termination would not amount to
"retrenchment". This
view finds support from a decision of this Court in Escorts Ltd. vs. Presiding
Officer, (1997) 11 scc 521.
This case does not fall in either of
the two situations contemplated by Clause (bb). The `Rule of exception',
therefore, is not applicable in the instant case & consequently the finding
recorded by the Tribunal on "retrenchment" cannot be disturbed.
For the reasons stated above, we
find no merit in this petition which is dismissed at the SLP stage.
(43) S.M. Nilajkar vs Telecom District Manager Karnataka (2003) 3 SCALE 533
A number of workers were engaged as
casual labourers for the purpose of expansion of telecom facilities in the
district of Belgaum, Karnataka, during the years 1985-86 and 1986-87. The
services of these workers were utilized for digging, laying cables, erecting
poles, drawing lines and other connected works. It appears that the services of
these workmen were terminated sometime during the year 1987 and they were not
engaged on work thereafter.
SC Observed: Government as a welfare
State floats several schemes and projects generating employment opportunities,
though they are short-lived. The objective is to meet the need of the moment. The benefit of such schemes and projects is
that for the duration they exist, they provide employment and livelihood to
such persons as would not have been able to secure the same but for such
schemes or projects. If the
workmen employed for fulfilling the need of such passing-phase-projects or
schemes were to become a liability on the employer-State by too liberally
interpreting the labour laws in favour of the workmen, then the same may well
act as a disincentive to the State for floating such schemes and the State may
opt to keep away from initiating such schemes and projects even in times of
dire need, because it may feel that by opening the gates of welfare it would be
letting-in onerous obligations entailed upon it by extended application of the
labour laws. Sub-clause (bb) in the definition of retrenchment was introduced
to take care of such like- situations by Industrial Disputes (Amendment) Act,
1984 with effect from 18.8.1984.
'Retrenchment' in its ordinary
connotation is discharge of labour as surplus though the business or work
itself is continued. It is well- settled by a catena of decisions that labour
laws being beneficial pieces of legislation are to be interpreted in favour of
the beneficiaries in case of doubt or where it is possible to take two views of
a provision. It is also well-settled that the Parliament has employed the
expression "the termination by the employer of the service of a workman
for any reason whatsoever" while defining the term
"retrenchment", which is suggestive of the legislative intent to
assign the term 'retrenchment' a meaning wider than what it is understood to
have in common parlance. There are four exceptions carved out of the
artificially extended meaning of the term 'retrenchment', and therefore, termination
of service of a workman so long as it is attributable to the act of the
employer would fall within the meaning of 'retrenchment' de hors the reason for
termination. To be excepted from within the meaning of 'retrenchment' the
termination of service must fall within one of the four excepted categories. A
termination of service which does not fall within the categories (a), (b), (bb)
and (c) would fall within the meaning of 'retrenchment'.
The termination of service of a
workman engaged in a scheme or project may not amount to retrenchment within
the meaning of sub-clause (bb) subject to the following conditions being
satisfied:-
(i) that the workman was employed in
a project or scheme of temporary duration;
(ii) the employment was on a
contract, and not as a daily-wager simplicitor, which provided inter alia that
the employment shall come to an end on the expiry of the scheme or project; and
(iii) the employment came to an end
simultaneously with the termination of the scheme or project and consistently with
the terms of the contract.
(iv) the workman ought to have been
apprised or made aware of the abovesaid terms by the employer at the
commencement of employment.
Held that the workers were not
project employees as contended by the employer. The appointment was not for any
particular project and hence would not be governed by sub-clause (bb) of clause
(oo) of Section 2 of the Industrial Disputes Act. 1947. Of the workmen each had
rendered a continuous service within the meaning of Section 25B of the Act for
a period over 240 days and, therefore, their termination amounted to
retrenchment which was invalid for non-compliance with Section 25F of the Act.
The workmen were, therefore, entitled to reinstatement.
(44) The Workmen of Fire Stone Tyre & Rubber Co Pvt Ltd vs Fire Stone
Tyre & Rubber Co Pvt Ltd (1976) 3 SCC 819: AIR 1976 SC 1775
The respondent-company manufacturing
tyres in Bombay, due to the
general strike in its factory between the period 3rd March 1967 and 16th May
1967 and again from 4th October 1967 and due to the consequent short supply of
tyres had to lay-off 17 out of its 30 workmen in the Delhi distribution office
and also some out of its 33 workmen in its Madras distribution office. The
workmen in the Delhi and Madras offices were called back to duty on 22nd April
1968 and 29th April 1968 respectively. The workmen were not given their wages
or compensation for the period of lay-off.
An industrial dispute was raised and
referred to the tribunal by the Delhi
Administration even when the lay-off was
in operation. The Presiding officer of
the Additional Industrial Tribunal,
Delhi held that the workmen were not entitled to any layoff compensation. The workmen in Madras
Held by the Apex Court:
The simple dictionary meaning
according to the concise oxford Dictionary of the term "lay-off is
"period during which a workman is temporarily discharged". Lay-off
means the failure, refusal or inability of employer on account of contingencies
mentioned in cl. (kkk) of s. 2 of the Industrial Disputes Act, 1947, to give
employment to a workman whose name is borne on the Muster Rolls of his
Industrial Establishment. It has been called a
temporary discharge of the workmen or a temporary suspension of his contract of
service. Strictly speaking, it is not so. It is merely a fact of temporary
unemployment of the workman in the work of the lndustrial Establihment. Mere
refusal or inability to give employment to the workman when he reports for duty
on one or more grounds mentioned in cl. (kkk) of s. 2 is not a temporary
discharge of the workman.
Gaya Cotton & Jute Mills Ltd. v.
Gaya Cotton & lute Mills Labour Union [1952] II Labour Law Journal 37,
referred to.
(2)(i) That the power to lay-off a
workman is inherent in the definition in cl. (kkk) of s. 2 is not correct,
since no words in the definition clause to indicate the conferment of any power on the employer to lay-off a workman can be found. His
failure or inability to give employment, by itself militates against the theory
of conferment of power. No section in Chapter VA in express language or by
necessary implication confers any power, even on the management of the
Industrial Establishment to which the relevant provisions are applicable, to
lay-off a workman. There is no provision in the Act
specifically providing that an employer would be entitled to lay-off his
workmen for the reasons prescribed by s. 2 (kkk). Such a power, therefore, must be found out from the terms of contract of
service or the Standing orders governing the Establishment.
(ii) In the instant case, the number
of workmen being only 3, there being
no Standing orders certified under the Industrial Employment (Standing orders)
Act (Act 20 of 1946),1946, and there being no contract of service conferring any such right of lay-off, the
inescapable conclusion is that the workmen were laid-off without any authority
of law or the power in the management under the contract of service.
(3) If the terms of a contract of service or
the statutory terms engrafted in the Standing orders do not give the power to
lay-off to the employer, the employer would be bound to pay compensation for
the period of lay-off which ordinarily and general
would be equal to the full wages of the concerned V workman. If, however, the terms of employment confer a right of
lay-off on the management then in the case of an Industrial Establishment which
is governed by Chapter VA, compensation will be payable in accordance with the
provisions contained therein.
But compensation or no compensation will be payable in the case of an
Industrial Establishment to which the provisions of Chapter VA do not apply and
it will be so as per the terms of employment.
(4) In a reference under s. 10(l) of
the Act. it is open to the tribunal or court to award compensation which may
not be equal to the full amount of
basic wages and dearness allowance. But no such power exists in the Labour Court
SC held: 75% of the basic wages and
dearness allowance would be the adequate compensation for the lay-off period.
(45) Orrisa Textile and Steel Ltd vs State of Orissa AIR 2002 SC 708
The constitutional validity of
Section 25O of the Industrial Disputes Act, 1947, has been challenged in this
case alleging, inter alia, that the said provision is violative of the fundamental
rights guaranteed to a citizen under Article 19(1)(g) of the Constitution and,
therefore, is ultra vires.
The petitioner's case is that the
'right to continue business' within the meaning of Article 19(1)(g) of the
Constitution includes right to close down a business and the very fact that the
citizen cannot exercise the said right, inasmuch as permission of the State
Government is required under Section 25O before closing ; down the business,
infringes the right guaranteed under Article 19(1)(g) of the Constitution.
SC quoted decision of KarHC in
Stump, Schule and Somappa Ltd. v. State of Karnataka
"In our conclusion, we are of
the view that the present Section 25O of the Act is denuded of the infirmities
found in its predecessor. The provisions of Section 25O of the Act, as it now
stands, require the Government to give reasons for its order; the factors to be
considered by the appropriate Government are stated in Section 25O(2); an
objective approach in arriving at the decision by the Government, is now
imperative; the factors stated in Section 25O(2) which are to be considered,
are to be understood in the light of the decision in the Excel Wear's case
(supra), the appropriate Government has to strive to strike a balance between
the various interests involved, in the background of a particular situation;
any unreasonable order can be corrected by judicial review; the Government
itself may review its order or refer the matter for decision by a Tribunal for
adjudication; the application of the employer has to be considered by the
appropriate Government and the order to be communicated within sixty days from
the date on which the application is made, failing which the permission is
deemed to have been granted; there is always an assumption that the Government
would exercise its power reasonably. In the Excel Wear's case (supra), the
Supreme Court recognised that a law may provide to deter reckless, unjust,
unfair or mala fide closures; therefore, requirement of prior permission for
closure by itself cannot be an unreasonable restriction on the fundamental
right of the employer. In this view of the matter, we hold that, it is not
possible to declare Section 25O of the Act as violative of Article 19(1)(g) of
the Constitution."
It is too well-settled that if the
competent authority passed an order in exercise of his power under a statute
without conforming to the statutory requirements, then the order gets vitiated
and can be struck down if challenged before a court of law, but that does not
make the statute itself unconstitutional. The right to close a business is an
integral part of the fundamental right to carry on business and is guaranteed
under Article 19(1)(g) of the Constitution. The closure of any industrial
undertaking is likely to have adverse impact on the interest of the working
class and, therefore, the Legislature enacted the provision of Section 25O of
the Industrial Disputes Act to consider the interest of the workers employed in
a large industrial undertaking. The interest of the labour has not to be
ignored and, therefore, a balance has been struck by prescribing the manner of
seeking permission for closure and by providing for dealing with the said
application by the competent authority and providing guidelines for the
exercise of such power. In view of the authoritative pronouncements of the
Karnataka High Court (1989-II-LLJ-4), Kerala High Court and Delhi High Court,
(Supra) with which we are in respectful agreement, as well as the observations
of the Supreme Court in Meenakshi Mills' case (Supra) we do not find any
substance in the arguments of Mr. Mohapatra and we hold that the amended
provisions of Section 25O of the Industrial Disputes Act do not violate the
fundamental right guaranteed under Article 19(1)(g) of the Constitution.
(46) U.P State Brassware Corporation Ltd vs Uday Narain Pandey (2006) 1 SCC
479
Services of respondent workman,
terminated on expiry of his tenure. ID raised by him that he was entitled to
back wages. Contended by appellant that since fixed period - S6-N(corresponding
to S25-F IDA) has no application – No work no pay principle – Hence grant of
back wages by Labour court unjustified.
Apex Court Observed:
Order VII, Rule 7 of the Code of
Civil Procedure confers power upon the court to mould relief in a given situation.
The provisions of the Code of Civil Procedure are applicable to the proceedings
under the Industrial Disputes Act. Section 11-A of the Industrial Disputes Act
empowers the Labour Court, Tribunal and National Tribunal to give appropriate
relief in case of discharge or dismissal of workmen.
The meaning of the word 'discharge'
is somewhat vague. In this case, we have noticed that one of the contentions of
the Appellant was that the services of the Respondent had been terminated in
terms of its order dated 12/13.2.1987 whereby and whereunder the services of
the Respondent herein was approved till 31.3.1987.
The Industrial Disputes Act was
principally established for the purpose of pre-empting industrial tensions,
providing the mechanics of dispute-resolutions and setting up the necessary
infrastructure so that the energies of partners in production may not be
dissipated in counter- productive battles and assurance of industrial justice
may create a climate of goodwill. [See LIC v. D.J. Bahadur, (1981) 1 SCC 315]
Industrial Courts while adjudicating
on disputes between the management and the workmen, therefore, must take such
decisions which would be in consonance with the purpose the law seeks to
achieve. When justice is the buzzword in the matter of adjudication under the
Industrial Disputes Act, it would be wholly improper on the part of the
superior courts to make them apply the cold letter of the statutes to act
mechanically. Rendition of justice would bring within its purview giving a
person what is due to him and not what can be given to him in law.
A person is not entitled to get
something only because it would be lawful to do so. If that principle is
applied, the functions of an industrial court shall lose much of its
significance.
SC quoted Kendriya Vidyalaya
Sangathan Case: When the question of determining the entitlement of a person to
back wages is concerned, the employee has to show that he was not gainfully
employed. The initial burden is on him. After and if he places materials in
that regard, the employer can bring on record materials to rebut the claim. In
the instant case, the respondent had neither pleaded nor placed any material in
that regard."
Only question is whether the
Respondent would be entitled to back wages from the date of his termination of
service till the aforementioned date. The decision to close down the
establishment by the State of Uttar Pradesh like other public sector
organizations had been taken as far back on 17.11.1990 wherefor a GO had been
issued. It had further been averred, which has been noticed hereinbefore, that
the said GO has substantially been implemented. In this view of the matter, we
are of the opinion that interest of justice would be subserved if the back
wages payable to the Respondent for the period 1.4.1987 to 26.3.1993 is
confined to 25% of the total back wages payable during the said period.
