Workers resorted to strike in public utility services industry in which some of them resorted to violent demonstrations, acted in defiance of law and order and there were others who were merely silent spectators. The strike was declared illegal.

• Can punishment of dismissal or termination be imposed on all workmen or only on those who fomented illegal strike and did act detrimental to the maintenance of law and order?
• Can a joint charge-sheet be given to all workmen or only individual charge-sheet be given to some of them?

Solution:

• Yes, the punishment of dismissal or termination be imposed on all workmen who fomented illegal strike in a public utility service in breach of contract without giving notice of strike to the employer within six weeks before striking (Section 22 of the Industrial Disputes Act, 1947).
• No, a joint charge-sheet cannot be given to all workmen but charge sheet can be given to only individual who took part in illegal strike. Under Section 35 of the Industrial Disputes Act, 1947, persons who refuses to take part or to continue to take part in any strike or lock- out which is illegal under this Ac, cannot be made subject to expulsion or to any fine or penalty compared with other members of the union. Thus the charge sheet may be given to those who are liable for punishment in respect to illegal strike. notwithstanding.

Situational Problem 02:

The workman of Annasaheb Patil Sugar Factory was employed during crushing season only and consequent to closure of season they ceased to work.

• Is it retrenchment? Give reasons.
• What is the difference between closure and retrenchment?

Solution:

• The information in the problem suggests that it is seasonal employment and it is assumed that the employment will cease after the completion of season. Hence it is not retrenchment.
• The difference between closure and retrenchment is as follows:
• Closure means the permanent closing down of a place of employment or part thereof, while in retrenchment, the employer lessens over-burdened employees under circumstances, viz. Government policies, loss in some departments, etc.
• Closure affects all the employees, while retrenchment affects some of the workmen.
• In closure business is terminated permanently, while in retrenchment business goes on uninterrupted.

Situational Problem 03:

Union in an industrial establishment has 60 % of total workmen as its members since last 10 months. It plans for recognition under the MRTU & PULP Act, 1971.

• Will that union succeed? Why?
• Suggest the procedure for getting recognition under the MRTU & PULP Act, 1971

Solution:

• Yes, the Union will succeed to get recognition. Section 11 of the MRTU & PULP Act, 1971, any applicant union which has for the whole of the period of six calendar months a membership not less than 30% of the total number of employees employed in any undertaking may apply for being registered as a recognized union for such undertaking.
• The procedure for recognition is provided under Section 12 of the MRTU & PULP Act, 1971.
• The trade union seeking recognition must make an application in the prescribed form to the Industrial Court with necessary documents attached and prescribed fees.
• On finding the application on a preliminary scrutiny to be in order, the Industrial Court displays a notice on the notice board of the undertaking, declaring its intention to consider the said application on the date specified in the noticeIt calls for any objections from other union.
• If, after considering the objections, if any, that may be received and if after holding such inquiry in the matter as it deems fit, the Industrial Court recognises the trade union subject to conditions of Section 19 of the MRTU & PULP Act, 1971.

Situational Problem 04:

Niteesh and Company Ltd are manufacturing salt from seawater on the coast of Ratnagiri in Maharashtra. They have employed 30 workers to collect the salt, pack it and load it into the trucks. The inspector of factories prosecutes the director for not maintaining a register of workers as required under the factories act.

• Can the Factories Act be applied to this company? State relevant case law.
• Define factory under the factories Act, 1948.

Solution:

• Yes, the Factories Act is applicable in this case, the concerned case law is Ardeshir H. Bhiwandiwala v. State of Bombay, AIR 1962 SC 29
• According to section 2(m) “factory” means any premises including the precincts thereof-

(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or

(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, – but does not include a mine subject to the operation of the Mines Act, 1952 (XXXV of 1952) or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place.

Situational Problem 05:

An investigating officer was refused entry into the premises of the workplace at which the investigation officer was entitled to enter by Mr. X

• Can Mr. X be punished under the MRTU & PULP Act, 1971?
• If so, what is a punishment that can be given to Mr. X. Support your answer with relevant provisions?

Solution:

• Yes, Mr. X can be punished under Section 49 of the MRTU & PULP Act, 1971
• According to Section 49 of the MRTU & PULP Act, 1971, any person who wilfully,—
• prevents or obstructs officers, members of the office staff, or members of any union from exercising any of their rights conferred by ‘ this Act;
• refuses entry to an Investigating Officer to any place which he is entitled to enter ;
• fails to produce any document which he is required to produce; or
• fails to comply with any requisition or order issued to him by or under the provisions of this Act or the rules made thereunder; shall, on conviction, be punished with fine which may extend to five hundred rupees.

Situational Problem 06:

A probationer technical workman was charge sheeted for riotous or disorderly behaviour outside the place of work

• Was the employer required to charge sheet the said workman to conduct departmental inquiry?
• If domestic inquiry is necessitated in the above case, is the delinquent employer entitled for copy of document submitted to Enquiry Officer but having no bearing on charges and not relied upon the examination?

Solution:

• No, the employer is not required to charge sheet the said workman to conduct departmental inquiry because his behaviour is outside the place of work.
• Yes, in domestic inquiry the employer is entitled for copy of document submitted to Enquiry Officer but having no bearing on charges and not relied upon the examination.

Situational Problem 07:

One person was working for cleaning and sweeping the floors of temple. He was appointed by the trust of the temple

• Can the person claim as ‘workman’ under the IDA, 1947?
• Is the temple ‘industry’ under the IDA, 1947?

Solution:

• Yes, the person can claim as workman under the Industrial Disputes Act, 1947, since the relationship as workman and employer can be established between him and the trust,
• Yes, applying Triple Test given by the honourable Supreme Court in Bangalore Water Works v. Rajappa case, a temple can be industry where systematic activities are carried on by the co-operation of the workmen and the employer, within the meaning of Section 2(j) which defines industry.

Situational Problem 08:

35 women are employed in Mythili Industries. Since only two women workers were having children below 5 yrs. of age, the manager of the industry refuses to provide creche for the children.

• Is the refusal correct? Give reasons?
• What are the objects of the Factories Act, 1948?

Solution:

• No, his refusal is incorrect. Under section 48 of the factories act, every factory wherein more than 30 women workers work shall be provided with a suitable room for the use of children under age of 6 as a creche. The number of women workers having children does not matter here. He has to provide for creche as the number of women workers are 35 which is more than 30.
• The main objectives of the Indian Factories Act, 1948 are to regulate the working conditions in factories, to regulate health, safety welfare, and annual leave and enact special provision in respect of young persons, women and children who work in the factories.

Situational Problem 09:

A recognized trade union resorts to strike

• When can a recognized trade union resort to strike under the MRTU & PULP Act, 1971?
• What happens if strike is commenced one day before the date when strike could commence? Will it affect the recognition of the trade union?

Solution:

• If the strike is in consequence of the industrial dispute, the recognized trade union can resort to strike after giving employer a notice of 14 days in the prescribed form ‘I’ and also after obtaining vote of majority of the members of union in favour of strike before the notice of strike is given.
• In such case, the strike would become illegal and if illegal strike continues further ,in consequence, the Industrial Court can cancel recognition of a trade union after giving show cause notice.

Situational Problem 10:

Employee is pursuing his fellow employee to join an unrecognized trade union. When employer learned it, he transferred him under management [policy.

• Is any way unfair labour practice under the MRTU & PULP Act, 1971?
• What action employee can take under the MRTU & PULP Act, 1971?

Solution:

• Yes, under Schedule II of the MRTU & PULP Act, 1971, if the employer interferes with, restrain or coerce employees in the exercise of their right to organize, form, join or assist a trade union and to engage in connected activities by threatening an employee with discharge or dismissal, if he joins a union, it amounts to an unfair labour practice on the part of employer.
• Under Section 28(1) of the MRTU & PULP Act, 1971, an employer may, within 90 days of the occurrence of such unfair labour practice. File a complaint before the Court competent to deal with such complaint either under Section 5, or under Section 7, as the case may be of the Act.

Situational Problem 11:

An award passed by the Tribunal giving higher pay scale to workmen. The employer terminates the award after one year. The employer, after termination of the award makes payment of wages at the scale prevalent prior to passing of award.

• Whether the action of the employer of reducing wages is legal?
• How long the award remains in operation?

Solution:

• No, the employer is not entitled to stop the increment granted under the award given by the Industrial Tribunal after the termination of award. The employer is not within his right to terminate the award unilaterally. Workman can recover the deficit of wages from the employer by referring to the Industrial Tribunal.
• An award remains in operation for a period of one year from the date on which it came into operation.

Situational Problem 12:

A union has got 38% membership of total workmen employed in the establishment and is applied for grant of recognition. Another union objects on the ground that it has got 48% membership of the total workmen in that establishment.

• To which authority the application for grant of recognition of trade union has to be made?
• Give any two duties of recognized union.

Solution:

• Yes, the Union will succeed to get recognition. Section 11 of the MRTU & PULP Act, 1971, any applicant union which has for the whole of the period of six calendar months a membership not less than 30% of the total number of employees employed in any undertaking may apply for being registered as a recognized union for such undertaking.
• The Duties of recognized trade unions are (a) the membership subscription shall be not less than fifty paise per month; (b) the Executive Committee shall meet at intervals of not more than three months; (c) all resolutions passed, whether by the Executive Committee or the general body of the union, shall be recorded in a minute book kept for the purpose; (d) an auditor appointed by the State Government may audit its account at least once in each financial year.

Situational Problem 13:

The university of M is engaged in imparting education to large number of students. Madan, a clerk was employed in the printing press of the University for the past three years. The University struck of the name of Madan from the muster rolls, and asked Madan not to attend duties any more.

• Whether the University is an industry?
• The action of the University amounts to what, and whether it is legal?

Solution:

• Yes, applying Triple Test given by the honourable Supreme Court in Bangalore Water Works v. Rajappa case, University can be industry where systematic activities are carried on by the co-operation of the workmen and the employer, within the meaning of Section 2(j) which defines industry.
• The action by the University amounts to retrenchment. The action is illegal because condition precedent to retrenchment are not complied by the University.

The post Labour Laws: Situational Problems appeared first on The Fact Factor.

Award:

According to Section 2(b) of the Industrial Disputes Act, 1947 ‘Award’ means an interim or a final determination of any Industrial Dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunaland includes an arbitration award made under section 10A.

According to section 2(b) of the Industrial Dispute Act, 1947, definition of award has two parts. The first part covers a determination, final or interim, of any industrial dispute. The second part takes in a determination of any question relation to an industrial dispute. Thus, both the part of definition assumes the existence of an industrial dispute, actual or apprehended.

Ingredients of Award: 

To constitute Award under Section 2(b) of the Industrial Dispute Act, 1947 the following ingredients are to be satisfied –

• An Award is an interim or final determination of an industrial dispute.
• It is an Interim or final determination of any question relating to such dispute.
• Such interim or final determination is made by any Labour Court, Industrial Tribunal or National Industrial Tribunal.
• Award (Judgement) of Arbitrators under section 10A is an Award.

Form of Report or Award:

The section 16 of Industrial Dispute Act provides for procedure that, the report of board or Court shall be in writing and shall be signed by all the members of the Board or Court, as the case may be, to be followed. The award of a Labour Court or Tribunal or National Tribunal shall be in writing and shall be signed by its Presiding Officer.

Publication of Award:

The section 17 of the act mentions about publication procedure of the award decided after the due course. The clause (1) of the section states: Every report of Board or Court together with any minute of dissent recorded therewith, every arbitration and every award of a Labour Court, Tribunal or National Tribunal shall within a period of thirty days from the date of its receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit. The second clause of the same section provides for immunity against any legal proceedings, thus avoiding any further delay, to the award finalised.

Commencement of Award:

Commencement of award is described under section 17-A of the act. According to Section 17A, an award (including an arbitration award) shall become enforceable on the expiry of the thirty days from the date of its publication under section 17. But if the Central Government is of opinion, in any case where the award has been given by National Tribunal will be inexpedient on public grounds affecting economy or social justice to give effect to the whole or any part of the award the appropriate Government, or as the case may be, the Central Government may, by notification in the Official Gazette, declare that the award shall not become enforceable on the expiry of the said of thirty days.

Enforcement of an Award:

An award may be enforced of the following ways:

• The aggrieved party may apply to Appropriate Government for prosecuting the defaulting party under section 29 or section 31 of this Act.
• Where any money is payable by the employer to a workman, the workman may move the Appropriate Government for recovery of the money due to him under award.
• The party in whose favour the award has been granted may file a suit and obtain a decree, which shall be enforced by execution under the provisions of the Civil Procedure Code.

Settlement:

According to Section 2(p) of the Industrial Dispute Act, 1947 “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.

The common mechanisms for settlement of disputes under the Industrial Dispute Act,1947 are conciliation and mediation. Conciliation is the procedure in which there is an involvement of a third party who provides assistance to the parties in dispute to carry out negotiation between them. 

Section 4 of the Industrial Dispute Act, 1947 lays down the function of a conciliation officer which is to create a kindred atmosphere within the industry which will help the parties to settle the disputes between them. This is a function with an administrative nature and not a judicial one. A conciliation officer is required to hold proceedings, carry out investigations regarding the dispute in a fair manner to help the parties arrive at a settlement.

Common Points of Awards and Settlement

Persons bound by the Award and settlement:

Following are the person bound by any award decided, under section 18:

1. 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.
2. 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.
3. A settlement arrived at in the course of conciliation proceedings under this Act or arbitration award in a case where a notification has been issued under sub section (3-A) of section 10-A 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, which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.

Penalty for breach of Settlement or Award:

If any person who commits breach of any terms of a settlement or Award is liable for punishment. The punishment provided for is imprisonment which may extend to 6 months or with fine or with both.

Period of operation of settlement and Award:

The section 19 speaks about the period for which settlement and award will be binding upon the parties to the concerned industrial dispute. 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. 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 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 expire 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.

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 17-A. Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit.

The post Awards and Settlement appeared first on The Fact Factor.

The main object of the Industrial Disputes Act is the investigation and settlement of industrial disputes. For this particular purpose, various authorities have been created under the Act. The adjudication of the industrial dispute has at the first instance been kept out of the jurisdiction of the civil courts so that efforts may be made for the settlement of such dispute through some other agencies at the earliest. The industrial disputes are mainly settled through three different modes. They are – (i) conciliation (ii) adjudication, and (iii) arbitration. Different authorities under the Act are works committee, conciliation officer, Board of conciliation, Court of inquiry, Labour Court, Tribunals.

The Industrial Disputes Act, 1947 provides an elaborate and efficient machinery for the peaceful and amicable settlement of the industrial disputes. They include:

1. Works Committees (Sec 3)
2. Conciliation Officers (Sec 4)
3. Board of Conciliation (Sec5)
4. Courts of Enquiry (Sec6)
5. Labour Courts (Sec 7)
6. Tribunals (Sec 7A)
7. National Tribunals (Sec 7B)

Works Committee (Section 3 of the Act):

Negotiation is an important communication process used to resolve conflicts. It is voluntary, non-binding, and a process in which parties control the outcome as well as the procedure. Section 3(1) of the Industrial Disputes Act provides for Works Committee.

Condition for Forming Works Committee:

The industrial establishment in which one hundred or more workmen are employed or have been employed on any day in the preceding twelve months should constitute the works committee. The appropriate Government by general or special order, order the employer to constitute a Works Committee in the prescribed manner.

Constitution of Works Committee:

Works Committee must consist of representatives of employer and workmen engaged in the establishment. The number of members in the committee should be fixed and not more than 20. The number of representatives of workmen on the committee shall not be less than the number of representatives of the employer. The representatives of the workmen shall be chosen in the prescribed manner from among the workmen engaged in the establishment and in consultation with their trade union, if any, registered under the Indian Trade Unions Act, 1926 (16 of 1926). The Central Government or the equivalent authority holds the right to dissolve this committee if they feel it is not constituted as per the guidelines.

Duties of Works Committee:

It shall be the duty of the works committee

• to take measures for securing and preserving amity and good relations between the employer and the workmen;
• to comment upon the matters of their common interest; and
• to endeavour, to compose any material difference of opinion in respect of such matter.

The main purpose of constitution of Works Committee is to develop the sense of partnership between the employer and the workmen. They are normally concerned with the problems arising in the day to day working of the concern. The function of the work committee is to ascertain the grievances of the employees and to arrive at some agreement when the occasion so arises. Works committees are more suitable for the prevention of industrial unrest by unit. Their main purpose is to solve the problem in cordial atmosphere of mutual goodwill and friendship, in the premises of the factory, not as to contesting parties before a conciliation officer. It is comparatively easier to reconcile the differences in the initial stage when neither of the party has taken a very hard stand. From this point of view also, Works Committees plays an effective role in preventing industrial disputes.

The finding of Works Committee is recommendatory or advisory. The final power to decide whether they are to be implemented rests with the employer. The employer is not bound to implement the findings of such committee.

In Kemp & Co. Ltd. v. Workmen, (1955) IILLJ 481 Mad case, the Court observed that the institution of Works Committee has been provided in the rules framed under the Industrial Disputes Act, in order to look after the welfare and interest of the workman,

In the Metal Box Company of India Ltd. v. their Workmen, 1969 AIR 612 case, the Court observed that agreed solutions between the Works Committee and the management are always entitled to great weight and should not be readily disturbed, particularly in matters like classification, grades and scales which are peculiarly within the personal knowledge of the members of the Works Committee.

Dissolution of the Works Committee:

The Central Government or any officer authority to whom the power under Section 39 has been delegated, may, after making necessary enquiry, dissolve any works committee at any time, by an order in writing provided it or he is a satisfied the committee has not been constituted in the accordance with the rules or that not less than 2/3rd of the number of representatives of workmen have without any reasonable justification, failed to attend three consecutive meetings of the committee or that the committee has ceased to function for any other reason, thus defeating the very purpose for which this institution exists in the Industrial law.

Difficulties in Working of Works Committee:

• lack of appreciation on the part of both the parties;
• illiteracy and lack of understanding amongst the workers;
• disinclination of the workers’ representatives to participate in the deliberations of the
  committee; and
• works representatives became unpopular because of their failure in satisfying the high
  expectation of the workers.

Conciliation Officer (Section 4 of the Act):

Conciliation is a process by which discussion between the employers and the employees is kept going through the participation of a conciliator.  Conciliator plays a pivotal role in bringing round the parties involved in the disputes and held in resolving difference by making the parties understand and appreciate the difficulties of each party involved in the dispute in the Industrial field.  As a mediator, his tactful handling of the situation sometimes saves the situation from taking a serious turn.  

Section 4 of the Industrial Disputes Act, provides for Conciliation Officers. This Section corresponds to Section 18-A of the Trade Disputes Act, 1929. According to
this section, the appropriate Government is empowered to appoint, by notification in the Official Gazette, 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. According the sub-section (2), a Conciliation Officer may be appointed for a specified area or for specified industries in a specified area or for one or more specified industries either permanently or for a limited period. Conciliation Officer shall be deemed to be a public servant within the meaning of Section 21 of the Indian Penal Code.

The Conciliation officer is empowered to exercise all quasi-judicial powers of a Civil Court under the Civil Procedure Code, 1908. (CPC). He is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department, having a degree in law and at least seven years’ experience in the labour department including three years of experience as Conciliation Officer.

Powers of Conciliation Officer:

Section 11 of the Industrial Dispute Act, 1947, gives provisions for the powers of the conciliation officer.

• Conciliation Officer for the purpose of inquiring into an existing apprehended Industrial Dispute is empowered, after giving the notice to enter the premises occupied by the Industrial establishment.
• Conciliation Officer is also empowered to call for and inspect any document which he may consider relevant to the dispute.
• Conciliation Officer enjoys the same powers as are available to the civil Courts in respect of compelling the parties, to appear and produce all the relevant documents. Thus, the Conciliation officer is empowered to exercise all quasi-judicial powers of a Civil Court under the Civil Procedure Code, 1908. (CPC).
• All Conciliation Officers are Public Servants within the meaning of Section 21 of the Indian Penal Code.

Duties of Conciliation Officers:

Section 12 of the Industrial Disputes Act, gives provisions for duties of the conciliation officer.

• In every industrial dispute, existing or apprehended, the conciliation officer shall hold the conciliation proceedings in prescribed manner.
• The conciliation officer for settling the dispute without delay shall investigate the dispute and may do all such things to make the parties to come fair and amicable settlement of dispute.
• The conciliation officer shall send a report on the settlement of the dispute to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute.
• If no such settlement is arrived at, the conciliation officer shall as soon as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute, and bringing about a settlement thereof together with a full statement of such facts and circumstances and the reasons on account of which, in his opinion, a settlement could not be arrived at.
• If, on a consideration of the failure report referred above the appropriate Government is satisfied, that there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal it makes such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons thereof
• A report under Sec. 12 shall be submitted within 14 days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government.

Effects of Conciliation Proceedings:

Under Section 22 of the Act, the Strike and Lockout in a public utility service is prohibited during the conciliation proceedings. If a settlement is arrived, then he is required to send a report along with a copy of a memorandum of settlement signed by the parties to the Appropriate Government. If no settlement is arrived at between the parties the conciliation officer is required to send a full report to the appropriate government, giving all the circumstances relating to the dispute and the steps taken by him to resolve the dispute along with the reasons why the settlement could not be arrived at. Section 33 of the Act provides that during the pendency of Conciliation proceedings, no employer shall after the conditions of service of a workman to his prejudice discharge or punish by dismissal any workman during above proceedings.   

Board of Conciliation (Section 5 of the Act):

Where conciliation fails, board of conciliation takes over. The functions of the Board of Conciliation are the same as those of the conciliation officers. The purpose of constituting boards of Conciliation is to bring about settlement of individual disputes. Section 5 of the Act provides for the constitution of a Board of Conciliation and its powers and duties. A Board of Conciliation is a body of persons, which the appropriate Government may constitute by notification in the Official Gazette for the purpose of promoting the settlement of an industrial dispute. It shall consist of a Chairman and two or four other members, as the appropriate Government may think fit. The Chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appointed to represent shall be appointed on the recommendation of that party. But if any party fails to make recommendation aforesaid within the prescribed time, the appropriate Government shall appoint such persons as it thinks fit to represent that party.

A Board having a prescribed quorum may act notwithstanding the absence of the Chairman or any of its members or any vacancy in its number. The above-mentioned provisions are subject to the restriction that if the appropriate Government notifies the board that the services of the Chairman or of any other member have ceased to be available, the board shall not act until a new Chairman, or member, as the case may be, has been appointed.

Duties of Board of Conciliation:

Section 13 of the Industrial Disputes Act, 1947, gives provisions related to duties of the Board of Conciliation.

• Where the dispute has been referred to a Board under this Act, it shall be the duty of the Board to endeavour to bring about at settlement of the same and for this purpose the Board shall, in such manner as it thinks fit and without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute
• If a settlement of dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the Board shall send a report thereof to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute
• If no such settlement is arrived at, the Board shall as soon as practicable after the close of investigation send to the appropriate Government a full report on the steps taken by the Board for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof Report shall also contain a full statement of such facts and circumstance and the reasons on account of which, in its opinion a settlement could not be arrived at.
• The board shall submit its report within 2 months of the date on which the dispute was referred to it or within such shorter period as may be fixed by the appropriate Government.

Court of Inquiry (Section 6 of the Act):

Provisions for Court of Inquiry have been made in Section 6 of the Industrial Disputes Act, which lays down that:

The Central Government or the State Government, as the case may be, can appoint a Court of Inquiry. Such appointment is to be notified in the Official Gazette. After notification in Official Gazette, it attains a valid status. Such Court of inquiry is meant to inquire into any matter appearing to be connected with or to an industrial dispute.

A Court may consist of one independent person or such number of independent person as the appropriate Government may think fit and where a Court consists of two or more
members, one of them shall be appointed Chairman. The Court, having the prescribed quorum, may act notwithstanding the absence of the Chairman or any of its members or any vacancy in its number. In absence of Chairman of the Court of inquiry the Court shall not function. If the appropriate Government notifies the Court that the services of the chairman have ceased to be available the Court shall not act until a new Chairman has been appointed.

Duties and Powers of Court of Inquiry:

The powers and duties of these Courts are provided in Sections 11, 14 and 16 to 21 of Chapter IV of the Act. Section 14 of the Industrial Act 1947 prescribes duties of the Court of inquiry are as follows:

• The court of inquiry is to inquire into the matters referred to it under section 10(1) of the Industrial Dispute Act by the appropriate government. It is only those matters which are appearing to be or connected with the industrial dispute that can be referred to it under section 10(1) or under Section 12(5) of the Industrial Dispute Act, 1947.
• The court of inquiry is to make a report to the appropriate government on the basis of an inquiry held by it on the matters referred to it, ordinary within 6 months from the date of commencement of the inquiry. The inquiry made beyond the period of 6 months will not be illegal as the provision is directory in nature.

Effects of Proceedings Before Court of Inquiry:

Unlike the proceedings in the nature of conciliation when there is a legal bar regarding the worker’s right to go on strike, the employer’s right to declare Lockout and dismiss or otherwise punish the workmen under Section 33 of the said Act. The provision of this section 22, 23 and 33 provide that during the pendency of the preceding before the Court, the following rights remain unaffected.

• The workmen’s right to go on strike;
• The Employer’s right to declare Lockout; and
• The employer’s right to dismiss or otherwise punish the workmen under Section 33 of the Act.

Labour Court (Section 7 of the Act):

The appropriate Government may, by notification in the Official Gazette constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the second schedule and for performing such other functions as may be assigned to them under this Act. A Labour Court shall consist of one person only to be appointed by the appropriate Government.

The qualifications of a person who can be appointed as Presiding Officer of the Labour Court are mentioned in sub-section (3) of Section 7 as follows :

• he is, or has been, a judge of a High Court; or
• he has, for a period of not less than three years, been a District Judge or an Additional District Judge; or
• he has held any judicial office in India for not less than seven years; or
  (d) he has been the Presiding Officer of a Labour Court constituted under any Provincial Act or State Act for not less than five years.

Jurisdiction of Labour Courts:

The Labour Courts adjudicate the following disputes relating to matters specified in the second schedule:

• The propriety or legality of an order passed by an employer under the standing order.
• The application and interpretation of standing orders.
• Discharge or dismissal of workmen including reinstatement of or grant of relief to workmen wrongfully dismissed.
• Withdrawal of any customary concession or privilege.
• Illegality or otherwise of strike or lock-out. and
• All matters other than those specified in the Third schedule.

Duties of Labour Court:

Section 15 of the Act gives provisions related to the duties of Labour Court. The Labour Court shall hold its proceedings expeditiously and shall as soon as practicable on the conclusion thereof submit its award to the appropriate Government. The functions of the Labour Court as provided in the Act are:

• adjudication of industrial disputes relating to any matter specified in the Second Schedule;
• performing of such other functions as may be assigned to them under this Act.

No time period has been laid down for the completion of proceedings but it is expected that such Courts will hold their proceedings without going into the technicalities of a Civil Court. Labour Court has no power to permit suo motu the management to avail the opportunity of adducing fresh evidence in support of charges). Provisions of Section 137 of the Limitation Act do not apply to reference of dispute to the Labour Court. In case of delays, Court can mould relief by refusing back wages or directing payment of past wages

In Statesman Pvt. Ltd. v. H.R. Deb, AIR 1968 SC 1495 case, the Court observed that the expression “holding a judicial office” in Section 7 (3) (d) signifies more than discharge of judicial functions while holding some other office. The phrase postulates that there is an office and that that office is primarily judicial. Office means a fixed position for performance of duties. The use of same expression in Chapter V of Part VI of the Constitution not in pari materia can have no bearing upon the Industrial Disputes Act and vice versa. The intention of the Legislature really is that men who can be described as independent and with sufficient judicial experience must be selected. The mention of High Court Judges and District Judges earlier in the same section indicates that ordinarily Judicial Officers from the Civil judiciary must be selected at least so long as the separation of judiciary from the executive in the public services is not finally achieved. The appointment of a person from the ranks of Civil judiciary carries with it an assurance, which is unique. The functions of a Labour Court are of great public importance and quasi-Civil in nature. Men of experience on the Civil side of the law are more suitable than Magistrates. Persons employed on multifarious duties and in addition performing some judicial functions, may not truly answer the requirement of Section 7 and it may be open in a quo warranto proceeding to question their appointment on the ground that they do not hold essentially a judicial office because they primarily perform other functions.

In South Indian Bank Ltd. v. A.R. Chacko, AIR 1964 SC 1522 case, the Court observed that Schedule II of the Industrial Disputes Act, 1947 refers specifically to Section 7 of the Act. That section lays down that the appropriate Government may, by notification in the Official Gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act. Section 33C (2) in terms assign the determination of the amount of benefit to which the workman is entitled to receive from the employer and which is capable of being computed in terms of money to such Labour Court as may be specified in this behalf by the appropriate Government. The Labour Court, therefore, as specified by the Government, and not the Industrial Tribunal, has jurisdiction to deal with an application made to it under Section 33C (2) of the Act.

In Vijaya Bank v. Shyamal Kumar Lodh, CIVIL APPEAL Nos. 4211 & 4212 OF 2007 case, the Supreme Court held that a Labour Court constituted under the Industrial Disputes Act, 1947, within the local limits of whose jurisdiction the establishment is situated, has jurisdiction to decide any dispute regarding subsistence allowance. The Court observed that here in the present case undisputedly dispute pertains to subsistence allowance and the Labour Court where the workman had brought the action has been constituted under Section 7 of the Industrial Disputes Act, 1947 and further the appellant bank is situated within the local limits of its jurisdiction.

In State of Maharashtra v. Labour Law Practitioners’ Appeal No. 450 of 1979 case, the Bombay High Court held that the Labour Court adjudicates upon disputes which are essentially of a civil nature. The Labour Court’s functions were held as far back as 1968 to be ‘quasi-civil’ in nature. This must apply to the Industrial Court. The Industrial Court has original jurisdiction under the statue. It is also a principal Court, exercises supervision over the Labour Court and hears Appeals from the decisions of the Labour Courts. Accordingly, a member of the Industrial Court may well be said to be a district judge. The Industrial Court and the Labour Court constitute a hierarchy or system of courts, the latter being inferior to the former. The posts of Labour Court judges would, being thus inferior to the post of the district judge, i.e., the Industrial Court Judge, form part of the judicial service.

Tribunals (Section 7A of the Act):

The appropriate Government may be notification in the Official Gazette, constitute one or more tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second schedule or the Third schedule. A Tribunal shall consist of one person only to be appointed by the appropriate Government. It shall discharge judicial functions, though it is not a court.   It is the duty of the Tribunal to adjudicate upon any industrial dispute. These Tribunals shall perform such other functions as may be assigned to them under this Act.

The Tribunal shall consist of one person only, whom the State Government shall appoint. Any person having one of the following qualifications may be appointed as the Presiding Officer of the Industrial Tribunal, namely:

• if he is, or has been, a judge of a High Court; or
• if he has for a period of not less than three years, been a District Judge or an Additional District Judge.

It is provided by Section 7-A (4) that the Appropriate Government, if it thinks fit, may appoint two persons as assessors to advise the Tribunal in the proceedings before it. The Government is empowered under Section 7-A of the Act of constitute a Tribunal for a limited time or for any particular case as the case may be.

Jurisdiction of Industrial Tribunals:

Section 7 (A)(l) of the Act deals with the jurisdiction of the industrial tribunal. Industrial tribunals have a wider jurisdiction than a Labour Court. It has jurisdiction over any matter specified in Second or Third Schedule. The following matters are specified under the Third schedule:

• Wages, including the period and mode of payment.
• Compensatory and other allowances.
• Hours of work and rest intervals.
• Leave with wages and holidays.
• Bonus, Profit sharing. Provident Fund and gratuity.
• Shift working otherwise than in accordance with standing orders.
• Classification by grades.
• Rules of discipline.
• Nationalization.
• Retrenchment of workmen and closure of establishment, and
• Any other matter that may be prescribed

Duties of a Tribunal:

The duties of a tribunal are the same as those of a Labour Court

In J.K. Iron and Steel Co., Kanpur v. Iron and Steel Mazdoor Union, AIR 1956 SC 231 case, The Court observed that although these Tribunals are invested with many trappings of a Court but do not have the same status as Courts. The Tribunal can consider the conditions of service of the workmen and can vary them if it is found necessary. The fact that a particular condition exists in other similar concerns is no justification if it could not be justified on its own merits.

National Tribunals (Section 7B of the Act):

The Central Government may by notification in the Official Gazette, constitute one or more National Tribunals for the adjudication of industrial disputes which in the opinion of the Central Government, involve questions of national importance or are of such a nature that industrial establishments situated in more than one state are likely to be interested in, or affected by such disputes. A national tribunal shall consist of one person only to be appointed by the Central Government. The duties of a National Tribunal are the same as those of as Labour Court or an Industrial Tribunal. [Sec.7B (2)]

National Tribunal are constituted by the Central Government through Official Gazette. These Tribunals are constituted for deciding industrial disputes of National importance. These Tribunals are also constituted to solve the industrial disputes of the industries situated in two or more States,

One person as a Presiding Officer is to be appointed by the Central Government. If it is deemed necessary, the Central Government may appoint two or more persons as assessors to advise and assist the Presiding Officer of one-man Tribunal. No person shall be qualified for appointment as Presiding Officer of a National Tribunal unless he is or has been a Judge of a High Court. Section 7-C further provides that such a presiding officer should be an independent person and must not have attained the age of 65 years

Duties of National Tribunals:

Section 15 of the Act, lays down that where an industrial dispute has been referred by the Central Government to a National Tribunal for adjudication, it shall hold its proceedings expeditiously and shall submit the award to the appropriate Government, as soon as possible. Duties of National Tribunals are the same as Labour Court.

Common Provisions:

Section 7C: Disqualification of Presiding Officer:

According to Section 7-C of the Act, no person shall be appointed to, or continue in the office of the Presiding Officer of a Labour Court, Tribunal or National Tribunal, if –

• He is not an independent person; or
• He has attained the age of sixty-five years.

The moment any person suffers from any disqualification, he shall cease to have authority to act in the office concerned.

Section 8: Filling of Vacancies:

If, for any reason a vacancy (other than a temporary absence) occurs in the office of the presiding officer of a Labour Court, Tribunal or National Tribunal or in the office of the chairman or any other member of a Board or Court, then, in the case of a National Tribunal, the Central Government and in any other case, the appropriate Government, shall appoint another person in accordance with the provisions of this Act to fill the vacancy, and the proceeding may be continued before the Labour Court, Tribunal, National Tribunal, Board or Court, as the case may be, from the stage at which the vacancy is filled.

Section 9: Finality of Orders Constituting Boards, etc.:

(1) No order of the appropriate Government or of the Central Government appointing any person as the chairman or any other member of a Board or Court or as the presiding officer of a Labour Court, Tribunal or National Tribunal shall be called in question in any manner; and no act or proceeding before any Board or Court shall be called in question in any manner on the ground merely of the existence of any vacancy in, or defect in the constitution of, such Board or Court.

(2) No settlement arrived at in the course of a conciliation proceeding shall be invalid by reason only of the fact that such settlement was arrived at after the expiry of the period referred to in sub- section (6) of section 12 or sub- section (5) of section 13, as the case may be.

(3) Where the report of any settlement arrived at in the course of conciliation proceeding before a Board is signed by the chairman and all the other members of the Board, no such settlement shall be invalid by reason only of the casual or unforeseen absence of any of the members (including the chairman) of the Board during any stage of the proceeding.

Conclusion 

The Industrial Disputes Act ensures peace and harmony among all the industrial establishments, and if any conflict arises, the provisions in the Industrial Disputes Act helps in solving the issue in a systematic manner in which all the parties are satisfied and every decision made is fair and just. Different authorities under the Act are works committee, conciliation officer, Board of conciliation, Court of inquiry, Labour Court, Tribunals.

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In this article, we will be studying working of different organizations to check whether the organization comes under the ambit of definition of industry or not.

In Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 case, a seven-member Judges’ Bench was constituted to determine the scope of the industry. The triple test working principle was born in the case that is used to check the validity of different establishments. The Triple Test has requisites that are as follows:

1. Systematic Activity
2. Co-operation between the employer and employee
3. Activity concerned with the production of goods and services for the satisfaction of human wants.

Here, the industry will not embody any religious services or other work undertaken out of spiritual bliss. The profit motive stands irrelevant when it comes to any venture. Through the triple test, the focus is concentrated on the functional part emphasizing the employer-employee relations. An establishment that is engaged in philanthropic activities does not cease to become an industry because of it. Thus, if all the above-stated provisions are complied with, then the undertaking can be termed as an ‘industry’ under section 2(j) of the Industrial Disputes Act, 1947.

Notes:

• Absence of profit motive or gainful objective is irrelevant wherever the undertaking is whether 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 organization is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.

All organized activity possessing the triple elements in (i) although not trade or business, may still be “industry”, provided the nature of the activity, viz., the employer – employee basis, bears resemblance to what we find in trade or business. This takes into the fold of “industry”, undertaking, callings and services, adventures analogous to the carrying on of trade or business. All features, other than the methodology of carrying on the activity, viz., in organizing the cooperation between employer and employee, may be dissimilar. It does not matter, if on the employment terms, there is analogy.

Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations.  The ideology of the Act being industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition, nothing less, nothing more. Hence, the Supreme Court observed that professions, clubs, educational institutions. co-operatives, research institutes, charitable projects and other kindred adventures, if they fulfill the triple tests listed above, cannot be exempted from the scope of Section 2(j).

The Supreme Court, in Bangalore Water Supply case laid down the following guidelines for deciding the dominant nature of an undertaking:

• Where a complex of activities, some of which qualify for exemption, others not, involves the employees on the total undertaking. Some of whom are not “workmen” or some departments are not productive of goods and services if isolated, nature of the department will be the true test. The whole undertaking will be “industry” although those who are not “workmen” definition may not be benefit by the status.
• Notwithstanding with previous clause, sovereign functions strictly understood alone qualify for exemption and 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).

Sovereign Functions:

Earlier Sovereign functions were excluded from the ambit of the definition of industry. In Bangalore Water Supply and Sewerage Board v. A Rajiappa (AIR 1978 SC 548) case the Court has clearly said that Sovereign functions which are not involving employee-employer cooperation are excluded.  Sovereign functions strictly understood alone qualify for the 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).

In Corpn. of City of Nagpur v. Employees (1960 I LLJ 523) case held that If a department of a municipality discharged many functions, some pertaining to “industry” and other non-industrial activities, the predominant function of the department shall be the criterion for the purposes of the Act.

The amendment Act 1982 (which has not been brought into force) has excluded any activity of the Government relating to sovereign functions of the Government, including all activities carried on by the department of the Central Government dealing with defence, research, atomic energy, and space.

Municipal Corporation:

If a department of a municipality discharges many functions some pertaining to industry and others non-industrial, the predominant function of the department shall be the criterion for the purpose of the Act. While in the exercise of delegated legal functions, the Municipal Corporation is not an industry. It is an industry; when its departments render services to the public at large, such as construction, lighting, transport, etc.

By these criteria following activities of Municipal corporation come under the ambit of definition of the industry: Tax, Public Conveyance, Fire Brigade, Lighting, Water Works, City Engineers, Enforcement (Encroachment), Sewerage, Health, Market, Public gardens, Education, Printing Press, Building and General administration.

In D.N. Banerjee v. P. R. Mukherjee, (AIR 1953 SC 58) case, the dispute was between employees working in the sanitary department of Budge Budge Municipalty and Administration. The dispute was regarded as an industrial dispute as both the definition of “industry” and “industrial dispute” were attracted. It was held that the departments those dealing with sanitation and electricity fall within the definition of Industry.

In Corpn. of City of Nagpur v. Employees (1960 I LLJ 523) case the Court held that If a department of a municipality discharged many functions, some pertaining to “industry” and other non-industrial activities, the predominant function of the department shall be the criterion for the purposes of the Act.

Hospitals and Charitable Institutions:

In State of Bombay v. Hospital Mazdoor Sabha (1960 AIR SC 610) case, the Supreme Court held the State is carrying on an ‘undertaking’ within Sec. 2(j) when it runs a group of hospitals for purpose of giving medical relief to the citizens and for helping to impart medical education. The court observed as follows: An activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an ‘undertaking. It is the character of the activity in question which attracts the provisions of Sec. 2 (j), who conducts the activity and whether it is conducted for profit or not, do not make a material difference. Thus, activities that have no commercial implications, such as hospitals carried on with philanthropic motives would be covered by the expression ‘undertaking’. The mere fact that Government runs such activity is immaterial. In case activity is industry if carried on by a private person, it would be so, even if carried on by the Government.

In Management of Safdarjung Hospital v. Kuldip Singh (AIR 1970 SC 1406) case, the decision in State of Bombay v. Hospital Mazdoor Sabha, 1960 AIR SC 610 case is overruled. it was held that a place of treatment of patients run as a department of the government was not an industry because it was a part of the sovereign functions of the government. Charitable hospitals run by Government or even private associations cannot be included in the definition of the industry because they have not embarked upon economic activities analogous to trade or business. If hospitals, nursing home or a dispensary is run as a business in a commercial way, there may be elements of the industry.

In Dhanrajgiri Hospital v. Workmen, AIR 1975 SC 2032 case, the main activity of the hospital was imparting of training in nursing and the beds in the hospital were meant for their practical training. It was held not to be an industry, as it was not carrying on any economic activity in the nature of trade or business.

Therefore, a charitable hospital run by a private trust, offering free services and employing a permanent staff is an industry as there is a systematic activity, a cooperation between employer and employees and rendering of services which satisfies human wants and wishes. Further, the services of employees are hired as in any other business.

In FICCI v. Workmen, AIR 1972 SC 763 case, the Court observed that exemptions to charitable institutions under Section 32(5) of Payment of Bonus Act is not relevant to the construction of Section 2(j), there is an industry in the enterprise, provided the nature of the activity, namely the employer-employee basis bears resemblance to what is found in trade or business. The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.

Charitable Institutions:

Category – 1:

Those institutions which get profit, but the profits are siphoned (used) for altruistic (unselfish) purposes. The first condition of organized and systematic activity is passed. There is an employee and employer cooperation. Hence the second test is passed. The employee-employer cooperation is for the production of goods and services for human wants. Hence the third test is also passed. To make a profit is the motive. (Actually, it is immaterial). Hence such charitable institutions come under the ambit of definition of “Industry”.

If the institution is run for production and or supply of goods and services with an eye on profit, it is plainly an industry. The fact that the whole or substantial part of profits so earned is diverted for purely charitable purposes does not affect the nature of the economic activity which involves the cooperation of employer and employee and results in the production of goods and services. The workers are not concerned about Where the profit is going. They work and receive wages and are treated like any other workmen in any similar industry. The application of the income for philanthropic purposes, instead of filling individual coffers, makes no difference either to the employees or to the character of the activities.  The motive of the employer in the final disposal of products or profits is immaterial.

Category – 2:

Charitable institutions those make no profit but hire the service of employees as in any other business, but the goods/ services produced, are made available at a low or no cost to the needy and poor. The first condition of organized and systematic activity is passed. There is the hiring of employees as in any other business, there is employee and employer cooperation. Hence the second test is passed. The employee-employer cooperation is for the production of goods and services for human wants. Hence the third test is also passed. To make a profit is not the motive. (Actually, it is immaterial). Hence such charitable institutions come under the ambit of definition of “Industry”.

It is an allotropic modification of the first category. If a socially oriented kind person hires employees and, in cooperation with them, produces and supplies goods or services to the needy and the poor at a low price or free of cost, then he is doing for charity.  As the workmen are concerned, they contribute their labour in return for wages and conditions of service similar to any other similar business. Both pay similar wages under similar working conditions. The charitable approach is towards the users of services and goods and not towards the workmen. The Industrial Dispute Act, 1947 regulates industrial relations between employers and employers,
employers and employee and employee and employee. The Act has nothing to do with the charity. The income-tax Act may give,
some rebates in taxes for such activity. The motive of the employer in the final disposal of products or profits is immaterial.

By this definition, Gandhi Ashrams producing cloth using cotton, charkhas, and handlooms are also termed as “Industry”.

Category – 3:

Charitable institutions that are oriented on a humane mission fulfilled by persons who work, not because they are paid wages, but they work out of their passion for the cause and get job satisfaction. The first condition of organized and systematic activity is passed. Here the second test fails, because there is no employer-employee relation. Everybody is working out of their passion. Hence such charitable institutions do not come under the ambit of definition of “Industry”.

In such cases, there is no concept of an employer or employee. Everybody is working for some cause without expectation of anything in return neither in monetary form nor in physical form.

Legal Firm:

In National Union of Commercial Employees v. M.R. Meher, it was held that a solicitor’s firm is not an industry, although specifically considered, it is organized as an industrial concern. The court held that a person following a liberal profession does not carry on his profession in any intelligible sense with the active co-operation of his employees. Subsidiary work which is purely incidental type and which is intended to assist the solicitor in doing his job has no direct relation to the professional service ultimately rendered by the solicitor. There is, no doubt, a kind of co-operation between the solicitor and his employees, but that co-operation has no direct or immediate relation to the advice or service which the solicitor renders to his client. However this was overruled by Bangalore Water Supply case. wherein it was held that in view of the infrastructure of the offices of professional persons, the contribution to the success of the institution comes not merely from the professional or specialist but from all those whose excellence in their respective spheres makes for total proficiency.

Conclusion:

The law in force presently is the interpretation of the original Section 2(j) as was laid down by Bangalore Water supply Case. The triple test formula is surely pro-labour as it seeks to bring more activities within the ambit of the Industrial Dispute Act 1947. Whenever any dispute arises to determine the validity of an establishment, the provisions of the triple test come into force. If the provisions comply with the work undertaken by the establishment, then it will be an industry under section 2(j) of the Act or else not. There might be times where the establishment is running on profit motive through the rendering of services. Here, the establishment imitates an industry but is not an industry in real. The triple test plays a significant role in the judgements passed by the Court while dealing with uncertain validities of business entities. Whenever any dispute arises, one should consider what type of work the establishment is engage in so that it helps to provide clarity in future.

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In this article, we shall understand the meaning of important term “Appropriate Government”. Various power are given to the appropriate Government under the Industrial disputes act, 1947.

The Industrial Disputes Act has made provision for the investigation and settlement of industrial disputes and for certain other purposes. It provides for special machinery of conciliation officers, work committees, the court of inquiry, Labour courts, Industrial Tribunals, and National Tribunals, defining their powers, functions, and duties and also the procedure to be followed by them. It also enumerates the contingencies when a strike or lock-out can be lawfully resorted to when they can be declared illegal or unlawful, conditions for laying off, retrenching discharging or dismissing a workman, circumstances under which an industrial can be closed down and several other matters related to industrial employees and employers. 

As per the provisions of the Industrial Disputes Act, 1947, when conciliation fails to bring an amicable settlement of the dispute, the conciliation officer has to submit a failure report to the appropriate Government with his own view for reference. The appropriate Government, after proper examination of the failure report, refers it either to the Labour Court or to the Industrial Tribunal for promoting a settlement of the dispute. Under Sec 10 of the Industrial Disputes Act 1947, the appropriate Government enjoys discretionary power to refer an industrial dispute to the court or tribunal. The law prescribes five major provisions for reference to a dispute.

• By the first proviso, the appropriate Government has been granted with the liberty to make the reference to a Labour Court if the matter comes under Schedule-II.
• Secondly, the Government has been granted with further power of referring the dispute to Labour Court even if it comes under Schedule-Ill of the Act, provided the dispute relates to less than 100 workers. Usually, the matters under Schedule-Ill falls under the jurisdiction of the Tribunal.
• Thirdly, where the dispute relates to public utility services and a strike notice under Sec 22 has been given; if the appropriate Government after examination, thinks fit, can make a reference of the dispute, to the court.
• Fourthly, where the parties to an industrial dispute apply in the prescribed manner either jointly or separately to the appropriate Government for a reference of a dispute to the Board, Court, then the Government can refer the same to the Board, Court or Tribunal.
• Fifthly, where the strike or lock-out is in existence at the time of reference of the dispute to Labour Court or Tribunal, the appropriate Government may by order prohibit the continuance of any strike or lock-out in that industry.
• Besides this, if any industrial dispute exists or is apprehended, the employer and the workmen can enter into an agreement and submit it to the appropriate Government for reference of the dispute to the arbitrator. In this case, the appropriate Government has to refer the same to the arbitrator (s) chosen by them (the worker and management).

From the above explanation we can conclude that the appropriate government has to play a very important role in solving industrial disputes. The appropriate Government under the Industrial Disputes Act, 1947 enjoys a wide power for reference of disputes to Boards, Courts or Tribunals.

Let us see the definition of the term “appropriate Government” and what includes.

Section 2 (a) Appropriate Government:

“Appropriate Government” means—

(i) in relation to any industrial dispute concerning  any industry carried on by or under the authority of the Central Government, or by a railway company or concerning any such controlled industry as may be specified in this behalf by the Central Government or in relation to an industrial dispute concerning a Dock Labour Board established under section 5A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), or the Industrial Finance Corporation of India Limited formed and registered under the Companies Act, 1956 (1 of 1956)], or the Employees’ State Insurance Corporation established under section 3 of the Employees’ State Insurance Act, 1948 (34 of 1948), or the Board of Trustees constituted under section 3A of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948), or the Central Board of Trustees and the State Boards of Trustees constituted under section 5A and section 5B, respectively, of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952), or the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956), or the Oil and Natural Gas Corporation Limited registered under the Companies Act, 1956 (1 of 1956)], or the Deposit Insurance and Credit Guarantee Corporation established under section 3 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961), or the Central Warehousing Corporation established under section 3 of the Warehousing Corporations Act, 1962 (58 of 1962), or the Unit Trust of India established under section 3 of the Unit Trust of India Act, 1963 (52 of 1963), or the Food Corporation of India established under section 3 or a Board of Management established for two or more contiguous States under section 16 of the Food Corporations Act, 1964 (37 of 1964), or the Airports Authority of India constituted under section 3 of the Airports Authority of India Act, 1994 (55 of 1994),or a Regional Rural Bank established under section 3 of the Regional Rural Banks Act, 1976 (21 of 1976), or the Export Credit and Guarantee Corporation Limited or the Industrial Reconstruction Bank of India the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987)], or an air transport service, or a banking or an insurance company], a mine, an oilfield, a Cantonment Board,] or a 6 [major port, any company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, or any corporation, not being a corporation referred to in this clause, established by or under any law made by Parliament, or the Central public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the Central Government, the Central Government, and

(ii) in relation to any other industrial dispute, including the State public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government:

Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment;

Section 25 L (b) in The Industrial Disputes Act, 1947 (Added by 1976 Amendment)

(b) notwithstanding anything contained in sub- clause (ii) of clause (a) of section 2,

(i) in relation to any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or

(ii) in relation to any corporation[ not being a corporation referred to in sub- clause (i) of clause (a) of section 2] established by or under any law made by Parliament, the Central Government shall be appropriate Government.

By amendment Act of 1982, several new establishments have been added to the list under this definition.

In Hindustan Aeronautics v. Their Workmen, AIR 1975 SC 1737 case, the Court held that the State Government is the appropriate government in respect of a separate unit of the company within its jurisdiction, even though it may be functioning under the directions of its Head Office situated elsewhere.

In workmen of Sri Ranga Vilas Motors v. S.R. V. Motors, AIR 1967 SC 1040 case, the Court held that the competence of the Mysore State Government to make a reference in respect of a dispute relating to a transfer of workman employed in Banglore, through the Head Office of the company was situated in Madras State. The Court held that there should be a connection between the dispute and the territory of the State and the industry, concerning which the dispute arose. The conclusion was based on the view that if the workman was working at a place in a state different from that in which the Head Office was situated, the employment would be in separate unit or establishment, and hence, the appropriate government of the State in which the workman was employed.

Indian Legal System > Civil Laws > Labour Laws > Industrial Disputes Act, 1947 > Appropriate Government

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Closure:

• The Industrial Disputes Act, 1947, originally does not contain the provisions relating to the closure of an industry. The provisions relating to the law of closure were inserted in the year 1957 in view of the Supreme Court judgment in case Hariprasad Shivshankar Shukla v/s. A.D. Diwelkar, AIR 1957 S.C 121
• Subsequently, over a period of years the law relating to closure has undergone a series of amendments from time to time and thus was consolidated to the present position in the year 1982.
• According to Section 2(cc) of the Industrial Disputes Act, Closure of an industry means the permanent closing down of a place of employment or part thereof.
• Section 2(cc) of the Industrial Disputes Act was inserted by the Industrial Disputes (Amendment) Act of 1982, (w.e.f. 21-8-1984)

Provisions of Closure of an undertaking under Section 25 (O):

•  Subsection (1): An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner:  PROVIDED that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
• Subsection (2):Where an application for permission has been made under subsection (l),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 regards to the, genuineness and adequacy of the reasons stated by the employer, the interests of the general public and all other relevant factors, by order. and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
• Subsection (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.
• Subsection (4): An order of the appropriate government granting or refusing to grant permission shall, subject to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the date of such order.
• Subsection (5): The appropriate government may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a Tribunal for adjudication: PROVIDED that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
• Subsection (6):Where no application for permission under sub-section (l) 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.
• Subsection (7): Notwithstanding anything contained in the foregoing provisions of this section, the appropriate government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such undertaking for such period as may be specified in the order.
• Subsection (8): Where an undertaking is permitted to be closed down under sub-section (2) or where permission for closure is deemed to be granted under 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 fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.

Undertakings Covered Under Section 25(O):

• Those in which 100 or more workmen were employed on an average per working day for the preceding 12 months;
• Those which satisfy the definition of “an industrial establishment” contained in Section 25(L).

Procedure for Closure of an Undertaking:

• The procedure for the closure of an undertaking is specified in Subsection (1) of Section 25 (o) the Industrial Disputes Act, 1947.
• An employer who intends to close down an undertaking of an industrial establishment shall apply, for prior permission in the prescribed manner at least ninety days before the date on which the intended closure is to become effective, to the appropriate government.
• The notice should state clearly the reasons for the intended closure of the undertaking.
• The notice must seek prior permission of appropriate government for the intended closure.
• A copy of such application to the appropriate government shall also be served simultaneously to the representatives of the workmen in the prescribed manner.

Undertakings Excluded From Obtaining Prior Permission Before Closure:

• The exceptions are mentioned in Section 25 (o) Subsections (1) and (7) of the Industrial Disputes Act, 1947.
• As per Subsection (1) of Section 25(o) the provisions of Section 25(o) are not applicable to an undertaking set up for the construction of building, bridges, roads, canals, dams or for other construction work (infrastructure projects).
• As per Subsection (7) of Section 25(o), 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 the order can allow closure of establishment without approval notice.

Grant and Refusal of Permission:

• The grant or refusal of permission for closure of an undertaking is discussed in Subsection (2) of Section 25 (o) the Industrial Disputes Act, 1947.
• When an employer makes an application to the appropriate government for closure under the sub-section (l) of Section 25(o), the appropriate government conducts the necessary inquiry.
• A reasonable opportunity is given to the employer, the workmen, and persons interested in such closure of being heard. The appropriate government also verify genuineness and adequacy of the reasons stated by the employer. The interests of the general public and all other relevant factors are also considered.
• If the appropriate government is satisfied that the reasons for the intended closure of the undertakings are not  – (i) adequate and sufficient; or (ii) such closure is prejudicial to public interest, direct the employer not to close such undertaking.
• An order of the appropriate government granting or refusing to grant permission is final and binding on all the parties and remains in force for one year from the date of such order.

When is Permission deemed to be Granted?

• The concept of deemed permission is discussed in Subsection (3) of Section 25 (o) the Industrial Disputes Act, 1947.
• When an application has been made by an employer for permission for the closure of the undertaking under sub-section (1) and the appropriate government does not communicate the order granting or refusing to the permission of the closure of the undertaking to the employer within a period of sixty days from the date on which such application is made, Then the permission applied is deemed to have been granted on the expiration of the said period of sixty days.

Appeal:

• The provision for an appeal by the employer or any workman against the refusal or grant to the permission of the closure of an undertaking is discussed in Subsection (5) of Section 25 (o) the Industrial Disputes Act, 1947.
• The appeal should be made within 30 days from the date of an order of the refusal to the permission of the closure of an undertaking.
• The industrial tribunal within 30 days from the filing of appeal should affirm the order of the appropriate government or set aside it.
• The award by the tribunal is bound on all parties.
• The validity of the order of refusal for closure is for one year.

Illegal Closure:

• The topic of illegal closure is discussed in Subsection (6) of Section 25 (o) the Industrial Disputes Act, 1947.
• If an application for permission for the closure of the undertaking under sub-section (l) is not made at least ninety days before the date on which the intended closure is to become effective, to the appropriate government. then the closure is illegal Or
• The permission for closure has been refused, by the appropriate government then the closure of the undertaking is deemed to be illegal from the date of closure and the workmen are entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down

Closure Compensation to Workmen:

• The method of compensation to workmen after the closure of an undertaking is discussed in Subsection (8) of Section 25 (o) the Industrial Disputes Act, 1947.
• When an undertaking is approved or permitted or deemed to be permitted to be closed down, every workman in the undertaking who has been in continuous service for not less than one year immediately before the date of application for the permission is entitled to notice and compensation as specified in Section 25 (N) as if the said workman had been retrenched under that section.
• The compensation shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.

Provisions for Restarting of Closed Down Undertaking, S. 25(P):

• If the appropriate government is of opinion in respect of any undertaking of an industrial establishment to which Chapter V applies and which closed down before the commencement of the Industrial Disputes (Amendment) Act, 1976 (32 of 1976),
• Clause (a): that such undertaking was closed down otherwise than on account of unavoidable circumstances beyond the control of the employer;
• Clause (b): that there are possibilities of restarting the undertaking;
• Clause (c): that is necessary for the rehabilitation of the workmen employed in such undertaking before its closure or for the maintenance of supplies and services essential to the life of the community to restart the undertaking or both; and
• Clause (d): that the restarting of the undertaking will not result in hardship to the employer in relation to the undertaking,

• it may, after giving an opportunity to such employer and workmen, direct, by order published in the Official Gazette, that the undertaking shall be restarted within such time (not being less than one month from the date of the order ) as may be specified in the order.

Restarting of Closed Down Undertaking:

• The appropriate government has the power to order restarting of the closed down undertaking of an industrial establishment to which Chapter VB applies, and which were closed down prior to the commencement of the Amendment Act, 1976.
• It is to be noted that after 1976, the appropriate government has no power to restart the legally closed down undertakings.
• The closed down of the undertaking must be on account of unavoidable circumstances beyond the control of the employer. There is a possibility of restarting the closed down undertaking. Restarting of the closed undertaking is essential for well being of the workmen and society as a whole and after restarting there is no hardship to the employer.
• Before giving the order of restarting of the undertaking, the appropriate government is bound to give an opportunity to the employer and employee, and only thereafter, it satisfied, it may direct, by an order published in the Official Gazette, that the undertaking shall be restarted within the time (not less than one month from the date of the order) as may be specified in order.

Provisions for Penalty for Lay-Off and Retrenchment Without Permission S 25(Q):

• Any employer, who contravenes the provisions of section 25-M or section 25-N 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.

Provisions for Penalty for Closure of Undertaking Without Permission S 25(R):

• Subsection (1): Any employer, who closes down an undertaking without complying with the provisions of sub-section (1) of section 25-O shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
• Subsection (2): Any employer, who contravenes [an order refusing to grant permission to close down an undertaking under sub-section (2) of section 25-O or a direction given under section 25P], shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to five thousand rupees, or with both, and where the contravention is a continuing one, with a further fine which may extend to two thousand rupees for every day during which the contravention continues after the conviction.

Certain provisions of Chapter V-A to apply to an industrial establishment to which this Chapter applies S. 25 (S)

• The provisions of sections 25B, 25D, 25FF, 25G, 25H and 25J in Chapter V-A shall, so far as may be, apply also in relation to an industrial establishment to which the provisions of this Chapter apply.

Note: The definition of “continuous service” of Section 25(B) applies to all provisions contained in Section 25E to 25 R.

Indian Legal System > Civil Laws > Industrial Disputes Act, 1947 > Closure of Undertaking

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Industrialization in a country has always contributed to employment, contribution to national income, per capita income, exports and economic development on one side and industrial disputes on the other. For the industrial growth, there must be peace and harmony is a prerequisite. The Conflict between the employees and employers is inherent in industrial society. The Industrial Disputes Act was enacted to provide machinery and forum for the settlement of such conflicting and seemingly irreconcilable interests without disturbing the peace and the harmony in industry. The Act provides social justice to both employees and employers.

The Directive Principles of State Policy enshrined in Part IV of our Constitution, the supreme lex, are not “pious declarations” but “instruments of instructions” which command every government in power to promote the wellbeing and the interests of the underdog, namely, the working class. Many of these Directive Principles seek to establish a social order where “Justice-social, economic and political” shall be assured to all, especially, the working class. Consequently, the labour laws enacted to protect and promote the interests of the workers should be accorded a pivotal position in our Legal System.

According to Section 2(k) of the Industrial Disputes 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.

Thus, Industrial disputes may be among following different parties:

1. Employers and employers,
2. Employers and workmen and
3. Workmen and Workmen.

Historical Background of Industrial Disputes Act:

The first enactment dealing with the settlement of industrial disputes was the Employers’ and Workmen’s Disputes Act, 1860. Prior to the year 1947, industrial disputes were being settled under the provisions of the Trade Disputes Act, 1929. Experience of the working of the 1929 Act revealed various defects, which needed to be overcome by fresh legislation. Accordingly, the Industrial Disputes Bill was introduced in the Legislature. The Bill was referred to the select committee. On the recommendations of the Select Committee amendments were made in the original Bill.

Industrial Disputes Act, 1947 is meant for settling disputes, if any, between workers and the industrialists or factory owners. It is the principal central legislation for settlement of industrial disputes.

The main labour laws prior to the Industrial Disputes Act, 1947, were:

• The Bengal Regulation VII of 1819.
• The Workmen’s Breach of Contract Act, 1859
• The Employments & Workmen’s (Disputes) Act, 1860
• The Trade Disputes Act, 1920
• The Indian Trade Unions Act, 1926
• Trade Disputes Act, 1929
• Bombay Trade Disputes (Conciliation) Act, 1934
• The Trade Disputes (Amendment) Act, 1938.

The major shortcomings of these Acts were that the settlements or awards under these Acts were not binding or conclusive.

General Information of the Act:

• An Act to make provision for the investigation and settlement of industrial disputes and for certain other purposes.
• It is applicable to the whole of India w.e.f. On the first day of April 1947.
• The Act consists of 7 Chapters consisting of 40 sections, 5 Schedules, and Appendix.
• Other related rules are The Industrial Tribunal (Procedure) Rules, 1949, The Industrial Tribunal (Central Procedure) Rules, 1954, and The Industrial Disputes (Central) Rules,1957.

The Preamble of the Act:

The preamble to the Industrial Disputes Act, 1947 mentions that this Act makes provision for the investigation and settlement of Industrial Disputes and certain other purposes. The words “for certain purposes” essentially refer and include prevention of Industrial Disputes also as is clear from the Statement Objects and Reasons. Thus two institutions prescribed for the prevention and settlement of Industrial Disputes, provided for in the Bill are the Works Committees consisting of representatives of employers and workmen and Industrial Tribunals.

Objects of the Industrial Disputes Act:

The preamble to the Industrial Disputes Act, 1947 reads thus, ‘an act to make provision for the investigation and settlement of industrial disputes and for certain other purposes.’ On the basis of various judgments given from time to time by the supreme court, the principal objective  of the act may be stated as below:

1. to make provision for the investigation and settlement of industrial disputes and for certain other purposes.
2. To ensure social justice to both employers and employees and advance the progress of the industry by bringing about harmony and cordial relationship between the parties.
3. To provide machinery for settling disputes arising between the capital and the labour by peaceful methods and through the machinery of conciliation, arbitration and if necessary, by approaching the tribunals constituted under the act.
4. To promote measures for securing and preserving amity and good relations between the employer and workmen.
5. To enable workmen to achieve their legitimate demands by means of the legitimate weapon of strikes, and thus promote collective bargaining.
6. To prevent illegal strikes and lockouts.
7. To provide relief to workmen in cases of layoff, retrenchment, and closure.
8. To enable the State to play a constructive role in employer workmen relationship. Thus the concept of Welfare State is maintained.

In Dimakuchi Tea Estate v. Dimakuchi Tea Estate, 1958, AIR SC 353, case, the Supreme Court laid down following objectives of the Act:

• Promotion of measures of securing and preserving amity and good relations between the employer and workmen.
• Investigation and settlement of industrial disputes between employers and employers, employers and workmen, or workmen and workmen with a right of representation by registered trade union or federation of trade unions or an association of employers or a federation of associations of employers.
• Prevention of illegal strikes and lock-outs.
• Relief to workmen in the matter of lay-off and retrenchment.
• Promotion of collective bargaining.

Similar observations are made in the cases Steel Authority of India v. Union of India, AIR 2006 SC 3229,

In Workmen, Hindustan Lever Limited v. Hindustan Lever Limited, AIR 1999 SC 525 case, The Court opined that the Court by the interpretative process must strive to reduce the field of conflict and expand the area of agreement and show its preference for upholding agreements sanctified by mutuality and consensus in the larger public interest, namely, to eschew industrial strife, confrontation, and consequent wastage.

In Hospital Employees Union v. Christian Medical College, (1987) 4 S.C.C. 691 case, the Court held that the Act applies to all industries irrespective of religion or caste of parties. It applies to the industries owned by Central and State Governments too.

In Claridge & Co. Ltd. v. Industrial Tribunal, Bombay, AIR 1951 Bom 100 case, the Court held that the purpose of the Act is to provide machinery for a just and equitable settlement by adjudication by independent Tribunals, by negotiations and conciliations of industrial disputes. It substitutes arbitration and fair negotiation, instead of the trial of strength by strikes and lock-outs.

In Hariprasad Shivshankar Shukla v. A. P. Divekar, AIR 1957 SC 121 case, the Court observed that the purpose of all labour legislation is to provide fair wages and prevent disputes so that production might not be adversely affected.

In Rajasthan State Road Transport Corporation v. Krishna Kant, AIR 1995 SC 1715, 1726 case the Court observed: “the policy of law emerging from the Act … is to provide an alternative dispute resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and un-encumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to Civil Courts….”

Causes of Industrial Disputes:

The main causes of industrial disputes are:

• Wages: Low wages of industrial workers constitute a major cause of industrial disputes in the country. Wages have not been rising in proportion to the rise in prices (inflation). Hence labourers to demand higher wages which management may deny and it consequently leads to disputes.
• Bonus: It is the second major cause of industrial disputes. The workers feel that they should have a greater share in the profits of the industrial concern and demand higher bonus which management may deny and it consequently leads to disputes.
• Working Conditions: The working conditions such as lesser working hours, the security of a job, better safety measures in the factory, restrooms, leave, canteen, gratuity facilities, etc. are important for workers for their motivation towards the job. Lack of or insufficient working conditions are also responsible for many industrial disputes.
• Trade Unions: Recognition of trade union and rivalry between different trade unions is also the main cause of industrial disputes.
• Retrenchment: Due to modern techniques and modern machinery, production is simplified and requires less labour. In such a case, the management tries to reduce the manpower by retrenchment. This may create insecurity in the minds of workers and may lead to an industrial dispute.
• Political Influence: Most of the trade unions are associated with one or another political party. To score political point politicians may indulge in creating disputes in the industry.

Classification of Industrial Disputes:

Interest Disputes:

These conflicts are also called ‘conflicts of interest’ or ‘economic disputes’. In most cases the disputes arise from the demands or proposals for improvement in wages, benefits, job security or terms or conditions of employment. Such disputes relate to the establishment of new terms and conditions of employment for the general body workers. Interest disputes must be properly negotiated or bargained or compromised through collective bargaining. These disputes should be settled through conciliation as far as possible. Such disputes are solved generally on ‘give and take’ basis.

Grievance or Rights Disputes:

These disputes are also known as ‘conflicts of rights’ or ‘legal disputes’. They involve individual workers or a group of workers in the same group.  It is a protest by the workers against the act of management that deprives the rights of the employees. The grievance disputes arise out of payment of wages, fringe benefits, working hours, over time, promotions, demotions, seniority, safety, retirement benefits, seniority work-rules, leave rules and health related aspects, etc. In some cases, disputes arise especially over the interpretation and application of collective agreements. There are, more or less definite standard for resolving a dispute i.e., the relevant provision of the Act or collective agreement, employment contract, works rules or law, or customs or usage.

Disputes over Unfair Labour Practices:

The most common Labour type of dispute is the disputes over Unfair Practices in industrial relations. The management many times discriminates against workers on the ground that they are the members of the trade union and they participate in the activities of the union. Such disputes arise over the malpractices adopted by the management against a worker or trade union. The examples of such malpractices may be discrimination against workers for their being members of the trade union or their involvement in union activities; interference, restraint or coercion of employees from exercising their right to organize, join or assist a union; establishment of employer sponsored union and coerce the workers to join such union; refusal to bargain with the recognized union; recruiting new employees during a strike which is not declared illegal; failure to implement an award, settlement or agreement; indulging in acts of violence. Such disputes can be settled through conciliation or such disputes are settled according to the normal procedure laid down under the Industrial Disputes Act 1947.

Recognition Disputes: Recognition Disputes arises when the management of an organization refuses to recognize a trade union for the purpose of collective bargaining or to represent its member employees in case of a conflict or dispute. Issues under this category differ according to the cause that led the management to refuse recognition. Here the problem is that of attitude. A trade union victimization happens when there is already an existing trade union or it is a case of multiple trade unions and each making a claim for recognition. Recognition Disputes also arises when a particular trade union does not have sufficient representatives. Recognition disputes are settled through the guidelines given by the government for recognition of trade union or with the help of Code of Discipline which has been voluntarily laid down by the government.

Other Legal Measures for Industrial Peace:

• Industrial Disputes Act, 1947
• Factories Act, 1948
• Industrial Employment, (Standing Orders) Act, 1948
• Payments of Bonus Act, 1965
• Equal Remuneration Act, 1976
• Adoption of ‘Code of Discipline’, 1958
• Employees Provident Fund and Family Pension Act, 1952
• Employees State Insurance Act, 1948
• Payment of Gratuity Act, 1972
• Minimum Wages Act, 1948

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