Industrial Relations and Labour Laws
The Industrial Disputes Act 1947The Act has been amended several
times and is responsive to the changes taking place in the business
environmentIt is a special legislation which applies to workmen
irrespective of the amount of wages but covers supervisors drawing
wages not exceeding a specified amount per month It governs their
service conditions It is regarded as a supplement to the Indian
Contract ActIt deals with prevention and settlement of conflict
between the two parties.Basing on various judgements by the Supreme
court, the objectives of ID Act could be found (mentioned in next
slides)The term Industry has a wide meaning which normally include
all economic activities in an organised set up.The Industrial
Disputes Act 1947Industry includesDock Labour boardActivities or
profession carried on by individual or groupsAgricultureHospitals,
Dispensaries, Nursing Homes,Educational, Scientific, Research or
Training institutionsCharitable, Social or Philanthropic
institutionsKhadi and Village industriesGovernment activities like
defence, research, atomic energy and spaceAny domestic
serviceCo-operative society or club ( min 10
employees)Municipality/Municipal Corporation/City CorporationThe
Industrial Disputes Act 1947Disputes:Collective issue raised on
management which is rejectedCommunity interest of group of
employeesDispute between employees, employer and employers or
between employersDispute must be related to employment,
non-employment or terms of employment/conditions of labour or
withdrawal of benefits to an office bearer of union. However,
benefits like housing, conveyance, education or medical are the
responsibilities of the Government.Dispute also relate to Strike or
lock outsContractual relationship should be presentIndustry must be
existing not a dead one or imaginaryIndividual employee dispute can
be treated as an industrial dispute when taken up by a trade union
or by a number of workmenThe Industrial Disputes Act 1947Objectives
of ID Act:Promoting and securing amity and good relations
Minimising differences and settling disputes through
adjudicationProviding a suitable machinery for investigation of
disputesPreventing illegal strikes and lockoutsProviding relief to
workmen in matters of lay-offs, retrenchment, wronggul dismissals
and victimisationGiving the workmen the right of collective
bargainingPromoting conciliation
The Industrial Disputes Act 1947Principles under the Act
Permanent conciliation machinery available. Time limits have been
fixed. Time reckoned from the date of notice of strike. Specific
time limits for various stages also fixed. Individual or collective
disputes coveredCompulsory arbitration in public utility
srevidesStrikes and lockouts during the pendency of conciliation
and arbitration proceedings and arbitration awards, are
prohibited.An obligation on employers to recognise and deal with
representative union has been imposedWorks committee mutual
consultation by employer and workers set upDisputes may be referred
to Industrial Tribunal/Labour court by the employees, employers or
even the governmentIndustrial Disputes ActImportant
Definitions:Appropriate Government: Central or State
GovernmentAward: Award means an interim or final decision of any
industrial tribunal of dispute or of any question thereto by any
labour court, industrial tribunal or national tribunal. Also
includes arbitration awardEmployer: Authorities prescribed by the
Central or State Government. If no authority prescribed, the Head
of the Department. In other cases, the CEOIndustry: Industry means
any business, trade, undertaking, manufacture or calling. Amended
in 1982 to any systematic activity carried on by co-operation
between an employer and his workmen (whether employed directly or
through any agency including the contractor) for the production,
supply or distribution of goods or services with a view to satisfy
human wants or wishes( not being merely religious or spiritual in
nature)Industrial Disputes ActImportant Definitions:Industry does
not however include:Agriculture, Hospitals/Dispensaries,
educational, scientific, research or training institutions,
charitablesocialor philanthropic institutions, khadi and village
industries, activities of sovereign government(defense, research,
atomic energy and space), domestic services, co-op society, club or
any other body of individuals where not less than ten persons are
employedindustrial Dispute: any dispute or difference between
employers and employees 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 the conditions of
labour or any person ( collective will, appreciable number in case
of large industry, first raised with the management and rejected by
it, existing industry and not a dead/non-existing). However, an
individual dispute could become industrial dispute when a trade
union or a number of workmen take up the cause
Industrial Disputes ActCertain aspects of Industrial
disputes:Employment and Non-employment:-Dismissal, removal,
retrenchment, or dischargeDisputes re: Facilities: Tribunals and
courts has jurisdiction can pass appropriate ordersWithdrawal of
privilege of a trade union leaderDsiputes re: workmen employed by
the contractorLay off ( failure refusal or inability of the
employer) on account of shortage of raw materials or power or
accumulation of stocks or breakdown of machinery
Industrial Disputes ActCertain aspects of Industrial
disputes:Lockout: temporary closing of a place of employment, or
the suspension of work or temporary refusal by an employer to
continue to employ any number of persons employed by him. Lockout
is the anti thesis of strikean armour in the hands of the
employerPublic Utility Services Retrenchment does not mean
voluntary retirement, superannuation, termination of services or
termination of the contract or non-renewal of the
contractSettlement: A settlement means a settlement which has been
arrived at in the course of conciliation proceeding, and bind all
workmen, and also which has been arrived at otherwise, but has been
signed by both parties and a copy thereof has been sent to the
government and the conciliation officer (bipartite settlement)
Industrial Disputes ActCertain aspects of Industrial
disputes:Strike: A cessation of work by a body of persons employed
in any industry acting in combination, or a concerted refusal to
continue to work or to accept employmentMere cessation of work does
not constitute Strike unless it is a concerted action for the
enforcement of the demandsWages: 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 the
workman in respect of his employment or of work done in each
employment and which includes DA, Housing facilitieswater,
electricity, medical attendance or other amenities, travelling
allowanceContract of Personal Service: does not fall under the
definition of workman
Industrial Disputes ActAuthorities under the Act:Conciliation (
Works Committee, Conciliation Officer and the Board of
Conciliation)Arbitrationcourt of enquiryAdjudicationLabour Court,
Industrial Tribunal and National Tribunal
Conciliation: Conciliation is a method for the settlement of
industrial disputes through third party intervention. It aims at
reconciling the views of disputants and brings them to an
agreementThe conciliator is a neutral party, who without using
force, seeks to find some middle course for mutual agreement
between disputants so that the deadlock is brought to an end at the
earliest possible moment and normal peace restored. Government has
the power to nominate the conciliation officers (including the
number of conciliation officers)
Industrial Disputes ActAuthorities under the Act:Arbitration:A
Court of Inquiry as an is constituted as an adhoc body as the
occasion may arise, by the appropriate government. It can enquire
into any matter connected with or relevant to industrial dispute,
but not into the dispute itself. Constitution of the court has to
be notified in the Official Gazette. Government may appoint One or
more of the members as independent personsDuring the pendency of
the proceedings the following rights are not affected a) workers
right to go on strike; b) employers right to declare the lockout
and c)the right of the employer to dismiss or otherwise punish the
worker in certain cases.
Industrial Disputes ActAuthorities under the Act:Adjudication:
The ultimate legal remedy for the settlement of an unresolved
dispute is its reference to adjudication by the government. The
Government appoints a third party for purpose of deciding the
nature of final settlement
Labour Court: Government may constitute a labour court for
adjudicating the industrial disputes. Normally labour court upholds
the decisions of the departmental inquiries(domestic enquiries).
But if no domestic enquiries are held, the labour court has full
jurisdictional powers to undertake an inquiry, accept fresh
evidence, reappraise the same and render a new decision
thereon.
Industrial Disputes ActAuthorities under the Act:Industrial
Tribunal: The Appropriate Government may appoint one or more
industrial tribunals for the adjudication. These tribunals take up
disputes arising out of new demands which may affect the working of
the company or industry. Example:--Wagesincluding the period and
mode of payment; Compensatory and other allowances; Working
conditions; Bonus; Profit sharing; Classification of Grades;
Rationalisation, Retrenchment and any other matter assigned It is a
judicial body and normally takes up long standing disputes
unresolvedNational Tribunals Government may appoint one or more
national tribunals for adjudication of industrial disputes
involving questions of national importance or questions affecting
the interests of more than one State.
Industrial Disputes ActIMPORTANT
TERMINOLOGIES:StrikesLockoutsLay offRetrenchment Closure of
industry or businessUnfair Labour Practices ( victimisation,
threatening with discharge or dismissal, sponsoring trade unions,
favouritismlist is endless)The Minimum Wages Act 1948This Act
prescribes the minimum wages which should be paid by the employers
to workers. However, MINIMUM WAGE is not defined anywhere.
(literally impossible to fix)It aims to prevent workers
exploitation It is to secure social justice and welfare of the
workers in a competitive worldIt extends to the whole of India and
amended several tiesIt also deals with different kinds of workers
like Child labour, Adolsescent and AdultWages include all
remuneration payable to a workers expressed in terms of money
including house rent allowance ( but there are certain exceptions)
The Minimum Wages Act 1948Exceptions to the term Wages:Money value
of house accommodation, lighting, water, medical attendance or any
other value of amenitiesEmployers contribution to the Provident
Fund or Pension fundAny travelling allowanceReimbursement of
expenses incurred by the employee for office workGratuity on
discharge of employeesHowever, compensation for the rest day would
be treated as Wages.
The Minimum Wages Act 1948The concept of minimum wages shall
take into account the prevailing cost of essential commodities, the
cost of living at a particular place and time as neutralised by the
prise rise in essential commodities.The minimum wage should be paid
irrespective of profit or loss. It applied to all industries big or
small.Wages must be fair sufficiently high to provide a standard
family food, clothing, shelter, medical care and education of
children (appropriate to the workmen) and should consider the work
loadKinds of employment defined in the Act Rice mill, Flour Mill,
Plantations, Oil Mill, Local authority, Construction workers, stone
breaking or stone crushing, leather factory, public motor
transport, leather factory, mines of all categories etcThe Minimum
Wages Act 1948The Act empowers the Government to fix and/or review
the minimum wages for the specified employment. Revision should be
done in a period of two years or on a rise of 50 points in the
consumer price index whichever is earlier.(as per Labour conference
of May 1987)Minimum wage can be fixed for Time wage, Piece Wage,
Guaranteed wage (in piece wage), Overtime WageMinimum Wage can be
fixed: a) a basic rate of wage with adjustment with the cost of
living index; b) a basic rate of wage with or without cost of
living allowance and the cash value of concessions in respect of
essential commodities (supplied) or c) an all inclusive rate
allowing basic rate, cost of living allowance and the value of
concessionsThe Minimum Wages Act 1948As per the Act wages are to be
paid in Cash. Government has to be permit payment of wages in kind
where such practice is customaryThere are advisory boards,
committees and sub-committees etcOnly the following are allowed as
deductions from Minimum wagesFines, Deductions for absence from
duty, damage or loss deliberately caused, deductions for
housing/amenities, overpayments in some periods; income tax,
deductions as per court orders, PF contribution, payment of
Insurance premia or to a co-op society at the workers request,
deductions for investment in certain securities like NSCs or
donations like National relief fund etc (at the request of a
worker)The Minimum Wages Act 1948Where the employee works for part
of the day, the wage can be paid for part of the day except where
the employer himself is not able to provide full days workClaims
for minimum wages can be made by a) employee himself; b) any legal
practitioner on his behalf; c) any official or representative of a
trade union on behalf of the worker; d) any person acting with the
permission of the authority.Any employer violating the provisions
of the Minimum Wages Act may be punished with imprisonment upto 6
months and/or fine of Rs Five hundred rupees or with both. Separate
penalties are prescribed for failure to maintain proper
registers.The Payment of Bonus Act 1965Bonus is something paid as a
gesture of goodwill.Normally, employees contribute to higher
productivity and profits and a share of profits is given to
employees by way of Bonus.It is in addition to regular wages though
not required by the terms of contract of employmentSupreme Court
has given a formula which states that the following factors to be
considered while deciding the quantum of bonusa) surplus available;
b) gap between wages received and minimum living wage; c) welfare
work undertaken by employer; d) contribution of labour to profits;
e) the needs of shareholders and the necessity of attracting them;
f) expansion needs and g) financial stability of the employerThe
Payment of Bonus Act 1965The GOI appointed a tripartite committee
in 1961 to consider the question of payment of bonus based on
profits. The GOI implemented the committee recommendations with
some changes in the year 1964. Payment of Bonus Act was enacted in
the year 1965.Objectives of the Act: a) Statutory obligation for
payment of bonus to eligible employees; b) to outline the
principles for payment of bonus; c) fixing minimum and maximum
bonus as a per a formula; d) enforcement of the ActThe Act applies
to all establishments employing 20 or more workers on any day in
the accounting year. It applies to banks. The Payment of Bonus Act
1965Employee means any person (other than apprentice) employed on a
salary or wage not exceeding Rs3500/- per month (check this limit
now). Amt of bonus is on a salary of Rs2500.Employer includes
owner, manager or agent of the owner, Managing director or managing
agent Wage or salary includes all remuneration (except overtime
work) in monetary terms including DA but excluding the following:
a) temporary allowances; b) commission; c) travelling concession;
d) HRA; e) bonus and additional bonus; f) contribution to PF or
pension funds; g) terminal benefits to the employeeBonus cannot be
attached by any courtThe Payment of Bonus Act 1965Employees who are
terminated on account of Fraud, Riotous or Violent behaviour within
the office premises, or Theft, misappropriation or sabotage are not
eligible for bonusStatutory bonus: Minimum bonus is 8.33% of the
wages and salary earned and the Maximum is 20%. It is an employees
right but non-payment of bonus is not a dispute under ID Act, but a
claim under the Payment of Bonus Act.Festival Bonus: May be paid by
the employer in addition to the statutory bonus as per the
bipartite agreementsTime limit for payment: Eight weeks from the
closure of accountsDeductions: recovery of financial losses caused
by a misconductRecords to be maintained by the employer (Bonus paid
register and register showing the calculation of allocable
surplus)