INDUSTRIAL DISPUTE

ACT,
1947
OBJECT
THE OBJECT OF THE INDUSTRIAL
DISPUTE ACT, 1947 IS TO MAKE
PROVISION FOR THE
INVESTIGATION AND SETTLEMENT
OF INDUSTRIAL DISPUTES AND FOR
CERTAIN OTHER PURPOSES.
THE ACT IS PRIMARILY MEANT FOR
REGULATING THE RELATIONS OF
EMPLOYERS AND WORKMEN, PAST,
PRESENT AND FUTURE.
MAIN FEATURE OS THE ACT
THE ACT EXTENDS TO WHOLE INDIA
INCLUDING STATE OF JAMMU AND
KASHMIR.
IT IS APPLICABLE TO INDUSTRIES AND
CERTAIN CATEGORIES OF INDUSTRIAL
WORKERS.
IT LYS DOWN A COMPREHENSIVE
MACHINERY FOR THE PREVENTION AND
SETTLEMENT OF INDUSTRIAL DISPUTES.
THE MAIN EMPHASIS OF THE ACT IS ON
COMPULSORY ADJUDICATION BESIDES
CONCILIATION AND COMPULSORY
MAIN FEATURE OS THE ACT
AN AWARD SHALL BE BINDING ON BOTH
THE PARTIES TO THE DISPUTES FOR THE
SPECIFIED PERIOD NOT EXCEEDING ONE
YEAR. IT SHALL BE NORMALLY ENFORCED
BY THE GOVERNMENT.
THE RIGHT TO STRIKE BY THE WORKERS
AND LOCK-OUT BY THE EMPLOYERS HAS
BEEN SUBJECTED TI RESTRICTIONS AS
LAID DOWN IN THE ACT AND SUCH RIGHTS
ARE NOT ABSOLUTE RIGHTS.
A MODEL GRIEVANCES REDRESSAL
PROCEDURE HAS BEEN INCORPORATED
IN THE ACT.
DEFINITIONS - APPROPRIATE
GOVERNMENT
THE CENTRAL GOVERNMENT AS WELL AS
STATE GOVERNMENT ARE VESTED WITH
VARIOUS POWERS AND THE DUTIES IN
RELATION TO MATTERS DEALT WITH IN
THIS ACT.
THE CENTRAL GOVERNMENT IS THE
APPROPRIATE GOVERNMENT IN RESPECT
OF INDUSTRIAL DISPUTES ARISING IN THE
FOLLOWING INDUSTRIES:-

Any industry carried on by or under the

authority of Central Government.
DEFINITIONS - APPROPRIATE
GOVERNMENT
Deposit Insurance and Credit Guarantee
Corporation ; '13. Central Warehousing
Corporation;
The Unit Trust of India;
Food Corporation of India;
Airports Authority of India ;
Regional Rural Banks;
Export Credit and Guarantee Corporation Ltd ;
Industrial Reconstruction Corporation of India
Ltd ; '20. A Banking Company ;
DEFINITIONS - AVERAGE PAY
This clause lays down the manner of
calculating the average pay for the purpose of
payment of compensation at the time of
retrenchment of a workman.
The determination of average pay is to be 'in a
different way in the case of (;) monthly paid
workmen, (ii) weekly paid workmen, and (iii)
paid workmen.
The average pay is calculated in the following
manner for the different categories workers.
In the case of monthly paid workmen, the
average of the wages paid for three complete
DEFINITIONS
A award is-
an interim or final determination;
of an industrial dispute or any question relating there to ;
and
by a Labour Court, Industrial Tribunal, National Industrial
Tribunal or an Arbitrator under Section 10-A
Banking company [Sec. 2 (b)]
A banking company to fall within the meaning of the term
has to satisfy two conditions, namely;
It should be a banking company as defined in section 5 of
the Banking Companies Act, 1949.
It should have branches or establishments in more than
one State.
The following institutions have been specifically included in
DEFINITIONS
Industry [Sec. 20)]
The definition of 'industry' has been the subject
of much discussion from time to time
culminating ultimately in Bangalore Water
Supply and Sewarage Board v. Rajappa (AIR
1978 SC 548)•
The judgment of the Supreme Court in this
case paved the ground for amending the
definition of industry.
The Industrial Disputes Act, 1947 was
amended in 1982 and the new definition was
incorporated.
It means any systematic activity carried on by
DEFINITIONS
(b) any activity relating to the promotion of
sales or business or both carried on by an
establishment, but does not include ;
any agricultural operation except where such
agricultural operation is carried on in an
integrated manner with any other activity (being
any such activity as is referred to in the
foregoing provisions of this clause) and such
other activity is the predominant one; or
hospitals or dispensaries ; or
educational, scientific, research or training
institutions; or
institutions owned or managed by organisations
DEFINITIONS
Industrial dispute [Sec. 2. (k))
It means any dispute or difference between
employers and employer, 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.
The definition of 'industrial dispute' given above
can be divided into the following parts.
There must be some difference or dispute.
The difference or dispute must be between-
DEFINITIONS
The dispute should be connected with-
(a) the employment or non-employment; or
(b) the terms of employment ; or
(c) the conditions of labour of each person.

The dispute should relate to an 'industry' as

defined in Section 2(J).
The expression dispute or difference means a
controversy fairly definite and of real
substance.
It must be connected with
DEFINITIONS
Lay-off [Sec. 2(kkk))]
It means the failure, refusal or inability of an
employer on account of the shortage of coal,
power or raw materials or the accumulation of
stocks or the breakdown of machinery or
natural calamity or for any other connected
reason to give employment to a workman
whose name is borne on the muster rolls of his
industrial establishment and who has not been
retrenched.
The above definition may be considered under
the following three heads-
There must be failure, refusal or inability on the
DEFINITIONS
Lock-out [Sec. 2(L))
It means temporary closing of a place of
employment or the suspension of work or the
refusal by an employer to continue to employ
any number of persons employed by him.
Under the present definition, two alternative
acts of the employer constitute a lock-out.
(1) Temporary closing of a place of
employment or suspension of work.
It may be described as the withholding of work
by an employer from his employees in order to
gain a concession from them.
DEFINITIONS
Retrenchment [Sec. 2(Q))
It means the discharge of surplus labour or staff
by the employer for any reason whatsoever,
otherwise than as a punishment inflicted by
way of disciplinary action. It does not include
the following-
Voluntary retirement ;
Retirement of workman on reaching the age of
superannuation;
Termination of service of the workman as a
result of non renewal of the contract of
employment between the employer and the
DEFINITIONS
Settlement [Sec. 2(p)]
There are two modes of settling industrial disputes
between the employer and workmen:
By a settlement arrived at in the course of
conciliation proceedings, and
By a settlement otherwise than in the course of
conciliation proceedings.
In the case of a settlement arrived at in the course
of conciliation proceedings, nothing is to be done
either by the employer or by the workmen.
But in the case of a settlement arrived at
otherwise than in the course of conciliation
DEFINITIONS
Strike [Sec. 2 (q)]
Strike is a legitimate weapon in the hands of
the workmen to be used by them for asserting
their bargaining power.
The right to strike is an inherent right of every
worker.
But it is to be used as a last resort when all
other avenues for settlement of industrial
disputes have proved futile.
It means "A cessation of work by a body of
persons employed in any industry acting in
combination, or a concerted refusal or a
DEFINITIONS
WAGES (SEC 2(S)
It means all remuneration capable of
being expressed in terms of money which
would if the terms of employment were
fulfilled be payable to a workman in
respect of his employment or of work
done in such employment.
According to the definition of the term
'wages' given in the Act the following are
the essential:-
requirements which have to be fulfilled before
DEFINITIONS
Workman [Sec. 2(s))
The term means any person (including an apprentice)
employed in any industry to do any skilled or unskilled,
manual, supervisory, technical or clerical work for hire
or reward, whether the terms of employment be
expressed or implied.
The definition includes-
any person who has been dismissed, discharged or
retrenched in connection with an industrial DISPUTE
any person, whose dismissal, discharge or
retrenchment has led to the dispute. The definition
excludes-
● Any person subject to an Army Act, Air Force Act
or the Navy Act, or
MODE OF SETTLEMENT OF DISPUTES
The main object of Industrial Disputes Act is investigation and
settlement of industrial disputes.
With that object in view various authorities have been created
under the Act. The Act provides for the following modes of
settlement of industrial disputes.
Voluntary settlement and conciliation (Authorities under the Act).
Adjudication, (With the help of courts) and
Arbitration (With the help of third parties).
Voluntary Settlement in Conciliation
Works Committee
The works committee as an instrument for peaceful settlement
of INDUSTRIAL DISPUTE HAS BEEN INTRODUCED IN India
for first time under the Industrial dispute act, 1947
Constitution: Section 3 of the Act empowers the appropriate
government to Constitute a work committee
There are two conditions which must be satisfied before a
works committee can be constituted.
The establishment must be an industrial establishment
One hundred or more workmen should either be presently employed or
should have been employed on any day in the preceding twelve months.

The works committee must be composed of the

representatives of the employers and the workmen engaged in
the industrial establishment and MUST BE EQUAL IN
NUMBER
Voluntary Settlement in Conciliation
Works Committee
Functions and duties:
The works committees are required to promote measures for securing and
preserving good relations between the employer and his workmen.
The works committee shall meet and discuss matters of common interest
and make efforts to settle differences in respect of such matters.
The works committees are normally concerned with the problems arising in
the day-to-day working of the establishment, for instance, matters
concerning their welfare, training, wages, hours of work, bonus, holidays
with pay etc.
The decisions of the works committees, though carry great weight are not
binding either on the employer or workmen.
Works committees are not intended to be substitute for trade unions. The
success of such committees lies in the efforts of both the parties. They are
viewed as a prevention which is better than cure.
Voluntary Settlement in Conciliation
Conciliation Officers
A 'Conciliation officer' means a conciliation officer appointed under the
Industrial Disputes Act, 1947.
The duty of conciliation officers is to mediate and promote the settlement of
industrial disputes.
Appointment: It is discretionary on the part of appropriate government to
appoint conciliation officers.
The Act makes conciliation compulsory in all disputes in public utility
services and optional in other industrial establishments.
Conciliation or mediation is a procedure which endeavours to settle a
controversy by assisting parties to reach a voluntary agreement and the
ultimate decision is made by the parties themselves.
Voluntary Settlement in Conciliation
DUTIES OF Conciliation Officers (Section 12).
The conciliation officer may hold conciliation proceedings in the prescribed
manner where an industiral dispute exists or is apprehended.
In regard to industrial dispute relating to a public utility service, where
notice under section 22 has been given the conciliation officer shall hold
conciliation proceedings in respect of it.
Section 12(2) imposes a duty on conciliation officer to investigate disputes
without delay and empowers him to do all such things as he thinks fit for
the purpose of inducing the parties to arrive at a fair and amicable
settlement of the dispute.
Where the conciliation officer succeeds in bringing about a settlement, he is
required to make a report to the appropriate government or its authorised
officer together with a memorandum of settlement signed by the parties to
the dispute.
Voluntary Settlement in Conciliation
DUTIES OF Conciliation Officers (Section 12).
If the efforts to bring about settlement fail, then the conciliation officer is
required to make a report to the appropriate government. While making
such report he is to give a full statement of facts and circumstances and the
reasons on account of which, in his opinion, a settlement could not be
arrived at.
Where a conciliation officer reported under section 12(4) that no settlement
could be arrived at he will not be debarred from making further efforts to
bring about settlement between the management and the workmen.
The conciliation officer must submit the report within fourteen days of the
conciliation proceedings or within such shorter period as may be fixed by
the appropriate government. The period for submission of the report can be
extended by the agreement of the parties subject to the approval of
conciliation officer.
Voluntary Settlement in Conciliation
Board of Conciliation
The word 'Board' means a Board of Conciliation constituted under this Act.
The Board shall consist of a chairman and two or four other members as
the appropriate government thinks fit. The chairman of the Board must be
an independent person. The members appointed shall be in equal numbers
to represent the parties to the dispute.
Where the appropriate government is of the opinion that any industrial
dispute exists or is apprehended it may at any time by order in writing refer
the dispute to a Board for promoting a settlement thereof.
Where the parties to an industrial dispute apply in the prescribed manner,
whether jointly or separately for a reference of the dispute to a Board, the
appropriate government if satisfied that the persons applying represent the
majority of each party shall make the reference accordingly.
Where an industrial dispute has been referred to a Board the appropriate
government may be order prohibit the continuance of any strike or lock out
in connection with such dispute which may be in existence on the date of
the reference.
Voluntary Settlement in Conciliation
Duties of Board of Conciliation
Board is required to investigate without delay the dispute and all matters
affecting the merits of the dispute.
If a settlement is arrived at, the Board is required to send a report to the
appropriate government together with a memorandum of settlement duly signed
by the parties to the dispute.
In the event of failure, the Board is required to send a failure report to the
appropriate government setting out therein the proceedings and steps taken by
the Board for ascertaining the facts and circumstances relating to the dispute
and efforts made by it to achieve settlement. The report is also required to
contain full statement of the Board's findings thereon, the reasons for which a
settlement could not be arrived at and its recommendations for the
determination of the dispute.
The Board must submit its report within two months from the date on which the
dispute is referred to it or such shorter period as may be fixed by the appropriate
government. The appropriate government may extend the time for the
submission of the report by not more than two months in the aggregate and may
further extend the period if all the parties agree to that in writing.
Voluntary Settlement in Conciliation
Conciliation officer compared with Board of conciliation
It will be seen that where conciliation fails, Board of conciliation takes over.
The functions of the Board are the same as those of the conciliation officer.
But there are certain differences between the two which are as follows :
The conciliation officer is an individual public servant while the Board consists of three or five
persons.

The conciliation officer may be appointed for a specified area or for specified industries in a
specified area. However no such provisions exist in the case of the Board.

The conciliation officer holds the conciliation proceedings of his own accord when any industrial
dispute exists or is apprehended, but the machinery of the Board is set in motion when a dispute
is referred to it.

If no settlement is arrived at, the conciliation officer is required to send a report stating the facts
and circumstances, the steps taken and the reasons why no settlement was arrived at. In
addition to his duty of a conciliation officer, the Board has to suggest the remedy for the
determination of the dispute.

The time for the submission of the report to the appropriate government in the case of conciliation
proceedings by the conciliation officer is 14 days while it is two months in the case of the Board.

The members of the Board of Conciliation act in a judicial capacity and enjoy more powers than
conciliation officers.
Adjudication (with the help of Courts)
LABOUR COURTS
Functions: The functions of labour courts are-
to adjudicate the industrial disputes relating to matters specified in the second schedule of the
Act;
to perform such other functions as may be assigned to them under this Act.

Adjudication means a mandatory or compulsory settlement of industrial

disputes by Labour Courts or Industrial Tribunals or National Tribunals
under the Industrial Disputes Act.
Jurisdiction
The second schedule provides for the matters relating to industrial disputes
which shall be adjudicated by the labour courts.
But the first provision to section 10(1) lays down that where the disputes
relates to a matter specified in the third schedule, if it is not likely to affect
more than hundred workmen, it can be referred to a labour court.
Adjudication (with the help of Courts)
LABOUR COURTS
THE SECOND SCHEDULE
The matters specified in the second Schedule are-
The propriety or legality of an order passed by an employer under the standing orders
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 a strike or lock-out; and

All matters other than those specified in the third schedule.

LABOUR COURTS
Presiding Officer and his qualifications
(a) he is, or has been a judge of a high court; or
(b) he has for a period of not less than three years, been a district judge or an additional dis .
judge; or
(c) he has held any judicial office in India at least for seven years, or
(d) he has been the presiding officer of a labour court constituted under any Provincial Act State
Act for not less than five years.
Adjudication (with the help of Courts)
Tribunals
Functions: Industrial tribunals are constituted for the adjudication of
industrial disputes relaTED to any matter specified in the second schedule
or the third schedule.
Whereas a labour court can adjudicate an industrial dispute relating to
matters in schedule the industrial tribunal can adjudicate disputes relating
to matter contained in both schedules II III.
Thus there is a concurrent jurisdiction of the labour court and the industrial
tribunal in respect any matter included in the second schedule.
However, the first provision to section 10(1) lays down that where the
dispute relates to a matter specified in the third schedule, and is not likely
to affect mm than one hundred workmen the appropriate government may
make reference to a labour court.
Adjudication (with the help of Courts)
Tribunals
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;
Rationalization;
Retrenchment of workmen and closure of establishment ;
Any other matter that may be prescribed.
 Adjudication (with the help of Courts)
Tribunals
Presiding Officer and his qualifications

He is, or has been a judge of High Court; or

He has been a district judge or an additional district judge for a period of not less than three
years.

NATIONAL TRIBUNAL
A national tribunal can be constituted only for the adjudication of industrial disputes involving questions of
national importance or industrial disputes affecting industrial establishments situated in more one State.
The reference to national tribunal can be made only by the central government.
The national tribunal shall consist of one person only to be appointed as its presiding officer of the national
tribunal unless he is or has been a judge of the high court.
The central government may, if it so thinks fit, appoint two persons as assessors to advise the national
tribunal in the proceeding before it.
 NOTICES
THE object of section 9-A is to prohibit an employer from making
any change in the conditions of service applicable to his workmen
in respect of any matter specified in the fourth schedule unless he
complied with the following conditions-
A notice in prescribed manner of the nature of the change proposed to be
effected must be given to the workmen likely to be affected by such change;
and
A period of twenty-one days from the date of notice must have expired.
 Arbitration (With the help of third
parties)
Voluntary reference of disputes to Arbitration
Section 10-A authorises the employer and his workmen to refer the dispute to
arbitration at time before the dispute has been referred under section 10.
The object of this section is to enable employers and employees to refer their
dispute voluntarily to arbitration.
The essential require before a dispute can be referred to arbitration, are as under :
There should be an existing or apprehend industrial dispute

the reference to arbitration should be by a written agreement;

the reference should be made before the dispute had been referred under section 10 labour court ;
or tribunal or national tribunal ;

the names of the person or persons to act as arbitrator or arbitrators must be specified IN the
agreement. Such persons may be presiding officers of labour court, tribunal or national tribunal.

If the arbitration agreement provides for a reference of the dispute to an even

number of arbitrator the agreement must in that case provide for the appointment of
another person as umpire.
The will enter upon the reference, if the arbitrators are equally divided in their·
opinion. The award umpire shall be regarded as the arbitration award.
 STRIKES AND LOCK-OUTS
Prohibition of strikes and lock-outs [Section 22]
Section 22 of the Act lays down restrictions on the right of strike and lock-out
in public utility services.
According to section 22(1) a person employed in a public utility service is
prohibited from going on strike in breach of contract-
(a) without giving notice to the employer in the manner prescribed, within six
weeks before striking.
(b) within fourteen days of such notice - it follows there from that the strike
can take place only during the last four weeks of the six weeks mentioned in
the preceding clause ;
c) before the expiry of the date of strike specified in such notice
(d) during the pendency of conciliation proceedings before a conciliation
officer and seven days thereafter.
 STRIKES AND LOCK-OUTS
Prohibition of strikes and lock-outs [Section 22]
Section 22(2) prohibits an employer carrying on any public utility service from
declaring lock-out-(1) without giving to the workmen notice of lock-out in the
prescribed manner within six weeks before locking-out. It means notice is
effective only for six weeks, and any lock -out in pursuance of such a notice
must take place within that period ;
within fourteen days of such notice. It means lock-out can take place only
during the last four weeks of the period of six weeks mentioned in the
preceding clause ;
before the expiry of the date of lock-out specified in such notice;
during the pendency of any conciliation proceedings before a conciliation
officer and seven days thereafter.
 STRIKES AND LOCK-OUTS
General prohibition of strikes or lock-outs [Section 23]
This section provides for a general prohibition against strikes and lock-
outs in all industrial establishments including public utility services in the
following circumstances:
during the pendency of proceedings before a board of conciliation and seven
days after the conclusion of the proceedings;
during the pendency of proceedings before a labour court, tribunal, national
tribunal or arbitator [where a notification has been issued under Section 10-A
(3-A] and two months after the conclusion of such proceedings;
in breach of contract;
during the period of operation of a settlement or award in respect of any of the
matters covered by the settlement or award.
 STRIKES AND LOCK-OUTS
Section 22 and 23 compared :
The provisions of section 22 are applicable only to public utility services
while the provisions of section 23 are general in character and are
applicable to both public utility services as well as non public utility
services.
In public utility services there can be no strike or lock-out without notice
or prescribed period. But in industrial establishments other than public
utility services, there can be strike or lock-out without notice.
In section 23 during the pendency of any conciliation proceedings
before a conciliation officer, strike or lock-out can be resorted to while in
section 22 dealing with the public utility services, there can be no strike
or lock-out if any conciliation proceedings are pending before a
conciliation officer.
 ILLEGAL STRIKES AND LOCK-OUTS
Section 24 lays down the circumstances when a strike or lock-out
shall be considered to be legal or illegal.
A strike or lock-out shall be illegal if it is-
commenced or declared in contravention of section 22 in a public utility service;
or
commenced or declared in contravention of section 23 in any industrial
establishment; or (3) continued in contravention of an order under section 10
(3) ; or
continued in contravention of an order made under section 10-A (AWARD)

Every strike in India is not illegal, because the workers enjoy a

fundamental right to go on strike.
They become illegal only when they fall within the mischief of
section 24 of the Act.
 ILLEGAL STRIKES AND LOCK-OUTS
Effect of illegal strike:

Where the strike is illegal, the workmen cannot claim wages for
the period during which an illegal strike continues. In order to
entitle the workman to wages for the period of strike, the strike
should be legal as well as justified. The use of force of violence
resorted to by the workmen during strike disentitles them to wages
for the strike period (M/S Crompton Greaves Ltd. v. The
Workmen, AIR 1978 Sc. 1489]
 ILLEGAL STRIKES AND LOCK-OUTS
Where strike is commenced without giving notice as required
under section 23 or within 7 days of the conclusion of the
conciliation proceedings, the strike must be held illegal
irrespective of whether it was provoked by the employer. In such a
case workmen are not entitled to any pay for the period of the
strike [Maha Laxmi Cotton Mills Ltd. v Maha Laxmi Cotton Mills
Workers Union 4 FIR 248J
Where strike is unjustified and lock-out is justified, the workmen
would not be entitled to any wages at all. Similarly where the strike
is justified and the lock-out is unjustified the workmen would be
entitled to the entire wages for the period of strike or lock-out.
 ILLEGAL STRIKES AND LOCK-OUTS
Prohibition of financial aid to illegal strikes and lock-outs
[Section 25]
Section 25 prohibits any person from knowingly expending or
applying any money in direct furtherance or support of any illegal
strike or lock-out.
Penalty for illegal strikes or lock-outs [Section 26]
In such a case the workman shall be punishable with
imprisonment which may extend to one month or with fine which
may extend to rupees fifty or with both.
In case of illegal lock-out the employer shall be punishable with
imprisonment which may extend to one month or with fine which
may extend to rupees one thousand or with both.
 ILLEGAL STRIKES AND LOCK-OUTS
Penalty for instigation [Section 27]
The punishment in such cases is imprisonment for a term which
may extend to six months or with fine which may extend to one
thousand rupees or with both.
Penalty for giving financial aid to illegal strikes or lock-outs
[Section 28]
imprisonment which may extend to six months or with fine which
may extend to one thousand rupees or with both.
 LAY-OFF AND RETRENCHMENT
The provisions of Chapter V-A of the Industrial Disputes Act, 1947,
relating to lay-off and retrenchment compensation do not apply to
all industrial establishments.
three types of industrial establishments have been exempted
(a) Industrial establishments in which less than fifty workmen on
an average per working day are employed in the preceding
calendar month ; or
(b) industrial establishments which are of a seasonal character or
work only intermittently; or
(c) industrial establishments to which Chapter V-B applies
(inserted by the Industrial Disputes Amendment Act 1976).
 LAY-OFF AND RETRENCHMENT
Definition of continuous service [Section 25-b]
The right to compensation under the Act accrues to a workman
only if he has put in 'one year of continuous service'. Section 25- B
defines what amounts to one year of continuous service.
Continuous service for any period means uninterrupted service for
that period and interrupted service on account of any of the
following reasons :
(i) sickness;
(ii) authorised leave ;
(iii) an accident ;
(iv) a strike which is not illegal ;
(v) a lock-out; and
(vi) a cessation of work that is not due to any fault on the part of the workman.
 LAY-OFF AND RETRENCHMENT
Right of workmen laid-off for compensation [Section 25-C]
This section recognizes the right of workmen to get compensation
when laid-off. It also lays down the method in which compensation
has to be calculated.
Before a workman may claim lay-off compensation he must fulfill
the following conditions.
(1) He is not a badli or casual workman.
(2) His name is on the muster roll of the establishment; and
(3) He has completed one year of continuous service.

If the above requirements are fulfilled, a workman whether laid off

continuously or intermittently shall be paid compensation.
 LAY-OFF AND RETRENCHMENT
A workman is entitled to lay-off compensation at the rate equal to
50% of the total of the basic wage and dearness allowance for the
period of his layoff except for weekly holidays which may
intervene.
Compensation can normally be claimed for not more than 45 days
during any period of twelve months.
Even if lay-off exceeds 45 days during any period of twelve
months no compensation is required to be paid for the excess
period if there is an agreement to that effect between the workman
and the employer.
 LAY-OFF AND RETRENCHMENT

If the period of lay-off exceeds forty-five days, the employer bas

two alternatives before him,
(i) to go on paying lay-off compensation for such subsequent
periods, or
(ii) to retrench the workman.
In case of such retrenchment, the employer is enabled to adjust
the amount of lay-off compensation paid during the preceding 12
months against retrenchment compensation payable under
section 25-F.
 LAY-OFF AND RETRENCHMENT

Duties of employer in connection with a lay-off

THE EMPLOYER MUST MAINTAIN A MUSTER ROLL OF
WORKMEN
The lay-off must be for the reasons specified in section 2(KKK).
The period of detention of workmen if stoppage occurs during
working hours should not exceed two hours after the
commencement of the stoppage.
The compensation for lay-off must be at the rate and for the period
specified in section 25-C of the Industrial Disputes Act.
 LAY-OFF AND RETRENCHMENT
Workmen not entitled to compensation in certain cases [Section 25-F]
Refusal to accept alternative employment: If a laid off workman refuses to accept alternative
employment provided that such alternative employment is :
● in the same establishment from which he has been laid-off; or
● in any other establishment belonging to the same employer situated in the town or village within
a radius of five miles from the establishment to which he belongs; and
● in the opinion of the employer the alternative employment does not call for any special skill or
previous experience and can be done by the workman:
● it carries the same wages which would normally have been paid to the workman in his original
employment.
absence from the establishment at the appointed time –
strike or go slow in one part of the establishment-where lay-off is the consequence of strike or
slowing down of production by the workers in another part of the establishment.
 LAY-OFF AND RETRENCHMENT
Conditions precedent to retrenchment of workmen [Section 25-F]
One month's notice must be given to the workmen proposed to be retrenched.
It is clear that the requirement of serving a notice or paying wages in lieu
thereof is mandatory.
the workman has been paid at the time of retrenchment compensation
equivalent to fifteen days average pay for every completed year of continuous
service or any part thereof, provided it exceeds six months ; and
notice in the prescribed manner must be served on the appropriate government
or on such authority as may be specified by it.

Section 25-F is not applicable to a closed or dead industry.

 LAY-OFF AND RETRENCHMENT
Conditions precedent to retrenchment of workmen [Section 25-F]
One month's notice must be given to the workmen proposed to be retrenched.
It is clear that the requirement of serving a notice or paying wages in lieu
thereof is mandatory.
the workman has been paid at the time of retrenchment compensation
equivalent to fifteen days average pay for every completed year of continuous
service or any part thereof, provided it exceeds six months ; and
notice in the prescribed manner must be served on the appropriate government
or on such authority as may be specified by it.

Section 25-F is not applicable to a closed or dead industry.