A THREE DIMENSIONAL VIEW OF
CERTAIN IMPORTANT ASPECTS
OF THE INDUSTRIAL DISPUTES
ACT 1947
[By. Prof. H.A.C .POPPEN (hcpoppen@gmail.com) ]
I.
NATURE & SCOPE OF CERTAIN TERMS
USED IN THE ACT
A. INDUSTRY [SN.2(J)]
1) A new definition was introduced in 1984 , But the same has not been
notified for implementation .
2) The scope of the old definition was amplified by the supreme court in
the Bangalore water supply case [1978(2)SCC213] .
3) For becoming industry following ingredients should combine:
Systematic Activity + Organised Cooperation between employer &
Employees + For Production and/or Distribution of Goods & Services +
For Satisfying Human Needs.
4) However the following are excluded from the term Industry:
a) Sovereign Functions of the Government.
b) Spiritual and Religious activities geared towards achieving Celestial Bliss for
Humans.
B. WORKMAN [Sn2(s)]
1) The term excludes the following 3 categories:
a.
b.
c.
Managerial or Administrative Staff
Supervisory Staff drawing wages above Rs 10,000/- p.m.
Personnel of the armed forces & Police.
2) It includes the following categories even if they draw salary above Rs10,000/
p.m
a)Manual (b)Unskilled (c)Skilled (d)Technical (e)Operational (f)Clerical & supervisors drawing
salary up to Rs 10,000/- p.m.s & Terminated workmen doing any of the above functions.
3)The S.C. In H.R.Adayanta VS Sandoz [1994(5)SCC 737] held that an employee
cannot become a workman by merely showing that he is not falling in the 3
excluded categories. Only if it is proved that he is performing one of the inclusive
functions would he become a WORKMAN.
4) An employee cannot be excluded by merely giving him designations
of Manager|Administrator|Supervisor etc.
5) Even if a portion of the job is supervisory, If the dominant activity is
any one of the inclusive fucntions, the employees would be counted
as workman.[S.K Maini vs Carona Sahu 1994(3)SCC 510]
6) Teachers do not fall within the 6 inclusions and hence not workman.
[Karthiani Vs Union of India[1984(1) LLJ 259]
7) In Baselius Medical Hospital case 2007(2) LLJ 925, The Kerala HC
quoting the SC Judgement in Sonapet Coop Mills Case [2005(1) LLJ
1122] held a doctor doing mere medical consulting with no
supervisory function is a workman. However the Delhi HC in Multan
Eye Hospital Case [2012(133) FLR 675] Took the opposite view on the
Ground that doctors, Lawyers charted accountants have to follow a
code of ethics and hence cannot be treated as workman under I.D
Act.
(C) INDUSTRIAL DISPUTE [Sn2(k)]
1. THE INGREDIENTS ARE:
a) Parties to the dispure should be.
Employer Vs Employer
OR
Employer Vs WorkmEn
OR
WorkmEn Vs WorkmEn
Therefore only a Group of WorkmEn/Union can raise an industrial dispute
and not a single workman.
Employment or Non Employment
b) Subject matter of the dispute
should be connected with.
Terms of Employment
Conditions of labour
c) The definition further says that the workmen can raise disputes about
ANY PERSON , Who may or not be a workman. In the Indian bank case
1997(51)FJR76 the Madras HC clarified that, the any person should be
an employee of that establishment and not be a stranger.
d) The Definition does not allow an individual workman to raise an
industrial dispute. If he has a dispute, He can raise it only if it is
sponsored/espoused by his co-workmen.
e) However, under section 2-A an individual workman can raise his own
dispute by himself if it pertains only to his termination. He cannot on his
own raise disputes about his Non- Promotion , Suspension, Transfer,
lesser Punishments etc.
f) Though contractors workmen do not come under the definition of
“workman” for the principal employer, the regular workmen of the
principal employer can raise a dispute against him about the service
conditions and absorption of contract labour using the ANY PERSON
clause referred in the definition .
D) STRIKE [Sn2(q)]
1. INGREDIENTS ARE:
a) Concerted refusal to work or accept work.
b) By a group of workmen.
c) To press their demand against the employer.
E) LOCKOUT[Sn 2(l)]
• INGREDIENTS ARE:
a) Employer refusing to employ or temporarily closing the place of employment,
to put pressure on workmen to climb down from their demand or prevent
indiscipline at work place by group of workmen.
b) If it is an individual or small number of workmen , Employer should use the
weapon of suspension pending enquiry.
F. RETRENCHMENT[Sn2(oo) ]
1) All kinds of termination barring the following 5 types:
a)
b)
c)
d)
e)
Voluntary Retirement ,
Superannuation ,.
Non- Renewal of a fixed term contract.,
Termination on account of continued ill health,
On account of disciplinary action [ Loss of lien termination is retrenchment]
G) LAY-OFF [Sn 2(kkk)]
1) Temporary inability of the employer to provide work to his
workmen.
2) If it is for the following reasons only half wages need be paid:
a)
b)
c)
d)
e)
Shortage of Coal|Power|Raw material.
Accumulation of stocks.
Breakdown of machinery
Natural calamity
Any other connected reason.
3) If Non-Providing work is for any other reason workmen must be
paid full wages
H) CLOSURE [Sn 2 (cc)]
Is the PERMANENT Closure of the business itself.
[Lay of is the temporary closure of any place of the business]
I)
1)
2)
3)
4)
PUBLIC UTILITY SERVICE [Sn2(n)+Sch. I]
Permanent Public Utility –Industries listed under section 2(n)(i) to(v)
Temporary Public Utility –Industries listed under Sch-I if the
government has issued a gazette notification under Sn. 2(n)(vi)
Such notifications only valid for 6 months
If notification not renewed, Sch.-I industries will go back to nonpublic utility category .
J) APPROPRIATE GOVERNEMENT [Sn2(a)]
1) Labour law falls under the concurrent list of the constitution.
2) Therefore, The Central as well as the State govts. can make labour laws ,
Rules and can have separate administrative & Implementation set ups.
3) But both cannot have administrative control over your establishment at
the same time.
4) Section 2(a) will help you decide whether you come under the state or
central administrative machinery .
5) Therefore you may have to follow the central Act along with the state
rules and go to the state labour athority,if you are listed under the state
in sn.2(a) or to Central if listed under Central list .
J. ALL ABOUT AGREEMENTS/SETTLEMENTS &
AWARDS
1. Methods of dispute settlements.
a) Through bi-partite negotiations, resulting in AGREEMENTS[sec
18(1)]
b) Through the intervention of conciliation officers appointed by the
government, resulting in SETTLEMENTS [sec12(3) +18(3)]
c) When conciliation fails ,parties can opt for choosing a mutually
acceptable mediator called ARBITRATOR and he gives his decision
through an AWARD. Parties are not permitted to challenge HIS
award in HCs or SC.
d) When parties do not choose arbitration the government
refers the dispute for resolution to the LABOUR COURT ( on
matters in sch-II) or to INDUSTRIAL TRIBUNALS (on matters in
sch-III) for ADJUDICATION and they give their decisions called
AWARDS. The adjudication awards can be challenged in higher
courts, if they have not followed the proper legal procedure.
No challenge is permitted on ERRORS OF FACT and challenge
possible only on ERRORS OF LAW.
2. Validity period of settlements & awards.
(a) SETTLEMENTS are valid for the period indicated by the
parties in the settlement itself or else for a minimum period
for 6 months [sec 19(2)]
(b) AWARDS are initially valid for 12 months and government
can extend their validity for two more spells of 12 months
each taking it up to 36 months [sec 19(3)(4)]
3. Do the terms of settlements and awards cease to become
enforceable after the validity period expires [sec 19(2)&
19(6)]
(a) They need to be terminated by issuing TERMINATION
NOTICES under sec 19(2) or 19(6)
(b) The supreme court in LIC Of India vs D.J. Bahadur[1981(1)
SCC 315] has clarified that settlements and awards will
CONTINUE TO BE ENFORCEABLE even after their validity
period expires and will REMAIN IN FORCE till the terms are
ALTERED OR CANCELLED in subsequent settlements or awards.
4. On whom are settlements & awards binding [sec18]
(a) It is binding on the parties who raised the dispute
(b) It is also binding on the parties summoned to attend the
conciliation or adjudication process
(c) It is also binding on unions/workers who were invited to
the CONCILIATION TALKS but failed to participate or refused to
sign the SETTLEMENT.
(d) It is also binding on future workmen and successors and
assignees and legal heirs of the employers.
III. Procedure for altering existing service conditions [sec 9-A & SCH.
IV] & Sec 33(1)(a)]
(a) Schedule IV contains ELEVEN items of service conditions which
cannot be altered unilaterally by the employer
(b) For altering any one of the ELEVEN Items a notice of change in formEE under section 9-A is to be issued at least 21 days in advance.
(c) In case of opposition by the workmen, the change cannot be
enforced until the dispute is settled through conciliation/arbitration or
adjudication.
(d) Section 9-B gives power to the government to exempt employers
from going through this procedure.
IV. Power of the labour courts & tribunals to reduce disciplinary
punishments awarded by the management [sec11-A]
1. The LC & IT can use this power only if the punishment awarded is a
DISCHARGE or DISMISSAL
2. It cannot be invoked if the punishment awarded is not termination.
3. The SC in South India Cashew workers case [2006(2) LLJ-772] and the
Karnataka HC in Bangalore Metro Transportation corporation case
[2011(4) LLJ-400] has ruled that courts CAN NOT re-appreciate
evidence or reduce punishments in case the original punishments
awarded by management is less than termination and in nontermination cases they can interfere only if they find:
(a) Want of good faith, victimisation or unfair labour practice resorted
to by management.
(b) Labour courts/ IT have power to cancel the dismissal orders and
order reinstatements with or without back wages & consequential
benefits.[With consequential benefits will mean as if there never was
termination ]
(c) The LC/IT can instead of reinstatement, order payment of adequate
compensation [ the SC in the OP Bhandari case [1986(53) FLR752] and
the DIVISION BENCH of Karnataka HC in the Bharat Fritz Werner Case
[2011(128) FLR653] has clarified that in no case can the compensation
ordered be more then 40 months last drawn salary]
(d) If the Labour Court comes to the conclusion that the disciplinary
procedure is ok, they cannot reduce the quantum of punishment
unless they give reasons to show that the quantum of punishment is
SHOCKINGLY DISPROPORTIONAL to the gravity of the offence
committed [see SC ruling in LIC vs Dhandapani 2006(1)LLJ329]
(e) The SC in U.P.S.R.T.Corporation case [2007(3)LLJ171] & Charanjit
Lamba vs Commanding officer [2010(126)FLR989] has made it clear
that mere statements by the courts that the punishment is “shockingly
disproportionate” would not be enough, they will have to give cogent
reasons for their coming to that conclusion. If it is not a speaking order
it could be challenged and got struck down in the High Courts.
V. Can the management challenge the Labour court’s orders for
reinstatement in the High Courts [sec17B]
(a) Though sec 17(2) of the ID Act says that the awards/orders of the LC
& ITS are final and shall not be challenged. It can be challenged in the
high courts under article 226 of the constitution.
(b) High courts cannot accept the challenge if it is to challenge it on
“mistake of facts”.
(c) Challenge can be taken up only if there is scope for arguing, there is
“Mistake Of Law” in the lower court’s judgment.
(d) If mistake of law is established, HC will send the case back
to the LC to take a fresh a decision based on the correct law.
(e) In case the management decides to challenge the
reinstatement order of the LC in the HC the management will
have to pay the workman the LAST DRAWN WAGES till the
disposal of the case by the High court [if in the mean time
superannuation takes place, payment can be discontinued
from that date]
(f) The rate of “Last Drawn Wages” will not undergo change
during the HC trial even if there is pay revision or annual
increments are drawn by other workmen. [see SC ruling in
Dena bank case 1999(2) SCC 106 & Rajaram Maize case 1999
SCC(L&S)641]
(g) The payment under sec 17-B is not payable if the dismissed
workman is gainfully employed in some other establishment
during the HC trial period. [sec Kerala HC ruling in south India
workers congress 2010(1) LLJ 276 & Delhi HC ruling in Sathya
Sai Vidya Vihar 2010(2)LLJ249
VI Determination of Legality & Illegality of Strikes & Lock outs
[Sn: 22,23,24,26,27,28]
Factors To Be Considered
In Public Utility Services
In Non-Public Utility Services
Not required [Sn 23] [Unless
Is issue of strike notice in form -O Yes (Without proper notice will
the standing order or any
or Lock out notice in Form P
be illegal)
agreement requires such
mandatory
& Sn 22(1) & Sn 22(2)
notice]
If indulged in during pendency of
conciliation proceedings before
an officer
Illegal [Sn 22(d)]
Not Illegal [Sn 23 & 24]
Illegal [Sn 23(a)]
Illegal [Sn 23(a) & 24]
If indulged in during conciliation
proceedings before a Board
Factors To Be Considered
In Public Utility Services
In Non-Public Utility Services
If indulged in during the pendency
period of adjudication & arbitration Illegal [Sn 23(b) &(bb)]
proceedings
Illegal [Sn 23(b) & (bb) & 24]
A legally commenced strike, lock
out, if continued after government Illegal from the date of such
issues a ban order under Sn10(3) or ban [Sn24(1)(ii) ]
10-A(4A)
Illegal from the date of ban
[Sn24(1)(ii) ]
If lock out is in retaliation for an
illegal strike or vice-versa
No notice is required and the
Retaliatory strike/ lock out
shall not be illegal [Sn24(3)]
even if without notice
No notice is required and the
Retaliatory strike/ lock out shall
not be illegal [Sn24(3)] even if
without notice.
Consequences of
participating/instigating illegal
strike or /lock out
Punishable under Sn. 27
Punishable under Sn. 27
1) Can the restrictions on strike in public utility services under 22(1) be
invoked on the striking contract workmen [who are not employees
of the principal employer] by the principal employer has been
answered in the affirmative by Karnataka H.C in IOC v/s Petroleum
workers union[2013(137)FLR 875]
2) Normally provisions of the I.D Act are not applicable to nonworkmen [Managers & Supervisors] But the restrictions on strike
under Sn 22(1) apply to all categories of employees including
managers & supervisors and even they can be punished under Sn26
for going on illegal strike. [see Delhi HC ruling in Indian Oil
Corporation V/s Officer Association [2000(85)FLR144]
3) In Syndicate bank case[ 1994(2)LLT 836] The Supreme court held
that workmen on a legal strike would be eligible to claim wages only
if they establish in the labour court that their strike was both legal &
justified.
VII I.D. Act Provisions Regulating Lay off & Payment of
Compensation [Sn 2 (kkk) &CH. V
SL
No.
Factors
Applicability to Smaller establishments
Falling Under Chapter V-A
Applicability to Larger
establishments falling under
Chapter V-B [more than 100
woekmen]
(a) The general definition under 2(Ka) is not
Applicability of the applicable
(a) The general definition under
Definition or
(b) The definition for the purposes of
2(Ka) is not applicable
"Industrial
Chapter V-A is the definition given in section (b) The definition for the purposes
Establishment" under 25-A [Factory +Mines+ Plantations employing of chapter V-B is the definition given
1
section 2(Ka) to lay less than 100 workmen ]
in section 25-L [Plantations +Mines
off provisions under (c) Provisions of Lay-off will not apply if the +Factoriys employing 100 or more
Chapter VA & VB
average attendance in the month
workmen will be governed by Ch. V[2(Ka), 25A, 25-L]
immediately preceding the start or lay off
B sections]
was less than 50 workmen
SL
No.
Factors
Applicability to Smaller
establishments Falling
Under Chapter V-A
Applicability to Larger establishments falling
under Chapter V-B [more than 100 workmen]
(a) Permission of the government is required if the
average attendance of the workmen in the
preceding 12 months was 100 or more
No permission is
(b) If the lay off is for shortage of power or coal or
Is prior government required if the average natural calamity post -facto approval is required
permission to be
attendance of workmen (c) For other reasons like accumulation of stocks
2
taken for declaring lay in the establishment in or break down of machinery prior approval must
off [Sn. 25M(1)]
the previous 12 months be taken from government
was less than 100
(d) In case of mines prior permission is not
required if lay off is due to: Fire, flood, excess of
inflammable gas or explosion; but post incident
permission should be taken
SL
No.
Factors
Applicability to Smaller Applicability to Larger establishments falling
establishments Falling
under Chapter V-B [more than 100
Under Chapter V-A
workmen]
Should Governments
prior Permission be
No application for
3 awaited before laying off
permission required
the workmen [Sn
25M(6)]
(a) Application for permission to be
submitted at least 90 days in advance
(b) In the case of mines for fire, floods,
explosion etc. should apply within 30 days of
the occurrence of the incident
(c) If no reply is received from the
government within 60 days it can be
presumed that permission is granted
(d) If permission is denied workmen who
were laid off should be paid full wages
Normal rate of
4 compensation payable
[Sn 25 M(10)]
(1) 50% of Basic +D.A.
(2) If permission denied 100% of wages
50% of Basic + D.A
SL
No.
5
6
7
8
Factors
Applicability to Smaller
establishments Falling
Under Chapter V-A
What is the rate of compensation
payable when the willing workmen are
laid off due to strike or slow down by Nil
another Section of workmen [Sn
25E(iii)]
Applicability to Larger establishments
falling under Chapter V-B [more than 100
workmen]
50% of Basic + D.A
Eligible if they meet the
Are casual or Badli workmen who are attendance requirements of
Must meet attendance requirement of
not regular workmen eligible for lay off 240 days/12 months
240/12 months under Sn 25-B
compensation [Sn 25-B]
prescribed under section
25-B
In case of central PSUS in a state
Who is the permission granting
permission has always to be taken from
No permission required
authority state or central? [Sn 25L(b)]
central labour department [25L(b)] others
from the state govt.
Penalty for laying off without
permission [Sn 25Q]
Not Applicable
Imprisonment up to one month or fine of
Rs. 1000 or both + Pay full wages to
workmen [25Q]
VIII I.D.Act provisions regulating Retrenchment
1. What is the scope of the term retrenchment
(25F and 25N)
(a)
(b)
(c)
(d)
(e)
According to the new definition introduced in 1984 (Section 2(oo)) retrenchment
means all types of termination of workman’s service barring the following 5
exceptions:
Termination for indiscipline after proper enquiry
By way of resignation or voluntary retirement by the workman
Retirement on reaching the age of superannuation
Termination resulting from non-renewal of a fixed term contract of employment
Termination on account of continued ill health
2. After 1984,terminations under the standing order
provisions of “loss-of-lien” or simple discharge using
one month/3 months clauses in the appointment
letter of confirmed workmen would amount to illegal
retrenchment/termination as held by the S.C in West
Bengal electricity board case(1995(50)FLR 456)
3.Casual workmen who satisfy the attendance test of
240 days/12 months prescribed in section 25-B are
eligible for retrenchment compensation benefits
4. Probationary workmen are not eligible for
compensation if their services are terminated before
issue of a confirmation letter.
5. Rate of compensation payable is 15 days wages for
each completed year of service
6. Prior permission from the government is required if
the average attendance of the workmen in the
establishment is 100 or more (apply 90 days in
advance)
7. For smaller establishments the notice to workmen
should be one month and for larger establishments it
would be 3 months or pay in lieu there of.
8. The principle of last to come in go out first should be
adopted category or designation wise. (deviations
with proper reasons could be made,if it could be
justified before courts)
9. If work is restarted at a future date, the retrenched
workmen should be re-called (if they have not crossed
the age of superannuation) (Sn 25 H)
10. If the services are terminated under a voluntary
retirement scheme (VRS) the workmen will lose their
right of re-employment
11.If workmen’s services comes to an end after a fixed
term employment of say 5 years, he will not be
eligible for compensation as his termination does not
meet the requirements of section 2(oo)
(X ) RECOVERY OF MONEY DUE FROM THE EMPLOYER
(SN 33C)
(1 )WHEN CAN THE WORKMAN INVOKE THIS
PROCEDURE?
(a)He should have become entitled for some amount:
(i)Under a settlement or award
(ii) For lay off /retrenchment/closure compensation
under chapter V-A or V-B.
(2) TIME LIMIT FOR CLAIMING
(a) Claims should be submitted to the government
within one year of it falling due
(b) Government can condone delay, if proper reasons
are given.
(3) Who can file?
(a) The workman/his heirs/anybody authorized by him.
(4) Two types of claim petitions
(a) If the workman knows the exact entitlement amount the
petition should be under 33(C)(1)
(b) If the entitlement is known, but the quantum is not known
,the petition should be under 33(C)(2)
(5) Procedure for claiming
(a) Rule 62 outlines the procedure and the forms to be used for
filing
(b) The government will forward the petition to the labour court
for issuing necessary orders
(c) After receiving the orders, government will send it to the
collector for attaching the employer’s property and then pay
it to the claimants.
NOTE: if the workman’s salary is below Rs 18,000/-pm, he could
also file a claim under section 15 of the payment of wages
act 1936
XI Temporary restriction on employer’s powers to alter
service condition or take disciplinary action against
workmen during the pendency periods of
conciliation/adjudication or arbitration (Sn 33)-------------------------------------------------------------------------
(1) Restrictions are temporary
(a) The restrictions imposed under Sn 33 is only during
the period of pendency
(b) The restrictions will not apply outside the pendency
period.
(c) These temporary restrictions are imposed for
preventing actions by employer which may escalate
the conflict and reduce the prospect of an amicable
resolution of the dispute.
(2) WHAT IS MEANT BY PERIOD OF PENDENCY
(a) Conciliation is deemed to commence and conclude
when contingencies mentioned in sec 20(1) and
20(2) are satisfied
(b) Adjudication and arbitration are deemed to
commence and conclude when contingencies
mentioned in sec 20(3) are satisfied
(c) The period intervening the commencement and
conclusion are called period of pendency.
(3) RESTRICTIONS ON ALTERATION OF SERVICE
CONDITIONS [ Sns. 33(1)(a) &33(2)(a)
Section no
33(1)(a)
Contingency
1.some matters are in dispute and
pending conciliation/arbitration
2.management wants to alter one
or more of the disputed items
Restriction
Any change in service condition can
be done only with the express
written permission of the authority
before whom the issue is pending
3. against workmen who are
concerned in the dispute
33(2)(a)
The workmen are concerned in the (a)no permission or approval
dispute,but the matter proposed to required
be altered is not connected with
(b) management can take the
any of the disputed items
required action as stipulated in the
standing orders or appointment
letter.
(4) RESTRICTIONS ON TAKING DISCIPLINARY ACTION
AGAINST NON-PROTECTED WORKMEN (SN 33(1)(B)
AND SN 33(2)(B))
Section no
33(1)(b)
contingency
Restriction
The workman has committed a No discharge or dismissal orders shall be issued
misconduct in connection with without taking express written permission from
the pending dispute
the authority
33(2)(b)
The workman has committed a (a)no restriction on issuing punishments less
misconduct which is not
than termination
connected with the pending
(b) IF IT IS TERMINATION must pay one month’s
dispute
salary and apply for approval of the
discharge/dismissal
(c) if not approved must reinstate.
(5) RESTRICTIONS ON PUNISHING PROTECTED WORKMEN
(SN 33(3) AND SN 33(4))
(1) No kinds of punishment can be issued against
protected workmen without taking advance written
permission from the authority concerned.
(2) WHO IS A PROTECTED WORKMAN
(a) All union office bearers cannot claim protected
status
(b) Every union can claim up to 1 percent of its strength,
subjecte to a minimum of 5 union office
bearers(Rule 61)
(c) If they claim more, the management should write to
the union to spell out for whom they would like to
give the protected status within 15 days
(d) As per the rules each year the union should communicate
to the management by or before 30th April the names of
the person to be declared as protected workmen
(e) Such protection is for a maximum period of 12 months
and limited to periods when there are disputes pending
(f) If there is any dispute on this matter it should be referred
to the labour commissioner
NOTE: in the HIL life care LTD vs Hindustan latex labour union
(2011(128) FLR 653) the division bench of the Kerala HC
over ruling the single bench as well as the labour
commissioner’s decision held that the management can
refuse to grant status to nominated union leaders if
disciplinary proceedings are pending against them
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