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Light on Important Aspects of the Industrial Disputes

Act,1947by ANKITSINGH on SEPTEMBER 24, 2010

The idea of Industrial disputes was practically unknown to India till the end of the

World War I (1914-18). There was no special legislation as such on the issue of disputes

in Industries as such and so at that time ordinary principles of master and servant were

used to govern the relations between the employers and employees in the industries.

At that point of time, majority of the industries were under the control of the British industrialists

- administration and the War provided them with an opportunity to increase their production and

henceforth their profits as well. England emerged successful in World War I which gave rise to

establishment of a large number of factories and so huge investment of money. Inspite of huge

investment there was no improvement in the condition of labor. The year of 1919 marks the

outbreak of an industrial strike on scale previously unknown to the world.

The formation of the International Labor Organization provoked the labor class and instilled the

spirit among labor community to struggle for their rights. The first session of the International

Labor Conference took place in Washington in 1919 and India also participated in the

Conference.

The provinces of Bombay and Bengal were the first one to take initiative and they appointed

committees to investigate the matter to consider and report or create machinery for prevention or

settlement of disputes. The Bengal committee recommended the formation of joint workers

committee and it was not in favour of any sort of government interference or any type of speciallegislation to decide labor disputes, but however they did recommended the formation and

setting up of Industrial Courts. The Bombay Government at that adhering to the

recommendations of the committee about setting up of the Industrial Courts, introduced a Bill in

the Legislative Council of the State, but due to the interference of the Central Government the

bill was dropped and not introduced before the Legislative Council of the State. The Central
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Government however enacted the Workmens Compensation Act, 1923, the Mines Act, 1923

and also the all important Trade Unions Act of 1926.

As an experimental measure, the Indian Trade Disputes Act was passed in the year 1929 on the

lines of the British Trade Disputes Act of 1927. It was to remain if force for five years. The Act

was made permanent in April, 1934.

There were intensive agitations around the country in 1929 by various labor leaders demanding

reforms and expansion of labor laws, resulting in appointment of a Royal Commission on Indian

Labor by the King Emperor. The object of the of the commission was to enquire into and report

on existing conditions of labor in industrial undertakings in British India ; on Health, efficiency

and standard of living of the workers ; and on the relation between the employer and the

employed ;and to make recommendations thereon.

Under the Government of India Act, 1935, provincial autonomy was given to all provinces. The

governments of many states appointed committees to inquire and to examine the present levels of

wages, conditions of work and make necessary recommendations henceforth. On of the first and

the most important measure so adopted was the enactment of the Bombay Industrial Disputes

Act of 1938. When the Second World War started it once again changed the complexion of the

Labor Struggle.

The Central Government being controlled by the Britishers was always in a more advantageous

position in terms of the powers when compared to the Provincial Governments. They had

exclusive powers of control of any trade or industry which were given to them by the Defense of

India Act, 1939. It also gave powers to regulate and control of any trade or industry, for the

purpose of maintaining of essential services for the life of the community. In January, 1942 Rule

81 was added to the said rules by the legislative authorities to restrain LockOuts and Strikes,

this rule made strike and lock outs prohibitive until under very restricted conditions. The

government was given exclusive power to refer industrial disputes to adjudication and enforce

the awards. These provisions including the Trade Disputes Act form the basic structure and

backbone of the Industrial Disputes Act. The Rule 81- A empowered the Central Government to

make provisions for prohibiting, subject to provisions of an order; a strike or a lock- out in

connection with any trade dispute and it also makes it an offence to contravene any order made

under it and prescribes punishment for the same.

The lapse of Defence of India Act, 1939 and its Rules, the government made the provision for

the settlement and investigations of industrial disputes and for other purposes enacted the

Industrial Disputes Act, 1947.

Object of the Act


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The Act was basically enacted to make provisions investigations and settlement of industrial

disputes and for certain other purposes. The object of the Act is not only to make provision for

investigation and settlements of industrial disputes, but also to secure industrial peace so that it

may result in more production and improve national economy and to ensure fair settlements to

the workmen and to prevent disputes between the employers and employees so that production

may not be adversely affected and the larger interests of the public may not suffer .

The Principle objects of the Act are:

1) the promotion of measures for securing and preserving 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 as a result of representation by a registered

trade union or federation of trade unions or association of employers or federation of associations

of employers.

3) Prevention of illegal strikes and lock-outs.

4) Relief to workmen in the matter of layoff and retrenchment

5) Collective Bargaining.

In the landmark case ofCrown Aluminum Works v. Workmen AIR 1958 SC 30 it was held

by the Apex Court that though the social and economic justice is the ultimate ideal of industrial

adjudication, its immediate objective in an industrial dispute as to the wage structure is to settle

the dispute by constituting such a wage structure as would do justice to the interests of both labor

and capital , would establish harmony between them lead to their genuine and whole hearted

cooperation in the task of production .

Important Definitions under the Act

Section 2 of the Act lays down the definitions given under the act. Some of the important

definitions given under the act are:-

1) Section 2 (b) Award - means an interim or a final determination of any industrial dispute or

of any question relating thereto by any Labor Court, Industrial Tribunal or National Industrial

Tribunal and includes an arbitration award made under Section 10- A

2) Section 2 (g) Employermeans

(i) in relation to an industry carried on by or under the authority of any department of the Central

Government or a State Government , the authority prescribed in this behalf , or where no

authority is prescribed , the head of the department.

(ii) in relation to an industry carried on by or on behalf of a local authority , the chief executive

officer of that authority.


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3) Section 2 (j) Industrymeans any systematic activity carried on bycooperation 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 Labor Board established under section 5A of the DockWorkers

(Regulation of Employment) Act , 1948 (9 of 1948 ) ;

(b) any activity relating to the promotion of sales or business or both carried on by an

establishment .

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.

ExplanationFor the purposes of this sub-clause , agricultural operation does not include any

activity carried on in a plantations as defined under clause (f) of section 2 of the Plantations

Labor Act,1951 (69 of 1951) ; or

(2) hospitals or dispensaries

(3) educational, scientific ,research or training institutions ; or

(4) institutions owned or managed by organizations wholly or substantially engaged in any

charitable , social or philanthropic service ; or

(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


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(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 ;

4) Section 2 (k) Industrial Disputemeans 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

conditions of labor , of any person.

5) Section 2 (kkk) Lay Offmeans failure, refusal or inability of an employer on account of

shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of

machinery (or natural calamity or for any connected reason) to give employment to a workman

whose name is borne on the muster rolls of his industrial establishment and who has not been

retrenched.

Every workman whose name is borne on the muster rolls of the industrial establishment and who

presents himself for work at the establishment at the time appointed for the purpose during

normal working hours on any day and is not given in the employment by the employer within

two hours of his presenting himself shall be deemed to have been laid off for that day within the

meaning of this clause:

Provided that if the workman ,instead of being given employment at the commencement of any

shift for any day is asked to present himself for the purpose during the second half of the shift for

the day and is given employment then , he shall be deemed to have laidoff only for onehalf

of that day :

Provided further that if he is not given any such employment even after so presenting himself, he

shall not be deemed to have been laid off for the second half of the shift for the day and shall be

entitled to full basic wages and dearness allowance for that part of the day;

6) Section 2 (l) Lock out means the temporary closing of a place of employment or the

suspension of work, or the refusal by an employer to continue to employ any number of persons

employed by him;

7) Section 2 (oo) Retrenchment means the termination by the employer of the service

of a workman for any reason whatsoever, otherwise than as a punishment inflicted byway of disciplinary action, but does not include - (a) voluntary retirement of the

workman; or

(b) retirement of the workman on reaching the age of superannuating if the contract of

employment between the employer and the workman concerned contains a stipulation

in that behalf; or


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(bb) termination of the service of the workman as a result of the non-removal 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;

Section 2 (p) Settlementmeans a settlement arrived at in the course of conciliation

proceeding and includes a written agreement between the employer and workmen arrived at

otherwise than in the course of conciliation proceeding where such agreement has been signed by

the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an

officer authorised in this behalf by the appropriate Government and the conciliation officer;

9) Section 2 (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;

10) Section 2(qq) Trade Unions means a trade union registered under the Trade Unions Act,

1926 (16 of 1926);

11) Section 2(rr) Wagesmeans all remuneration capable of being expressed in terms

of money, which would, if the terms of employment, expressed or implied, were

fulfilled, be payable to a workman in respect of his employment, or of work done in

such employment, and includes - (i) such allowances (including dearness allowance) as

the workman is for the time being entitled to;

(ii) the value of any house accommodation, or of supply of light, water, medical

attendance or other amenity or of any service or of any confessional supply of food

grains or other articles;

(iii) any traveling concession;

(iv) any commission payable on the promotion of sales or business or both; but does not

include - (a) any bonus;

(b) any contribution paid or payable by the employer to any pension fund or provident

fund or for the benefit of the workman under any law for the time being in force;(c) any gratuity payable on the termination of his service;

12) Section 2 (s) Workmanmeans 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


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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 (45 of 1950), 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 one

thousand six hundred 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.

BANGALORE WATER SUPPLY V. A.RAJAPPA

Citation AIR 1948 SC 548, 1978 2SCC 213

In Bangalore Water Supply & Sewerage Board v. A.Rajappa 1978 2SCC 213 / AIR 1978

SC 548. In Supreme Court, 7 members Judge Bench decided the case (5 to 2). A very

wide interpretation to the term industry was given. It was held that profit motive or a

desire to generate income is not necessary. Any systematic activity organized by

cooperation between employer and employees for the production and/or distribution of

goods and services calculated to satisfy human wants and wishes is industry.

Thus, many hospitals, educational institutions, universities, charitable institutions and

welfare organizations have got covered under the Act. Professions, clubs, cooperatives,

research institutes etc. are also covered.

The Honble Apex Court also held that in deciding whether the State was running an

Industry , the definition of public utility service prescribed in section 2 (n) was very

significant and one had merely to glance at the six categories of public utility services

mentioned therein to realize that in running the hospitals the State was running an

industry . It is the character of the activity which decides the question as to whether

the activity in question attracts the provision of S. 2 (j); who conducts the activity, saidthe Court, and whether it is conducted for profit or not do not make a material

difference.

Hospital Mazdoor Sabha was correctly decided in so far as it held that the JJ Group of hospitals

was an industry but the same cannot be said in regard to the view of the Court that certain

activities ought to be treated as falling outside the definition clause.


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Works Committee is established in cases of Industrial establishments where one

hundredor more workmen are employed or have been employed on any day in the

preceding twelve months. Preceding twelve months to be taken prior to the date of

order issued by the appropriate Government. Works Committee is basically established

to take measures for securing and preserving amity and good relation between

employer and workmen, to comment upon the matters of their common interest and to

endeavor to compose any material difference of opinion in respect of such matters.

Conciliation Officers are appointed by the appropriate Government by notification in the

Official Gazette and it is their duty to mediate and promote the settlement of industrial disputes

.They may be appointed for a specified area and also for a specified time or may be permanently.

Labor Courts are constituted by the appropriate Government by notification in the Official

Gazette; one or more may be established. Such courts are established with a view to adjudicate

industrial disputes relating to matters given in the second schedule and performing any other

functions as may be assigned to them under the Act. Person so appointed by the appropriate

government as the Judge of such a Labor Court should be or has been Judge of High Court, or he

has for a period of not less than three years been a District Judge or an Additional District Judge,

or he has held any Judicial Office in India for not less than seven years, or he has been the

presiding officer of a Labor Court constituted under any Provincial Act or State Act for not less

than five years.

In every industrial establishment where fifty or more workmen are employed, the employer is to

constitute a Grievance Settlement Authority for the settlement of industrial disputes connected

with an individual workman employed in the establishment. This authority is to be constituted in

accordance with the rules that may be framed by the government. Any workmen or any trade

union of workmen of which such workman is a member can refer any industrial dispute

connected with such individual workman to the Grievance Settlement Authority.

Duties of Conciliation Officers

1) When an industrial dispute exists or is apprehended, the conciliation officer may, or where the

dispute relates to a public utility service and a notice under Section 22 has been given, shall hold

conciliation proceedings in the prescribed manner.

2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute,

without delay investigate the dispute and all the matters affecting the merits and the right

settlement thereof and may do all such things as he thinks fit for the purpose of inducing the

parties to come to a fair and amicable settlement of the dispute.


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3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of

the conciliation proceedings the conciliation officer shall send the report thereof to the

appropriate Government together with a memorandum of the settlement signed by the parties to

the dispute.

4) If no settlement is arrived at, the conciliation officer shall , as soon as practicable after the

close of the investigation , send to the appropriate Government , a report setting forth the steps

taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing

about a settlement thereof , together with a full statement of such facts and circumstances , and

the reasons on account of which , in his opinion , a settlement could not be arrived at.

5) If, on a consideration of the report referred to in sub-section (4), the appropriate Government

is satisfied that there is case for reference to a Board or Tribunal, it may make such reference.

Where the appropriate Government does not make such reference it shall record and

communicate to the parties concerned its reason thereof.

6) A report under section shall be submitted within fourteen days of the commencement of the

conciliation proceedings or within such shorter period as may be fixed by the appropriate

government.

In a landmark case decided by the Calcutta High Court, Royal Calcutta Golf Club Mazdoor

Union v. State of West Bengal AIR 1956 Cal 550it was held by that honble court that duties

of a conciliation officer , though not judicial in nature, but are administrative in nature . It is

observed from the provision of section 12 that the conciliation officer has to do a variety of

things. He has to investigate the disputes and do all such things as he thinks fit for the purpose of

inducing the parties to arrive at a fair and amicable settlement of the dispute. If it was held that

the duties of a conciliation officer were judicial, then in connection with everything that he does,

the formalities of a judicial trial have to be observed, e.g he could not ascertain from one side its

view, except upon notice to, or in the presence of, the other parties. It is but patent that no

conciliation proceedings could be carried on in such conditions. The main task of a conciliation

officer is to go from one camp to the other and find out the greatest common measure of

agreement. That being so, the grievance that the investigations have not been carried on, in the

manner that the judicial proceedings should be carried on, is without substance. So far as the

violation of the rules of natural justice is concerned, that principle would not apply if the

proceedings are purely administrative.

CONCILIATION PROCEEDINGS AND PROCEEDUREWhen conciliation proceedings

have commenced under section 12 (1) of the Industrial Disputes Act, 1947, the further procedure

enjoyed by the Act has to be followed. When no settlement is arrived at, during conciliation


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proceedings, it is the duty of the appropriate Government to proceed under sub-section (5) of the

section either to make a reference or to record and communicate to the parties concerned its

reasons for not making a reference. A writ of mandamus can be issued directing the appropriate

Government to discharge the duty cast on them under Section 12 (5). This was held in the case

ofThe State of Madras v. The Swadesamitran Labor Union, 3 FJR 431 (Mad HC)

In the case Sasamau Workers Union v. The State of Bihar, AIR 1952 Mad 74 it was held that

the expression settlement of disputes as used in Section 12 , Industrial Disputes Act, does not

necessarily refer to a settlement by the conciliation officer alone. The parties to the dispute may

well agree that a particular dispute may be decided by a third party, such as Labor Commissioner

whose direction will be accepted as final. The dispute must be deemed to have been settled by

the Labor Commissioner under mutual agreement during any conciliation proceedings.

Conciliation Officer is not to be considered as a Tribunal and no appeal can be made from a

decision of a Conciliation Officer to the Supreme Court. Article 136 of the Constitution of India

deals with Special Leave Petition to the Honble Apex Court. Under Article 136, an appeal lies

to the Supreme Court from the adjudications of courts and tribunals only. Adjudication of a court

or tribunal must doubtless be judicial; but every authority which by its constitution or authority

specially conferred upon it is required to act judicially, is not necessarily a tribunal for the

purpose of Article 136. A tribunal, adjudication is a subject to appeal, must besides being under a

duty to act judicially, be a body invested with the judicial power of the state.

The duty to act judicially of the authority given to him by the statute does not explicitly give at

authority the judicial power of the state.

Duties of Board

(1) Where a dispute has been referred to a board under this Act, then it is the duty of the Board to

endeavor to bring about a settlement of the same and for this purpose the Board will, in any

manner as it thinks fit and without any due delay, investigate the dispute and any matter affecting

the merits and the right settlement thereof and may do all such things as it thinks necessary or fit

for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.

(2) If a settlement of the dispute or any of the matters and dispute is arrived at in the course of

the conciliation proceedings, the Board will send a report thereof to the appropriate Government

together with a memorandum of the settlement signed by the parties to the dispute.

(3) If no consensus or settlement is arrived at, the Board shall, as soon as practicable after the

close of the investigation , send to the appropriate Government a full report setting the

proceedings and steps taken by the Board for ascertaining the facts and circumstances relating to

the dispute and for bringing about a settlement thereof, together with a full statement of such


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facts and circumstances , its findings, the reasons on account of which , in its opinion , a

settlement could not be arrived at and it recommendations for the determination of the dispute.

(4) If, on the receipt of a report under the last subsection in respect of a dispute relating to a

public utility service , the appropriate Government does not make a reference to either Labor

Court, Tribunal or even National Tribunal under section 10, it shall record and then communicate

to the parties concerned its reasons therefore

(5) The Board shall then submit its report under this section within two months of the date (on

which the dispute was referred to it) or within such shorter period as may be fixed by the

appropriate Government:

It is to be noted that the Government may from time to time extend the time for the submission

of the report by such further periods which should not exceed two months in aggregate.

It is further to be noted that that the time for the submission of the report may be extended by

such period as may be agreed on in writing by all the parties to the dispute.

Duties of Labor Courts, Tribunals and National Tribunals

Industrial Disputes are referred to a Labor Court, Tribunal or National Tribunal for adjudication

and it is their duties to hold its proceedings expeditiously and within the period specified in the

order referring such industrial dispute or the further period extended and submit its award to the

appropriate Government.

1) Freedom of Contract: Restrictions under industrial laws: Social justice

The freedom of contract is not considered anymore as a private matter. Now, various legislations

have come into existence, primarily in the field of industrial relations which give power to

various tribunals to disregard existing contracts and to create new contracts in the interest of the

weaker against the unjust and arbitrary action of the stronger. Industrial Tribunals discretion

must however be exercised in accordance with well-recognized principles of social justice. The

dispute between the employers and the workmen when settling, the function of the tribunal is not

confined to administration of justice in accordance with law. It confers rights and privileges on

either party which it considers reasonable and proper. It is not to merely interpret or give effect

to the contractual rights and obligation of the parties but it can also create new rights and

obligations between them which it considers essential for keeping industrial peace.

2) Social justice: Disciplinary actionIn the modern era, the matters of disciplinary action

against industrial employees should be dealt with in accordance with the principles of natural

justice. In the matters of indiscipline, the assessment of the act should be done keeping in mind

social justice concept. In matters of dismissal, interference by labor courts, tribunals and

National Tribunals have been justified when there has been


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a) Want of good faith

b) Victimization and unfair labor practice,

c) Basic error or violation of natural justice and

d) the finding of the management as to misconduct is completely baseless or perverse .

Tribunals have number functions and they are to have same powers which are vested in a Civil

Court under the Code of Civil Procedure when trying a suit in respect of the below given

matters:-

(i) enforcing the attendance of any person and examining him on oath ;

(ii) compelling the production of documents and material objects ;

(iii) issuing commissions for the examination of witnesses ;

(iv) in respect of such other matters as may be prescribed ; and every inquiry or investigation by

a tribunal shall be deemed to be a judicial proceeding within the meaning of Indian Penal Code .

3) The Federal Court held in Western India Automobile Association v. Industrial Tribunal,

Bombay AIR 1949 (FC III), that adjudication does not mean adjudication according to the strict

law of master and servant and held that an adjudicators award may contain provisions for

settlement of a dispute which no court could order if it was bound by ordinary law. They held

that Industrial Tribunals are not stopped by these limitations and held further that an adjudicator

has jurisdiction to investigate disputes about discharge and dismissal and, where necessary, to

direct reinstatement.

Section 16: Form of Report or Award

The report of a Board or Court shall be in writing and it should be signed by each and every

member of the court, as the case may be. It authorizes any member to write a note of dissent if he

so desires. The report hence need not be anonymous. The second part deals with the award of a

Labor Court, Tribunal or National Tribunal. It should be signed by the presiding officer.

Publication of Reports and Awards

Publication of reports and awards are dealt with in the section 17. This section deals with the

publication of reports and awards. A limit of thirty days is fixed for such publication .The

manner of publication depends upon the wishes of the appropriate government. Subject to

section 17-A, the appropriate government has powers to reject or modify an award, the award as

published shall be final. There is now no appeal, provided under the Act. The mere non-

publication of the award within thirty days of the receipt of the same by the State Government

does not invalidate the award itself. There is nothing in the Act itself to indicate that a

publication contrary to the provisions of sub-section (1) of section 17 will make the award illegal

or void. So from delay, on consequences flow as such.


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Commencement of the Award

Section 17-A deals with the commencement of award. If the appropriate government or the

Central Government is of the opinion that it would be inexpedient on public grounds affecting

national economy or social justice to give effect to the whole or part of the award, it can as a first

measure declare in the Official Gazette that the award shall not become enforceable after expiry

of thirty days from the date of its publication under section 17.

After that within ninety days from the date of publication stated in sub-section (1), the

appropriate Government or the Central Government may reject or modify the award. The order

so made shall be laid before the State Legislature or the Parliament, as the case may be. It shall

then become enforceable after fifteen days from the date the award was so laid.

There are cases when no orders are made and the award is neither rejected nor modified. In such

cases the award given by the Labor Court, Tribunal or National Tribunal, as the case may be,

shall become enforceable on the expiry of ninety days from the date of the publication of the

award.

Sub-section (4) of section 17-A deals with date of operation of award. It gives discretion to the

tribunal to fix a date from which the award will come into operation or force, in Hindustan

Times Ltd v. Workmen AIR 1963 SC 1332 it was held and observed by the honble Supreme

Court that no general principle was either possible or desirable to be stated in relation to fixation

of date from which the award should operate.

The date of enforceability of the award of the tribunal is the date which comes on the expiry of

thirty days from the date of its publication under section-17. Where it is not specifically

mentioned in the award as to the date from which the award shall come into operation, the date

of operation as well as the enforceable date, will be identical.

Where it is specifically mentioned in the award that it shall come into operation within a week

from the date of its publication, such provision in the award does not violate the provision

relating to the enforceability of the award under section 17 of the Act.

Section 17B Payment of full wages to workman pending proceedings in higher courts

Where in any case a Labor Court , Tribunal or National Tribunal by its award directs

reinstatement of any workman and the employer prefers any proceedings against suchaward in a High Court or the Supreme Court, the employer shall be liable to pay such

workman, during the period of pendency of such proceedings in the High Court or the

Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance

admissible to him under any rule if the workman had not been employed in any


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establishment during such period and an affidavit by such workman had been filed to

that effect in such Court :

Provided that where it is proved to the satisfaction of the High Court or the Supreme

Court that such workman had been employed and had been receiving adequate

remuneration during any such period or part thereof, the Court shall order that no

wages shall be payable under this section for such period or part, as the case may be.

To receive relief under the section, the workmen will have to make an application with

an affidavit to the Court in which the award has been challenged stating that he had

been unemployed during the period for which relief has been sought. The application

thus would be moved after the expiry of the period of unemployment. It will be

necessary to issue a notice to the employer and the employer will have a right to show

and prove that the workmen had been employed.

The right to receive payment will subsist so long as the proceedings are pending before

the Higher Court. The money paid would be irrespective of the decision of the

proceedings.

Period of operation of settlement and awards

Section 19 of the Industrial Disputes Act, 1947 deals with Period of operation of

settlement and awards.

(1) The section deals with the:-

(a) Date of commencement and period of operation of settlement and award.

(b) Binding nature of the awards before and after the statutory period.

(c) Power of the appropriate Government to refer the award to Labor Court or Tribunal

for consideration to reduce the period of operation due to natural change in the

circumstances.

(2) Settlement shall come into operation on the date agreed, otherwise on the date it is

signed by the parties.

(3) Settlement shall be binding for such period as may be agreed otherwise six months

from the date under Para 2 and for such further period till it is determined by giving

two months notice.(4) The effect is that the settlement shall have a permanent binding. It cannot be

terminated within six months or within the period as agreed and even thereafter it can

be terminated only by giving six months notice.

(5) Award shall generally remain in operation for one year from the date it becomes

enforceable under Section 17-A. This period can be reduced by the appropriate


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Government and also increased subject to a maximum period of three years.

If, however, the award by its nature is not capable of remaining in force for the period

given, after it has been given effect to, there is no continuing obligation left on the

parties.

(6) The result is that the awards have a permanent binding effect unless the award is

terminated by giving two months notice by either party to the other party, such

termination, however, cannot take place during the period the award is to remain in

force.

(7) In case of any material change in the circumstances which formed the basis of the

award the appropriate Government have power to refer to the Tribunal or Labor Court ,

the question of period by which the applicability of the award is to be reduced . The

decision made by the Labor Court or Tribunal, as the case may be, shall be final. Such a

reference can be made by the Government suo motu or on the application of any party.

(8) Notice contemplated under sub-section (2) or (6) can be given by a party

representing the majority only of persons bound by the settlement or award. There is no

separate provision to decide if a notice is proper or not. It can give rise to an industrial

dispute. The plea can be taken in any proceedings as well.

Commencement and conclusion of proceedings

Section 20 of the Industrial Disputes Act, 1947 deals with commencement and

conclusion of proceedings.

(1) This section deals with:-

(a) commencement of conciliation proceedings or proceedings before an arbitrator,

Court ,Labor Court, Tribunal or National Tribunal,

(b) Conclusion of the proceeding or proceedings before an arbitrator, Court, Labor

Court , Tribunal or National Tribunal.

(2) The proceedings are deemed to have commenced under law before

(i) a Conciliation Officer on the date of notice of closure or lockout under section 22 of

the Act or on the date the order of reference is passed by appropriate Government

referring the dispute for conciliation to the Board.(ii) An arbitrator, Labor Court, Tribunal or National Tribunal on the date the order of

reference is passed by the appropriate Government.

(3) The proceedings are concluded under law before

(i) a Conciliation Officer : (a) on the date a settlement is arrived at and is signed by the

parties,(b) where a report is received by the appropriate Government, or (c) where a


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reference is made of the dispute under Section 10 of the Act during the pendency of

conciliation proceedings,

(ii) a Labor Court, Tribunal or National Tribunal on the date the award becomes

enforceable under law.

Workers v. Industry Colliery, 1953 SCR 428In this case it was held by the honble

court that under section 20(2)(b) of the Industrial Disputes Act, 1947, a conciliation

proceeding is deemed to have concluded only when the report of the Conciliation

Officer is received by the appropriate Government. A strike which is commenced before

the report has actually been received by the appropriate Government will therefore be

illegal under Section 22(1) of the Act. The receipt of the report by the Chief Labor

Commissioner will not constitute receipt by the Central Government for the purposes of

section 20(2)(b) of the Act as he cannot be deemed to be an agent of the Government for

the purposes of receiving such report and is only the channel or post office through

which the report may be submitted to the Government.

Matters to be kept confidential

Section 21 deals with the matters which are to be kept confidential by the Conciliation

Officer, member of board and court, the presiding officers at Labor Court ,Tribunal and

National Tribunal, arbitrators, parties or any person present at or concerned with the

proceedings. The conditions important here are :-

(1) that such matters are not available otherwise than through the evidence produced

before the Conciliation Officer or courts, etc.

(2) that the trade union , person, firm or company concerned has requested in writing to

the officer concerned that the matter be kept confidential.

The exceptions are :-

(a) that the matters can be disclosed if the secretary of the union , firm or company in

question gives his consent in writing to give the information, or

(b) that the information is given in connection with the prosecution under the section

193, Indian Penal Code.

The disclosure of the matter which has to be kept confidential under section is madepenal and is punishable on the complaint made by or on behalf of the trade union or

individual business concerned under section 30 of the Act.

STRIKES AND LOCK-OUTS

Section 22 - PROHIBITION OF STRIKES AND LOCK-OUTS


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(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 on any public utility service shall lock-out any of his

workmen - (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 lock-out or strike on the day on

which it is declared, to such authority as may be specified by the appropriate

Government either generally or for a particular area or for a particular class of public

utility services.

(4) The notice of strike referred to in sub-section (1) shall be given by such number of

persons to such person or persons and in such manner as may be prescribed.

(5) The notice of lock-out referred to in sub-section (2) shall be given in such manner as

may be prescribed.

(6) If on any day an employer receives from any person employed by him any such

notices as are referred to in sub-section (1) or gives to any person employed by him any

such notices as are referred to in sub-section (2), he shall within five days thereof report

to the appropriate Government or to such authority as that Government may prescribe,

the number of such notices received or given on that day.The basic importance of section 22 is that, that it prohibits strikes and lock- out in public

utility services, commenced without giving notices as needed to be given. In a public

utility services both the employees and the employer have to give notice of any

intending strike or lock-out to their employers or employees, as the case may be. The

notice must specify a date for the commencement of strike or lock-out, it should be


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fourteen days before the commencement of strike or lock-out and it should be within six

weeks before strike or lock-out. There should be no pendency of any conciliation

proceedings and a period of seven days must have expired from the date of the

conclusion of such proceedings.

To the provision given above regarding notice, sub-clause (3) acts as an exception and it

lays down that no notice would be necessary for a strike or lock out , if a lock -out or

strike is already in existence in the concern . It is the duty of the employer to intimidate

the appropriate Government about the day on which such strike or lock out begins.

What are Strikes - It is a work stoppage caused by the mass refusal of employees to

work. A strike usually takes place in response to employee grievance. The right to strike

has as such not been sanctioned by the Indian Legal System. Industrial Disputes Act

and the Industrial Disputes (Appellate Tribunal) Act of 1950 state that strike under the

circumstances mentioned there would be illegal. The Act also provides for some

penalties for illegal strikes.

In the case of Workmen v. Bihar Firebricks & Potteries Ltd, 1953 LAC 81 it was held

that the right to go on strike was actually born from the important principles of

Natural Justice and Social Justice. The right to strike in some cases has been recognized

as a legitimate weapon in certain cases for the workmen to see that their demands are

met with. Whether a strike is justified or not should be judged by the results of the

adjudication of demands. It might in some cases be resorted to register their protest and

it cannot be said to be unjustified unless the reasons for it are absolutely perverse.

Notice to strike within six weeks before striking is not necessary where there is already

lockout in existence. In Mineral Miner Union vs. Kudremukh Iron Ore Co. Ltd., it was

held that the provisions of section 22 are mandatory and the date on which the

workmen proposed to go on strike should be specified in the notice. If meanwhile the

date of strike specified in the notice of strike expires, workmen have to give fresh notice.

It may be noted that if a lock out is already in existence and employees want to resort to

strike, it is not necessary to give notice as is otherwise required. In Sadual Textile Mills

v. Their workmen certain workmen struck work as a protest against the lay-off and thetransfer of some workmen from one shift to another without giving four days notice as

required by standing order 23. On these grounds a question arose whether the strike

was justified. The industrial tribunal answered in affirmative. Against this a writ

petition was preferred in the High Court of Rajasthan. Reversing the decision of the

TribunalJustice Wanchooobserved:


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.We are of opinion that what is generally known as a lightning strike like this take

place without notice.. And each worker striking is guilty of misconduct under

the standing orders ..and liable to be summarily dismissed..as.. the strike

cannot be justified at all.

Under the Constitution of India, Article 19 (1)(a) and Article 19(1)(c) includes the right

to strike and the right to demonstrate so far as the industrial employees are concerned,

but the position of Government servants is different. Government servants are in a

different situation when compared to private employees. For government servants, the

freedom guaranteed under Articles 19(1)(a) and art.19(1)(c) does not include the right to

strike and the right to demonstrate. Freedom of speech and freedom to form association

guaranteed under Articles 19(1)(a) and Articles 19(1)(c) are not absolute and cannot be

interpreted with mathematical exactitude. The Government servants have a greater

responsibility than other employees. They have a different and special status because

they are a part of the machinery of the Government. The conduct of Government

servants is a matter of public interest and welfare of the people. So, it is necessary that

the important administrative services to continue, for matter of public interest.

In Jawahar Mills Ltd v. Industrial Tri., (1965) 1 LLJ 315 (Mad HC) it was held that a

strike which is illegal cannot afford any substantial cause for absence. The employer

deducted two days wages when the workman was absent as he was on strike. The

Tribunal held that the deduction was unjust and that the absence during strike was due

to a reasonable cause as contemplated under section 9 of the Payment of Wages Act.

The award was quashed.

LOCK-OUT means the temporary closing of a place of employment or the suspension

of work, or the refusal by an employer to continue to employ any number of persons

employed by him.

In the case of Statesman Ltd v. Workmen AIR 1976 SC 758 it was held that though this

does not give any authority to the management to act unreasonably and be unjust to the

workmen working under the management. The management cannot behave

unreasonably relying on the fact that the lock-out is born legally. If by their conduct,there is any sign which shows that the workmen union are ready to resume the work

peacefully, then in that case the refusal to restart the industry is not correct and the

initial legality of the lock-out loses its virtue.

A lockout may happen for several reasons. When only part of a trade union votes to

strike, the purpose of a lockout is to put pressure on a union by reducing the number of


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members who are able to work. If a group of the workers strike so that the work of the

rest of the workers becomes impossible or less productive, the employer may declare a

lockout until the workers end the strike. Another case in which an employer may

impose a lockout is to avoid slowdowns or intermittent work-stoppages. Occupation of

factories has been the traditional method of response to lock-outs by the workers

movement.

GHERAO

It is an act by the labor workmen against the management and it is accompanied by

confinement, restraint, or other offences under the criminal law of the country, the fact

that it is done by the members of a trade union, and used as an instrument of collective

bargainers, gives rise to no special treatment or any sort of exemption from law. Any

workmen guilty of wrongfully restraining any person belonging to the management, or

wrongfully confining him, during a gherao will be guilty under section 339 or 340 IPC

for having committed cognizable offences for which they are liable to be arrested

without a warrant and punishable with simple imprisonment for a term which may

extend to one month or fine which may be upto five hundred rupees or both, for

wrongful restraint imprisonment upto one year or fine upto one thousand rupees or

both. In case of wrongful confinement, when the confinement extends three or more

days, then imprisonment which may extend upto two years with fine or both. When the

confinement is for ten or more days, then the imprisonment term may extend upto three

years or fine or both.

General prohibition of strikes and lock-outs

Section 23 of the Act deals with general prohibition of strikes and lock-outs. The section

prohibits strikes and lock-outs in following conditions:-

(1) during the pendency of conciliation proceedings before a board and seven days after

the conclusion of conciliation proceedings,

(2) During the pendency of proceedings before a tribunal and two months after the

conciliation of such proceedings.

(3) in breach of contract,(4) In respect of any matter for which settlement or award exists and till such settlement

or award is in operation.

The section is applicable to public utility services as well. No notice is necessary for a

strike or lock-out in industrial establishment other than those of public utility services.


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The consequences of strike would depend upon the legality and the nature of the strike,

whether it is justified or unjustified; violent or peaceful.

Legality of Strikes and Lock-Outs (Section 24)

Strikes or lock-outs which are in contravention of the important provisions of section 22

or 23 of the Act have been declared illegal. Any strike which is in continuance and is not

in contravention of either of the sections i.e. 22 and 23 of the Act, so not illegal, then in

such a case the strike can continue until and unless an order under Section 10(3) of the

Act has been passed prohibiting the continuance of the strike and lock-out. If any

person participates or abets illegal strike or lock-outs or instigates, incites others to take

part in illegal strike or lock-out, then such a person can be punished under the penal

provisions available under the Act.

Strike, with time has been recognized as a weapon of workmen which is used by them

for asserting their bargaining power and for backing of their collective demands upon

an unwilling employer. It is to be used by the workmen as a last resort when all the

other methods for settlement of industrial dispute legally so provided, have failed.

A strike is a very powerful weapon used by trade unions and other labor associations to

get their demands accepted. It generally involves quitting of work by a group of

workers for the purpose of bringing the pressure on their employer so that their

demands get accepted. When workers collectively cease to work in a particular

industry, they are said to be on strike.

According to Industrial Disputes Act 1947, a strike is a cessation of work by a body of persons

employed in an industry acting in combination; or a concerted refusal of any number of persons

who are or have been so employed to continue to work or to accept employment; or a refusal

under a common understanding of any number of such persons to continue to work or to accept

employment. This definition throws light on a few aspects of a strike. Firstly, a strike is a

referred to as stoppage of work by a group of workers employed in a particular industry.

Secondly, it also includes the refusal of a number of employees to continue work under their

employer.

In a strike, a group of workers agree to stop working to protest against something theythink is unfair where they work. Labors withhold their services in order to pressurize

their employment or government to meet their demands. Demands made by strikers

can range from asking for higher wages or better benefits to seeking changes in the

workplace environment. Strikes sometimes occur so that employers listen more

carefully to the workers and address their problems.


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Causes of strikes: Strikes can occur because of the following reasons:

1) Dissatisfaction with company policy,

2) Salary and incentive problems,

3) Increment not up to the mark,

4) Wrongful discharge or dismissal of workmen,

5) Withdrawal of any concession or privilege,

6) Hours of work and rest intervals,

7) Leaves with wages and holidays,

Bonus, profit sharing, Provident fund and gratuity,

9) Retrenchment of workmen and closure of establishment,

10) Disputes connected to wages.

In the case of Ram Swaroop v. Rex, 1 FJR 113 (All HC) it was held by the court that mere

absence from work does not amount to taking part in a strike within the meaning of the Industrial

Disputes Act, 1947. There should be some evidence to show that the absence of the workman

was the result of some concern between him and other persons that they would not continue to

work or there should have been a refusal on the part of the workman. It was held in this

particular case that there was no strike.

When any strike is started without giving notice as required under section 22 of the Act

or within seven days of the conclusion of conciliation proceedings, the strike must be

held to be illegal irrespective of whether it was provoked by the employer, and the

workmen would not be entitled to any pay for the period of the strike

Justification of Strike There has always been question whether strikes are justified.

Justification of strike does not solely depend on the facts but also on law, if there is error

in decision by the tribunal in justification of strike, then High Court may interfere under

Art.226 of the Constitution.

Lock-out is the temporary closing of a place of employment or the suspension of work,

or the refusal by an employer to continue to employ any number of persons employed

by him.

A lock-out which has a sole object of preventing violence and any threat to life andproperty may be justified in certain cases. In these sorts of cases it becomes difficult to

prove that it is an illegal lock-out as the sole object of illegal lock-out is to compel the

workmen to accept the terms and conditions of the employer which the workers may

consider as unreasonable and oppressive. Lay-off is to discontinue work or activity, to

dismiss or discharge temporarily. When the workers are in employment and then they


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are laid off, that results in their unemployment, however temporary. The lock-out

which has been found by the Labor Court to have direct connection with lay-off is

totally illegal.

LAY-OFF AND RETRENCHMENT

Section 25-A talks about Lay-off and Retrenchment. Lay-off is the failure, refusal or

inability of the employer on account of shortage of coal, power or raw materials or the

accumulation of stocks or the breakdown of machinery or for any other reason to give

employment to workman, whose name is borne on the muster rolls of the industrial

establishment and who has not been retrenched.

Every workman whose name is borne on the muster rolls of the industrial

establishment and who presents himself for work at the establishment at the time

appointed for the purpose during the normal working hours, on any day and is not

given employment by the employer within two hours of his so presenting himself shall

be deemed to have been laid off for that day within the meaning of the clause:

Provided that if the workman instead of being given employment at the

commencement of any shift for any day is asked to present himself for the purpose

during the second half of the shift for the day and is given employment then he should

be deemed to have been laid off only for one half of that day :

It is to be noted that further that if he is not given any such employment even after so

presenting himself he shall not be deemed to have been laid off for the second half of

the shift for the day and shall be entitled to full basic wages and dearness allowance for

that part of the day.

Retrenchment, on other hand 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

(1) voluntary retirement of the workman

(2) retrenchment 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(3) Termination of the service of the workman on the ground of continued ill- health.

Continuous Service (Section 25- B)

Continuous service for any period actually means service which is not interrupted.

Interruption on account of

(i) sickness, or


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(ii) authorized leave, or

(iii) a lock-out or cessation of work, which is not due to any fault on the part of the

workman.

A person will be considered to be in continuous employment under the employer if :-(a)

for a period for one year if he has actually worked under the employer not less than

(i) one hundred and ninety days in the case of a workman employed below ground in a

mine, and

(ii) two hundred and forty days in any other case;

(b) for a period of six months if he has actually worked under the employer for not less

than -

(i) ninety-five days in the case of a workman employed below ground in a mine, and

(ii) one hundred and twenty days in any other case.

In calculating the number of days under the aforesaid provisions it will include the

days on which a workman

(a) is laid off :

(i) under an agreement, or

(ii) as permitted by standing order made under the Industrial Employment (Standing

Orders) Act,1946

(iii) under this Act, or

(iv) under any other law applicable to the industrial establishments ;

(b) has been on leave with full wages earned in the previous year ;

(c) has been absent due to temporary disablement caused by accident arising out of and

in the course of his employment ; and

(d) in the case of a female if she has been on maternity leave which does not exceed

twelve weeks.

Right of Compensation of workmen Laid-off (Section 25-C)

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, whethercontinuously 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:


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It is to be noted 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:

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.

Badli workman is 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.

Section 25DUnder this section, it will be the duty of every employer to maintain for the

purposes of industry a muster roll of workmen during the period of lay-off for the use of the

workers who may present themselves for work at the appointed time during the period of lay-off.

If the worker wants to avail himself the compensation for the period of lay-off then he has to

present himself for work at the establishment at the appointed time during normal working hours

at least once a day.

Section 25-EThe section talks about the conditions when workmen are not entitled for

compensation. The important conditions are:-

(1) When a workman refuses to accept alternative job in the same establishment or refuses to

accept alternative job in another establishment of the employer in the same village or town or

within a radius of five miles carrying an offer of normal pay, if the alternative post requires no

special skill or previous experience. Whether the alternative offer requires any special skill or

experience is for the employer to judge.

(2) Failure to present himself for work at the establishment at least once a day during normal

working hours.

(3) Where lay-off is the consequence of strike or slowing-down by the workers in another part of

the establishment.

Conditions important for retrenchment of workmen (Section 25-F)

The conditions important which are to be followed by retrenchment are:-

(1) There should be one months notice in writing to the workmen so concerned.


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(2) The notice should specify the reasons for retrenchment.

(3) The period of one months notice should have expired before retrenchment is enforced, or the

workman has been paid in lieu of such notice the wages for the period.

(4) If the retrenchment is as a result of agreement no notice is necessary provided the date of

termination of services is specified.

(5) The workmen has been paid retrenchment compensation which should be equivalent to 15

days average pay for every one years service or any part thereof provided it exceeds six months.

(6) The notice is also given to the appropriate Government.

Section 25-FFSection 25-FF talks about compensation to workmen in case of transfer of

undertakings. The section provides for payment of compensation in case of an undertaking to

which the Industrial Disputes Act is applicable, has been transferred from one hand to other. The

transfer may be either of ownership or management. Every workman who has been in continuous

service for not less than one year in that undertaking immediately before such transfer will be

entitled to notice and compensation in accordance with the provisions of Section 25-F.

The proviso to the section lays down the exceptions to the general rule stated above, they are:-

(i) that the transfer does not entail any interruption in service of the workmen;

(ii) that the terms and conditions under the new management compare favorably with the old

ones;

(iii) That under the terms of such transfer or by any other method which may include any

agreement between the new management and the worker, the management binds itself to pay the

retrenchment compensation on the basis of continued services.

Notice of intention to close down any undertaking (Section 25-FFA)

Any employer who intends to close down an undertaking will have to serve, at least

sixty days before the date on which the intended closure is to become effective, a notice,

in the manner so prescribed by the appropriate Government stating clearly the reasons

for the intended closure of the undertaking: It is to be noted 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, 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


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that provisions of sub-section (1) shall not apply in relation to such undertaking for

such period as may be specified in the order.

Workmen Compensation in case of closing down of undertakings

Where an undertaking is closed down for any reason, 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: 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. An undertaking which is closed down by reason merely of

(i) Financial losses

(ii) Accumulation of undisposed stocks

(iii) the expiry of the period of the lease or license granted to it

(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.

(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 beencontinuous and has not been interrupted by such alternative employment. (1B) For the

purposes of sub-sections (1) and (1A),

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


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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 completed year of

continuous service or any part thereof in excess of six months.

Procedure for retrenchment Procedure for retrenchment of a workman is dealt with

in the section 25 G of the Industrial Disputes Act. It says that a workman, working in an

industrial establishment, being citizen of India, should be retrenched by the principle

oflast come, first go. The man, who comes last, should go first. This principle is to be

followed in the absence of any agreement between the employer and the workman. If

the employer deviates from the above rule, reasons should be so recorded.

Prohibition of Lay-off (Section 25-M)

(1) No workman ,other than a badli workman or a casual workman whose name is

borne on the muster-rolls of an industrial establishment to which this Chapter applies

shall be laid-off by his employer except with the prior permission of the appropriate

Government or such authority as may be specified by that Government by notification

in the Official Gazette, obtained on an application made in this behalf unless such lay-

off is due to shortage of power or to natural calamity, and in the case of a mine, such

lay-off is due also to fire, flood, excess of inflammable gas or explosion.

(2) An application for permission under sub-section (1) shall be made by the employer

in the prescribed manner stating clearly the reasons for the intended lay-off and a copy

of such application shall also be served simultaneously on the workmen concerned in

the prescribed manner.

(3) Where the workmen (other than badli workmen or casual workmen) of an industrial

establishment, being a mine, have been laid-off under sub-section (1) for reasons of fire,

flood or excess of inflammable gas or explosion, the employer, in relation to such

establishment, shall, within a period of thirty days from the date of commencement of

such lay-off, apply, in the prescribed manner, to the appropriate Government or the

specified authority for permission to continue the lay-off.

(4) Where an application for permission under sub-section (1) or sub-section (3) hasbeen 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


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recorded in writing, grant or refuse to grant such permission and a copy of such order

shall be communicated to the employer and the workmen.

(5) Where an application for permission under sub-section (1) or sub-section (3) has

been made and the appropriate Government or the specified authority does not

communicate the order granting or refusing to grant permission to the employer within

a period of sixty days from the date on which such application is made, the permission

applied for shall be deemed to have been granted on the expiration of the said period of

sixty days.

(6) An order of the appropriate Government or the specified authority granting or

refusing to grant permission shall, subject to the provisions of sub-section (7), be final

and binding on all the parties concerned and shall remain in force for one year from the

date of such order.

(7) The appropriate Government or the specified authority may, either on its own

motion or on the application made by the employer or any workman, review its order

granting or refusing to grant permission under sub-section (4) or refer the matter, or, as

the case may be, cause it to be referred, to a Tribunal for adjudication:

When 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 the 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 periodas may be specified in the order.

(10) The provisions of section 25C (other than the second proviso thereto) shall apply to

cases of lay-off referred to in this section.

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


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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.

Penalties under the Industrial Disputes Act

Illegal Strikes and Lock-outs Penalties (Section 26)

The section states about the penalty for strikes and lock-outs, which are illegal under

section 24 of the Industrial Disputes Act. Any illegal strike or lock out started or

continued and any act which promotes illegal strikes and lock-out, will be punishable

under this section of the act. The section applies only on the employer and the

workmen. Only the appropriate Government has the right to prosecute such a person

and no private individual has the authority to do so. No private individual has a right

to go to the court and file a complaint. The criminal prosecution is no bar either to civil

remedy or any other method under the act.

Instigation : Any person found instigating of inciting others to take part in the strikes of

lock-out or any act leading to it shall be punishable with imprisonment which may

extend upto six months or fine extending upto rupees one thousand or both. This

provision is given under section 27 of the Act.

Section 28 states the penalty to be levied on any person who intentionally spends or

applies any money in direct support of illegal strike or lock-out. Such a person shall be

punishable with imprisonment which may extend to six months or fine upto one

thousand rupees or both.

Breach of settlement or award Section 29 talks about the penalty for breach of

settlement or award. Person, who commits breach of any provision of any settlement or

award, binding on him, will be punishable with imprisonment for a term which may

extend to six months, or fine, or both. When such a breach continues, fine may extend totwo hundred rupees for every day during which the breach continue after the

conviction of the first. Court in such a case has power to ask any person so convicted of

breach to pay the fine as compensation to the person who in the opinion of the court is

injured by the breach.


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Disclosing Confidential Information Section 30 talks about penalty for disclosing

confidential information. Any person who willfully discloses any information as dealt

with in section 21 in contravention of the provisions of that section will on the

complaint made by or on behalf of the Trade Union or an individual shall be punishable

with imprisonment for a term which may extend to six months, or fine upto one

thousand rupees or both.

Section 30-A- If any employer closes down any undertaking without complying with

the provisions of section 25-FFA,then such person shall be punishable with

imprisonment which may extend upto six months or fine upto five thousand rupees or

both.

Penalty for other offences Section 31 is in a way based on the provisions given in

section 33.Any employer who contravenes the provisions of section 33 shall be

punishable with imprisonment for a term which may extend to six months, or with fine

which may extend to one thousand rupees, or with both.

Any person so contravening any provision given under the Act for which no penalty is

elsewhere provided, shall be punished with fine which may extend to one hundred

rupees.

Offences by Companies - section 32 says that where a person committing an offence

under this Act is a company, or other body corporate, or an association of persons

(whether incorporated or not), every director, manager, secretary, agent or other officer

or person concerned with the management thereof shall, unless he proves that the

offence was committed without his knowledge or consent, be deemed to be guilty of

such offence.

Conditions of service, etc., to remain unchanged under certain circumstances during

pendency of proceedings (Section 33)

No change in working conditions - Employer shall not make any change in condition of service

connected to dispute without permission of authority before which proceedings are pending.

Change which is not related to dispute can be made in accordance with standing orders without

any permission.

No discharge without permission (on matters related to dispute) -Employer shall not discharge,

dismiss or punish any workman in matter for any misconduct concerned to dispute, without

permission of authority before whom proceedings are pending . Punishment which is not

connected to dispute can be made in accordance with standing orders without any permission.


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However, dismissal or discharge of workman will require approval of the action. Application for

approval should be made after action is taken.

Protected workmen - In every establishment, 1% of total workmen are recognized as Protected

workman u/s 33(3) (but minimum 5 and maximum 100). In case of such workmen, order for his

dismissal, discharge or punishment cannot be passed without permission of authority before

which proceedings are pending, whether the issue is related to dispute or not. Such permission is

required only during the period proceedings are pending and not after main reference is decided.

Section 34talks about cognizance of offences. The section lays down the procedure for the

cognizance of offences committed under the Act. The power to launch prosecution has been

reserved with appropriate Government under the Act. The power vested in the government is

absolute and not qualified. The offence is to be tried only on the motion of the appropriate

government. It limits the exercise of power of trial to presidency magistrate or magistrate of first

class.

Protection of persons - Section 35 of the Industrial Disputes Act deals with point of protection

of persons. This section deals with two distinct aspects:-

(1) Gives protection to persons against the penalties which might have been incorporated in the

rules of any union or society for non- participation in the strikes or lock-outs which are illegal

under the Act or for doing anything which he is authorized to do under the Act.

(2) Gives a right irrespective of the provisions of the trade union or society relating to the rights

guaranteed under (1) above. The rules of any union or society relating to the rights guaranteed by

this section are declared void in general. The person so acting as provided under the section shall

not be subjected :-

(a) to expulsion from any trade union or society.

(b) to any fine or penalty provided in the rules of union or society for any of the actions done,

(c) to any deprivation of any right or benefit occurring to him or to his legal representative,

(d) to any disadvantage as compared to other members of the union or society.

The section also provides that a court while giving relief restoring the membership to any person

of the union or society, shall be competent to award by way of compensation or damage any sum

of the funds of the said union or society.

Representation of partiesA party to any proceeding has an inherent right to represent his case

. This section lays down as to who c

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