This page contains Labour Law Notes of the 5 Year BALLB Hons. course in law schools. These notes briefly discuss the history, philosophy, objectives, and laws concerning Labour issues in India.
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PRIMARY CONCERNS OF LABOUR LAWS
1. Freedom of Association
Labour Union
Mobilisation
2. Wages
Not below minimum
Security of Tennure
Certainty of employment
3. Conditions at Work
It should be Humane
4. Social Security
Medical, Post retirement, etc
Why Contract law isn’t enough?
Contract law assumes that both parties are equal but at the Industrial level, there is a huge power differential between laborers and Employers which places the employer at a superior bargaining position.
This results in a relationship of subordination and obedience between the worker and the employee.
Different events that influenced Labour Law
Period of colonization
British laws strategically framed to benefit capitalists British entrepreneurs and create a submissive labor force in India
Indentured Labours (who could be transported) in plantation fields in India and abroad.
Laws to punish workers who ran away
Workers’ breach of contract Act empowered the employees to catch and punish absconding laborers.
All this was done to ensure the immobility of workers from one place to another.
Freedom Struggle
Gradually brought together peasants, laborers, and factory workers.
Russian Revolution
Dissemination of socialist literature amongst workers.
Russian support to communism and freedom from colonialism.
Establishment of ILO
British India was one of the founding members.
Establishment of AITUC in 1920
All India Trade Union Congress.
JL Nehru was its first President.
Overthrow of colonialism
Making of Indian Constitution
Five Year Plans
Focus on planned economy, self-reliance and labor welfare in Industries
The link between Macroeconomics and Labor policy
Failure of USSR
Forced India to liberalize and accept the Washington Consensus (IMF, WTO, and US Treasury)
Liberalization and Globalization
During the balance of deficit crisis in the 1990s, India was given the Bailout package with conditions of liberalization, opening up of the economy, increase of contractual labors, etc
Outsourcing of Work (finding new havens of cheap labor)
To promote outsourcing govt. established and promoted SEZs, NMEZ (National Manufacturing Economic Zone) where labor laws don’t apply
Led to the exploitation of workers.
Individual Contract of Employment
Means different terms and conditions for different workers.
Companies have their model standing orders mentioning hours of employment etc
Drawback of Contractualisation of workforce
Collective bargaining fails
Example-Journalism Industry
ABP v Union of India
SC supported an individual contract of employment
ABP argued that in modern times collective bargaining hindrance because of different expectations from different workers.
Crisis in Neo-Liberalism.
Liberalization happened but labor laws didn’t change
2008-Financial Crisis
Housing loan crisis
Jasmine revolution?
Increasing income disparity
Books-‘From British Raj to Billionaire Raj’
After 1929, India faced major income disparity in 2018
1% hold the 29% wealth
Arjun Sen Gupta-‘Challenges of unemployment’
Share of the organized sector is just 7%
Labour laws apply to the organized sector
Majority in the Unorganised sector belong to marginalized sections-
SCs
STs
Muslims
Fisherfolks
Report of NSSO
The highest unemployment rate in 45 years.
In 2005- 67% employed
In 2017- 49.3% employed
Causes–
Demonetisation
Amit Bhonsale’s analysis.
Difference between the informal and unorganized sector?
Social security schemes in organized sectors are a result of unionization.
Some independent unionization in the unorganized sector as well.
Trade unions have imbibed social democracy.
Triadic relationship between a trade union, political party, and party in power.
Trade unions considered mini-democracy.
S.22 of Trade Union Act allows outsiders to participate in Trade Union.
To avoid victimization
Two resolutions after the enactment of the constitution
That private business would not be taken over
Labour protection scheme
Not to go for lockouts and strikes for 3 years.
Nehru believed in Fabian socialism.
Method of settlement if Industrial Dispute
Earlier collective bargaining.
Later arbitration was inserted.
Immunities for workers under TU Act-
S.17- immunity from criminal conspiracy.
S.18- immunity from civil suit and tortuous liability.
Trade Union Act does not make registration of Trade Unions compulsory.
Whether street workers in Dwarka can form TU?
Yes.
Labour Autonomy timeline
1. Ottokahn Freud-written Labour ante law.
2. History of English Labour Law
3. How labor law is autonomous in character by the virtue of being fought out by workers through struggles.
4. 1st National Commission on labor Report 1969
Drafted by Justice Gajendragadkar. IMP
Gives conceptual clarity
5. 2nd National Commission on Labour Report 2002
Talks about the unorganized sector.
6. 1929 Whitley Commission on Labour Report
First Royal Commission on Labour conditions in India.
LABOUR LAW AUTONOMY
The autonomy of collectivism.
Organized Labour
On some points, Ottokahn Freud is clear about the autonomy of labor but on some times he desires state intervention.
Relative and absolute autonomy.
Are Labour Laws Autonomous?
One aspect of labor law is the protection of labor/workers.
Labour laws are part of social justice which workers have secured by their constant struggle spanning through centuries.
Dignity jurisprudence becomes an important aspect of labor laws.
In that sense, labor laws are autonomous.
In the 18th century UK, there was express legislation to prevent unionization of Labour.
Law of Trilogy (3 Judgements)
1. Mughal Steamship Company v Mc Gregor 1892
2. Allen v Flood 1898
3. Quinn v Leathem 1901
In these cases, UK courts tried to secure the right of laborers.
Engels’s writings on the conditions of workers in the UK.
1802 Combination Act of the UK allowed a combination of workers.
Later workers were given grouping and collecting bargaining rights.
Some important terminologies-
Wild-cat strike
A strike without notice to the employer.
Closed Shop Agreement
There would be an agreement between trade union and employer that he would hire from only one trade union. The only bargaining entity is one trade union.
Pre-Entry closed shop
The agreement is pre-recruitment.
Union Shop closed shop
After recruitment, elected employees should become part of one trade union.
Debates on the codification of labor laws.
1974 Employment Act-compilation of rights of employees. That state intervenes in negotiations of workers and employees and only when such talks fail.
Can closed shop work in India?
Charu Khurana Case
Women could only work as a hairdresser. But male to work as make-up artist and stylist as well as a hairdresser.
Production units were not allowed to hire anybody from outside.
So employers were forcing a kind of closed shop agreement.
But court stuck this on account violation of gender equality.
Higher courts have not looked at a closed shop
S.17, 18, and 19 of the TU Act provides that provisions of the contract act won’t be applicable to the agreement between TU and Employers.
If there is an agreement between the Union and its members to breach the terms of the contract, there will be immunity.
But trade unions and employers cannot enter into an agreement to take away the right of workers.
Tulsidas Paul v 2nd Labour Court West Bengal
The court looks at the closed shop arrangements and expresses displeasure at closed-shop. Freedom of association was at stake. Closed shop arrangement takes away the negative right of the right of association.
There were two unions- Mazdoor Union and Employees Union. When employers recruited from the latter, members of the formerly created ruckus. That’s how the matter went to court. In Bihar, an attempt was made to study the feasibility of Closed shop arrangements.
What is a TRADE UNION?
Group of workers organized to do collective bargaining
In India, there are many TUs.
There is no closed-shop arrangement in India. The absence of a closed-shop arrangement doesn’t mean that the Employers will negotiate with all trade unions. They will recognize any one of them to bargain with.
There is no specific recognition method (for selection of the sole bargaining agent) prescribed in the TU Act. The recognition method includes-
1. Check-off system,
2. Verification method,
3. The secret-ballot method, etc
Selecting Bargaining Agents
Check-off system
In the receipt book of TU, the name of the member will be entered. Labour commissioner comes to the Industry space and checks the proof of membership by ascertaining the number of members in the TU and the TU with majority membership will be given the status of the sole bargaining agent.
Verification Method
Method of ascertaining the membership rests with the labor commissioner.
Secret-ballot method
Members of different TU contest elections. The majority follow this method.
Example-Railways. More than 2500 TU exists. The Employer and TUs enter into an agreement that trade unions who get 30% vote will form the bargaining council and this bargaining council will be the sole bargaining agent. Bargaining council may comprise of multiple trade union.
Food Corporation of India case-
The court said that secret-ballot is to be followed in public undertakings.
Elect a Bargaining Council (comprised of different TUs)
Bargaining council is again elected on the basis of the check-off system, verification method, or secret-ballot method.
By practice, bi-partite agreements are better. Because state generally acts in favor of industries. A legally tripartite agreement has more recognition.
When the ID Act was drafted, the methods were completely state-interventionism. It was only after independence, bipartite and tripartite agreements came into being.
Problem with the check-off system
They ascertain membership by looking at the records of membership and records can be manipulated.
Problem with lack of legal recognition process?
There is no recognition process in TU Act for selecting the bargaining agent which can bargain with the employers. In the absence of formal/legal recognition, there are spurious Trade Unions. And employers seek to ally with those TUs which work in their favor. In such a scenario the interests of original workers are compromised and lead to more agitations.
LABOUR LAW: AUTONOMY FROM THE COMMON LAW- LORD WEDDERBURN
What is Kahn Freund’s argument?
British industrial relations have developed by way of industrial autonomy. The “free play of collective forces if you like collective laissez faire.” The primacy or “priority of autonomous over statutory methods. Even, rather optimistically: “What the State has not given the State cannot take away.’
That labour law should be autonomous. Common law cannot be applied to Labour law. Because marxism ideology distrust state which it thinks is the representative of bourgeois class whose interests are different than the workers.
He saw the “main object of labour law” to be a force counteracting the “inequality of bargaining power inherent in the employment relationship”; but only a few pages away he describes its “principal purpose” as regulating, supporting and restraining “the power of management and the power of organised labour.
Whether is it labor law autonomy or industrial autonomy?
It is not autonomy of labor law but PARTICULARISM OF LABOUR LAW. Because no law can be completely autonomous of other laws.
Particularism means the difference between capital and labor. The character of dependency of labor on capital. Complete independence would place labor law in ” a juridical void.
Labour and Industrial Laws in India
3 kinds of laws to deal with Industrial relations in India-
1. Trade Union Act
Recognized Right to organize and unionize.
2. Industrial Dispute Act 1947
Types of dispute resolution mechanism-
1. Conciliation
2. Tri-partitie collective bargaining (ILO recommends)
State, Employer, and Workers.
The purpose of conciliation is to alley aggressive mobilization of Trade Unions.
Even under conciliation, workers don’t get paid full wages during strike period under the rule-No work, No pay. This has been upheld by courts though it strikes at workers right.
3. Arbitration-
4. Adjudication-
5. Bi-partite collective bargaining-
S.18-any collective bargaining agreement will be binding on both parties.
Agreement between Employer and TU will be binding on workers
S.83-Agreement reached through conciliation shall be binding on present and future workers.
ID Act doesn’t mention bi-partite collective agreement as ADR.
S.2(P) says that settlement comes through conciliation and otherwise. This otherwise includes a bi-partite agreement.
Since court gave strict interpretation to S.81, workers prefer 18(3)
Industry Employment Standing Order Act
No prejudicial move by an employer against the worker.
Labour law must break free from the assumptions of underlying institutions of the civil law, the property rights of the employer, through which he controls work and the enterprise, the prerogative of the proprietor to organize and distribute work, and the status of subordination attached to the worker.
The contract of employment could be retained as representing a free choice to enter an employment relationship; but it must be modified, on the base rather of realistic agreement than of hierarchic subordination. Above all labor law was distinguished from civil law by its collective character, its umbilical cord to the social facts.
It must deal in categories of collective negotiation rather than of contract; the base, and source, of the law itself is derived from collective autonomy. Recognising the social facts of conflict, it must avoid the trap of legally imposed solutions.
Providing the required minimum protections, it must recognise the dominant source of industrial negotiation. In the enforcement of the laws, the aim must always be the search for acceptable, collective compromises:
Kahn- Freund, too, saw the main object of labour law to be a force counteracting the inequality of bargaining power inherent in the employment relationship.
Common Law Control
Technical problems with Contract of Employment-
In the free-flow of capital economy, finding ownership of capital is difficult and there is a blurring of relationship.
Uber example-whether drivers are employers?
US court said that Uber only facilitates contact between drivers and travelers through the software.
Delivery Boys–
Whether they are workers of E-commerce companies or logistics companies.
Only persons employed by the employer are covered under a contract of employment and not interns and apprentices.
Intersectionalities not recognized.
Taking care of discriminatory elements.
There are sexual, racial, caste discrimination.
The divide is about whether the dominance of common law inappropriate for labor law.
The old rules of contract, for example, based upon ‘will’ and ‘agreement’, however, ‘modernized’, meet objections from many who agree at least in perceiving them to constitute “that indispensable figment of the legal mind, known as the contract of employment” shrouding a relationship of subordination:
In the Industrial period, collective contracts replaced individual contracts. But in the post-globalization world, individual contact came back into prominence.
Replacing the concept of “employee”, with a contract of “service” as opposed to “services”, is necessary but not sufficient.
Difference between ‘Contract for Employment’ and ‘Contract of Employment’
The control test.
Problematic because of the subordination and the hierarchy it creates.
In a contract for employment, an independent contractor, such as a self-employed person or vendor, is engaged for a fee to carry out an assignment or project.
A short period of time. Assignment of work for a particular duration. The process of work will be decided by the employee.
Principle employer will have a contract for employment with the contractor and the worker will have a contract of employment with the contractor.
Industrial Dispute Act does not provide for a contract for employment. Common law concepts restrict labor law in even less predictable ways as when young trainees, for example, for whom society can provide no proper employment and who manifestly should have been given status and protections equivalent to those anciently accorded to apprentices, are left with uncertain protection even by legislation on race and sex discrimination, despite the fact that they work for others because they do not satisfy the test of a contract either for service or for services personally to execute work on labor.
All this masking of subordination by the terms of the contract, the fragmentation of the concept of “employee” along with the social forms of dependent labor, and the curbing of legislation by the bridle of the common law interpretation remain true for the newest as for the oldest relationships. There is no absence of subordination in “telework” or “distance employment.” Indeed, the new information, like the new nuclear technologies introduce their own peculiar risks of exploitation for many workers.
Courts and Precedents
The obvious dangers of allowing the employer to argue that the absence of the employee has automatically terminated his contract by frustration rather than by “dismissal” which can be tested against “fairness” are well documented in labor law. The EAT (Employment Appeal Tribunal) has in part understood them.
Traditionally, British unions and employers concluded collective agreements that were viewed as gentlemen’s agreements and not legally enforceable contracts. This presumption of non-enforceability was upheld by the courts.
The presumption was legislatively reversed in 1971 by the Industrial Relations Act. To combat this, many unions and employers included a clause in agreements explicitly stating the presumption of non-enforceability. These were dubbed TINALEA clauses because they proclaimed “this is not a legally enforceable agreement.”
It is the very function of the common law to preserve subordination inherently within employment, and if necessary, to do so creatively. True, we do not find judges deciding today that a servant has impliedly agreed not to sue the employer for injury negligently caused by a fellow servant who is in “common employment”.
In the last decade or so the Court of Appeal has enlarged the duty of cooperation, extending even to a worker’s obligation to “serve the employer faithfully with a view to promoting those commercial interests for which he is employed”, a model of unitary labor relations.
S.13 of ID Act– Worker not to be dismissed or conditions of service not to be changed during the pending of the industrial dispute between employer and employee.
FREEDOM OF ASSOCIATION
Two essential conditions of FoA according to Freud-
1. Positive guarantees/assurances to TUs and Workers
Some privileges to workers when they engage on TU.
19(1)(c) of the Indian constitution.
2. Right to strike and collective bargaining.
Under the Indian constitution, only Freedom of association.
Positive privileges have been given in Statutes such as TU Act
Immunity from civil suit under S.17 and S.18 of TU Act.
S.22-24 of ID Act, the prohibition of strike and lock-out, unless certain conditions are met as prescribed.
14 days notice
There are no ongoing proceedings in any adjudication forum.
But certain limitations placed on them by case laws.
Two important ILO conventions-
1. Convention 1987- convention on FoA and Right to organize
2. Convention 1998- convention on the right to organize and effective collective bargaining.
3. Convention 1998- declaration of fundamental principles of work.
India is a member of ILO, India is supposed to follow these conventions.
India did not ratify both of these conventions so we have only FR in the Indian constitution. Strangely Pakistan and Bangladesh have recognized it.
India did not recognize because we don’t have any policy on recognition of the Trade Union.
Justification-
That in India, TUs are attached to political parties and ideologies, it will give a boost to certain ideologies.
Absent of restraint
There should not be any curtailment
CASE LAWS
All India Bank Employees’ Association (AIBEA) v National Industrial Tribunal 1961
Facts–
Workers were agitating for an increase in wages.
Under the Bonus Act, workers are supposed to get Books of account and balance sheet to determine the ability of an organization to pay. Also to have better wage negotiations and effective collective bargaining.
In the meanwhile, the Banking companies Act prohibited disclosure of such information.
Issue–
Whether there was a violation of FR of Article 14 and 19(1)(c)?
Whether FoA includes collective bargaining?
Whether the right to strike and collective bargaining derives from FoA?
Whether 19(1)(c) should be extended to the right to strike and collective bargaining?
Held–
1. FoA is subjected to reasonable restrictions.
2. FR is available not only to workers but also to employers. If we extend this interpretation to employees as well, it will be disadvantageous to workers because then employers will also concomitant right of making a profit under the right to trade.
3. The court acted like common law.
4. No FR to collective bargaining and strike. Drew and analogy with the right to trade and make a profit.
5. 19 freedoms are available to individual citizens so citizens’ freedoms are protected and not groups’ freedoms. If u protect associations or unions right then all associations including employers association rights also get protected.
6. But the right to strike and collective bargaining is a statutory right and can be regulated as such.
Kameshwar Prasad v State of Bihar 1962 10J
Facts–
There was blanket prohibition on government from participating in any kind of demonstration.
Issue–
Whether right to demonstration is FR?
Held–
Right to demonstration is protected under 19(1)(a) and 19(1)(b).
Right to strike is not protected.
B.R. Singh v Union of India 1989 1J
Facts–
Workers of TFAI had certain demands regarding increase of wages, regularization and housing.
Negotiations were going on with management. When management did not take any action within the deadline, they called a general body meeting but management denied permission. GBM was anyway called. TFAI management suspended office bearers responsible for that.
Issue–
Whether right to demonstration is FR?
Held-
Statutory right to strike implicit in S.22-24, 10 and 10A of the ID Act.
T.K. Rangarajan v Government of Tamil Nadu 2003 2J
Facts–
TN by an ordinance declared strike by govt. as misconduct and dismissed many for going on strike.
Issue–
Whether public servant have right to strike?
Held–
No fundamental, statutory or equitable/moral right to strike exists with the government employees.
The apex court reiterated in no uncertain terms that there is no fundamental right to strike.
Problem–
It’s per-incurriam judgement because it does not looks at precedent.
Discipline in public employment does not mean subordination of public servants.
D Thomas Franko v Disciplinary Authority 2013 Mad
No FR but statutory right to strike. Held that termination cannot happen without factual ascertainment and following of PNJ. No FR but statutory right to strike.
IMPORTANT
The right to strike was culled out as statutory right from S.22-24 of ID Act which prohibits certain kinds of strikes. If the Right to strike were part of 19(1)(c) then it would be part of reasonable restriction under 19(4) but according to statute (ID Act), the restrictions are of different nature than reasonable restrictions under 19(4). S.22 restrictions are in the nature of protecting the collective interests of both parties-employers and employees. This shows that legislative intent was different. If the trade unions get broader right, then associations of employers also get broader right which would be problematic
S.17 of TUA- Immunity from conspiracy to commit minor offenses. S.120B.
In a common law regime, any act against public order is punishable as a criminal and civil wrong. But under the labor law, there is immunity from certain criminal and tortuous liabilities.
Types of Strikes
1. General Strike–
2. Notional strike– for 1 hour, etc
3. Go slow strike– u work so slowly. Can cause extensive damage to machines.
4. Sit-in strike– Go sit in front of the management office
5. Tools down– do not touch the tools
6. Work to rule-no extra work
7. Wild-cat strike-sudden strike
8. Picketing– demonstration in front of the gate of the work area.
9. Gherao– encircle the office of manager and sometimes restraining him from coming outside or locking-him up.
FREEDOM OF ASSOCIATION (FOA) AND THE TU Act?
Immunity of TUs
This is one of the major distinction of Labour Law
History–
Fight between Judiciary and parliament
In 18th CE, the outlook of parliament was that workers cannot combine under the Combination Act. (combination means campaigning together)
A trade union leader Francis Place fought and died to get the right of combination.
Trade Dispute Act 1825 allowed peaceful picketing.
Master and Servant Act 1825- non-aggravated breach of contract would be immune from tortuous liability. But if there is a major breach of duties then it would amount to damages under tort law.
Master and Servant Act 1867- same as 1825 put changed punishment. If workers commit a breach of contract, it prescribed imprisonment.
Case Laws-
Lumley v Gye 1853- Gye had to compensate Lumley for inducing Lumley’s servant to breach the contract.
After Lumley v Gye, fingers were raised at the biased approach of the judiciary so civil immunity was given to workers in the TU Act 1871.
There was also criminal law amendment 1871 which took out molestation, obstruction, etc from the list of criminal offenses.
Queen v Band- Held that there is no immunity if workers intervene with free-will of the employer.
Law of Trilogy- IMP
Mughal Steamship Company v Mc Gregor 1892-
Case of business enterprise and not labor.
There was a combination of a transport line business and a new company.
Few companies combined and formed a business.
Mc Gregor had control over a major portion of this business.
The combination company induced the client not to do any transaction with the Mughal Steamship company.
The court came up with the principle of deliberate infliction of harm without justification or excuse.
Damages were awarded under tort law.
Accused said that they did not for trade benefits and self-advancement and not to cause any harm to other companies.
Court applied the PREDOMINANT OBJECTIVE TEST.
So the combination was excused.
Allen v Flood 1898
Two unions in a ship making industry-Boiler Makers Union and Ship Rights Union. There was a closed shop arrangement between Boiler Makers Union and employers that the latter will not hire from any third party. After some time, the employer hired from the Ship Right Union. Allen, the president of BMU gave a warning of the strike to the employer and pressured him to fire Flood and Taylor-two workers who were hired from SRU and they were fired. Flood filed a case against Allen.
Lord Hershell looked at PREDOMINANT OBJECTIVE AND THE MALICIOUS INTENT. Allen was initially found guilty and was asked to give damage but later in House of Lords, he was acquitted because the court said that it was the unity of workers and not malicious intent behind pressurizing the employer to fire Flood. The intention was to conform to the closed shop arrangements.
Quinn v Leathem 1901
After 1875 enactment, there were no major judgments in court.
Leather was a wholesale slaughterer. Leathem had employees who didn’t belong to any union. However, a strong Meat Workers Union pressurized to fire those workers and hire from the Union. Leathem rejected the demand. MWU approached workers of Munce who had Hotel business. Workers gave a threat of a strike to Munce if he purchased from Leathem.
It was a clear case of secondary Boycott. Court looked at the malicious intention and found no justification on part of Quinn. Quinn’s union was found to be malicious intent. Taking legal means to achieve the illegal objectives and vice versa is a conspiracy. In Allen v Flood, the case was against Allen in an individual capacity.
The Court did not look at real purpose doctrine here.
Taff Vale Railway company v Amalgamated Society of Railway Servants-
The dispute was related to better remuneration. When a worker demanded better wages, he was transferred and abused. Workers in protest greased the railway tracks which caused heavy financial damage to the company. The court said that the Union intentionally committed certain acts which caused loss to the company.
A commission was constituted to investigate. This TU became a political party later as Labour Party which came to power later. They enacted new legislation- Trade Union Acts 1906. By this law, TUs were granted immunity from the civil conspiracy. Immunity was also granted from inducement to breach of contract. Immunities were also granted from peaceful picketing.
INDIAN CASE LAWS
There were 3 important TU leaders in colonial India
1. MN Joshi
2. John Baptista
3. PP Wadia
Labour Union started demanding registration of Union taking cue from the Laws in England.
Madras Textile Labour Union case-
The union was formed due to the efforts of PP Wadia. Due to the writings of Jhunjhunwala, workers were already aware of dignity at the workplace.
There was an altercation between a white supervisor and a worker.
Buckingham and Karnataka mills case-
The union was formed due to the efforts of PP Wadia. Due to the writings of Jhunjhunwala, workers were already aware of dignity at the workplace.
There was an altercation between a white supervisor and a worker.
PP Wadia called for a strike in the industry. The strike continued for five days. The management filed a case against Wadi and other members of the TU. Court held against TU and ordered Wadia to give 40000 as compensation to management. After PP Wadia’s arrest demands increased for legislation. Interestingly Textile Mill owners of Bombay were interested in Unionisation and they approached John Baptista.
Motilal Nehru assisted in drafting the TU Act.
S.17 TU Act 1926-Criminal conspiracy in trade disputes.- No office-bearer or member of a registered Trade Union shall be liable to punishment under sub-section (2) of section 120B IPC (45 of 1860), in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in section 15, unless the agreement is an agreement to commit an offense.
Very limited immunity- Only for minor offenses. The action should in furtherance of the objective under S.15.
The protection is from S.120B(2)
Why this protection?
Strike and inducement for breach of contract were understood to be a crime and unlawful act.
RS Ruikar v Emperor 1935
This case came after the IPC amendment 1932 which introduced S.107 which penalized any subversive action against government servants. Pursuing workers to breach the contract of employment was also considered to be molestation.
Ruikar gave a speech to mobilized workers for a strike against Nagpur Mill.
One of the arguments was that IPC amendments were in violation of the provision of the TU Act (S.17).
Court held that S.17 is only limited to S.120B(2) of IPC.
Also molestation is a separate offense in IPC.
There is no immunity from molestation and obstruction.
Jay Engineering 1968 Calcutta HC
Whether Gherao would get protection under S.17
Results in obstruction of freedom of mobility.
Criminal trespass, wrongful confinement.
The immunity is of limited nature and must be clearly understood.
An agreement to commit an offense will never be excused.
Looked at the Brookes v Barnard 1964
There was a BOAC which entered into closed shop agreement with draughtsmen union also agreed that the latter shall not strike. One Union member Brookes had a fight with office bearers of Union and resigned. Union demanded his resignation and forced BOAC to terminate his employment.
Whether there was the malicious intention?
Whether there was a commission of unlawful act?
1. Threatening on the ground of breach of contract was a criminal offense.
2. In every threat of a strike, there is an offense.
3. British Parliament by an amendment provided English TU’s immunity in case of a strike.
4. But in India, we don’t have any amendments done to Labour Law.
S.15-Objects on which general funds may be spent.
Making placards, refreshments, etc
S.18-Immunity from civil suit in certain cases-
No suit or other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union or any office-bearer; or member thereof in respect of any act done in contemplation or furtherance of a trade dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment, or that it is in interference with the trade, business or employment of some other person or with the right of some other person to dispose of his capital or of his labor as he wills.
A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil Court in respect of any tortious act done in contemplation or furtherance of a trade dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union.
Immunity is from-
1. Inducement of breach of contract
2. Interference with trade
3. Intervening with the free will of employers.
Dalmia Cement Ltd. vs. Naraindas Anandji Bechar, AIR 1939 Sindh 256
Facts– Naraindas was a regular visitor in Industry. Whenever he entered the premise, he entered with a large gang of workers equipped with LATHIS.
Dalmia Cement asked for an injunction to restrain his entry into the premises. Naraindas justified his entry being a trade leader and invitation by workers.
Issue- Whether injunction would be granted or not under S.18 for civil liability?
Held– No. Because immunity is only from so and so and no other wrongs. (In this case trespass with arms in his hand
Rohtas Industries vs. Rohtas Industries Staff Union AIR 1976
There was dispute relating to renumeration and strike went on for months.
Parties decided to opt for arbitration which decided against the workers.
Issue– Whether workers would get wages for strike period?
Held– No. Because it was illegal strike. (Arb)
Whether compensation should be given to management?
Yes.
Arbitral Award challenged in High court.
Whether compensation should become part of ID?
ID Act provides that only matters relating employment, non-employment and conditions relating to work shall be part of ID.
Why compensation to management?
Strike is immune under S.18.
Test to be applied is REAL PURPOSE TEST. (Surrel v Smith)
If the PREDOMINANT OBJECTIVE is to cause damage, there will be liability and no immunity.
Though S.16 immunity is available but since strike is illegal no wages.
ID tends to resolve disputes. Aim of TU act is to empower worker’s right to campaign.
Legality or illegality of strike has nothing to do with immunity provided under ID act.
Even if the strike is illegal, S.18 immunity shall be available.
In SC, Krishna Iyer agrees with Ramaswamy but makes certain observation-
It is difficult to fancy workers who live by working in the industry combining to kill the goose that lays the golden eggs. The inevitable by-product of combination for cessation of work may be loss to the management but the obvious intendment of such a collective bargaining strategy is to force the employer to accept the demand of the workers for betterment of their lot or redressal of injustice, not to inflict damage on the boss. In short, it is far too recondite for an employer to urge that a strike, albeit illegal, was motivated by destruction of the industry.
Court agrees with the real purpose doctrine.
Simpson & Group vs. Amco Batteries 1990 1J
Any physical intervention or duress with the employer shall not be justified under S.18.
In a community of wage earners in which most men were dependent upon the sale of their labour for their daily bread and hope of self-advancement, the strike, the boycott and the picket line were the primary weapons of the working class as against the economic might of the employer and, therefore, to enable the working class to bargain collectively and effectively in negotiating agreement with the employers for improved conditions of employment, the Courts should be reluctant to give any assistance to the employer in any manner which would impair the bargaining power of the workers-Union.
Industrial Dispute Act 1947
S.22-Prohibition of strikes and lock-outs. No person employed in a public utility service shall go on strike in breach of contract.
S.23-General prohibition of strikes and lock-outs. No workman who is employed in any industrial establishment shall go on strike in breach of contract and no employer of any such workman shall declare a lock-out (a) during the pendency of conciliation proceedings..
Rational is to give preparatory time to the employer-SC
JUSTIFIED STRIKE AND WAGES
If the strike is justified, workers will get wages. Court will look whether the Union has exhausted all other remedies before going for strike.
It completely rest on discretion of court.
S.24-Illegal strikes and lock-outs. (1) A strike or a lock-out shall be illegal if it is commenced or declared in contravention of section 22 or section 23; or it is continued in contravention of an order made under sub-section (3) of section 10 or sub-section (4A) of section 10A.
S.25. Prohibition of financial aid to illegal strikes and lock-outs. No person shall knowingly expend or apply any money in direct furtherance of support of any illegal strike or lock-out.
S.26. Penalty for illegal strikes and lock-outs.
Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to fifty rupees, or with both.
Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.
S.27. Penalty for instigation, etc. Any person who instigates or incites others to take part in, or otherwise acts in furtherance of, a strike or lock-out which is illegal under this Act, 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.
S.28. Penalty for giving financial aid to illegal strikes and lock-outs. Any person who knowingly expends or applies any money in direct furtherance or support of any illegal strike or lock-out 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.
Immunity in TU Act 1926
S.18(2)–A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil Court in respect of any tortious act done in contemplation or furtherance of a trade dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union.
S.19 ID Act-
Enforceability of agreements.-
Notwithstanding anything contained in any other law for the time being in force, an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint of trade:
Provided that nothing in this section shall enable any Civil Court to entertain any legal proceeding instituted for the express purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell their goods, transact business, work, employ or be employed.
Tulsidas Paul v AIR 1963
There were two unions functioning in an umbrella making industry. There were competition between them and Employer hired workers from one union. Other union gave a threat of strike. Employer filed a case.
Court said that immunity under S.19 applies to agreements between members of Union in restraint of trade and not agreement between employer and employees.
So closed shop arrangement is not covered.
Charu Khurana case
Though court didn’t deal with closed shop arrangement but facts indicate a closed shop arrangement.
So Freedom of association in India exist in a limited sense as far as labour law is concerned and same is the case with immunities.
DEFINITION OF STRIKE AND LOCK-OUT
S.2 of ID Act
NOTICE OF STRIKE OR LOCK OUT (S.22-25)
Mineral Minor’s Union v Kudremukh Iron Ore 1989
Facts–
On 1st September, 1984, MMU issued notice of its intention to go on one day token strike any day after 20th September, 1984.
On 10th September 1984 the Management replied that the strike was unjustified as the allegations were baseless and advised the Union not to go on strike.
On 18th September 1984, the Management cautioned that it the workmen were to go on one day token strike as informed by them, action would be taken against them. Thereafter in terms of Section 20(1) of the Industrial Disputes Act conciliation proceedings commenced and took place between 19th September 1984 and 1st October 1984, on which date the conciliation failed.
A report about the failure of conciliation was sent to the State Government, on 12th October 1984, The State Government, however, informed the parties about the failure of conciliation only on 9th November 1984.
Thereafter, on 19th November 1984, the workmen, who are members of the petitioner-Union, went on strike.
The Management considered that the strike resorted to by the workmen on 10th December 1984, without fresh notice and without informing the date of strike, was illegal.
The management by its notice dated 20/21st December 1984 informed the petitioner that on the principle of ‘no work no pay’ basis the workmen were not entitled to the wages for 10th December 1984.
The Management also informed that they were deducting 8 days wages, of the workmen having gone on illegal strike, as permitted under S.9(2) of the Payment of Wages Act. Aggrieved by this notice, the petitioner filed the writ petition.
Held–
Trial court held that in a notice of strike required to be issued under Section 22(1) of the Act, the date on which the workmen intended to go on strike should be specified and its non-specification renders the strike illegal.
Appellate court held that The provisions of Section 22 of the I.D. Act are mandatory.
Date on which the workmen propose to go on strike has to be specified in the notice contemplated by the said provision read with the relevant Rules and the Form prescribed for the notice.
If by the time stated in Section 22(1)(d) the date of the strike specified in the notice of strike expires, the workmen have to issue a fresh notice as provided under Section 22 of the Act once again, and all other statutory consequences flowing out of the said statutory notice would follow on issuance of the said notice.
We respectfully disagree with the view expressed by the learned single Judge that, to such a second notice, the provisions of Sections 20(1) and 12(1) of the I.D. Act are not applicable. We are of the view that, whenever a notice as provided by Section 22 is issued even though such a notice is necessitated by the failure of conciliation proceedings, provisions such a as Sections 20(1), 12(1) read with Section 22 in its entirety will be attracted.
The remedy to the hardship that may result from such a view has to be found elsewhere, such as seeking a reference under 2nd proviso to Section 10(1) of the I.D. Act.
The strike resorted to by the workmen on 10th December 1984 was illegal.
The deduction of the wages for the day of the strike was justified. The question as to the legality or propriety of the deduction of eight days’ wages under Section 9(2) of the Payment of Wages Act is left open for decision in case the workmen invoke any other available remedy, and we decline to interfere with the discretion exercised by the learned single judge on this question.
Note-Though ID Act enabled right to strike there are still provisions within the statute which make strikes illegal. They support employer to make strike illegal. S.22(6) prescribes employer to inform government about the strike. Generally employer also alerts the police. Govt. informs the labour commissioner which starts conciliation process. Strikes during conciliation are illegal.
Workers contended that period of conciliation should be excluded from the period of strike.
Court went by literal interpretation of the law.
PENDENCY OF CONCILIATION PROCEEDING A BAR AGAINST ALL WORKMEN
Ramnagar Cane and Sugar Company Ltd. vs. Jatin Chakravorty 1961
There were two unions in the sugar industry which was declared to be a public utility service. Majority union was Employees Union and the minority union was the ‘Workers Union’. [S.18(3)] Both unions submitted a charter of demands to the Industry separately. Workers Union also issued a notice of strike. Company formed a conciliation board on Feb 1. [S.11 n 22] Matters in charter of demands were common. In conciliation, only the majority union came to the table. The management asked the conciliator to separately meet the minority union which was unsuccessful. So the conciliation officer prepared a conciliation failure report under S.12(4) on 3rd Feb. Memo of settlement with Majority union was drafted on 25 Feb. On 13th Feb, Minority union went on strike and criminal cases were filed against them. The appellant’s argument was that the pendency of the conciliation proceedings between the appellant and the Employees’ Union makes illegal the strike in which the respondents joined on February 13, 1954.
Issue– Whether strike was illegal?
Minority Union contended that they went on strike 10 days after conciliation with them was over. Court said 22(d) and 18(3) has to be read together. In this case, since demands were common, it has to be binding. By a reading of S.18, there can be no doubt that the settlement arrived at between the appellant and the Employees’ Union during the course of conciliation proceedings would bind not only the members of the said Union but all workmen employed in the establishment of the appellant at that date. In other words, if a conciliation proceeding is pending between one union and the employer and it relates to matters concerning all the employees of the employer, the pendency of the said conciliation proceeding would be a bar against all the employees of the employer employed in a public utility service to go on a strike during the pendency of the said proceeding under s. 22 (1)(d). It would be another matter if the conciliation proceedings in question are confined to specific demands limited to a specified class of employees. In such a case it may be contended that the other workmen who are not interested in the said demands may not be bound by the said proceedings. That, however, is another aspect of the matter with which we are not concerned in the present appeal.
ILLEGAL STRIKE/LOCK-OUT
State of Bihar vs. Deodar Jha and Ors. AIR 1958
Facts–
Sri Damodar Jha was the General Secretary of the workers union of Patna Electric Supply Company managed by Sri A. V. Ramaswami. In March 1952, the Union made certain written demands, and, in due course Government referred the disputes to a Tribunal for adjudication 29th of March 1952.
In meanwhile Ramdeo Rai, an employee of the Company, was suspended by Sri Ramaswami wilful disobedience of his order which was to the effect that he should allow three other workers to live in the same room.
Suspension of Ramdeo Rai by the Company was communicated to Sri R. N. Sharma then Assistant Commissioner of Labour. The Union said that Ramdeo’s suspension was unjustified and requested P. W. 12 to intervene in the matter and make an inquiry. During the inquiry, P. W. 12 saw an altercation going on between two sets of workers followed by an exchange of blows and hurling of shoes. P.W. 12 informed the Police Station nearby and also submitted a report to the Deputy Commissioner of Labour. He, further, informed the Company of the facts which had taken place in his presence.
The company accordingly, took disciplinary action against Ramdeo and a few others and suspended them forthwith. He, then, applied to the Industrial Tribunal for necessary permission to dismiss these workers as adjudication proceedings were pending in its Court.
The workmen concerned also filed petitions before the Tribunal under Section 33A of the Industrial Disputes Act.
On the 26th of November, 1952, company received a notice by the Union intimating him that the employees of the Company proposed to go on a token strike from 8 a. m., on the 29th of November, 1952, to 8 a.m., on the 30th of November 1952, unless their demands were fulfilled.
The demand was for the restoration of suspended workers with retrospective effect and also for the concession of pending demands other than those referred to the Tribunal. The company replied to the notice pointing out that the token strike would be illegal under the labor laws.
The token strike commenced and ended as per notice served by the Union, and it was alleged by the prosecution that the 25 respondents joined the strike, ceased to work, and did not attend to their duties during that period.
According to the petition of complaint, the aforesaid strike was in contravention of Section 23 (b) of the Industrial Disputes Act as one staged during the pendency of an industrial proceeding before the Tribunal and was, therefore, illegal under Section 24 of the Act. The strike was also illegal for want of adequate and proper notice as required under Section 22 (1) (b) of the same Act. The respondents were summoned to meet their trial under Section 26 (1) of the Act by the Sub-divisional Magistrate at Patna, and the case was later transferred to the file of Sri S. C. Gupta, judicial Magistrate who on evidence, found that the prosecution had not proved clearly even the absence of all the accused persons and concerted action on their behalf. Against this order of acquittal, the Government has appealed.
Respondents said that, as there was an illegal lock-out put by the Company of the four or five workers-in connection with the accommodation dispute, the strike, even if it offended Sections 22 or 23 of the Act, became justifiable and legal on the strength of the provisions of Sub-section (3) of Section 24.
Held–
A “strike” maybe for a short period or for a long period. The length of time has nothing to do with the meaning of “strike” as given in the Act.
Strikes are only illegal when penalties have been imposed for them for contravention of the provisions of Sections 22, 23 and 24 of the Act.
In the present case that 14 days’ notice was not given to the Company by the Union. A strike of the employees or workers, will, therefore, automatically become an illegal one punishable under Section 26 of the Act.
It may be remembered that the expression “breach of contract” does not mean a breach of a condition of service, and it is not incumbent on the prosecution to produce and prove the standing rules in order to establish that the employees were guilty of breaking the contract.
Workers stayed away and did not perform their duties, as they were bound to render to the Company and this, therefore, was in contravention of the terms of their service. On these material facts, I hold that a large number of workers in the Company, including the five respondents aforesaid, did go on strike in breach of contract. As pointed out before, a strike of this nature is prohibited in law in public utility services unless the conditions referred to in the four Clauses (a), (b), (c), and (d) are satisfied. These, admittedly, have not been done by the employees and, hence, there is no other alternative, but to hold that the five respondents are guilty of illegal strike under Section 26 of the Act.
It is true that the resolution regarding alleged victimization of workers and certain alleged pending demands were not for consideration by the Tribunal, but that does not make any difference inasmuch as the workers are not permitted in law to resort to a strike during the pendency of a proceeding before a Tribunal or a Board according to the conditions laid down both under Section 22 and Section 23 of the Act.
“Lock-out”, according to Clause (1) of Section 2 of ID Act means “the 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”.
It implies either the closing of the place of employment, suspension of work, or refusal by an employer to continue to employ any number of persons employed by him. The measure adopted by the Company in this case by suspending four or five workmen, who had taken part in that occurrence, was with the ultimate view of terminating their service and, accordingly, the act on the part of the Company cannot constitute a lockout.
In case of a lock-out, the service, that is to say, the relationship of employer and employee continues and does not come to an end.
Whether workers employment can be terminated on account of misconduct or illegal Strike?
No. The penalty for illegal strike and misconduct under S.26 is only fine or imprisonment and not dismissal or termination.
LEGAL AND JUSTIFIED STRIKE:
The Swadeshi Industries vs. Its Workmen AIR 1960
Initially, the Industry initially started as a Cotton Textile manufacturing unit and later also started manufacturing Art-Silk but the latter was not considered public utility service.
There was a dispute regarding bonuses and workers of Art n Silk unit went on strike.
Industry contended that it was illegal and suspended workers in mass. The Company’s case appears to be however that the cotton weaving mill and the silk weaving mill formed really one unit and not two distinct units and that every person who is employed in this composite unit must be held to be an employee of the cotton textile industry and thus a public utility service.
The Appellate Tribunal held on the contrary that there was no evidence to show that the workmen had been employed in public utility service and consequently held that the strike was not illegal.
It was also of opinion on a consideration of all the circumstances of the case that the strike was justified. In holding that the strike was justified the Appellate Tribunal laid stress on the fact that two of the terms of the agreement entered into by the workmen represented by the Mazdoor Union and the Company had not been implemented. One of these terms was that the Company shall introduce a provident fund system within a year. The provident fund system was introduced in September 1950 but not within a year from the date of the agreement.
Other demands were- 1. Basic Pay. 2. Dearness Allowance. 3. Bonus. 4. Provident Fund and Gratuity and 5. Leave and Holidays.
Held–
The decision of this depends on the answer to the question of whether these 230 workmen were employed in the cotton textile section of the Company (PUS).
Whether the strike was justified or not is a question of fact and when on a consideration of all the facts and circumstances the Appellate Tribunal has come to the conclusion that the strike was justified, that finding is not vitiated merely because it placed undue weight on one or more circumstances. If there was evidence before the Appellate Tribunal on which it could reasonably come to the conclusion that the strike was justified we shall not be justified in interfering with that decision.
Collective bargaining for securing improvement on matters like these viz., Basic Pay, dearness allowance, bonus, provident fund, and gratuity, leave and holidays is the primary object of a trade union and when demands like these are put forward and thereafter a strike is resorted to in an attempt to induce the Company to agree to the demands or at least to open negotiations the strike must prima facie be considered justified. There is nothing to indicate that these demands were being put up frivolously or for an ulterior purpose.
The Statesman Ltd. vs. Their Workmen, AIR 1976
Facts-
Workmen of Statesmen declared a strike on 21 September 1966 against bonus disparity. On the same day, employers declared lock-out which went on till 5 January 1967.
On the day following the declaration of lockout, the workmen requested the management to lift the lockout preferring peaceful resumption of work and asking for interim relief on their economic demands. The management did not agree to lift the lockout. Eventually, however, The lockout was lifted and the strike called off. On the question of wages during the strike period, the Industrial Tribunal, apportioning fault to both the parties directed that the management should pay half the wages to the employees during the strike period.
Whether workers be given full wages for the entire period?
Held–
Krishan Iyer J observed that after lock-out workers addressed a letter twice to the employer to lift the lock-out which was rejected. The entire objective of lock-out is to bring employees to the table. In this hungry world, the weaker many cannot afford the luxury of finery in a speech that the happier few can afford. In the rough and tumble of industrial disputes conciliation is a necessary grace the stronger party, the socially conscious management, must cultivate and huff a flaw it must eschew.
Such is the spirit of giving and take which must inform industrial negotiation if peace and production are the bonafide ends and national development the great concern. This broad philosophic approach amply vindicates the justice of the Tribunal’s impugned award.
Where the strike is illegal and sequel of a lockout legal, the Court has to view the whole course of developments and not stop with examining the initial legitimacy. If one side or other behaves unreasonably or the overall interests of good industrial relations warrant the Tribunal making such directions regarding strike period wage as will meet with justice, fair play and pragmatic wisdom, there is no error in doing so.
In the instant case there was a pending industrial dispute when the Unions sprang a strike notice. The strike being illegal, the lockout that followed, became a legal, defensive measure. But the management could not behave unreasonably merely because the lockout was born lawfully. If by subsequent conduct, the Unions had shown readiness to resume work peacefully, the refusal to restart the industry was not right and the initial legitimacy of the lockout lost its virtue by this blemished sequel.
Management of Churakulam Tea Estate (P) Ltd. vs. Workmen AIR 1969
Facts–
The appellant Churakulam Tea Estate paid bonus to its workers for nine years, i.e., from 1947 to 1951 and 1953 to 1956 as per the agreement. there was a memorandum of settlement, dated January 25, 1960, between the managements of the various plantations and their workers, relating to payment of bonus. The appellant did pay any bonus for next three years on the ground of no profit.
The workmen started an agitation claiming bonus and conciliation proceedings in that regard failed.
Twenty seven workers, in the factory of the appellant, struck work on the afternoon of November 30, 1961.
The management declined to pay wages, for that day, to these factory workers. The management also laid off, without compensation, all the workmen of the estate, from December 1, 1961 to December 8, 1961.
The specific claim, for payment of bonus, by the workmen, was on the basis that the said payment had become traditional and customary; or, at any rate, it had become an implied condition of service.
According to the management, the strike, on November 30, 1961, was both illegal and unjustified and hence the factory workers, who went on strike, were not entitled to wages.
Held–
The Tribunal, in the instant case, was wrong in holding that an inference could be drawn for payment of bonus, as an implied condition of service, in the circumstances of the present case, the payment, admittedly, was not uniform and was not connected with any festival.
In our view, it is impossible to infer an implied condition of service, where payment has not been uniform in the past, unless such payment can be connected with some festival.
In this case, admittedly, the payments have neither been uniform, nor were they connected with any festival.
Admittedly there were no conciliation proceedings pending before such a Board on November 30, 1961, the day on which the factory workers went on strike and hence the strike does not come under Section 23(a), No doubt if the strike, in this case, is hit by Section 23(a), it will be illegal under Section 24(1)(i) of the Act; but we have already held that it does not come under Section 23(a) of the Act. It follows that the strike, in this case, cannot be considered to be illegal.
The evidences clearly establishes that the strike was as a protest against the unreasonable attitude of the management in boycotting the conference held on November 23, 1961, by the Labour Minister of the State.
Therefore, the strike must be held to be neither illegal nor unjustified and in consequence it must be further held that the factory workers are entitled to wages for that day.
WAGES IN THE CASE OF LEGAL AND UNJUSTIFIED STRIKE:
India Marine Service Private Ltd. vs. Thier Workmen AIR 1963
There was a dismissal of a workman on account of misconduct. Workers went on a subtle/token strike.
As a counter-action, the employer declared lock-out which went on for 53 days.
The workers asked for bonus for 44 days. The standing custom was of 37 days. Employer cried foul. Court had to look whether workers were entitled to wages during the period of strike (1 day) and lock-out (53 days). Whether Strike was unjustified and whether workers were entitled for wages during the lock-out period?
Held–
It was found that while the strike was unjustifiable and the lock-out when it was ordered on November 13, 1958, was justified, its continuance for 53 days was wholly unreasonable and, therefore, unjustified.
That where a strike is unjustified and is followed by a lock-out which has, because of its long duration, become unjustified, the proper course for an industrial tribunal is to apportion the blame and direct the payment of the wages for the period of the lock-out.
We would like to make it clear that in a case where the strike is unjustified and the look-out is justified the workmen would not be entitled to any wages at all. Similarly where the strike is justified and the look-out is unjustified the workmen would be entitled to the entire wages for the period of strike and look-out.
Where, however, a strike is unjustified and is followed by a look-out which becomes unjustified a case for apportionment of blame arises. In our opinion in the case before as the blame for the situation which resulted after the strike and the lock-out can be apportioned roughly half and half between the company and its workers. In the circumstances we, therefore, direct that the workmen should get half their wages from November 14, 1958, to January 3, 1959, (both days inclusive).
Unjustified is not read from the law which only talk about legality or illegality. Court looked at the demands of the workers which was 44 days bonus which was unjustified according to court. If the strike is legal and justified, full wages to be given to workers. If illegal then no wages. So within legality there is justified and unjustified. Justifiability becomes an important parameter.
Management of Fertilizer Corporation of India vs. The Workmen AIR 1970
Facts–
The appellant Corporation (a Central Government Undertaking), granted ad hoc bonus for good performance to the unit’s employees. For the next year, the appellant granted bonus as recommended by the Bonus Commission and also made ex-gratia payment for good performance. The appellant decided to pay bonus for the third year, strictly in accordance with the Payment of Bonus Ordinance and the Act, which had come into force then. In the fourth year the production did not exceed the target, and the appellant offered to pay only the statutory bonus under the Bonus Act ‘and stated that a production scheme had been introduced, that with the introduction of the production bonus scheme all ex-gratia payments were eliminated and that this scheme was approved by the Government of India. The workmen demanded that the bonus should be paid for the third and fourth years at the same rate as it had been paid in previous years also stated that if their demands were not met within 15 days, they would be forced to adopt agitation approaches. Conciliation proceedings started.
The appellant offered the workmen the option of either accepting the Cabinet decision or the production Bonus Scheme as formulated by the management. The workmen desired that the Cabinet’s directions be made applicable to them and went on strike and the reference to adjudication was made. The Tribunal accepted the claim of the workmen, and held that the strike was justified.
Held–
The appellant failed to establish that production bonus scheme was introduced with the consent and approval of the Central Government and that on its introduction the ex-gratia payment of bonus stood eliminated. Therefore the workmen were entitled to ex-gratia payment of bonus as in the previous years.
The management was prepared to pay at all times the bonus as per the Bonus Act. They had also announced the introduction of the production bonus scheme.
They were actively taking part in the conciliation proceedings. The appellant also made to the Union certain proposals at the conference and the representatives of the workmen promised to discuss with the workmen and give a reply to the appellant.
But, at a meeting of the workmen next day, they were incited to go on strike. The receipt of the telegram sent by the Labour Commissioner fixing a date for further discussions and inviting the Union and the management to attend the meeting, was falsely denied by the Union. The receipt of a telegram from a person representing the workmen at conciliation meeting, requesting the Union to put off going on strike by one day was admitted by the President of the Union, but that request was not complied with by the workmen.
All these circumstances clearly established that the demand of the Union regarding ex-gratia bonus could not be considered to be of an ‘urgent ‘and serious nature’. They also showed that the launching of the strike was unjustified. Therefore, the workmen were not entitled to any wages for the period of strike.
The Management of Chandramalai Estate vs. Its Workmen 1960 (Half Justification)
Facts–
On August 9, 1955, the Union of the workmen of the Chandramalai Estate submitted to the Manager a memorandum containing fifteen demands. Though the management agreed to fulfil some of the demands the principal demands remained unsatisfied.
On August 29, 1955, the matter was recommended by the Labour Officer to the Conciliation Officer, Trichur, for conciliation. The Conciliation Officer’s efforts proved in vain.
The last meeting for Conciliation appears to have been held on November 30, 1955.
On the following day the Union gave a strike notice and the workmen went on a strike with effect from December 9, 1955.
The strike ended on January 5, 1956.
Prior to this, on January 5, the Government had referred the dispute as regards five of the demands for adjudication to the Industrial Tribunal, Trivandrum. By its award dated October 17, 1957, the Tribunal granted the workmen’s demands on all these issues. The present appeal has been preferred by the management of the Chandramalai Estate against the Tribunal’s award on three of these issues. Are the workers entitled to get wages for the period of the strike ?”
Held–
It is clear that on November 30, 1955, the Union knew that conciliation attempts had failed. The next step would be a report by the Conciliation Officer, of such failure to the Government and it would have been proper and reasonable for the Union to address the Government at the same time and request that a reference should be made to the Industrial Tribunal. The Union however did not choose to wait and after giving notice on December 1, 1955, to the management that it had decided to strike from December 9, 1955, actually started the strike from that day.
It will not be right for labour to think that for any kind of demand a strike can be commenced with impunity without exhausting reasonable avenues for peaceful achievement of their objects. There may be cases where the demand is of such an urgent and serious nature that it would not be reasonable to expect labour to wait till after asking the Government to make a reference. In such cases, strike even before such a request has been made may well be justified. The present is not however one of such cases. In our opinion the workmen might well have waited for some time after conciliation efforts failed before starting a strike and in the meantime to have asked the Government to make the reference. They did not wait at all.
The conciliation efforts failed on November 30, 1955, and on the very next day the Union made its decision on strike and sent the notice of the intended strike from the 9th December, 1955, and on the 9th December, 1955, the workmen actually struck work. The Government appear to have acted quickly and referred the dispute on January 3, 1956. It was after this that the strike was called off. We are unable to see how the strike in such circumstances could be held to be justified.
The Tribunal’s conclusion appears to be that the strike though not fully justified, was half justified and half unjustified; we find it difficult to appreciate this curious concept of half justification. In any case, the circumstances of the present case do not support the conclusion that the strike was justified at all. We are bound to hold in view of the circumstances mentioned above that the Tribunal erred in holding that the strike was at least partially justified. The error is so serious that we are bound in the interests of justice to set aside the decision.
There is, in our view, no escape from the conclusion that the strike was unjustified and so the workmen are not entitled to any wages for the strike period.
Crompton Greaves vs. Its Workmen AIR 1978
Facts–
On December 27, 1967, M/s. Cromption Ltd, intimated its workmen’s Union its decision to reduce the strength of the workmen in its branch at Calcutta on the ground of severe recession in business.
The Union sought the intervention of the Labour Commissioner requested the Company to hold bipartite talk with the Union which was held on the morning of January 10, 1968 but no agreement could be arrived at.
The Assistant Labour Commissioner arranged another joint conference which was scheduled for January 12, 1968. On the afternoon of January 10 1968, the Company without informing the Labour Commissioner hung up a notice retrenching 93 of its Workman.
Treating the step taken by the Company as pretty serious the workmen resorted to strike with effect from January 11 1968 after giving notice to the appellant and the Labour Directorate and continued the same upto June 26, 1968.
Issues–
1. Whether the aforesaid strike was illegal or unjustified?
2. Whether workmen entitled to wages?
Held-
It is well settled that in order to entitle the workmen to wages for the period of strike, the strike should be legal as well as justified.
A strike is legal if it does not violate any provision of the statutes. Again, a strike cannot be said to be unjustified unless the reasons for it are entirely perverse of unreasonable.
Whether a particular strike was justified or not is a question of facts which has to be judged in the light of the facts and circumstances of each case.
It is also well settled that the use of force or violence or acts of sabotage resorted to by the workmen during a strike disentitles them to wages for the strike period.
Bank of India vs. T.S. Kelawala and Ors. 1990
Facts–
In 1977, some demands for wage revision made by the employees of all Banks were pending and in support of their demands, a call for a country wide strike was given.The appellant-Bank issued a Circular on September 23, 1977 to its managers and agents directing them to deduct wages of the employees for the days they go on strike. The respondent Unions gave a call for a four hour strike on December 29, 1977. Two days before the strike, the appellant-Bank warned the employees that if they participate in the strike, they would be committing a breach of their contract of service and they would not be entitled to salary for the full day. The appellant Bank by its circular directed the managers and agents to deduct the full day’s salary of those employees who participated in the strike. On a writ petition filed by the respondents, the High Court quashed the said Circular.
In the latter appeal, the appellant’s workers had indulged in “go-slow” in July 1984, thereby bringing down production. The workers did not attend to their work and were loitering in the premises and were indulging in go-slow tactics to pressurise the company to concede their demands. The company suspended its operation by giving a notice of lock out. It did not pay wages to the workers for July, 1984 on the ground that they did not work during all the working hours and had not their wages. The workers’ union filed a complaint before the Industrial Court complaining that the appellant company had indulged in unfair labour practice and that the lock-out declared was illegal. The Industrial Court held that the deduction of wages for July, 1984 on account of the go-slow was not justified. It also declared that the company had committed an unfair labour practice by not paying full monthly wages to the workers and directed the company to pay the said wages for the month of July, 1984. Aggrieved, the appellant company has preferred the appeal.
Held–
Whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employer can take disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages.
However, when misconduct is not disputed but admitted and is resorted to on a mass scale such as when the employees go on strike, legal or illegal, there is no need to hold an inquiry unless an employee contends that although he did not want to go on strike and wanted to resume his duty, he was prevented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it.
That was certainly not the situation in the present case. The Bank had done all its power to warn the employees of the consequences of their action. The Bank was therefore not liable to pay the salary.
It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employment and for which they were entitled to be paid. The service regulations provide for absence from duty of an individual employee as a misconduct.
When the contract, Standing Orders, or the service rules, regulations are silent, but enactment such as the payment of Wages Act providing for wage-cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment.
The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right. However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal.
Therefore, a legal strike may not invite disciplinary proceedings, an illegal strike may do so, it being a misconduct.
However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike. The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it. When workers resort to it, they do so knowing full well its consequences. During the period of strike the contract of employment continues but the workers withhold their labour. Consequently, they cannot expect to be paid.
The contract, which is this case is monthly, cannot be subdivided into days and hours. If the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month he served. If the employment-contract is held indivisible, it will be so for both the parties. There is no difficulty, inequity or impracticability in construing the contract as divisible into different periods such as days and hours for proportionate reimbursement or deduction of wages, which is normally done in practice.
The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed. As things stand today, they do not provide a remedy for mass-misconduct which is admitted or cannot be disputed. Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper.
The service conditions are not expected to visualise and provide for all situations. When they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so. The pro rata deduction of wages is not an unreasonable exercise of power on such occasions. Whether on such occasions, the wages are deductable at all and to what extent will, however, depend on the facts of each case.
Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for the whole day.
On the other hand, the employees may put in work after the strike hours and the employer may accept it. In that case the employer may not be entitled to deduct wages at all or be entitled to deduct only for the hours of strike. If statutes such as the Payment of Wages Act or the State enactments like the Shops and Establishments Act apply, the employer ,may be justified in deducting wages under their provisions. Even if they do not apply, nothing prevents the employer from taking guidance from the legislative wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is silent on the subject.
There cannot be two opinions that go-slow is a serious misconduct being a covert and a more damaging breach of the contract of employment. It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work. It has been roundly condemned as an industrial action and has not been recognised as a legitimate weapon of the workmen to redress their grievances. In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for disciplinary action for it. Hence, once it is proved. those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service.
The proof of go-slow, particularly when it is disputed, involves investigation into various aspects such as the nature of the process of production, the stages of production and their relative importance, the role of the workers engaged at each stage of production, the pre-production activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors hearing on the average production etc. The go-slow further may be indulged in by an individual workman or only some workmen either in one section or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the productive process. Even where it is admitted, go-slow may in some case present difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go-slow ceases which may be difficult to estimate. The deduction of wages for go-slow may, therefore, present difficulties which may not be easily resoluble.
When, therefore, wages are sought to be deducted for breach of contract on account of go-slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to he adjudicated by an independent machinery statutory or otherwise as the parties may resort to. The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable. It is, therefore, necessary that in all cases where the factum of go-slow and/or the extent of the loss of production on account of it, is disputed, there should he a proper inquiry on charges which furnish particulars of the go-slow and the loss of production on that account.
The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case. In the instant case, there is a finding recorded by the Industrial Court that there was a go-slow resorted to by the workmen resulting in loss of production during the said period. Since the said finding is not challenged, it is not possible to interfere with it in this appeal. Though the appellant is justified in deducting wages for the said period, in the facts and circumstances of the case it is directed that it will not deduct more than 5 per cent of the wages of the workmen for the month of July, 1984 when they indulged in go-slow tactics.
Absence from work without informing management amounts to misconduct and management can deduct wages and takes either disciplinary actions under standing order rules.
WAGES IN THE CASE OF LEGAL AND JUSTIFIED STRIKE:
Why this categorization of Justified and unjustified?
To determine wages during the strike and lockout period.
Syndicate Bank vs. Umesh Nayak AIR 1995 5J
Facts–
The question is whether workmen who proceed on strike, whether legal or illegal, are entitled to wages for the period of strike?
In the first two cases, viz., Churakulam Tea Estate and Crompton Greaves, the view taken is that the strike must be both legal and justified to entitle the workmen to the wages for the period of strike whereas the latter decision in TS. Kelawala has taken the view that whether the strike is legal or illegal, the employees are not entitled to wages for the period of strike.
To keep the record straight, it must be mentioned at the very outset that in the latter case, viz., TS. Kelawala the question whether the strike was justified or not, was not raised and, therefore, the further question whether the employees were entitled to wages if the strike is justified, was neither discussed nor answered.
Secondly , the first two decisions, viz., Churakulam Tea Estate and Crompton Greaves were not cited at the Bar while deciding the said case and hence there was no occasion to consider the said decisions there.
The decisions were not cited probably because the question of the justifiability or otherwise of the strike did not fall for consideration.
It is, however, apparent from the earlier two decisions, viz., Churakulam Tea Estate and Crompton Greave that the view taken there is not that the employees are entitled to wages for the strike period merely because the strike is legal. The view is that for such entitlement the strike has both to be legal and justified. In other words, if the strike is illegal but justified or if the strike is legal but unjustified, the employees would not be entitled to the wages for the strike period.
Since the question whether the employees are entitled to wages, if the strike is justified, did not fall for consideration in the latter case, viz., in T.S. Kelawala, there is, as stated in the beginning, only an apparent conflict in the decisions.
Court upheld the Churakulam and Crompton that workers are entitled to wages if the strike is legal and Justified.
Court said that the strike was illegal.
As in the case of TS. Kelawala, in this case also the question whether the strike was justified or not was not raised. No argument has also been advanced on behalf of the employees before us on the said issue. In the circumstances, the law laid down by this Court in TS. Kelawala , with which we concur, will be applicable. The wages of the employees for the whole day in question, i.e., 29-12-1977 are liable to be deducted.
Court wrongly reads Kelawala. Court does not struck down Kelawala and adjusts it with other two cases. Talked negatively about Trade Unions.
This decision is very demotivating for TUs.
Churakulam and Crompton were related to strike in private enterprise. Kelawala and Umesh Nayak concerned with strike in Public Utility services (defined in 2(n) ID Act).
Meghraj Case
That there cannot be blanket prohibition of going on strike of entire government workers.
Predominant responsibility of the worker to be looked at.
Inalienable Function (IF) to be looked at.
PN Mukharjee v Nagpur
Court talked about IF.
If a person is involved in IF such policy making, he cannot go on strike
Delhi University case
Driver would be worker under ID Act as he is not integral to the organisation.
Court differentiated between govt. employee and Industrial worker on the basis of the test Integral Function.
Sandeep Desai Article
Looked at right to strike from a different angle.
In ordinary parlance, Strike may be understood to mean “stoppage of work”. Oxford Dictionary describes it as “employees’ concerted refusal to work until some grievance is remedied;
The paramount object of any striking workmen is to coerce their employer to concede to their demands.
Today, the situation is such that a demand for a right to strike evokes contempt for the agitators. Scores of concessions given to workmen, coupled with the demands of liberalisation, privatisation and globalisation have obviated the need even for recognition of strike, let alone the right to strike.
Strike, by definition, is stoppage of work. Conceding the same as a right suffers from an inherent defect inasmuch as it violates the underlying spirit of employer-employee relationship. In other words, instead of promoting and multiplying, it scuttles and retards the production and distribution of goods.
Secondly, strike as a ‘right’ must have a concomitant ‘duty’. Admittedly, no right can exist in vacuum. Thus, some kind of a duty must be attributed to the employer. But such a duty is neither imaginable nor conceivable since such a concession would be abstract, self-defeating and meaningless. In other words, it makes no sense to say that workmen have a right to strike and employers have a corresponding duty to bear that.
One must also not forget that state has a duty cast on it to ensure uninterrupted production of goods and for supply of services and, therefore, a balance has been tried to be achieved between the conflicting claims of rival parties. In such a scheme, strike possesses no ideological base to raise it to the altar of a ‘right’.
Legislative Intent
An analysis of the Act reveals that none of its provisions confers a right to strike on any one. Except defining strike, the ID Act contains no provisions either favouring or encouraging strike.
In fact, the ID Act 1947 has several provisions that make the resorting to strikes very difficult.
Section 22 of the Act provides that a person employed in a public utility service cannot go on strike in breach of contract without giving to the employer six weeks’ notice and/or during the pendency of any conciliation proceedings.
Section 23 also contains certain general prohibitions. According to this provision a workman employed in any industrial establishment cannot resort to strike in breach of contract and when conciliation proceedings are pending before a board, labour court, tribunal/national tribunal or an arbitrator. Strike is also barred during any period in which a settlement or award is in operation in respect of any of the matters covered by the settlement or award.
Judicial and Legal Approach
Conceptually Right to strike cannot exists as a right because there is no corresponding duty as employer has no duty to enforce strike.
How ID Act does not envisage any entitlement discourse to right to strike.
Relies on Judgements like Kameshwar Prasad, Rangranjan, BR Singh.
All India Bank Employees’ Association case-
The court reasoned that the right to form associations and unions under Article 19 of Constitution is confined to citizens individually and this cannot be stretched to cover the groups to achieve the object for which they had united themselves. “It is one thing to interpret each of the freedoms guaranteed by the several articles in Part-III in a fair and liberal sense, it is quite another to read each guaranteed right as involving or including concomitant rights necessary to achieve the object which might be supposed to underlie the grant of each of those rights, for that construction would, by a series of ever expanding concentric circles in the shape of rights concomitant to concomitant rights and so on, lead to an almost grotesque result.”
That both under the Trade Unions Act as well as under Industrial Disputes Act, the expression ‘union’ signifies not merely a union of workers but includes also unions of employers. If the fulfilment of every object for which a union of workmen was formed were held to be a guaranteed right, it would logically follow that a similar content ought to be given to the same freedom when applied to a union of employers which would result in an absurdity.
This position in the AIEBA was emphatically reiterated and upheld subsequently in two cases viz., Kameshwar Prasad v. State of Bihar 1962 and Radhey Shyam Sharma v. Post Master-General 1962 respectively. Interestingly, both of them were decided by constitution benches.
Ex-Capt. Harish Uppal v. Union of India
The constitution bench of the Supreme Court came down heavily upon the lawyers’ strike. The court held: “lawyers have no right to go on strike or give a call for boycott, not even for a token strike.” Commenting on the pernicious effects of strike, the court further observed: “For just or unjust cause, strike cannot be justified in the present day situation. Take strike in any field, it can be easily realized that that weapon does more harm than any justice. Sufferer is the society- public at large.” Thus, it is evident, that, of late, the devastating and catastrophic effects of strikes on the society, and annihilation of the fundamental rights of the citizenry by the strikers, have captured the attention of the court.
Rangarajan case was no exception.
The case arose out of an unprecedented action of the Tamil Nadu Government terminating the services of all employees who had resorted to strike for their demands. Castigating the anarchy and chaos unleashed by the striking employees, the court expressed its anguish and disapprobation thus: “… government employees cannot claim that they can take the society to ransom by going on strike. Even if there is injustice to some extent, as presumed by such employees, in a democratic welfare state, they have to resort to the machinery provided under different statutory provisions for redressal of their grievances. Strike as a weapon is mostly misused which results in chaos and total maladministration. Strike affects the society as a whole and particularly when two lakh employees go on strike en masse, the entire administration comes to a grinding halt. In the case of strike by teachers, the entire educational system suffers; many students are prevented from appearing in their exams which ultimately affects their whole career. In case of strike by doctors, innocent patients suffer; in case of strike by employees of transport services, entire movement of the society comes to a standstill: business is adversely affected and number of persons find it difficult to attend to their work, to move from one place to another or one city to another. On occasions, public properties are destroyed or damaged and finally this creates bitterness among the public against those who are on strike.
Conclusion-
Strikes have played a crucial role in shaping and moulding the employer-employee relations and emancipation of workmen but with the passage of time and enactment of several social-welfare laws, they have lost their relevance. As Shah J observes: “Strike does more harm than justice. Sufferer is the society-public at large.
Mallikarjun Sharma Article
T K. Rangarajan v. Tamil Nadu (2003)-‘no fundamental statutory or equitable moral right to strike exists with the government employees’
Strike, which means ‘concerned stoppage of work by workers done with a view to improving their wages or conditions, or giving vent to a grievance or making a protest about something or the other, or supporting or sympathizing with other workers in such endeavour’2 is an age-old weapon in the hands of the working classes in their ‘encounters’ with the might of capital.
Right cannot exist in vacuum. It is accompanied by Duty. If workers have right to strike, employer has duty to correspond to the that right.
UDHR
India is a member state of the ILO and has ratified about 36-37 of its conventions. But it has not ratified Convention No. 87 of 1948 concerning freedom of association and protection of the right to organize as also the Convention No. 98 of 1949 concerning right to organize and collective bargaining, both of which conventions assure the right to effective collective bargaining (which includes right to strike, though not expressly stated) by the employees and also mention that such rights are also available to the public servants in government administration as also to members of the armed forces and police subject of course to restrictions in laws made in that behalf by the concerned member states in their specific conditions. In contrast, Pakistan and Bangladesh, generally decried as countries groaning under military rule or perverse democracy, ratified the said conventions long back.
Indians boast to be the world’s largest democracy and have the longest Constitution of the world, acclaiming it as second to none in its worth, nobility and greatness. But actually we lack constitutional protection of many important human and democratic rights such as this right to effective collective bargaining including the right to strike whereas even small and politically-not-so-significant third world countries have incorporated these rights in their Constitutions. For example, article 32 of the Constitution of Rwanda, a very small African State, lays down: “The right to strike shall be exercised within the laws by which it is regulated. It may not infringe upon the freedom to work.”
However, the right to strike has been statutorily recognized, though not positively and directly but in an indirect manner, by the labour statutes in the country.
Then section 18 of the Trade Unions Act confers civil immunity to registered trade unions and their members from any possible action for damages, etc. arising from the breach of contract said to have occurred due to a strike. And this also means that a strike is not treated as a breach of contract enabling the employer to terminate the contract of service merely on that basis.
Current Discourse on Strike-
New Industrial Relations Court Bill of 2015 recommended 3 courts for labour dispute-
1. Industrial Relation Court
2. Industrial Court on Minimum Wages
3. Industrial Court on Social Security
2(1) of the Bill talks about strike
It broadens the definition of strike-
If 50% workers go on strike that would amount to strike
Extending the liability of strike over workmen
Proposed S.71 prohibits strike on every Industrial Establishment except on notice.
Problem of Notice-Employers start conciliation proceedings.
Conciliations are generally not in favour of labourers due to involvement of 3rd parties including State.
The Problem with Medium and small scale enterprises-
If workers are less than 20 then most labour protective legislations providing for gratuity, provident fund, bonus, etc does not apply.
Chemicals & Fibres of India Ltd. vs. DG Bhoir and Ors. AIR 1975
Individual dispute becomes trade union dispute if TU espouses the cause of that individual dispute.
Herbert son case 1977 3J
Minority union cannot challenge even if majority unions enters into agreement.
Tata Chemical Case 1978 2J
Minority union can challenge even if majority unions enters into agreement.
Law of contract will not be applicable.
Whether Employer can ask for injunction against Strike?
Kameshwar Singh and BR Singh case.
Broader Tort-Deliberate injury to cause harm.
Bring TU Act from next class.
Mannequins at Work-Anima Muyarath
Women workers employed as showroom sales executives (commonly called as saleswomen or salesgirls in the retail textile show-rooms are functioning like mannequins for the promotion of business.
The salesgirls in the retail sector have also become “living automatons” in the workplace where they have to stand the whole day, devoid of breaks and basic amenities. This has resulted in the deterioration of the health conditions of the workers in the retail sector.
Feminisation of the labour force can be understood by an increase in the female workforce participation rate compared to men as well as women taking over some jobs traditionally done by men (Standing 1989).
There are plenty of reasons for the traders to prefer women over men.
First and foremost, women workers can be paid lesser than men.
As per the Global Wage Report 2016 –17 released by the International Labour Organization (ILO), gender wage disparity in India is among the worst in the world. 27% wage disparity.
The retail sector, which is an informal sector, is highly unorganised, and hence is filled by the female workforce.
They found that the “feminine knowledge” and maternal nature of female workers helped in promotion of sales.
Both male and female retail employees were expected to adopt positive feminine traits of attentive service.
Equal Remuneration Act does not apply to unorganised sector.
The wage of the female worker is considered only as a supplementary income, despite the fact that many of them are the sole breadwinners of their families.
Unlike small and medium establishments, the big textile establishments are more organised, and most of the stringent rules of service laid down by the employer are violative of the employee’s right to life and contrary to the provisions of labour laws. The absence of any facilities to sit while at work is a major issue faced by the salesgirls in general, and this is a severe problem in most of the textile establishments.
They are also deprived of rest breaks and they are only allowed half an hour for lunch break in the whole 12 hours of work time.
This time period is not enough to take rest considering the strenuous and demanding working conditions.
The societal conditions are such that the male employees can take rest once they get back home after a whole day of work.
Meanwhile, this is not possible for women as they have to do the household chores at home as well.
Due to the prolonged standing in the workspace many of the salesgirls suffer from varicose veins even before reaching their middle age.
Standing for a long time can have adverse effect on women’s reproductive health as well. It can result in low birth weight, pre-term birth, spontaneous abortion, etc
These illness are also not covered under Employe Health Insurance cover.
In most of the establishments surveyed in Kozhikode, during the working hours, the women employees need to get permission from the floor managers to use toilet facilities. As the “punching” system is also prevalent in most of the big textile establishments, the time spent in the toilets will be recorded.
Lack of toilet facilities and strict timings force women workers to eat and drink less, which in turn, would affect their health through malnutrition, dehydration and the lack of adequate fluid replacements.
It results in health situations like cramps, rashes and heat strokes (Tilley et al 2013).
The holding up of urine in the bladder and refraining from drink- ing water will result in urogenital infections like urinary tract infections, burn- ing sensation, oedema or swollen legs and kidney diseases.
While men also face such problems due to lack of toilet spaces, they often resort to public places to relieve themselves which women cannot do owing to the societal moralities and susceptibility to sexual assaults.
While health and comfort levels should be the criteria to choose a dress code in a workspace, the salesgirls in big textile establishments are mandated to wear a sari which is highly uncomfortable for daily use.
It restraints the movement of a person compared to other clothing.
The general trend suggests that salwar kameez or churidar are the preferred attire of choice for many working women across India because they are convenient to travel in the overcrowded public transportations and considering the soaring temperatures, are more comfortable than wearing sari.
The purpose of making sari as the uniform of salesgirls is to keep the textile showrooms more attractive for the customers; this itself is a case of objectification of women’s bodies. While this is another marketing strategy of the textile employers, the price of the uniform is de- ducted from the salary of the workers.
The salesgirls could achieve a sufficient salary only if they increase the sales of the shop as much as they can.
The unhealthy competition which arises out of this situation ruins the healthy relationship between the workers. On the one hand, the “incentive” increases the sales of the shop, and on the other, it blocks the unity among the workers.
Some of the textile managements impose fine on workers if they talk to each other during the working hours. Workers are also entitled to get overtime wages if they work for more than eight hours a day.
Struggle–
Historically, women’s trade union movements arise at a time when the mainstream trade unions ignore the interests of the women workers completely.
On the international women’s day in 2014, a collective of women workers from the unorganised sector, Penkoottu, started campaigning for the textile retail workers’ right to sit by releasing a pamphlet named “seize the right to sit;” subsequently, two sitting strikes took place in different parts of Kerala. Both the strikes were inspiringly successful.
The salesgirls are reluctant to join trade unions due to the fear of losing employment. The management always discouraged union activities among these women workers. In certain shops the managements impose fines upon workers if they enter any campaigns.
As a result of the “right to sit campaign” initiated by women’s groups like Penkoottu, Asanghaditha Mekhala Thozhilali Union (AMTU) in Kozhikode, and the late interventions by trade unions like the Centre of Indian Trade Unions (CITU) in Alappuzha, the government was forced to take action and an ordinance was passed amending KSCE Act, 1960 in 201415 which has become an act in 2015. While the ordinance came in the light of the “right to sit” campaign, the concept of right to sit was not fully incorporated in the legislation. Instead of incorporating the “right to sit” in the workspace, a provision for a restroom is introduced. It is specified in the provision that a restroom should be furnished with adequate number of seats. But chairs in the restrooms will not solve the issue of salesgirls as it is practically not possible to go to the restroom after at- tending each customer and come back for the next. Seats should be provided in the workspace itself, in order to solve the problem.
Women TU SEWA
Various struggles ongoing regarding domestic workers.
Trade Union and Women
We don’t see any woman TU leader.
Gender discrimination in TU.
Charu Khurana case-women was not allowed to become a member of TU, only if she works as a Hairdresser.
Reorganisation of workforce in post-liberalisation era.
Anganwadi workers strike in Maharashtra.
They are integral part of National Health Mission Program.
ICD-Integrated Child Development Program.
Asha and Usha programs.
But they complain against the voluntary character of the Job.
They demand to be considered as workers and at least given the benefits of unskilled workers.
Women in Plantation workers-
Women do lot of bending works.
Face a lot of problems.
Unfortunately none of the TUs espouse their cause.
Women formed Women solidarity groups.
Traditional Labourers
Regular
Permanent
Casual
Seasonal
1983
The first oil shock which lead to the first wave of liberalisation in field of seeds, oil and fertilizer.
After effect of retrenchment on employer-
Kanpur leather factories.
Massive retrenchment in those factories in 1950s.
Injustice to workmen.
Nehru amended ID act and Chapter 5B was added.
The chapter talks about security of tennure.
Rationalisation without tears
Removing surplus labourers without causing hardships.
Every section of ID Act has a History.
25B ID Act defines continuous service as 240 days of working. 15 days salary for every continuous period of service+1 month notice. If employer has more than 100 workers, he has to take permission from government for retrenchment.
In 2007 SC explained intention of S.2(o)(b)(b) ID Act.
2015-
44 legislations are complied to 3 legislations.
But all informal sector have no right to organise/unionise
Such as sweepers
COLLECTIVE BARGAINING
One of the important rights that evolve from freedom of association is Right to Collective Bargaining. Though the law doesn’t very expressly talks about it as a right under the I.D. Act we come across this process of collective bargaining under Sec. 2 (P) of the Act r/w Sec. 12 & Sec. 18 of the Act.
Article 19(1)(c)-
Two types of CB
1. Bi-Partite-Bargaining between parties.
2. Tri-Partitie
Prominent DSM in UK is Bi-Partite
CB basically means Bi-Partite. There should not be intervention from 3rd parties.
But under original ID Act envisaged only Tri-Partite conciliation. Only after 1966 after the case of Pune Mazdoor Sabha v VK Dhulia, court said that since it was contract between two parties, law of contract will apply. There was huge hue and cry by trade unions. So the ID act was amended to incorporate collective bargaining.
S.2(p) ID Act- Settlement means 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.
Talks about two kind of settlements
Agreement-signed by parties.
Conciliation-to be signed by officer
Conciliation are generally inefficient and have little training in labour law.
S.4 ID Act-The appropriate Government may, by notification in the Official Gazette, appoint such number of persons as it thinks fit, to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.
They rarely know the technique of mediation
They generally request the employer to come to a settlement.
No separate mechanism of settlement in India like in Australia.
Provisions of Arbitration and conciliation Act are not applicable to Industrial Dispute. (As per S.10 of ID Act)
After conciliation officers steps in, the employer will sit with TU separately and both bi-partite and tri-partite will go simultaneously.
1st Method- There would be industrial dispute, form H will be prepared and conciliation officer will be called and form H will be converted to form O. Basically bipartite becomes tripartite.
Either u draft the settlement and then call the officer or call the officer and then draft the settlement.
It gets the colour of settlement
Third Practice-Both parties formulate an agreement and send it to conciliation officer.
All this drama is because of S.18(1) and S.18(3) of the ID Act.
S.18-Persons on whom settlements and awards are binding.
A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement.
Subject to the provisions of sub-section (3), an arbitration award] which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.
A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub-section (3A) of section 10A] or an award of a Labour Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on—
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal], as the case may be, records the opinion that they were so summoned without proper cause;
(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;
(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.
Disproportionate weightage has been given to 18(3) which favours conciliation.
Collective Bargaining generally happens between Employer and Recognised/Majority/Representative TU.
Disproportionate weightage has been given to conciliation rather than adjudication as a form of collective bargaining
Whether 18(1) agreement get elevated to 18(3) agreement at any point?
Very less cases where there has been comparison between different settlement mechanism
Herbertsons Ltd. vs. Their Workmen, 1977 3J
Facts–
There was 18(1) agreement between majority union and employer. Later minority union claimed that large number of majority union members jointed its membership hence it should be substituted as respondent. Employer recognised the minority union as bargaining agent and the tribunal substituted the majority union with the minority union. The majority union challenged this.
Issue-What is the representative status of majority union in a collective bargaining?
Held-
Voluntary settlement much better than adjudication.
Par 21-when a recognised union negotiates, individual workers cannot challenge the settlement reached. Once there is a recognised union, individual workers cannot challenge the bargaining.
Practice becoming an important backbone of collective bargaining.
If the settlement is fair and reasonable, then principle of severalty won’t apply. Settlement has to be taken as a whole.
Fairness criteria- settlement entered into by majority union where there is no coercion and duress. Fairness depends upon facts.
18(1) converted to 18(3) the moment majority union…,
Rights of registered TU
Immunities
If the settlement was fair and just it would allow the parties to be governed by the settlement substituting the award. Since a recognised and registered union had entered into a voluntary settlement this Court thought that if the same was found to be just and fair that could be allowed to be binding on all the workers even if a very small number of workers were not members of the majority union.
In the instant case the numerical strength of the members of the 2nd respondent, who are workers of the company, would also have an important bearing as to whether the settlement accepted by the majority of the workmen is to be considered as just and fair. Not a single worker of the company claimed before the Tribunal to be its member and asserted that the settlement was not fair and just. All the workers of the company had accepted the settlement and received the arrears and emoluments in accordance with the same.
When a recognised union negotiates with an employer the workers as individuals do not come into the picture. It is not necessary that each individual worker should know the implications of the settlement since a recognised union which is expected to protect the legitimate interests of labour enters into a settlement in the best interests of labour.
Having regard to the totality of the terms of the settlement it is difficult to hold that the terms are in any way unfair or unreasonable. An adjudication has to be distinguished from a voluntary settlement. By the settlement labour has scored in some aspects and saved all unnecessary expenses in uncertain litigation. The settlement cannot be judged on the touchstone of the principles laid down by this Court for adjudication.
There may be several factors that influence parties to come to a settlement as a phased endeavour in collective bargaining. Once cordiality is established between the employer and labour in arriving at a settlement there is always a likelihood of further advance in the shape of improved emoluments by voluntary settlement, avoiding friction and unhealthy litigation. This is the quintessence of settlement which courts and Tribunals should endeavour to encourage.
It is not possible to scan the settlement in bits and pieces and hold some parts good and acceptable and others bad.
Unless it can be demonstrated that the objectionable portion is such that it completely outweighs all the other advantages gained, the Court will be slow to hold a settlement as unfair and unjust. the settlement has to be accepted or rejected as a whole.
In the instant case the 3rd respondent representing the large majority of the workmen has stood by this settlement which is a strong factor difficult to ignore. When a union backed by a large majority of workmen has accepted a settlement in the course of collective bargaining, this Court would not interfere with the settlement.
NOTE- There is no certainty in Labour jurisprudence
Tata Chemicals vs. The Workmen, 1978 2J
Facts–
The appellant, a Public Limited Company has its factory at Mithapur in the State of Gujarat. It was carrying on its dealings with Sangh which was a recognised Union till 25-1-1973. Later on Employees Union came to be recognised under the Code of Discipline, in view of the fact that it had 55% of the total number of employees as its members. The appellant accorded recognition to the Employees Union with effect from 25-1-1973.
On 18-6-1973 the Employees Union submitted a charter of demands which, inter alia, included a demand for dearness allowance at 100% of Ahmedabad Cotton Textile rate.
Meanwhile, on 9-7-1973, the Sangh representing 800 workmen of the concern also submitted its charter of demands which included a demand for dearness allowance as paid to the workmen of the Cotton Textile Industry. The appellant arrived at, an agreement with the Employees Union in respect of the demands submitted by the latter. It was agreed between the parties that the settlement would remain in force for a period of 3 years with effect from 1st January, 1974.
On 21-1-1975 the State Government made a reference to the Industrial ‘tribunal for adjudication of the dispute raised by the Sangh. Later on, the Employees Union abandoned its initial stand and supported the demand of the Sangh on the ground that the appellant had made huge profits. The appellant contended that in view of the settlement with the Employees Union, the Sangh was precluded from raising any dispute which was the subject matter of reference to the Tribunal. It also contended that as the benefit accruing from the settlement had been and was being taken by all the workmen the reference was incompetent. The demand for variable dearness allowance was also opposed by the appellant on the ground that the employees were being paid dearness allowance in accordance with the recommendation of the Central Wage Board.
The Tribunal awarded dearness allowance varying from 85% to 95% of the Ahmedabad Textile dearness allowance.
Held–
An analysis of S.2(p) of the Industrial Disputes Act, 1947 which defines settlement and section 18 of the Act show that a settlement which is arrived at otherwise than in the course of conciliation proceedings is. binding only on the parties to the settlement who have subscribed to it in the prescribed manner.
In the present case since the agreement was not arrived at in the course of conciliation it could not bind any one other than the parties thereto. The fact that the Employees Union which had been duly recognised under the Code of Discipline arrived at the agreement with the appellant Company could not operate as a legal impediment in the way of the Sangh which was not a party to the agreement to raise a demand or dispute with regard to the variable dearness allowance limited to Ahmedabad cost of living index or affect the validity of the reference by the Government or the jurisdiction of the Court to go into the dispute.
A minority union can validly raise an industrial dispute is clear from section 2(k).
The acceptance of benefit under an agreement by workers who are not parties to the agreement cannot amount to acquiescence. Even if 99 per cent of the workers have impliedly accepted the agreement it will not put an end to the dispute before the Labour Court and make it functus officio.
18(1) is to be literally looked at. No need to read 18(1) and 18(3) together.
2(k) does not stress upon majority and minority trade union. Its not the case that only majority union can raise dispute.
Problems with this case–
1. When there is no recognition of majority union, the court steps in and adjudication takes place.
2. Dilution of collective bargaining spirit.
3. Promotes inter-union rivalry.
4. Here it was 18(3) settlement yet court said that minority union can challenge.
Tata Engineering & Locomotive Co. vs. Their Workmen, 1981 3J
Facts-
In conciliation proceedings in relation to the demands of one of the two unions (Sanghatana) of workers of the appellant-company a settlement was reached. At the instance of the second union (Telco Union) which was dissatisfied with the settlement, the Government referred the dispute to the tribunal. Before the tribunal the company contended that since 564 out of 635 daily rated workers to whom the settlement reached by the Sanghatana related, had assented to it, the dispute no longer survived.
Rejecting the Telco Union’s is contention that the settlement was vitiated by duress, coercion or false promises, the tribunal held that it was binding on the parties under section 18 (1) read with section 2 (p) of the ID Act 1947.
Although the tribunal found that the settlement was just and fair in most aspects it held that an increase in the additional daily wages was called for in respect of certain categories and calculated the increase separately for each grade. The tribunal refused to act upon the settlement.
Held–
The declaration signed by 564 workers of the company constituted presumptive proof of the fact that the signatories to it were all members of the Sanghatana when they signed it. In the absence of any evidence that any of the signatories to the declaration was not one of the 635 workers or that any signature appearing in the declaration was forged or fictitious the assertion of each signatory that he was a member of the Sanghatana is to be presumed to be correct until it is shown to be false.
If the settlement had been arrived at by a vast majority of the concerned workmen with their eyes open and was accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers were not parties to it or refused to accept it or because the tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did. The question whether a settlement is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication.
Court followed Herbertson but didn’t say that Tata Chemical is wrong.
Para 7 ‘It is further unquestionable that a minority union of workers may raise an industrial dispute even if another union which consists of the majority of them enters into a settlement with the employer (vide Tata Chemicals Ltd. v. Its Workmen).’
But later court says that settlement is binding on all members.
General Manager, Security Paper Mills vs. R.S. Sharma, 1986
Facts–
Representative union versus minority union
Held–
S.19 provides for primacy of majority trade union but these cases by allowing minority unions to challenging settlement entered by majority union disregarded the primacy given to Majority Union under S.19 ID Act 1947.
S.19- Period of operation of settlements and awards-
(1) A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute.
(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement settlement is signed by the parties to the dispute, and shall continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement.
(3) An award shall, subject to the provisions of this section, remain in operation for a period of one year from the date on which the award becomes enforceable under section 17A:
Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit:
Provided further that the appropriate Government may, before the expiry of the said period, extend the period of operation by any period not exceeding one year at a time as it thinks fit so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.
(4) Where the appropriate Government, whether of its own motion or on the application of any party bound by the award, considers that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal for decision whether the period of operation should not, by reason of such change, be shortened and the decision of Labour Court or the Tribunal, as the case may be on such reference shall, be final.
(5) Nothing contained in sub-section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.
(6) Notwithstanding the expiry of the period of operation under sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.
(7) No notice given under sub-section (2) or sub-section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be.
Labour Right Activists demand for recognition of TU in India. Justice Gajendragadkar recommended secret ballot method for recognition of TU.
Maha, WB, Rajasthan, Gujarat- Follow verification Method
Only WB and Kerala follow secret ballot.
Rail Coach Factory Men’s Union v Union of India 2010
The union belonged to production unit. Recognition process in Railway is Zonal.
Whether men’s union should be taken into recognition.
Court said that no.
MRF United Worker’s Union v TN
There was a union in the Industry which always stood with the Employer. Unfair Labour Practices. Sponsoring a TU by Employer is unfair labour practice (Schedule 3 of ID Act). MRF went to ILO.
Court looking at code of conduct for recognised TU. Code of conduct has become an important code of discipline in labour jurisprudence. Code of Conduct 1962. There are even caste based TU.
6 Rights of a recognised TU-
1. Enter into bargaining with Employer
2. Put up notice in Premise
3. Call for a General Body Meeting
4. Enter into discussion with Employer and Workers
Court said that let MRF follow verification method but secret ballot is better.
Yellow Union- A TU which works against the interest of majority of workers.
Article
QUESTIONS ON RECOGNITION– By Sarath Chandra
Existing industrial relations laws do not stipulate an acceptable and democratic method of determining the bargaining agent and fail to adequately protect the rights of the majority union. As long as these issues are evaded neither free collective bargaining nor industrial peace is possible.
Intra-Union Rivalry
Initially India had only one union AITUC. Later different TUs came into being. Revolutionary leaders turned towards communism and liberal turned congress. This gave rise to
Meerut Conspiracy-Bolshevik revolution influenced TU leaders were arrested by British.
Royal Indian Navy Mutiny– Officers mistreated the kitchen workers who were largely Indians.
6 states have state law relating to recognition of TU
Maharashtra has oldest recognition method but follows verification method.
It provides for eligibility criteria for applying for recognition-
2 Years standing as TU post registration
TU should have at least 30% of votes for the preceding 6 months
Then verification method will be followed by officer.
Industrial court supervises all procedure of recognition.
Effect of 18(1)
The settlement entered into by majority union is binding on all workers.
Balmer Lawrie Workers’ Union v Balmer Lawrie And Co. Ltd. 1984
They were challenging the rights of the recognised union under S.22 of Maharashtra Act. They also challenged the 15% deduction of arrears from employees wages.
Para 1.2 and 1.3
…hard won battle sentiments….’
There has to be some compromises workers have to do to get better wages. When recognised TU enters into a settlement, its for the entire workers indiscriminately. When recognised TU makes funds, it for beneficial activities of entire workmen and not only for members of RTU so the deduction is fair.
Automobile Products of India v Association of Engineering 1990
2 rounds of litigation. NRTU challenged RTU on the basis that latter had lost 30% of votes and its recognition has to be cancelled. Industrial court appointed a IO. In the meanwhile TUs got into a settlement and proposed that election should happen according to secret ballot method to determine the representative TU. The appellant union got elected and respondent union raised a dispute stating that there was some irregularity in deciding the voters list. Court said that law prescribes verification method and it should have been followed. The question is whether settlement reached between TUs would have more value than statutory method. Court said no. Generally in case of settlements between TUs court does not interfere but here court followed rigid procedure.
Even now labour reforms does not contain any provision on recognition. Interestingly Industrial code use the word ‘negotiating agent’ and not Trade Union. Intention is to weaken Trade Unionism.
PHILOSOPHY OF TRADE UNIONISM
Two kinds of collectivisms has been observed in the world-
1. Class conscious point of view
That there are two classes who are always in fight with each other.
TU only for proletariats
2. Non-class conscious point of view
Believe in cooperation with the employer
Demand based on negotiation with the employer.
Catholic, Protestant and Democratic TUs
TU can also be formed for the Employer.
After the 1st international conference of workers in 1867, different forms of collectivisms originated in Anglo-Saxon countries.
In US TU originated as pure and simple TU. Samuel Gompers was a TU leader.
They don’t believe in politicisation of TU
They feel that TU should be formed in a temporary manner to fulfil demands.
They were largely local craft based TU
They believe in economic determinism
Anarcho Syndicalism TUs
Che Guvera was upholder of this.
Very revolutionary in nature.
They believe bourgeois class should not be there
They don’t believe in state as such.
They don’t believe in party affiliation as well
Believe in militant strike.
Does not believe in creating TU fund as it will lead to corruption, corporatisation and capitalisation. When they go on strike, they immediately collect fund from workers.
Socio-Democratic TUs
Generally prevail in common law countries
That there shouldn’t be sudden transition from capitalism to socialism. It should be achieved through democratic means.
TU should fight within the structure of capitalism
Reformism or Fabian socialism
Nehru upheld it.
Political party affiliation.
Triadic affiliation-TU get affiliated to political party which get elected and takes care of workers interests.
Russian Socialism
Specific to Russia
Believed in one TU and one Political party
That workers demand is inclusive of social, culture and economic demands.
It failed in 1982.
China follows a variation of Russian model.
Indian Trade Unions
Generally follow social democratic TUs
Takes care of both workers and employers
Specific provision on outsider in TU Act
S.22 restricts no. of outsiders in TU
In unorganised sector half of the office bearers can be from outside sectors.
In organised sector only 1/3rd office bearers can be from outside
Difference between Officer and Office bearer of a TU
1. Office bearers are elected through elections.
2. Officers is selected by TU to conducted the workings of TU. He acts like coordinators
Initially there was no restriction on no. outsiders who can become office berries of a TU but amendments in 1965 and 2001, it diluted representation of outsiders.
Organised sector is more unionised.
SBI Staff Association v SBI 1996
Talked about S.22.
Whether restriction on no of outsiders was legitimate?
Even in immunities there is reflection of social democratic TUs.
Of lately contract labour has been on rise. Informalisation demotivates unionisation due to rotation of workforce.
1. Contract labourers are migrant labourers
2. Contractor has rotation system
3. Women workforce get rotated every 75 days.
4. They are out of the organised labour law.
5. New kinds of works does not demand reliable hands.
6. Why political consciousness required in worker force?
7. For workers unity, confidence and self-respect
8. Workers as a class negotiate with Employer
9. They have to stand together otherwise nobody will listen to them.
10. Class consciousness
11. Importance of standing together.
JUDICIAL INTERPRETATION OF OUTSIDERS IN TU
SBI Staff Association vs. SBI 1996 1685
Facts-
Staff Association elected Awasthi
Ordinary Members are insiders
Honorary/Temporary members can be outsiders
S.22 and S.6(e) of TU Act
S.3 ID Act-Works Committee to bring amity and good relations. Takes up minor issues.
S.36– representing the workmen before adjudicatory forum
Held–
S.3 and 36 of ID Act are to be read together and compared with S.22 of TU Act. Problems-Different objectives
Work Committee members should be insiders.
S.3 borrowed from Trade Dispute Act 1927
Dealt with S.22 legally which became Jurisprudence
So only insider members can be members of adjudication/negotiation process on behalf of workers. But it defeats the purpose of S.22
Neelimarla Jute Mills vs. Govt. of A.P. 2001
Request was filed in Court to restrain outsiders from participating in Industrial dispute
The company was a sick company.
So only insider members can be members of adjudication/negotiation process on behalf of workers.
Mukherjee PK v Industrial Court 1996
Two elected office bearers got promoted to executive cadre.
Then there was a demand by TU Members they should be ousted as they became outsiders.
Court said that TU Act does not bifurcate between workmen. The only bifurcation is between workmen and employer.
MODULE II: JURISDICTIONAL ISSUES IN INDUSTRIAL RELATIONS
Definitions of Industry by courts
Can be divided into 5 phases-
Phase 1- 1950-1962
Broad interpretation given by courts.
Phase 2-1962-78
Phase 3-
Phase 4-
Phase 5- (1995-2006)
CASE LAWS-
In first two cases, Banerjee Baroda case, court tried to bring municipalities under ‘government’ by saying definition of industry needs to be taken as a whole. Gave a holistic definition
3rd case cooperation of City of Nagpur clarifies a lot of point.
City of Nagpur
6 tests were laid down.
Noscito Socis- taking the colour from trade or business.
4 department not industry and 16 department is industry.
What is not industry?
Predominant activity test. It has to be related to industrial activity.
When a person is employed for personal service of the employer then it is not an industry
Legal sovereign functions. (from Australian jurisprudence)
In Madras Gymkhana case, court said legal sovereign functions can be determined by the test whether it can be done by a private institution.
No investment does not mean an entity is not an industry.
4th case BWSSP
Dispute arose because of termination of 2 employees in hospital (staff nurses). Replaced with 2 discharged employees. Issue was with respect to 25(f) and 25(h).
25(h) says if you retrench and vacant position, priority is given to retrenched one.
Whether charitable hospital come under industry?
Triple Tests
Profit making is not necessary criteria to qualify as an industry.
But cooperation between employer and employee is an important criteria.
Paragraph no. 16 and 17-‘If a charitable undertaking is run by a private enterprise, would that become an industry? Yes.
Organisation in the form of trade and business.
Satisfaction of material needs of the community
Whether Research Association is Industry?
Yes. As it passes the triple test.
Worker and employer of a research entity has no right over the research work.
Teachers are not covered under ID Act and they don’t come under the ambit of industry.
Ahmadabad Teachers association case-court said that teachers not entitled to gratuity.
Whether law firm is an industry?
Ahmedabad textile industry’ research association v state of Bombay 1961 SC 484
No. Used the liberal vocation test.
Each solicitor does his case on his own and for himself. So there is no cooperation of others in producing the knowledge. In law firms, solicitors work individually.
Law firm is also a partnership so no employer has such.
Though subordinate staff does instrumental work, but it is not directly related to solicitors pursuant of clients.
Hospital Mazdoor Sabha
Triple test was propounded-
1. Systematic activity,
2. Co-operation between employer and employee and
3. Production of goods and services calculated to satisfy human material needs,
Plus one more test- ‘Organisation Test’
Harinagar Cane Farm v Bihar
Whether agriculture workforce is an industry?
Court said that if you look the lists in constitutions, Industrial workforce is under concurrent list and agricultural workmen under state list. It means they were intended to be treated differently.
If there is processing unit is attached to the agricultural work, it’s an industry.
Para8- ‘In dealing with the present appeal….2(j).
University of Delhi v Ram Nath
Para 6, 9, 11, 17
Analogous Activity Test
Has two characters-
1. Organisational Form
2. Commercial Character
If a question comes whether an entity is an industry, u have to write both perspectives and then write your own perspective.
Madras Gymkhana Club case
Created to offer recreational activities to its members.
Members asked for better payment of wages.
Whether Gymkhana Club an Industry?
Whether there was satisfaction of material needs of substantial members of community
Since it was members club that gave service to members, there is no service rendered to community as such.
Whether there was any commercial activity involved in the Gymkhana club?
No. No larger commercial activity. Membership only limited to affluent/elite classes.
The analogous activity test (activity analogous to trade or business) was not looked at.
Safdarjung v Kuldeep Singh Sethi 1970 6J
Facts–
Kuldip Singh Sethi was appointed as a Store-keeper in 1956 in the pay scale of Rs. 60–5–75. In 1962 Government re-revised the pay scales of Storekeepers to Rs. 130–5–160–8–200–EB–8–280–10–300 with the usual allowances. The order was to take effect from the date of issue. Kuldip Singh Sethi complained by his petition that the Management of the Hospital had failed to give him nay in this scale and claimed Rs. 914 for the period November to May 31, 1968. Hospital claimed that it is not an industry.
Issue–
Whether Safdarjung Hospital an industry?
Whether TB research laboratory an industry?
Held–
Refers to Madras Gymkhana case
Economic activity (coming from analogous activity tests) becomes an important ingredient in determination of an industry.
So Safdarjung hospital not an industry
In case of TB research laboratory, applied predominant activity test (DU case)
Said that in case TB research laboratory, predominant activity is research.
Bangalore Water Supply & Sewage Board (BWSSB) v A. Rajappa, 1978 7J
Facts–
The respondent employees were fined by the Appellant Board for misconduct and various sums were recovered from them. Therefore, they filed a Claims Application No. 5/72 under Section 33C (2) of the Industrial Disputes Art. alleging that the said punishment was imposed in violation of the principles of natural justice.
Held–
According to Beg– While defining Industry, its important to look at the preamble to find the object of the act, legislative history, socio-economic ethos of the country and surrounding circumstances. “The result is that we have then to turn to the preamble to find the object of the Act itself, to the legislative history of the Act, and to the socioeconomic ethos and aspirations and needs of the times in which the Act was passed.”
I think the phrase ‘analogous to industry’, which has been used in the Safdarjung Hospital case (supra) could not really cut down the scope of “industry”. The result, however, of that decision has been that the scope has been cut down. I therefore, completely agree with my learned brother that the decisions of this Court in Safdarjung Hospital case and other cases mentioned by my learned brother must be held to be overruled. It seems to me that the term ‘analogous to trade or business, could reasonably mean only activity which results in goods made or manufactured or services rendered which are capable of being converted into saleable ones. They must be capable of entering the world of “res commercium although they may be, kept out of the market for some reason. It is not the motive of an activity in making goods or rendering a service, but the possibility of making them marketable if one who makes goods or renders services, so desires, that should determine whether the activity lies within the domain or circle of industry. But, even this may not be always a, satisfactory test.
This leads one on to consider another kind of test. It is that, wherever an industrial dispute could arise between either employers and their workmen or between workmen and workmen, it should be considered an area within the sphere of ‘industry’ but not otherwise. In other words, the nature of the activity will lie determined by the conditions which give rise to the likelihood of occurrence of such disputes and their actual occurrence in the sphere. This may be a pragmatic test. For example, a lawyer or a solicitor could not raise a dispute with his litigants in general on the footing that they were his employers. Nor could doctors raise disputes with their patients on such a footing. Again, the personal character of the relationship between a doctor and his assistant and a lawyer and his clerk may be of such a kind that it requires complete confidence and harmony in the productive activity in which they may be cooperating so that, unless the operations of the solicitor or the lawyer or the doctor take an ORGANISED AND SYSTEMATISED FORM OF A BUSINESS OR TRADE, EMPLOYING A NUMBER OF PERSONS, IN WHICH DISPUTES could arise between employers and their employees, they would not enter the field of industry.
All public sector run industries cannot be excluded from the scope of industry.
According to Krishna Iyer-What is the common worker or ordinary employer to do if he is bewildered by a definitional dilemma, and is unsure whether his. enterprise say, a hospital, university, a library, a service club, a local body, a research institute, a pinjarapole, a chamber of commerce, a Gandhi Ashram-is an industry at all ?
Para-38,39, 40
Uphold the triple test-An industry is a continuity, is an organized activity, is a purposeful pursuit-not any isolated adventure , desultory excursion or casual, fleeting engagement motivelessly undertaken. Such is the common feature of a trade, business, calling, manufacture- mechanical or handicraft based-service, employment, industrial occupation or avocation. An ‘industry’ cannot exist without co-operative endeavour between employer and employee. No employer, no industry; no employee, no industry-not as a dogmatic proposition in economics but as an articulate major premise of the definition and the schema of the Act, and as a necessary postulate of industrial disputes and statutory resolution thereof. An industry is not a futility but geared to utilities in which the community has concern. And in this mundane world where law lives, now, economic utilities-material goods and services, not transcendental flights nor intangible achievements-are the functional focus of industry. We hold these triple ingredients to be unexceptionable.
If the TRIPLE TESTS (propounded in Hospital Mazdoor Sabha) of
1. Systematic activity,
2. Co-operation between employer and employee and
3. Production of goods and services,
were alone to be applied, a University, a college, a research institute or teaching institution will be an industry.
Our task is not to supplant the ratio of Banerji but to straighten and strengthen it in its application, away from different deviations and aberrations.
We need to read Banerjee (analogous test), City of Nagpur and Mazdoor Sabha (triple test) together.
In this case, court takes Banerjee and strengths it by supplementing analogous test with organisational character.
- Where (i) systematic activity, (ii) organised by co-operation between employer and employees, (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes prima facie, there is an ‘industry’ in that enterprise.
- Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector.
- The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
- If the organisation is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.
- ‘Undertaking’ must suffer a contextual and associational shrinkage; so also, service, calling and the like. Thus all organised activity possessing the triple elements, although not trade or business, may still be ‘industry’ provided the nature of the activity, viz. the employer-employee basis, bears resemblance to trade or business.
- However, where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not “workmen” as in Delhi University or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in Corporation of Nagpur will be the true test. The whole undertaking will be ‘industry’ although those who are not ‘workmen’ may not benefit by the statute.
- Applying the aforesaid tests to the specific cases, activities such as (i) professions, (ii) clubs, (iii) educational institutions, (iv) co-operatives, (v) research institutes, (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests (supra), cannot be exempted from the scope of section 2(j).
- A restricted category of professions, clubs, co-operatives and even gurukulas and little research labs may qualify for exemption if in simple ventures, substantially, and going by the dominant nature criterion, substantively, no employees are employed but in minimal matters marginal employees are hired without destroying the non-employee character of the unit.
- If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then the institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like undertakings alone are exempt—not other generosity, compassion, developmental passion or project.
- Notwithstanding the previous clauses, sovereign functions, strictly understood (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.
- Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within section 2(j).
Liberal interpretation of the word is more appropriate.
Overruled all other previous cases including DU, Gymkhana, Meher, Safdarjung, etc.
Para- 52, 56, 57, 63, 75-76, 80,
Para- 112, 119, 125 Education is also wealth
Para 90- Tax department
Para 97, 101, 103, 111- Liberal profession
Para 126- charitable institution
Para 127- Research institution
Legislative Amendment 1982- After lobbying by employers association, certain entities were excluded from industry- Mere agriculture activity, hospital and dispensary, educational and scientific research, all charitable, social, philanthropic, Khadi village industry, sovereign function, domestic service, profession carried out by an individual, activity carried out by cooperative.
But this legislation was not notified.
In this case overruling Delhi case, court said that teachers are workmen because of their skills. Skill cannot be limited to merely to industrial activity.
Problems
PSUs which do mixed kind of functions. Sometimes they do sovereign functions and sometime they do non-sovereign functions.
Court said in such a case you have to look department wise.
Problem/Drawback of over-inclusion?
Whether Judiciary is an industry?
No. It’s an inalienable function. (sovereign)
Preservation of forest is not a sovereign function and cannot be exempted.
PROBLEM WITH BWSSP
Relying on control test in some manner. Emphasis on structural relation between workers and employers. Bringing out structural relation will be disadvantageous for 93% workers who are in unorganised sector.
5TH PHASE (1995-2006)
Chief Conservator of Forest v Jaganath Maruti Kondhare 1996
Court looked at special regulations that bind civil servants working in forest department. State argued that preservation of forest is a sovereign functions and hence excluded from Industry.
Court said that even this sovereign functions is for welfare of the community hence Industry.
Sub Divisional Inspector of Posts, Vacuum vs. Theyyam Joseph 1996
Whether Post department is an industry?
Joseph was in post service as temporary workmen by replacing another. He was later suspended without giving 25F benefits.
Court said that duty of state is to provide telecommunication service to general public and is an essential part of the sovereign functions of the state as a welfare State. It is therefore not an Industry.
Court mixed up welfare and sovereign functions.
T Joseph’s case was a case relating to the departmental employee whose services was dispensed with. Considering the rules in operation in that behalf, it was held that the telephone department is not an industry.
Bombay Telephone Canteen Employees Association vs. Union of India, 1997
Facts-The dispute arose on account of termination by the respondent-Management of the services of the said employe on April 28, 1989; It was alleged that the termination was without any notice and payment of retrenchment compensation under Section 25-f. The reference came to be made on April 19, 1991. The Tribunal has held, that the telephone Nigam Limited, Bombay is not an ‘industry’. It, therefore, has no jurisdiction to adjudicate the dispute.
Whether department of PSU is an industry?
Since they have separate set conduct rules and regulations.
That the employees working in the statutory canteen, in view of the admission made in the counter-affidavit that they are holding civil posts and are being paid monthly salary and are employees, the necessary conclusion would be that the Tribunal has no jurisdiction to adjudicate the dispute on a reference under Section 10(1) of the Act. On the other hand, the remedy to approach the constitutional court under Article 226 is available. Equally, the remedy under Section 19 of the Administrative Tribunal Act is available.
DEFINITION OF WORKMAN
S.2(s) of ID Act– Workman means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-
who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act; or
who is employed in the police service or as an officer or other employee of a prison; or
who is employed mainly in a managerial or administrative capacity; or
who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
3 Categories of the definition-
1. Nature of work
2. Terms of employment (whether there is contract of employment)
3. Exemptions
Court generally looks at 1st and 2nd part.
1. Whether enterprise falls under industry?
2. Whether industrial-dispute falls under definition of industrial-dispute under ID Act?
Generally the test being followed is CONTROL TEST.
Borrowed the test from tort law (master and servant test).
Not the perfect law to apply as in Industry law there is employer and employee relationship where as in tort law there is master-servant relationship where there is subordination. By taking the definition from common law, there is a problematic presumption that there is relation of subordination and obedience.
In an Industry, conduct is governed by standing orders laying down conditions of service (decided by consent and democratic dialogue between workers and employer) so the relationship is technically not of a master-servant relationship. But in master-servant relationship, there is feudal structure.
Court borrowed contract of employment from British Jurisprudence to define workmen which led to the exclusion of large number of workmen from the ambit of ID Act. Contract of employment means direct control and supervision by employer.
So Parliament came up with a law.
Krishna Iyer (In Rohtas case) said that though we follow UK Jurisprudence on immunities but the principle needs to be domesticated.
Whether Maalis (Gardners) are workmen?
240 days of service is mandatory to get security of wage under ID Act. So employers generally keep rotating workers before their 240 days service gets completed.
Judiciary played an active role in removing contract labour from ambit of ID Act.
Bidi industry played a vital role in that.
Shivnandan Sharma case 1956 3J
Propounded the “Due control and supervision test”.
Kind of assignment given to workers.
Facts– Shivnandan Sharma was a cashier in Punjab National Banks. They had tradition of appointing treasurers though agency. A person wanting to become treasurer had to pay security to become treasurer in the bank. Treasurer appointed several cashier. Some times later, Bank informed that it closing down the branch due to financial difficulty.
Issue– Whether cashier is employee of the Bank?
Court looked whether there was any control and supervision exercised by Bank on cashier. Where there is presence of intermediary, its a contract labour. Court looked at the agreement between Cashier and the Bank. Agreement has to be looked substantively and not just formally.
Though responsibility of appointment was given to treasurers but power of approval was with bank.
Borrowed from UK
Four tests-
1. Appointment
2. Payment
3. Termination
4. Method of Working
Dharangdhara Chemicals Works v State of Saurashtra 4J
DCW has a chemical factory. They used normal water to manufacture water. A salt superintendent used to super-wise that. A category of workman called Agaryas used to make salts. They used to come from village and lived in settlements in salt plant for 8 months. Employer had a huge plot and Agaryas were given pattas of small plot and employer did not control over how many Agaryas would be given pattas. The salt-superintendent used to test the salt quality and if it was up to the quality, then they were paid accordingly. But the salt whether of good quality or not would go to the employer. Such people who are illiterate, uneducated, not articulate are rampantly exploited.
Whether Agaryas are workmen of employees?
Court looked at various UK cases-
Master-servant relationship borrowed in labour jurisprudence.
Short v Henderson
In this case there was no supervision and control, no muster roll, etc, seasonal and community work. By looking at the nature and character of work, court still believed that there was control and supervision by referring the Salt superintendent who supervised and assessed the quality of Salt. So there was constant intervention and supervision by the salt superintendent. Hence the workers were always under the control of superintendent. Every process of making salt was intervened by the employer and hence the Agaryas qualify as a workmen. The court was not carried away by fixation and upheld the rights of the workmen. Principle of control and supervision has not be applied rigidly but liberally but keeping in mind the “nature of work and character of workforce”.
Later the “due control and supervision” became the Integration test
Contractor/Sardars in labour legislation have a long History. In Bidi industry they were known as “Sattedaars” Bidi was manufactured by coolies in two manners- Outside the factory and inside the factory. Sattedaars used to control Bidi makers outside but the employer directly controlled the process inside the factory. It was claimed that when the Bidi were manufactured outside, it were contact for employment/Service. Employer gives money to Sattedaars, and Sattedaars would inspect the Bidis. They act like an agent of Employer.
A contractor is a person who undertakes to get done work of someone else without submitting himself to the employer- Dharangdhara Case.
Chintaman Rao v State of MP 1958 3J
Facts-
It needs to be looked at- what process happens in
Held– Sattedaars acting as independent agents and are not directly employed by the employer. Looks at three facts
Coolies worked outside the factory
No direct payment
No direct control of hiring and firing
Depends upon terms of employment entered into between the worker and the employer.
Court said (infamously) that Sattedaars are independent contractors. In Shivnandan there was presence of recruitment agency.
Birdhi Chandra Sharma v Nagpur 1961 2J
Facts– In this case coolies/workers could come any time to the factory, take raw materials and make goods according to their capacity.
Court says that there was no control over the working hours. Nature and character of the work is that they were remunerated not on the basis of working hours but the quality of work. They were held to be workers. The extent of nature of control over work varies from industry to industry.
Bidi workers are rural and inarticulate workers. Employers use various strategies to avoid liabilities. Employer assigns work to Sattedaars who in turn procure coolies and get them manufacture Bidis. Sattedaars were always employees of the Employer and is a puppet in the hands of Employer. This is a vicious system where the Employer uses loyal servants to exploit the labours. Court should not have given legitimacy to Sattedaars system in Chintaman Rao case. Social justice was interpreted so widely and liberally in the Dharangdhara case keeping in mind the objective of the ID Act.
Why should court look at definition of workers under factory act while determining definition of workmen under ID Act?
Three common elements in determination of definition of workers- Employer, Employee and their relations. In these case, court also said that presence of workers in the premise is necessary.
Shankar Balaji Waje v Maharashtra 1962 3J
Facts– Whether Bidi rollers were workers under factories Act?
Held– Subbarao J in his minority judgement said that they are workers under Factories act. Majority looked at consistency of working hours and control and supervision to held otherwise.
DC Diwan and Sons v Secretary United Bidi workers case 1964
This case became important for laying down the definition.
Facts– There was a presence of Sattedaars. There was an agreement between Sattedaars and principle employer which provided that former would take raw materials to workmen who would work from home and finished goods would be returned to employer and the contractor would be payed Lum-sum amount. Principle employer contended there was no direct control or supervision.
Held– Tribunal questioned the agency of the sattedaars and called it a vicious system created to escape from the liabilities of the factories act by excluding workers from the direct responsibilities of the principle employer.
DOCTRINE OF LIFTING THE VEIL/PIERCING THE VEIL
To see whether there sham agreement (contract for employment) to evade the employer’s liability. So court looks into the motive to determine the contract the of service.
Balwant Rai Saluja v AIR India 2013 3J (very regressive as it reads down the control & supervision)
Facts– AIR India has a vested interest in Hotel Corporation of India (HCI) and HCI has large businesses included catering services for ground staff. They engaged Chaffier to work in the catering services. Chaffier recruited many workers on the instruction of HCI and the initial contract with workers was for 40 days which kept renewing for 20 years and they claimed permanent status as employees of AIR India and also challenged certain unfair practices. There was need for permanent employment in AIR India, yet they chose to have this contractual system.
Issue– Whether workmen can ask permanency under AIR India under the Factories Act?
Held–
- As per S.4(6) of Factories act if there are more than 250 workers working in an organisation then it is an obligation on employer to establish a canteen.
- Court held that workers would only get benefit under Factories act and not anything outside the scope of factories Act.
- SAIL Judgement– Rigid reading of law. S.10 of Contract Labour. Justice Prasad mentioned control and supervision test.
- Justice Gowda talked about ‘Due Control and Supervision’ Merely recruitment and firing a worker is not just control and supervision.
- The authority that established the canteen has responsibility. One set of cases say that responsibility of maintaining statutory canteen lies on the entity that establishes it.
- Gowda relied on sham and camouflage contracts (Hussainbhai v Alladi case).
- Control test is not the decisive factor to ascertain employment relationship always.
- Control test was employed to ascertain master-servant relationship.
- In Labour industry there is employer-employee relationship. Employer and Employee are equal partners in labour industry.
- So integrated activity test should be applied.
- ‘During last three decades…in deciding upon the relationship between employer and employee.. important one.…should tell a contract of service’
- 4 components in CONTROL TEST (Dharangdhara)-
- Appointment
- Payment
- Termination
- Method of Working
- Control and supervision test is to determine ‘Contract of Employment’
- Court want to add certain additional points in control test (IMP)-
- Where is the activity being conducted, premise or home?
- Who provides the raw material-employer or contractor or workmen themselves bring it?
- Whether employer’s right to reject the end product?
- Court shouldn’t look at whether a worker is working under multiple employers. If he is putting a substantial time under a particular employer, it should be considered to be principle engaged with the employer concerned under the Shops and Establishment Act.
- He relied on MMR Khan case as well.
- As per Justice Gowda, workers should be considered direct employees of the Air India.
- Justice Dattu raised several points-
- That the workmen of a statutory canteen would come under workmen of the statute (Factories Act). So for the purposes of Factories Act, they should be considered workmen. So workmen cannot ask for benefits under other statutes.
- Silver Jubilee Tailoring House v Chief Inspector of Shops and Establishment 1973
- Court had to decide whether workmen in a tailoring shop would come under ambit of workmen under Shops and Establishment Act.
- Court shouldn’t look at whether a worker is working under multiple employers. If he is putting a substantial time under a particular employer, it should be considered to be principle engaged with the employer concerned under the Shops and Establishment Act.
- Court should also look at organisation test.
MMR Khan, Harishankar Sharma case, Parimal Chandra cases held that if a statutory canteen established by a super authority, that will be responsible.
Hussainbhai v Alladi Factory 1975
Related to a sham or camouflage contractor. Alladi Factory was engaged in rope making. Principle employer engaged an immediate contractor to hire workers. Court held that where workers or group of workers labours to produce goods and services for the benefit of the principle employer who has complete/sufficient control over skills, subsistence and continued employment of labourers, then presence of intermediary or immediate contractors is of no consequence as the veil to evade liability should be lifted. In such a case there is employer-employee relationship under ID Act between workers and principle employer. ECONOMIC ACTIVITY/CONTROL TEST. PRINCIPLE OF PIERCING THE VEILbetween Principle Employer and Contractor.
But in an another case court said that principle of piercing the veil has to be sparingly exercised. (LIC case) There has to be come complaint against the company.
It similar to INTEGRATED ACTIVITY TEST. So look at both while deciding employer-employee relationship.
Contract labourers are in direct employment with the Contractor and the Principle Employer.
How is instruction different from involvement?
In AIR India case, there was instruction as to how to appoint board of directors etc. So certain level of control was exercised by Air India on HCI.
Involving means how you engage with the workers. It means day to day employment with detailed instruction on everything.
Why do we say that court gave broader definition of Workmen in Dharangdhara case?
Because court said that you have to also look at ‘nature of work and character of workforce’ along with the control test.
Ram Singh v Union Territory Chandigarh
Facts- case was about employment of an electrician who was appointed by a contractor to work in Engineering department. He was claiming regularisation of his post.
Held–
- Control Test is not the decisive test. All other facts and circumstances are to be looked at along with terms of the contract.
- An Integration Test is also to be taken into account.
- Whether employee’s work is important for the concerned entity.
National Law University Example
Workers are outsourced from the Contractor but day to day instructions are given by NLU which is the principle employer. Whether this is enough to prove that there principle has actual control and supervision over workers?
In some cases court said yes but in later cases, court said no. In NLU recruitment of labour is done only by the contractor and only he has power of dismissal. So two important element of Control and Supervision test is missing in this case. Same was said in the HCA and Air India case.
What is Primary Control?
Recruitment, appointment and dismissal along with Integrated Activity test. For more, see Silver Jubilee case.
GP Panth University v State of UP 2000
Facts– GPU was a residential university which had a cafeteria whose workers were asking for regularisation. University contended that it had no control over cafeteria workers but a food committee regulated their service conditions. Court looked at regulations of workers and found that there were enough control of university over workers including financial matters etc.
Held–
- Court looked at social justice perspective enshrined in the constitution which includes-
- Security of tennure
- Economic Justice.
- That interpretation of workmen should be in the possible widest manner.
- The worker are always given promise of regularisation but they keep waiting in the waiting room till the end of their tennure.
- The workers were regularised.
NLU Mess
- Mess committee consisting of students coordinate the mess.
- Mess committee has to consult the Finance Department of University over expenditure of funds.
- Hostel Wardens also have substantial power over conduct of workers.
- Storekeeper has responsibility to ensure regular supply of materials.
- Through whom mess workers got employment?
- Contractor provided the mess workers.
- But this contractor position was created to control workers.
- Can it be contended that contractor position is sham and bogus and that mess workers position is integral to the functioning of University.
- But government has come up with qualification criteria for regularisation.
PNB v Ghulam Dastagir case
- Bank Manager was given allowances to privately appoint driver.
- This driver asked for regularisation or direct employment with Bank.
- He claimed that the system was sham and bogus as there was PERMANENT JOB for driver and bank in order to evade statutory compliance had resorted to this measure.
- Court looked at long practice of the PNB- an old bank and held that the practice was not sham and bogus.
- Krishna Iyer J asked bank to create permanent vacancy for this job.
Observations
- Workmen definition is very inclusive in character
- Workman means any person employed in any industry to do any skilled or skilled manual, supervisory, clerical, technical work.
- Initially there were only 4 categories- skilled, unskilled, manual and clerical.
- There were 2 additions- supervisory and technical.
- There was another amendment in 1982 and now the definition is manual, unskilled, skilled, clerical, supervisory or technical.
- Contradictions post 1956 amendment dealt in the following cases-
- Burma Shell Oil Storage v Burma Shell Management Staff Association 1970
- The company has many category of workers. Court had decide whether they will come under the category of workers like well superintendent.
- Sales Engineering representatives-
- To decide whether a particular worker falls under definition PRIMARY OR DOMINANT WORK has to be looked at.
- Court said that unless workers fall under the categories mentioned in the ID Act, they cannot take the benefit of the ID Act.
- 4 exceptions has also been provided in the definition-
- If a worker is employed in the designation of supervisor and earning more than 10000, he will not fall under the category of workman.
- If a worker is temporarily given responsibility of a supervisor, he will still come under the ambit of workman under ID Act.
- Army and Policemen are excluded.
- Whether sales engineering representatives would come under ambit of workman?
- These are new posts which came after liberalisation. They were engaged in sales promotion.
- Court said that unless they fall under 4 categories they are not workmen. Workman should have job profile mentioned in these categories. There is some requirement of manual labour or physical labour. Provided they don’t fall under any of the 4 exceptions.
- Court also used the argument of Ejusdem Generis.
- In TU, workers definition is different. Any person working in a trade or industry is workman.
- When you look at TU Act and ID Act, the common terminology is Industry which is defined only in ID Act.
- Whether definition of Industry in ID Act should be read into definition of Industry in TU Act?
- Court looked at Pari-Materia. Similar subject matter in same system of law.
- Court looked at meaning of skilled and technical separately and said it has to be skilled-manual. Court said they are creatively using their technical knowledge but not manually using it.
- Semi-Skilled- Not fully skilled. Qualification requirement is relaxed.
- Haryana in 2002 started determining minimum wages according to experience.
- SK Verma v Mahesh Chandra
- Whether development officer is workman?
- Court emphasised on the 4 exceptions. If the workman does not fall in any of the exceptions, then the person concerned should be concerned workman.
- Ved Prakash 1979
- Arkal Govidraj Rao v Ciba Gigy India 1985
- Relies on SK Verma and Ved Prakash.
- An employee was appointed as Stenographer and later promoted to Assistant (group leader)
- Whether Stenographer covered under workman?
- Stenographer basically does a clerical job. Very skilled job.
- Court looked at actual profile of work she was doing- clerical and some supervision (as assistant). The dominant position remained stenographer and hence clerical.
- HR Antodaya v Santosh 1994 5J
- Whether medical representative would become workman?
- Court held SK Verma to be in per-incurium and said that there is legislative intention behind these categories so categorises have to be looked first and then exceptions.
- Since there is a separate legislations for medical representative, therefore they should not come under ID Act.
- Court actually went back to 1956 definition.
- How is nocitor a socis different from Ejusdem Generis?
- The former is more liberal. In nocitor a socis, only when there is an ambiguity or doubt regarding a word, then you take its meaning from the accompanying words.
- Burma Shell Oil Storage v Burma Shell Management Staff Association 1970
We discussed two things regarding workmen definition
- Control test
- Categories of workmen under definition
Miss Sundaram v Goa 1988
Whether teachers are workman?
Any mental/intellectual labour is not manual. Work of teacher is noble work, etc.
Private Primary Teachers v Admin Officers and others 2004
- Even though teachers are not workers, they can still claim gratuity if they there is continued 5 years service.
DEFINITION OF INDUSTRIAL DISPUTE
S.2(k) ID Act- Industrial dispute means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person;
Phrase– “Of any person”. Whether has to be given liberal meaning or to read with objects and purpose?
Workmen v Demakuchhi Tea Estate 1958
This land was taken by white entrepreneurs under colonial Government. White officers were running the estate and workers were indentured labourers. Dr. Cox was the superior officer. Mr. Banerjee was appointed was medical officers in 1940 on condition of performance. He was put on probation for 3 months. As per the rule if the entity does not give confirmation after probation period, it is considered deemed confirmation. So Banerjee was given increment. He was fired in November and reason for termination was not mentioned. Since 3 months notice was not given, salary was given. Trade union raised his dispute and claimed that no reason was given. Management replied insufficient medical knowledge resulted in the termination. Tribunal claimed there is no industrial dispute as Banerjee is not a workman. SC relied on the phrase “of any person” to hold that Union can espouse the cause of any person. One restrictive meaning of the phrase can be ‘any workmen in the establishment.’ But if given liberal interpretation, union can espouse cause of any workmen working not only in the concerned establishment but any other similar establishment. But this will result in a kind of anarchy and chaos. The counsel said that dispute must be real and substantial in which one party (employer) in the dispute can give relief to another (workmen). If there is a settlement between TUs and Employers of different establishment, will it be binding? Thirdly, he contended that phrase ‘of any person’ should not be restricted to definition of workmen under ID Act but any employees under the concerned establishment. Court gave very constructive interpretation to the phrase. TU raising the dispute should have direct nexus or be personally interested in the matter of the employee. Workers as a class should have a COMMUNITY OF INTEREST in the matter involved. Read Para 10,11.
Bombay Union of Journalist v The Hindu
Another trade union espoused the cause of workers of the Hindu as they had to no union of their own. Court allowed such espousal provided there is DIRECT AND SUBSTANTIAL INTEREST in the matters of the workmen.
Standard Vacuum Refining Company v Its Workmen 1960
Whether Union of Permanent Workers can espouse the cause of contractual workers?
Court applied the principle of Demakuchhi and said that there should be COMMUNITY OF INTEREST. Here workers as a class had common interest though there was segregation of workers on permanent and contract basis.
Municipal Corporation Delhi v Female Workers Muster Roll
Whether muster roll employees should get maternity benefits? Court said that all working women should get maternity benefit.
Shambhunath Goyal v BoB 1978
Whether written/oral or formal demand before management is necessary in order to raise an industrial dispute?
Court looked at S.2(k) and S.10(1) (reference by appropriate govt. of failure report to industrial court or national/industrial tribunal. Since S.10(1) uses the word ‘apprehension’ which means conciliation officer should not wait for formal demand.
Village Papers Private Ltd. v State of HP 1992
3rd Set of Cases.
When does an individual dispute becomes an industrial dispute?
IDA only deals with collective dispute. The moment TU espouses the cause of individual workers, it becomes ID. Dismissal etc of a workman is deemed to be an ID.
S.2A- Dismissal, etc., of an individual workman to be deemed to be an industrial dispute. Where any employer discharges, dismisses, retrenches, or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.
Where an employees terminates the services of an individual workman, such shall be deemed to be an ID notwithstanding the fact that no other worker or TU espouses that.
So one cannot raise ID regarding conditions or matters of employment.
When does S.2A become 2K?
When TU espouses the cause of individual workman.
Central Provinces Transport Services Ltd v Raghunath Gopal Patwardhan 1957
2 kind of DISCHARGE–
- Voluntary
- Retirement
- Resignation
- Superannuation
- Involuntary
- Dismissal
- Retrenchment
The CP Industrial Act also regulated conditions of employment unlike ID Act which only looks into settlement. Here there was definition of Employee unlike Workmen under ID Act. Even individual dispute could come under ID.
The case was related to termination of the employee. Argument was raised that ID Act and CP ID Act have to be read pari-materia. Court take into account 3 interpretation-
One interpretation was individual dispute ie matters concerning individual worker cannot become of S.2(k) ID Act.
Second interpretation was arrived at using General Clauses Act. Dispute of single workman can become dispute of workmen.
Since the Act was different so court decided that ID Act and CP ID Act have not to be read pari-materia.
Newspapers v State Industrial Tribunal UP 1957
There was a senior typist and junior typist. Typist was later terminated on ground of incompetence. And no other worker supported him. A union UP Journalist Union espoused his cause. Court did not allow this on argument that support has to come from workers or TU of same establishment.
Workers v Dharampal Premchand 4J
A firm was carrying out business of perfume and tobacco. Out of 45 employees 18 joined employees association. They were terminated. The cause of termination was taken up by Association. Since they had no union, they joined a regional Union to espouse their cause. Employer argued there is no substantial support from factory workers. Court said that outsider TU can espouse the cause of worker if there is some support from workers of that establishment.
Workmen of Indian Express v The Management
Relies on Dharampal and said that so long as there is no TU, outside TU can espouse the cause.
JH Jadhav v Forbes Gokak Limited. 2005
Whether espousal needs to be by majority of workers. No. Even minority can raise the dispute.
TRADE UNIONS ACT 1926
Relevant site: ILO
WHETHER INDUSTRY DEFINITION UNDER ID ACT HAS TO BE READ INTO TU ACT?
S.2(g) TU Act– “Trade Dispute” means any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment or non-employment, or the terms of employment or the conditions of labour, of any person, and “workmen” means all persons employed in TRADE OR INDUSTRY whether or not in the employment of the employer with whom the trade dispute arises; and
S.2(h) TU Act– “Trade Union” means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any TRADE OR BUSINESS, and includes any federation of two or more Trade Unions:
Whether members of TU are actually ‘workmen’ under TU Act?
S.4 of TU Act is important. It provides that 7 or members needed to form TU. No workmen of TU will be registered unless at least 10% of its members are employed in that industry.
S.5 & S.6 talk about registration of TU.
Ground of cancellation– Fraud or mistake.
Definition of Industry under ID Act-
S.2(j)- “Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;
Rangaswami v Registrar of TU 1962 Mad HC
Whether household staff of Raj-Bhavan would become workmen to form TU under TU Act?
It was contended that Raj-Bhavan is the personal residence of Governor and hence workers engaged for domestic work here cannot be workmen under TU Act.
Whether Raj-Bhavan is an industry?
Since Raj-Bhavan is not engaged in any commercial activity, its not an industry. Court read TU Act and ID Act pari-materia.
Central Machine Tool Institute v Labour Commissioner
It was a research based institute which made prototypes of tools. Workers there formed a TU.
Whether CMTI is an industry?
Court looked confused if definition of Industry under ID Act is wider than Trade as provided in TU Act (Para 20 and 22)
Court held that pari-materia test can be applied and gave reasons for that-
- The subject matter of ID and TU Act are in same legislative Topic (List 2, Entry 22)
- Both enactment concerns same class of persons.
- Aim of both enactment is to provide for the procedure and machinery for settlement of dispute.
- Both come under single legislative scheme.
Registrar TU v Govt. Press Employees 1975
Whether press employees of govt. press can form TU?
Govt. press is not engaged in commercial activities. Court again applied pari-materia test to hold against the workers.
Tirumala Trust Devasthanam v Commissioner of Labour 1979
Affirmed previous cases to hold that both ID Act and TU Act are in pari-materia.
In Rohtas case, court said that both Acts are not in pari-materia as both have different objectives. And that workers under TU Act have to be widely and liberally.
WHETHER WORKMEN DEFINITION UNDER ID ACT 1947 HAS TO BE READ INTO WORKMEN DEFINITION UNDER THE TU ACT 1926?
Govt. Tool Room v Asst. Labour Commissioner
Whether supervisory staff can form TU?
Court said ID Act Workmen definition has nothing to do with TU Act.
Workmen includes all persons engaged in a Trade. It is settled principle of law that definitions in a later enactment can be used to interpret definitions in an earlier enactment only if there is an ambiguity in the definition given in the earlier Act.
Chandrabhan v Sunbeam Auto Workers Union
Certain workers challenged the recognised status of Sunbeam Workers Union.
Whether trainees and supervisory staff can vote in the recognition process? Trainees and supervisory staff were contended to have been excluded from the definition of ‘Workmen’ under ID Act.
Court said that there is no need of narrowing the definition of workmen under TU Act.
Whether invoking trade dispute under TU Act is same as invoking industrial dispute under ID Act?
S.2(g) TU Act– “Trade Dispute” means any dispute between employers and workmen or between workmen and workmen, or between employers and employers which is connected with the employment or non-employment, or the terms of employment or the conditions of labour, of any person, and “workmen” means all persons employed in TRADE OR INDUSTRY whether or not in the employment of the employer with whom the trade dispute arises; and
S.2(k) ID Act- “Industrial Dispute” means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person;
NEW MODULE: SECURITY OF TENNURE
- Protection against arbitrary and illegal dismissal of workmen.
- Such dismissal are also violative of Article 14 of Indian constitution.
- Legislation provides for the mechanism of legal dismissal.
- Two types of Discharge/Dismissal-
- Voluntary
- Superannuation
- Involuntary
- Dismissal
- Retrenchment
- Lay-off
- Closure.
- Other kind of discharge include Discharge Simpliciter (DS) which is on the grounds of loss of confidence, trust and incompetence. DS is considered legal unless it is shown to be colourable or mala-fide.
- Voluntary
- If there is victimisation or malicious motive behind dismissal, court can pierce the veil and see whether discharge simpliciter was mala-fide.
- Dismissal can be challenged before Labour courts.
- Industrial Employment Standing Orders Act-
- Provides the definition of misconduct.
- Domestic inquiry is necessary before dismissal.
- Domestic inquiry must follow all principles of natural justice.
- Validity of Domestic inquiry is 6 months.
- Higher courts only have the power of judicial review and fresh evidences cannot be produced before Higher courts.
- Once the inquiry is over, there is no chance to add fresh evidence
- In case of discharge, workman can directly go to labour court under S.2 ID Act.
S.11 ID Act- Procedure and powers of conciliation officers, Boards, Courts and Tribunals.
- Subject to any rules that may be made in this behalf, an Arbitrator, a Board, Court, Labour Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit.
- A conciliation officer or a member of a Board, or Court or the presiding officer of a Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.
- Every Board, Court, Labour Court, Tribunal and National Tribunal shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit, in respect of the following matters, namely:—
- enforcing the attendance of any person and examining him on oath;
- compelling the production of documents and material objects;
- issuing commissions for the examination of witnesses;
- in respect of such other matters as may be prescribed;
- and every inquiry or investigation by a Board, Court, Labour Court, Tribunal or National Tribunal], shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the IPC (45 of 1860).
- A conciliation officer may enforce the attendance of any person for the purpose of examination of such person or call for and inspect any document which he has ground for considering to be relevant to the industrial dispute or to be necessary for the purpose of verifying the implementation of any award award or carrying out any other duty imposed on him under this Act, and for the aforesaid purposes, the conciliation officer shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), in respect of enforcing the attendance of any person and examining him or of compelling the production of documents.
- A Court, Labour Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as assessor or assessors to advise it in the proceeding before it.
- All conciliation officers, members of a Board or Court and the presiding officers of a Labour Court, Tribunal or National Tribunal shall be deemed to be public servants within the meaning of S.21 of the IPC (45 of 1860).
- Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a Labour Court, Tribunal or National Tribunal shall be in the discretion of that Labour Court, Tribunal or National Tribunal and the Labour Court, Tribunal or National Tribunal, as the case may be, shall have full power to determine by and to whom and to what extent and subject to what conditions, if any, such costs are to be paid, and to give all necessary directions for the purposes aforesaid and such costs may, on application made to the appropriate Government by the person entitled, be recovered by that Government in the same manner as an arrear of land revenue.
- Every Labour Court, Tribunal or National Tribunal shall be deemed to be Civil Court for the purposes of sections 345, 346 and 348 of the CrPC 1973 (2 of 1974).
- Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a Civil Court under Order 21 of the CPC, 1908 (5 of 1908).
- (10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it.
S.11A- Powers of Labour Courts, Tribunals and National Tribunals to give appropriate relief in in case of discharge or dismissal of workmen.
- Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require:
- Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.
- Difference between Discharge and Dismissal
- Dismissal is non-voluntary discharge on account of misconduct. When allegations of misconduct is made, the accused is put on suspension during which he is entitled to subsistence allowance till the domestic inquiry gets over.
- Dismissal without following procedures of PNJ is illegal.
- In case of retrenchment when workman is absent from service, PNJ need not to be followed.
- Retrenchment, Lay-off and Closure have different genesis.
- They involve massive termination of labourers.
- What is the logic of legitimising such termination?
- Initially there was nothing related to security of tennure in ID Act.
- Chapter 5A (more than 50 workers), 5B (more than 100 workers), 5C (more than 100 workers) talks procedures of retrenchment and lay-off in industrial establishments where more than a particular number of workers are working. These provisions are very important as these chapters provide for substantive rights of security of tennure.
- These chapters prohibit illegal and arbitrary retrenchment and closure.
- 1st 5 year plan talked about security of tennure.
- Most amendment of ID act influenced by 5 year plan policy.
Excel-ware v UOI (Contention of Corporate Socialism)
Employers contended that Chapter 5 of labour law is very rigid.
Washington Consensus– demanded flexibility in labour law framework. There were 2 demands-
- Do away with Chapter 5 of ID Act.
- Focus on contractualisation of labour force with different kind of welfare schemes like medical insurance, etc.
Doctrine of Flexicurity– Came into prominence during Thatcher regime. Advocated flexibility in labour law framework but with alternative welfare mechanisms.
Problem with contractualisation in India
Contract Labour provides that it will not apply where there are less than 20 workers. Now the govt. is planning to increase the limit to 40.
LAY OFF S.2(kkk) ID Act– Temporary breaking of relationship. But in retrenchment & closure full termination. Defined in S.2(kkk) ID Act as the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural calamity or for any other 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.
Explanations-
- 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 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 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 been laid-off only for one-half 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;
In lay-off, presence of employee at the factory gate is necessary. If there are 100 workmen, they need to be present at the gate and their attendance will be marked and then employment will inform that 50 are laid off as there is no work.
Retrenchment Conditions-
S.25F-Conditions precedent to retrenchment of workmen.—No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
- the workman has been given 1 month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
- the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to 15 average pay for every completed year of continuous service or any part thereof in excess of six months; and
- notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.
Employment Provident Fund
3 benefits after 10 years-
- Pension
- Link Insurance
- PF
Kairbtta Tea Estate v Rajamanikya 1960
In a confrontation between workers and employers, one superior got injured. Lock-out was declared subsequently and the factory was closed for 2 days. Workmen contended that closing down was lay-off and hence they are entitled to compensation. Management contended that it was lock-out.
Difference between Lock-out and Lay-off
Lay-off is generally done under economic compulsion. Lock-out purpose is to being the workers on the bargaining table. Lay is temporary closure of work. Lay-off to happen only under reasons mentioned under the ID Act. In the presence case Lay-off happened because of the confrontation and not because of economic compulsion.
S.2(kkk) r/w S.25C and S.25E.
LOGIC OF CHAPTER 5A & 5B OF THE ID ACT?
- They talk about lay-off and retrenchment
- S.25C- Right of workmen laid-off for compensation. Whenever a workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid-off, whether continuously or intermittently, he shall be paid by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent. of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid-off:
- Provided that if during any period of twelve months, a workman is so laid-off for more than 45 days, no such compensation shall be payable in respect of any period of the lay-off after the expiry of the first 45 days, if there is an agreement to that effect between the workman and the employer:
- Provided further that it shall be lawful for the employer in any case falling within the foregoing proviso toretrench the workman in accordance with the provisions contained in section 25F at any time after the expiry of the first 45 days of the lay-off and when he does so, any compensation paid to the workman for having been laid-off during the preceding twelve months may be set off against the compensation payable for retrenchment.
- Explanation.“Badli workman” means a workman who is employed in an industrial establishment in the place of another workman whose name is borne on the muster rolls of the establishment, but shall cease to be regarded as such for the purposes of this section, if he has completed one year of continuous service in the establishment.
- Employer does not have complete discretion to fire worker. The intend of the chapter is welfare by state intervention in order to prevent poverty of the laid-off workers. To bring equity, state supports the workmen.
Tatanagar Foundry Company v Their Workman 1962
The company made steel to make sleeper/general compartment.
For unjustified lay-off, workers are entitled to extra compensation. If there is deliberate/malicious attempt to create conditions of lay-off, it is unjustified.
S.25M-Prohibition of lay-off. 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 (hereafter in this section referred to as the specified authority, obtained on an application made in this behalf, unless such lay-off is due to shortage of power or to natural calamity, and in the case of a mine, such lay-off is due also to fire, flood, excess of inflammable gas or explosion.
Conditions–
1. More than 100 workman.
Sections for Lay-Off
- S.2(kkk) read with S.25.
Case Laws on Lay-Off-
Workmen of Deewan Tea State v Management 1959
Facts- There were 11 tea estates working under a management. There was a financial crisis and workers were laid off for 45 days. Standing Orders Act 1950 talked about grounds of lay-off. Whether lay-off justified?
Held– Justified under Rule 8(1) of Standing Orders Act 1950. Tribunal had held that under S.25(c) of ID Act, there is common law right to every employer to declare lay-off in times of financial crisis. If it’s not a lay-off which falls under S.2(kkk), can there be compensation under S.25(c). Tribunal had held that S.25(c) is separate from S.2(kkk). SC did not agree with tribunal finding and held that there is no common law right as such available to employers to lay off. Since Standing Order Act defined Lay-off, it gets more prominence than the definition of Lay-off under S.2(kkk) of the ID Act as Standing Order is a more specific act. Court said that since 2(kkk) and 25(C) have a closed relationship, S.8 of Standing order and S.25C will have to be read together.
Only when it is related to the production of industry and not the wider reason, that Lay-off is justified. Employers contended that since 2(kkk) of ID Act (more wider) came in 1956, S.8 of Standing Order Act which came earlier in 1950 will became redundant. Court did not agree to this. Court said that workers are entitled to 45 days compensation.
Firestone and Rubber Company v Workmen 1975
Firestone company had a production unit in Bombay where lay-off was declared for 2 months. Because of production stoppage due to 2 month strike by workers, distribution stopped in Delhi and Madras was affected and lay-off was declared here also. After a month, they were taken back but they demanded compensation which was denied by the Employers.
S.33 provides another remedy for recovery of money due from an employer-
- Where any money is due to a workman from an employer under a settlement or an award or under the provisions of Chapter VA or Chapter VB the workman himself or any other person authorised by him in writing in this behalf, or, in the case of the death of the workman, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue:
- Provided that every such application shall be made within one year from the date on which the money became due to the workman from the employer:
- Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period.
- Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government; within a period not exceeding three months.
- Provided that where the presiding officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit.]
- For the purposes of computing the money value of a benefit, the Labour Court may, if it so thinks fit, appoint a commissioner who shall, after taking such evidence as may be necessary, submit a report to the Labour Court and the Labour Court shall determine the amount after considering the report of the commissioner and other circumstances of the case.
- The decision of the Labour Court shall be forwarded by it to the appropriate Government and any amount found due by the Labour Court may be recovered in the manner provided for in sub-section (1).
- Where workmen employed under the same employer are entitled to receive from him any money or any benefit capable of being computed in terms of money, then, subject to such rules as may be made in this behalf, a single application for the recovery of the amount due may be made on behalf of or in respect of any number of such workmen.
- Explanation.—In this section “Labour Court” includes any court constituted under any law relating to investigation and settlement of industrial disputes in force in any State.
Court said lay-off is not temporary suspension or discharge but temporary unemployment on account of employers inability. If chapter 5A is not applicable then workers will not get 25(c) compensation. If there is any absence of any provision that comes from statute there should be some document to support temporary unemployment of workers. If there is no statutory support to lay-off the employer cannot declare lay-off. There was no standing order in this case and nor any contract of employment allowing employer to declare lay-off. So if there is unauthorised declaration of lay-off and in such a case workers are entitled to full compensation.
S.25(e)(3)-(iii) Workmen not entitled to compensation if laying-off is due to a strike or slowing-down of production on the part of workmen in another part of the establishment.
Associated Cement Companies v Workmen
There was limestone query and cement production unit owned by single employer. Limestone was governed by Mines Act and Cement was governed by ID Act. There was a strike in Limestone Query and lay off was declared in Cement unit. Management justified its stance under S.25(e)(3). Court provided the FUNCTIONAL INTEGRITY TEST. If there is no integrated activity between two units, they should not be considered part of establishment. In US they have a wider PHYSICAL PROXIMITY TEST. In this case both were integrated units even though they were governed by different statutes.
Zhandu Pharmaceuticals v RN Kulkarni 1966
In one establishment there were 2 kinds of Employees- those who were part of Chemical workers union and other who were not part of the unions. Employer in order to protect the lives and property of non-striking workers, they were put on lay-off. Court took a rigid stand and said that any concerted action on part of workmen to deter maximisation of profit justifies any action taken by employer to neutralise the economic loss. Court said under S.25(e) lay-off of non-striking workers is possible.
Nutan Mills v Employees Estate Insurance Corporation
Whether 25C compensation comes under the wages?
Under ESI Act contribution towards ESI was deducted from wages. In this cases workers were laid off and paid compensation but ESI was deducted from the compensation. Court said that compensation is not wage by relying on the definition of wages under S.2(rr) ID Act which defines wages as remuneration payable to a workman in respect of his employment or of work done in such employment. And also that compensation is a support measure and not wages.
RETRENCHMENT
Falls under Chapter 5A
S.2(oo)- Retrenchment means the termination by the employer of the service of a workman for any any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—
- voluntary retirement of the workman; or
- retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
- (bb) termination of the service of the workman as a result of the non-renewal of the contract 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
- termination of the service of a workman on the ground of continued ill-health;
So Retrenchment is termination by employer for any reason other than disciplinary action.
Exceptions–
- Voluntary retirement
- Retirement of the workman on reaching the age of superannuation
- Termination of the service of the workman as a result of the non-renewal of the contract contract of employment between the employer and the workman. (Fixed term contract)
S.2(o)(bb) was inserted in 1984, the first phase of liberalisation.
S.25F- Conditions precedent to retrenchment of workmen. No workman employed in any industry who has been in continuous service for not less than one year (240 days) under an employer shall be retrenched by that employer until-
- the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
- the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months; and
- notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.
Once it falls under S.2(oo), S.25F becomes applicable. If retrenchment is not according to S.25F workers are entitled to full compensation and re-instatement.
S.25G- Procedure for retrenchment.—Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.
1. So the procedure is last come first go.
S.25(h)- Re-employment of retrenched workmen.—Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re- employment and such retrenched workman] who offer themselves for re-employment shall have preference over other persons.
- If there is re-employment, first preference should be given to retrenched employees.
Chapter VB
S.25N– Lays down procedure for retrenchment in larger industries.
Reasons for Retrenchment-
Pipraich Sugar Mills Ltd v Pipraich Sugar Mill Mazdoor Union 1975
Company was in continuous loss since 1940. They decided to sell it 1950. Purchaser asked for cooperation from the worker to dismantle machinery and shift it to Madras. Workers were irked by all these decisions. There was an agreement b/w Workers and Original Employer that 25% of sale proceeds be given to Workers as compensation. The original employer decided to terminate Workers and were given 15 days salary. They were not given notice nor S.25B compensation. Workers claimed it to be retrenchment and demanded 25F compensation ie 15 days wage of every year of service. Management claimed that termination happened before closure of establishment while the reference was after the closure. Management also claimed that on the date of closure, there was no ID. Court said that it is not the date of reference which is to be taken as date of invoking industrial dispute but the date is when the matter of concern arose.
If there was no concluded settlement then Workers will not get 25% compensation.
Unless there is Surplus of workers, workers cannot be retrenched. IMPORTANT
Reason for Retrenchment- Surplusage
Barsilite Railway Co. v Workmen and Hariprasad Shivshankar Shukla v AD Divikar 1957
There was a licence given to private parties to run railways. After independence it was took over by government. 24% workers were discharged. In Hariprasad case, a mill was closure because of loss. In both cases, workers demanded compensation for retrenchment. Court relied on Pipraich Sugar Mills Ltd case. Court also looked at S.25G and 25H.
In closure, there is permanent closure of Industry.
SBI v Sundramani 1976
Two temporary employees were hired for 8 days which was extend for 8 days and further 8 days and so on. Later one was discharged from service after he had completed 1 year 1 month service. Court relied on Hospital Mazdoor Sabha wherein the court held that if worker has competed one year of service, termination has to be according to procedure otherwise they were entitled to retrenchment compensation under S.25F which if also violated then workers are entitled to reinstatement with full back wages.
Issue– Whether all kind of termination amounts to retrenchment?
Court said yes except termination during rationalisation. Court overlooked Pipraich case.
What is Dismissal? Read 2(a) with 11(a) ID Act.
Charted Bank Bombay v Charted Bank Employees Union 1960
Chief cashier had the responsibility of maintaining financial staff. He would decide recruitment and termination of employees in this department.
Assam Oil Company v Workman 1960
Court said that whatever be the consequence, if people are terminated without the lawful procedure, they ought to be reinstated with full back wages. Tribunal can get into the matter and PIERCE THE VEIL and once it is found that there is victimisation, colourable exercise and unfair labour practice, then the termination is invalid.
Even if it is termination simpliciter, cogent reason has to be given.
Termination Simpliciter- Right of employer to terminate a person if he is found to be unsuitable for the employment but in accordance with the standing order or the contract of employment.
Hindustan Steel Ltd v Presiding Officer 1977
A head timer was appointed for 3 years. After 3 year contract was not renewed and his employment was terminated. Workman asked for 25F compensation. Court reiterated Sundramani position and said that the workers get covered under 2(oo) hence 25F compensation. 1 year (240) continuous service necessary. Court distinguished Pipraich and Hariprasad Shukla case.
WB Electricity Board v Deshbandhu Ghosh 1985 SC
Facts–
- WB State Electricity Board Regulations provides that in case of a permanents employee his services may be terminated by serving 3 months notice or on payment of salary for the corresponding Period in lieu thereof.
- Board terminated the services of first respondent, a permanent employee with immediate effect on payment of three months’ salary in lieu of three months notice without giving any reasons.
- Board said that it was not punitive and valid per standing order.
- The High Court held that Regulation 34 was arbitrary in nature and suffered from the vice of enabling discrimination.
- Court said that it’s against constitutional principles based on social justice. It also like naked hire and fire. Employee was not given enough opportunity to be heard. Violation of Article 14.
- Conferment and exercise of arbitrary power on and by the State or its instrumentalities have been frowned upon and struck down by this Court as offending Article 14.
S.2(oo)(bb)- Termination in case of non-renewal of contract- “Retrenchment” does not include termination of the service of the workman as a result of the non-renewal of the contract 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.
Satyanarayan Reddy v Presiding Officer Labour Court 2008 SC
K Goverdhan Reddy v Assistant Engineer AP 1990
State of Rajasthan v Rameshwar Lal Gehlot 1996
Punjab Electricity Board v Darbara Singh 2005
Dhoraji Municipality v Wadher Basant Bahi 2011
BSNL v Maan Singh 2012
Surjit Singh v Presiding Officer 2007 Read para 8.
State of Rajasthan v. Jaipur Region P.W.D. 1986
- Held that notice under Section 25-F of the Industrial Disputes Act is not necessary if the retrenchment is under an agreement which stipulates the date of termination of service.
- In that case certain persons were employed as Helpers in Famine Operation. Since Famine Operation was over, the services of such persons were terminated. Their termination was held to be justifiable and they were not entitled to any benefits under Section 25-F of the Industrial Disputes Act.
K Goverdhan Reddy v Assistant Engineer AP 1990 (termination as a result of the non-renewal of the contract of employment)
Facts–
- Petitioners in this case were appointed as Work Inspectors (construction of Mother Dairy at Hayatnagar) on daily wage basis and had been working till the end of May 1988 when their services were discontinued on the ground that they are work-charged employees on daily wage basis in accordance with Standard Schedule of rats approved by the Board of Chief Engineers.
- The contention of the petitioners is that they have worked for more than 240 days and, therefore they cannot be retrenched except in accordance with the provisions of Section 25-F of the ID Act, 1947.
Held–
- Their appointment had been made subject to the specific condition that the term of employment was for the duration of the work of Mother Dairy.
- Under these circumstances their case is clearly governed by the provisions of Section 2(oo)(bb) of the Act and does not fall within the term “retrenchment” as visualised under Section 2(00) of the Act.
- In this view of the matter it cannot be said that the petitioners are entitled to a notice under Section 25-F of the Act before their services are terminated by the respondents.
Satyanarayan Reddy v Presiding Officer Labour Court 2008 SC
Facts–
- Appellants were the employees of Nagarjuna Cooperative Sugars Limited, a Government of AP Undertaking. The management of the industrial undertaking declared lay off where for compensation was to be paid.
- Appellants opted for voluntary retirement. Indisputably, they were paid the amount of special compensation in terms of the said G.O. Contending, however, that the said Voluntary Retirement Scheme did not provide for payment of lay off compensation.
- The Employees’ Union filed a Writ Petition in the High Court of Andhra Pradesh questioning a Memo under which lay off compensation was denied to the workmen.
- According to the workmen, that lay off compensation was paid only for the months of June and July 1995. They claimed existing legal right for obtaining lay off compensation for the period 1995 to 2002.
- The Government of Andhra Pradesh issued G.O. Ms. No. 25 dated 21.5.2001 providing for a special compensation package for the employees.
Held–
- There cannot be any doubt whatsoever that ordinarily upon opting for a voluntary retirement under a Scheme framed in that behalf, the workmen would cease to have any claim against the management.
- However, the same prima facie in our opinion would not mean that a statutory right of opting for lay off compensation, unless expressly waived, may continue to remain within the realm of legal right, so as to enforce the same before a forum constituted under the Act.
Gujarat Steel Tube Mazdoor Sabha 1980 (Worth Reading)
Facts– The workers protested the policy of wages in an engineering industry. There was two days strike which kept extending. Management warned that if the workers did not join by certain date, they all would be terminated. They all (853) were terminated later as termination simpliciter and new workers were hired. Management claimed that since litigation was already pending and hence the strike was illegal. Mass termination is not considered a good practice in the industry as it affects both workers and the industry. Later 400 joined the job. For the reinstatement of others, they parties approached arbitration under S.10A-
S.10A-Reference of disputes to arbitration.—
- Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under section 10 to a Labour Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement.
- (1A) Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of this Act.
- An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed.
- A copy of the arbitration agreement shall be forwarded to the appropriate Government and the conciliation officer and the appropriate Government shall, within [one month] from the date of the receipt of such copy, publish the same in the Official Gazette.
- (3A) Where an industrial dispute has been referred to arbitration and the appropriate Government is satisfied that the persons making the reference represent the majority of each party, the appropriate Government may, within the time referred to in sub-section (3), issue a notification in such manner as may be prescribed; and when any such notification is issued, the employers and workmen who are not parties to the arbitration agreement but are concerned in the dispute, shall be given an opportunity of presenting their case before the arbitrator or arbitrators.
- The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be.
- (4A) Where an industrial dispute has been referred to arbitration and a notification has been issued under sub-section (3A), the appropriate Government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.
- Nothing in the Arbitration Act, 1940 (10 of 1940), shall apply to arbitration under this section.
Arbitrator decided that the strike was illegal because of pending litigation and it was also unjustified on account of non-cooperation of workmen. HC reversed the arbitrator award. Matter went to SC. Issue was whether HC can interfere with arbitrator decision? Other issue was whether retrenchment was termination simpliciter or punitive dismissal? Since workers took part in illegal and unjustified strike, it was punitive dismissal on account of misconduct. Court also looked at the standing order of the establishment which provided that there has to to be disciplinary inquiry in such cases.
Referring Shamsher Singh case court said-
- In a situation where the order of termination purports to be a mere order of discharge without stating the stigmatisation in departmental inquiry, a search for the ‘substance of the matter’ will be indistinguishable from a search for the motive (real, unrevealed object) of the order. Failure to appreciate this relationship between motive (the real but unrevealed object) and from the apparent or officially revealed object in the present context has lead to an unreal inter-play of words, phrases wherein symbols like motive substance, form or direct parade in different combinations without communicating precise situations or entities in the world of facts. The need in this branch of jurisprudence is not so much to reach perfect justice but to lay down a plain test which the administrator can civil servant can understood without subtly and apply without difficulty. After all between ‘unsuitability’ and ‘misconduct’ thin partition do their bound divide’. And over the years, the accent has shifted and ….inhibition of the act.
- The arbitrator can take power under 11A when there is ambiguity regarding matter of termination. In 10A it is not clear whether one can get into cases and decide it judicially. Court held that arbitration is a ADR for ID. Though only tribunal has been mentioned under 11A but Arbitration can also have the same power to pierce the veil.
- Court also referred to Rohtas judgement- it was observed that arbitrator under 10A has power to bind even those who are not part of the agreement.
- Massive dismissal of both active and passive participants in strike was not appropriate and hence the discharge was wrongful and workers need to be reinstated. But court considered employers status and decided accordingly.
Important takeaways- IMPORTANT
- Collective and massive dismissal is inappropriate and unfair labour practice.
- Punitive dismissal– If workers are dismissed on account of illegal and unjustified strike, first misconduct has to be proved by an inquiry and even then termination simpliciter is not a remedy.
POWER OF HC to interfere with Tribunal Findings-
Harjinder Singh v Punjab Warehouse Corporation 2010
Harjinder was appointed as work-charge and later was appointed as Munshi and was given 3 months contract which was renewed repeatedly. After 4 years of service, he along with 21 others, was terminated by way of retrenchment by giving them one month’s pay and allowances in lieu of notice as per the requirement of Section 25F(a) of the Act. HC stayed the retrenchment but there was retrenchment again in 1992. He approached labour court on ground that that when he was retrenched, other workers who joined later were retained and hence violation of S.25G and therefore the retrenchment was bad and hence he should be reinstated. The Labour Court held that even though the appellant was retrenched after complying with Section 25-F of the Act, the principle of equality enshrined in Section 25G of the Act was violated and persons junior to the appellant were allowed to continue in service. When the matter reached before single judge HC, management argued that his initial appointment was bad and that the appellant was appointed in violation of Articles 14 and 16 of the Constitution and the regulations framed under Section 42 read with Section 23 of the Warehousing Corporations Act, 1962. The learned Single Judge did not find any jurisdictional error in the award of the Labour Court but substituted the award of reinstatement of the appellant with compensation of Rs.87,582/- by assuming that appellant was initially appointed without complying with the equality clause enshrined in Articles 14 and 16 of the Constitution of India and the relevant regulations.
IMP– When the matter reached Supreme Court it found that the learned Single Judge of the High Court committed serious jurisdictional error and unjustifiably interfered with the award of reinstatement passed by the Labour Court with compensation of Rs.87,582/- by entertaining a wholly unfounded plea that the appellant was appointed in violation of Articles 14 and 16 of the Constitution and the regulations. It held that a writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals: these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction.
HC used Art. 226 jurisdiction on following grounds-
- Error apparent on face of record
- Excessive jurisdiction
- Ignorance of law
- Misinterpretation of law
- Overlooking precedents
- Procedural impropriety
- Court also said that be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.
- The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion.
Social Justice– Court held that constitution promote social justice so that life of every individual becomes meaningful and he is able to live with human dignity. The concept of social justice engrafted in the Constitution consists of diverse principles essentially for the orderly growth and development of personality of every citizen. Social justice is thus an integral part of justice in the generic sense. IMP
Bhogpur Coop. Sugar Mills Ltd. v. Harmesh Kumar (2006)
We are not oblivious of the distinction in regard to the legality of the order of termination in a case where Section 25-F of the Act applies on the one hand, and a situation where Section 25-G thereof applies on the other. Whereas in a case where Section 25-F of the Act applies the workman is bound to prove that he had been in continuous service of 240 days during twelve months preceding the order of termination; in a case where he invokes the provisions of Sections 25-G and 25-H thereof he may not have to establish the said fact.
Bhuvnesh Kumar Dwivedi v Hindalco 2014
He was a workmen and was later appointed as supervisor. A permanent position existed in the company but he was appointed contractually for 8 years and later he was terminated. The respondent-employer engaged the appellant-workman for work against a post which was permanent in nature but his appointment was made only for a temporary period from 1992 to 1998 with oblique motive to deprive his statutory rights. The respondent-employer neither complied with the aforesaid mandatory provisions nor did the respondent pay retrenchment compensation or issue three months notice or notice pay in lieu of the same. Contended that 25N was violated.
Held-that the appellant is entitled to reinstatement with full back wages from the date of the termination of his service till the date of his reinstatement and other consequential benefits which accrue to him by virtue of his employment with the respondent company.
Phases/Periods-
1. 1st Period (Colonial period)– There was nothing in Trade dispute Act 1929, regarding retrenchment
2. 2nd period (1953-1984)-There was an attempt to define retrenchment legislature started providing compensation to worker for illegal termination.
3. 3rd Period (1984 onward)– S.2(oo)(bb) ID Act was inserted which was interpreted to include all kinds of workers including daily wage labourers and contract labourers in order to provide them 25F compensation.
4. 4th Period (1991 onward)– Pre-requisite of 25F which S.25B has to be fulfilled and once it is done. The temporary character of work does not matter but if they have complied the conditions of S.25B, they will be entitled to S.25F compensation.
Before 1991, if any casual worker has completed 240 days work, he would get 25F compensation. After 1991, fixed term contractor got excluded, and court by an interpretation also excluded casual workers from 25F compensation. After 2008, in case like Dhoraji, Harjinder, etc court got influenced by social justice and said that this philosophy has to be taken from constitution.
Merchant v Air Cabin Crew
Settlement b/w AIR India and Air Cabin Crew Association. TU propounded that women above 35 years should not work in air but on the ground. Govt. agreed to this proposal and judiciary upheld it.
Read Harjinder Kaur and Bhuvnesh Kumar Dwivedi 2014 on S.25M, N, O.
In Bhuvneshwar Kumar Dwivedi, the issue was HC’s power to interfere with findings of labour court.
S.25N- Conditions precedent to retrenchment of workmen.—
- No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,—
- the workman has been given three months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and
- the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
- An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.
- Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
- Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
- An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
- The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:
- Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
- Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
- Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct, that the provisions of sub- section (1) shall not apply in relation to such establishment for such period as may be specified in the order.
- Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.
S.25O- Procedure for closing down an undertaking.—
- An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least 90 days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner:
- Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
- Where an application for permission has been made under sub-section (1), the appropriate Government, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the general public and all other relevant factors, by order and for reasons to be recorded in writing, grant or refused to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
- Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of 60 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 60 days.
- An order of the appropriate Government granting or refusing to grant permission shall, subject to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the date of such order.
- The appropriate Government may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a Tribunal for adjudication:
- Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
- Where no application for permission under sub-section (1) is made within the period specified therein, or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down.
- Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such undertaking for such period as may be specified in the order.
- Where an undertaking is permitted to be closed down under sub-section (2) or where permission for closure is deemed to be granted under sub-section (3), every workman who is employed in that undertaking immediately before the date of application for permission under this section, shall be entitled to receive compensation which shall be equivalent to 15 days’ average pay for every completed year of continuous service or any part thereof in excess of six months.
Certain commonalities in S.25(m, n and o)
- Prior permission of govt.
- Time period in case of retrenchment
Constitutional validity of these provisions-
Excelware v UOI 1978 (25O)
After this case there was an amendment in 25O, which was challenged in Orissa Textile and Steel Ltd. v State of Orissa 2002
It was contended that 25O intervenes with FR of Employer. They said that Art.19 includes negative right of right to close the industry. Initially when 25O was enacted, it applied on industries having more than 300 workmen but later by an amendment it was brought down to 100.
Reasons of Closure– production related reasons.
In 25F, reasons has to be recorded, 1 month notice and 15 days average wage per year of service. (Eg- A’s salary is 20K pm and he worked for 20 years. He will get 10K*20 compensation)
Court gave 3 substantive and procedural grounds to stuck 25O.
Substantive reasons-
- Concept of Socialism- No concentration of property in few hands. But since India planned economic development by promoting private industries, socialism has to be looked pragmatically ie corporate socialism. So Employers rights should also be recognised.
S.2(j)-“Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;
An industry establishment can comprise of different units some of which may not be industry. Factory is the unit where production happens.
What’s the effect of refusal of permission of closing down?
The employer is compelled to run the industry. Earlier they was no remedy available to employer. So the court invalidated 25O.
S.25O(3)-Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
Workmen of Meenakshi Mills Ltd v Meenakshi Mills 1994 (25N)
It was related to constitutional validity retrenchment provision S.25N. Upholds validity of S.25N by looking at the specific procedure mentioned in the provision. Here there is also a speaking order. Social Welfare character of constitution was also discussed. Remedy under A.226 is available. Para 30, 36, 39.
Papanasam Labour Union v Madura Coats 1995 (25M)
Related to constitutional validity of 25M of ID Act. Same arguments were raised in this case as well as in the Excel ware. Difference between closure and retrenchment was discussed. In closure all workers lose their job but in retrenchment only few lost their jobs. Read all 14 points. Reasonable restriction u/a 19.
Orissa Textile and Steel Ltd. v State of Orissa 2002
Court looked at procedural adversity and 25O.
Relationship between the SUBSTANTIVE AND PROCEDURAL ARGUMENTS– substantive argument talks about constitutional right of employer. Court said that even though procedural requirement have been met but employer’s right under constitution has also to be respected.
S.11A-Powers of Labour Courts, Tribunals and National Tribunals to give appropriate relief in in case of discharge or dismissal of workmen.—
Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is SATISFIED that the order of discharge or dismissal was not justified, IT MAY, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require:
Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.
Read 2(a) and 11A together. Labour court can look at not only legality but also its justifiability.
Industrial Standing order talks about manner of inquiry.
- Preliminary Inquiry- Its based on the complaint. If case is found to be there prima-facie, charge-sheet is framed and both parties are given representation. As per S.30, the worker can be represented by TU leader, Office bearer, etc. Domestic inquiry is completely managerial prerogative.
Indian Iron and Steel Company v Workmen 1958 (This before S.11A was inserted) IMP
It was related dismissal of multiple workmen. Court looked at 4 kinds of dismissal-
- Dismissal on account of misconduct mentioned in Standing Order- Absence from Duty
- Dismissal on account of major misdemeanour.
- Dismissal on account of suspension. During Suspension, worker is entitled to subsistence allowance which 50% of wages.
- Dismissal on account of suspension on account of go-slow.
Court said that tribunals won’t sit as court of appeal over dismissal matters. Court can get into justifiability of judgement of management only if-
- Domestic Inquiry lacks good faith
- Victimisation and unfair labour practice
- Violation of PNJ
- Materials on the basis of which findings has been reached are perverse and baseless.
S.10- Reference of disputes to Boards, Courts or Tribunals.—
- Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time], by order in writing,—
- (a) refer the dispute to a Board for promoting a settlement thereof; or
- (b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
- (c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or
- (d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication:
- Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under clause (c):
- Provided further that] where the dispute relates to a public utility service and a notice under section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced:
- Provided also that where the dispute in relation to which the Central Government is the appropriate Government, it shall be competent for that Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the case may be, constituted by the State Government.
- (1A) Where the Central Government is of opinion that any industrial dispute exists or is apprehended and the dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such dispute and that the dispute should be adjudicated by a National Tribunal, then, the Central Government may, whether or not it is the appropriate Government in relation to that dispute, at any time, by order in writing, refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a National Tribunal for adjudication.]
- Where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a reference of the dispute to a Board, Court, 6[Labour Court, Tribunal or National Tribunal], the appropriate Government, if satisfied that the persons applying represent the majority of each party, shall make the reference accordingly.
- (2A) An order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section shall specify the period within which such Labour Court, Tribunal or National Tribunal shall submit its award on such dispute to the appropriate Government:
- Provided that where such industrial dispute is connected with an individual workman, no such period shall exceed three months:
- Provided further that where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, to the Labour Court, Tribunal or National Tribunal for extension of such period or for any other reason, and the presiding officer of such Labour Court, Tribunal or National Tribunal considers it necessary or expedient to extend such period, he may for reasons to be recorded in writing, extend such period by such further period as he may think fit:
- Provided also that in computing any period specified in this sub-section, the period, if any, for which the proceedings before the Labour Court, Tribunal or National Tribunal had been stayed by any injunction or order of a Civil Court shall be excluded:
- Provided also that no proceedings before a Labour Court, Tribunal or National Tribunal shall lapse merely on the ground that any period specified under this sub-section had expired without such proceedings being completed.
- Where an industrial dispute has been referred to a Board, Labour Court, Tribunal or National Tribunal] under this section, the appropriate Government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.
- Where in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal] under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, 4[the Labour Court or the Tribunal or the National Tribunal, as the case may be], shall confine its adjudication to those points and matters incidental thereto.
- Where a dispute concerning any establishment or establishments has been, or is to be, referred to a Labour Court, Tribunal or National Tribunal] under this section and the appropriate Government is of opinion, whether on an application made to it in this behalf or otherwise, that the dispute is of such a nature that any other establishment, group or class of establishments of a similar nature is likely to be interested in, or affected by, such dispute, the appropriate Government may, at the time of making the reference or at any time thereafter but before the submission of the award, include in that reference such establishment, group or class of establishments, whether or not at the time of such inclusion any dispute exists or is apprehended in that establishment, group or class of establishments.
- (6) Where any reference has been made under sub-section (1A) to a National Tribunal, then notwithstanding anything contained in this Act, no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter which is under adjudication before the National Tribunal, and accordingly,—
- (a) if the matter under adjudication before the National Tribunal is pending a proceeding before a Labour Court or Tribunal, the proceeding before the Labour Court or the Tribunal, as the case may be, in so far as it relates to such matter, shall be deemed to have been quashed on such reference to the National Tribunal; and
- (b) it shall not be lawful for the appropriate Government to refer the matter under adjudication before the National Tribunal to any Labour Court or Tribunal for adjudication during the pendency of the proceeding in relation to such matter before the National Tribunal.
- Explanation.—In this sub-section, “Labour Court” or “Tribunal” includes any Court or Tribunal or other authority constituted under any law relating to investigation and settlement of industrial disputes in force in any State.
- (7) Where any industrial dispute, in relation to which the Central Government is not the appropriate Government, is referred to a National Tribunal, then notwithstanding anything contained in this Act, any reference in section 15, section 17, section 19, section 33A, section 33B and section 36A to the appropriate Government in relation to such dispute shall be construed as a reference to the Central Government but, save as aforesaid and as otherwise expressly provided in this Act, any reference in any other provision of this Act to the appropriate Government in relation to that dispute shall mean a reference to the State Government.
- (10) (8) No proceedings before a Labour Court, Tribunal or National Tribunal in relation to an industrial dispute shall lapse merely by reason of the death of any of the parties to the dispute being a workman, and such Labour Court, Tribunal or National Tribunal shall complete such proceedings and submit its award to the appropriate Government.
Workmen of Firestone Tyre and Rubber Company v Management 1973
Position before S.11A ID Act.
- The right to take disciplinary actions are merely managerial action but if dispute is referred to tribunal, it has to decide its justifiability
- Before imposing punishment, due inquiry as per standing order should be there following all principles of PNJ.
- S.1(3)– Where more than 100 workers employed.
- 2 months notice
- Industry Standing Order should be framed according to the model standing order which would contain-
- Classification of workmen
- Display of notices
- Regulation as to payment of wages
- Shift working hours
- Attendance taking mechanism
- Muster roll should be kept
- Provision related to absence from place of work.
- Termination of services
- Conditions of work
- Terms of employment.
- List of Misconduct- exhaustive in character.
- Standing order should be framework by consensus between workers and management and then sent to certification officer.
- S.1(3)– Where more than 100 workers employed.
- Upheld Indian and Iron and Steel Company.
- Four conditions-
- If quantum of punishment is not proportionate with the the misconduct, then tribunal can intervene.
- Before imposing punishment, employer should conduct proper inquiry as per standing order.
- Even if no inquiry held by the employer, tribunal can give opportunity to adduce evidence and give decisions accordingly.
- If there is no inquiry as per standing order, it becomes defective because of procedural irregularity.
Whether workmen be given reinstatement for defective inquiry?
DK Yadav v Jayme Scooters Industry 1993
Absence from duty is misconduct. The ground of dismissal was absence of duty. Under model standing order, there is provision for absence from duty and a discretion has been given to employer to terminate the person. The reason is the assumption of wilful negligence on part of worker. The petitioner was absent for 5 days and on the very first day he was served a notice which reached him after 4-5 days. When he went after 5 days, he was not allowed to enter the premise. Standing order provides if a worker is consecutively absent for 8 days, he is deemed to have abandoned the employment. The tribunal found that this is not retrenchment. The authority should act fairly, justly, impartially and reasonably. In order to comply with this, circumstances should be looked into as to why he was absent. Since Right to livelihood is a FR, due process must be followed before one is deprived of it. Due process demands exercise of rationality, illegality and procedural impropriety. PNJ (Audi Altern Partem and Rule against bias) should also be followed.
Upturn Ltd. v Shami Banu 1998
Worker went on a maternity leave of 3 months and extended the leave for 3 months without informing the employer. She was terminated on ground of absence of duty. Whether it amounts to retrenchment? Court looked at the language of the standing order which provided that a worker is liable for termination if she/he went on leave without informing the employer for 7 days. Court held it to be arbitrary as this provided for automatic termination without any inquiry. Any standing order providing for automatic termination of permanent employee not directly related to production related work if it does not provide for inquiry. Court said it was not retrenchment as she was a permanent employee by looking at S.2(oo)(bb). Ideally court should have said that retrenchment is different from termination. There is wrong understanding that every termination is retrenchment.
M/s Scooters India Ltd v M Mohammad Yakub 2001
A semi-skilled worker was absent for more than 10 days and hence was terminated without inquiry. Labour court held it to be retrenchment and since 25F provisions not followed, so entitled to reinstatement and compensation. Supreme court agreed with the decision said that automatic termination without inquiry is bad. Here the remedy was good but the logic was bad.
So S.11A which talks about managerial power has become part of judicial power.
But against all this is reading beyond the law because if there is defective or improper inquiry, workers are entitled to reinstatement. In other words, in case of automatic termination without inquiry then tribunal straightaway gets power of inquiry and reinstatement.
Jackeline Mary v Superintendent
Applicant was olympic participant and inducted into police department. In the medical exams, she was found to be having more male hormone and served her termination notices. Standing Order looks gender in binaries.
Copper Engineering Ltd. v Shri PP Munde
28/05/2019
Copper Engineering Ltd. v Shri PP Munde 1975
Reiterated Firestone on the issue of procedure of inquiry. If inquiry is found to be defective then tribunal itself can get into the merits of the case and give opportunity to both sides to lead additional and fresh evidence to substantiate their claims. IMPORTANT. Firestone expanded the scope of material on record and limited the scope of fresh evidence.
Usha Breco Mazdoor Sangh v Management 2008
There was a scuffle between workers and management and after inquiry workers were terminated. Labour court intervened with the matter and did away with the punishment on the ground that charges were not properly proved.
If the inquiry is found to be proper, whether tribunal can intervene with the punishment. Tribunal can look into that only after looking into the merits of the case.
Whether labour court should exercise its discretionary jurisdiction under S.11A if the inquiry is proper? Whether S.11A is discretionary?
Looking at the merits of the case holistically and its justifiability is not discretion but the quantum of relief is discretion. “The upshot of our discussion…..important is how it does so.” SC reiterated that tribunal’s power is not wider and it needs to read along with certain principles. Court is reluctant to give wider power to court but recognise that labour court has discretionary power which has to be exercised judiciously.
Martin Burn v RN Banerjee– Standard of proof regarding misconduct is preponderance of probabilities.
Delhi Cloth Mills case (Pre 1971 amendment)- Held that if the preliminary issues in proper domestic inquiry is found to be in favour of management then tribunal need not go into the merits of the case. But S.11A does not talk about such pre-condition. Quantum of intervention can be decided only by looking at the merits of the case.
For limitations of Tribunals, read Harjinder Kaur case.
Mahindra and Mahindra v NB Naravada 2005 3J IMP
Facts– Worker abused the superior officer and was chargesheeted. Since the chargesheet was vague, he challenged it before labour court which asked the management to frame new chargesheet. Later the worker was terminated.
Held– Labour court found that punishment was harsher and reinstated the worker with back wages. Appellant relied UP SRTC v Subhash Chandra Sharma in which conduct of the driver was in question. Labour court had intervened in the quantum of punishment and Supreme court held that labour court cannot substitute management’s judgment with its own judgment.
Appellant relied on other judgement BC Chaturvedi in which court had held that that tribunal has to apply its mind in deciding the quantum of punishment and that tribunal cannot intervene in the punishment unless its SHOCKINGLY DISPROPORTIONATE. This was affirmed by court.
FIRESTONE and Rubber Company v Workmen 1973 (Summarises the Jurisprudence till 1971 by 10 points)
The principles governing the jurisdiction of the Tribunal when adjudicating disputes relating to dismissal or discharge
- The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal., the latter has power to see if action of the employer is justified.
- Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the Standing Orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality.
- When a proper enquiry has been held by an employer, and the finding of misconduct is plausible conclusion flowing from the evidence, adduced at the said enquiry, the Tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body. The interference with the decision of the employer will be justified only when the, findings arrived at in the enquiry are perverse or the management is guilty of victimisation, unfair labour practice or mala fide.IMP
- Even if enquiry is held by an employer or if the enquiry held by him is not found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer and employee to, adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action; and it is open to the employee to adduce evidence contra. (for additional evidence)
- The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the, merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.
- The Tribunal gets jurisdiction. to consider the evidence placed before-it for the first time in justifications of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.
- It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.
- An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his, action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee, and to enable the Tribunal itself to be satisfied about the alleged misconduct.
- Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to, suggest victimisation.
- (10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is within’ the judicial decision of a Labour Court or Tribunal as was held in The Management of Panitole Tea Estate v. The Workmen.
- (11) The above was the law as laid down by this Court as on 15-12-1971 applicable to all industrial adjudication arising out of orders of dismissal or discharge.
S.11A covers both individual and collective dispute in an industry.
Divisional Controller KSRTC v AT Mane
While in departmental proceedings, the standard of proof is one of preponderance of probabilities (management’s decision is presumed to be in due form), in a criminal case, the charge has to be proved by the prosecution beyond reasonable doubt. Where the charge against the delinquent employee is of a grave nature which involves complicated questions of law and fact, it is desirable to stay the departmental proceedings till conclusion of the criminal case. In case the criminal case does not proceed expeditiously, the departmental proceedings cannot be kept in abeyance for ever and may be resumed and proceeded with so as to conclude the same at an early date. The purpose is that if the employee is found not guilty his cause may be vindicated, and in case he is found guilty, administration may get rid of him at the earliest.
The Labour Court after reconsidering the whole case came to the conclusion that the enquiry has been conducted strictly in accordance with law in a fair manner and charges have rightly been proved against the delinquent employee. However, considering the difference in the standard of proof required in domestic enquiry, vis-a-vis that applicable to a criminal case, the Labour Court repelled the argument of respondent-workman that once he stood acquitted he was entitled for all reliefs including re-instatement and back wages.
Additional Evidence- corroborative evidence, supporting document
Fresh Evidence- De Novo evidence
S.11A FINAL POSITION
Case laws limited the power of tribunal in deciding quantum of punishment. Post 1997, Proportionality Principle came into prominence. Post Mahindra and Mahindra (3J) case, Shockingly Disproportionate view was propounded. In C Ramana v PATRC court held that the common thread running through all these cases is that court should not intervene with admin decision illogical, suffers from procedural impropriety, irrationality or shocking to the consciousness of court. Divisional Controller KSRTC v AT Mane held that if the inquiry is found to be proper, then tribunal can not intervene with the quantum of punishment unless it is found to be Shockingly Disproportionate. Also no fresh evidence can be adduced it the inquiry is proper. Court should decide the matter on judicious grounds and not on compassionate grounds.
There is lot of ego issue when re-instating dismissed workmen.
Disclaimer– Pending review