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Unit 3 Constitutional and Legal Framework of Industrial Relations: Conventions, Id Act, Trade Union Act
Unit 3 Constitutional and Legal Framework of Industrial Relations: Conventions, Id Act, Trade Union Act
FRAMEWORK OF INDUSTRIAL
RELATIONS: CONVENTIONS, ID ACT,
TRADE UNION ACT
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
Objectives
After going through this unit, you should be able to:
l
identify the impact of internal and external forces on industrial relations; and
Structures
3.1
Introduction
3.2
Constitutional Framework
3.3
3.4
3.5
3.6
3.7
3.8
Case
3.9
Summary
3.10
Self-Assessment Questions
3.11
Further Readings
3.1
INTRODUCTION
The Constitution of India has guaranteed some fundamental rights to the citizens and
has also laid down certain directive principles of state policy for the achievement of a
social order based on justice, liberty, equality and fraternity. The Constitution amply
provides for the upliftment of labour by guaranteeing certain fundamental rights to all.
Article 14 lays down that the State shall not deny to any person equality before the
law or the equal protection of laws. Traffic in human beings and forced labour, and
the employment of children in factories or mines or other hazardous work is
prohibited. The directive principles, though not enforceable by any court, are
nevertheless fundamental in the governance of the country, and it shall be the duty of
the State to apply those principles in making laws from time to time. The Government
of India, therefore, enacted a series of legislations to protect the working class from
exploitation and to bring about improvement in their working and living conditions.
The goals set in our country by the Constitution have a bearing on industrial
legislation and adjudication.
3.2
CONSTITUTIONAL FRAMEWORK
Labour is in the concurrent list of the Constitution on which both the Centre as well as
the States have the power to make laws. Article 254 has been enacted to clarify the
position. Normally, as laid down in Clause (1), in case of any repugnancy between the
Union and the State legislation, the legislation of the Union shall prevail.
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Conceptual Framework of
Employment Relations
Articles 39, 41, 42 and 43 have a special relevance in the field of industrial legislation
and adjudication. In fact, they are the substratum of industrial jurisprudence.
Article 39 accentuates the basic philosophy of idealistic socialism, which is enshrined
in the Preamble of the Constitution. It provides a motivation force to the directive
principles by laying down that the State shall direct its policy towards equal pay for
both men and women.
Article 41 lays down that the State shall, within the limits of its economic capacity
and development, make effective provision for securing the right to work, to education
and to public assistance in cases of unemployment, old age, sickness and disablement,
and in other cases of undeserved want.
Article 42 enjoins the state government to make provision for securing just and
humane conditions of work and for maternity relief.
Article 43 makes it obligatory for the State to secure by suitable legislation or
economic organisation or in any other manner to all workers, agricultural, industrial,
or otherwise, work, a living wage, conditions of work ensuring a decent standard of
life and full enjoyment of leisure and social and cultural opportunities.
Article 43-A makes it obligatory on the State to take steps by suitable legislation or
otherwise to secure the participation of workers in the management of undertakings
and industrial establishments. A brief discussion regarding the extent to which these
provisions had been adopted and enforced in our country will be in order.
Social security is guaranteed in our Constitution under Articles 39, 41 and 43. The
Employees State Insurance Act, 1948 is a pioneering piece of legislation in the field
of social insurance. The Employees State Insurance Scheme provides for benefits in
cash except the medical benefit, which is in kind. The Employees Provident Funds
and Miscellaneous Provisions Act, 1952 and the Maternity Benefit Act, 1961 are also
social security measures to help fulfill the objectives of directive principles of our
Constitution. The Provident Fund Scheme aimed at providing substantial security and
timely monetary assistance to industrial employees and their families. The Maternity
Benefit Scheme is primarily designed to provide maternity leave with full wages and
security of employment. The object of the Payment of Gratuity Act, 1972 is to provide
a scheme for the payment of gratuity to employees employed in factories, mines, oil
fields, plantations, ports, railways, shops and establishments.
Besides social security benefits, efforts have also been made to provide ample
opportunities for employment and for workers education. The Apprentices Act, 1961
was enacted to supplement the programme of institutional training by on-the-job
training and to regulate the training arrangements in industry. Employment exchanges
play an important role for the job seekers. The Employment Exchanges (Compulsory
Notification of Vacancies) Act, 1969 has made it obligatory on the employers to notify
vacancies occurring in their establishments to the prescribed employment exchanges
before they are filled. The voluntary workers education scheme was launched in our
country in 1958 to educate the workers in trade union philosophy and methods, and to
promote physical awareness of problems, privileges and obligations as workers and
citizens.
28
Substantial steps have been taken to fulfill the object of Article 42 of the Constitution.
The Factories Act, 1948 provides for health, safety, welfare, employment of young
persons and women, hours of work for adults and children, holidays and leave with
wages. Labour welfare funds have been set-up to provide welfare facilities to the
workers employed in different mines such as coal, mica, iron ore and limestone. The
Contract Labour (Regulation and Abolition) Act of 1970, a piece of social legislation,
provides for the abolition of contract labour wherever possible and to regulate the
conditions of contract labour in establishments or employments where the abolition of
contract labour system is not considered feasible for the time being.
Article 43 of the Constitution provides for a living wage. To provide social justice to
the unorganised labour and to prevent exploitation, the Minimum Wages Act, 1948
was enacted. It provides for the fixation of minimum rates of wages by the central or
state governments within a specified period for workers employed in certain scheduled
employments. The minimum wage in any event must be paid irrespective of the
capacity of the industry to pay.
3.3
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
The International Labour Organisation (ILO) was set-up in 1919 by the Versailles
Peace Conference as an autonomous body associated with the League of Nations. It
became the first specialised agency of the United Nations in 1946. India has been a
member of the ILO since its inception.
The aims and objectives of ILO are set out in the Preamble to its Constitution and in
the Declaration of Philadelphia (1944), which was formally annexed to the
Constitution in 1946. The Preamble affirms that universal and lasting peace can be
established only if it is based upon social justice. The Philadelphia Charter is a
reaffirmation of the principles on which the Organisation was originally based. The
Declaration reiterates that the central aim of national and international policy should
be the attainment of social justice. In order to achieve its objective, the ILO has relied
on its standard-setting function. The international labour standards take the form of
Conventions and Recommendations. The ILO adopted a series of Conventions and
Recommendations covering hours of work, employment of women, children and
young persons, weekly rest, holidays, leave with wages, night work, industrial safety,
health, hygiene, labour inspection, social security, labour-management relations,
freedom of association, wages and wage fixation, productivity, and employment.
India has been one of the founder members of the ILO and has been taking active part
in its deliberations. The ILO has adopted 183 Conventions and 180 Recommendations
so far. Out of 183 Conventions, India has ratified 39 Conventions. Conventions
ratified by India have been incorporated in the existing legislation. Conventions not
ratified by India have indirectly guided and shaped the Indian labour legislation in a
far-reaching manner. The ILO standards have a decisive impact on the factory, mines,
social security and wage legislation in India. The Conventions concerning basic
human rights have considerable influence on Indian law and practice. The
Conventions have formed the sheet- anchor of Indian labour legislation, especially
after 1946, when the Indian national government assumed office at the Centre.
The ILO has also greatly influenced the trade union movement in our country. The
AITUC owes its immediate origin to it. It is instrumental in improving the lot of the
working class in our country. Indias commitment to the ILO is reflected in its
adherence to the institution of tripartism as a novel method for resolving labourmanagement conflicts. ILO and India have common aims, common goals and common
destiny, as both of them are committed to world peace, freedom and social justice.
Both are striving for the socio-economic betterment of the poverty stricken and underprivileged people.
3.4
All systems of industrial relations have a legal framework if they operate within a
legal system. The legal framework may take the form of recognising the development
of certain institutions and remove any impediments to their existence. The role of law
in an industrial relations system may be perceived by the extent to which it attempts to
29
Conceptual Framework of
Employment Relations
regulate relationships, the extent to which it is obligatory rather than optional and the
attitude of the parties to the legal system.
In India there has been a large degree of agreement on the need for reforms. Major
disagreement, however, exists as to the part that law should play in any scheme of
reforms. Nevertheless, it has been commonly felt that any legislative reform by
definition involves the law.
The legal framework within which the industrial relations operates is in a constant
state of flux. State and central legislation affecting industrial relations is a neverending phenomenon. The three central enactments which have a bearing on
industrial relations in our country are: (a) the Trade Unions Act, 1926; (b) the
Industrial Employment (Standing Orders) Act, 1946; and (c) the Industrial Disputes
Act, 1947.
A detailed discussion of the above three central enactments is as follows:
3.5
ii)
30
primarily for the purpose of regulating the relations between workmen and
employers; or between workmen and workmen; or between employers and
employers; or
ii)
for imposing restrictive conditions on the conduct of any trade or business, and
includes any federation of two or more trade unions.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
ii)
The names, occupations and addresses of the members making the application.
ii)
The names, occupations and addresses of the place of work of the members of
the trade unions making the application.
iii) The name of the trade union and the address of its head office; and
iv) The titles, names, ages, addresses and occupations of the office-bearers of the
trade union.
Where a trade union has been in existence for more than one year before an
application is made for its registration, there shall be delivered to the Registrar,
together with the application, a general statement of the assets and liabilities of the
trade union prepared in such form and containing such particulars as may be
prescribed.
31
Conceptual Framework of
Employment Relations
b)
The objects for which the trade union has been established;
c)
The purposes for which the general funds of the trade union shall be employed;
d)
The maintenance of a list of the members of the trade union and adequate
facilities for the inspection thereof by the office-bearers and members of the trade
union;
e)
f)
(ii)
three rupees per annum for workers in other unorganised sectors; and
iii)
g)
The conditions under which any member shall be entitled to any benefit assured
by the rules and under which any fine or forfeiture may be imposed on the
members;
h)
i)
The manner in which the members of the executive and other office-bearers of
the trade union shall be appointed and removed;
j)
The duration of period being not more than three years, for which the members
of the executive and other office bearers of the trade union shall be elected;
k)
The safe custody of the funds of the trade union, and annual audit of accounts
thereof, and adequate facilities for the inspection of the account books by the
office-bearers and members of the trade union; and
l)
application for registration. If all the terms of the Act are complied with, it is
obligatory upon the Registrar to register a union. He has no discretion in the matter.
The Registrar, on registering a trade union, shall issue a certificate of registration in
the prescribed form, which shall be conclusive evidence that the trade union has been
duly registered under the Act.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
A registered trade union of workmen shall at all times continue to have not less than
ten percent or one hundred of the workmen, whichever is less, subject to a minimum
of seven, engaged or employed in an establishment or industry with which it is
connected, as its members.
Cancellation of Registration
A certificate of registration of a trade union may be withdrawn or cancelled by the
Registrar in the following circumstances:
i)
ii)
b)
c)
has wilfully and after notice from the Registrar contravened any provision
of the Act; or
d)
allowed any rule to continue in force which is inconsistent with any such
provision; or
e)
has rescinded any rule providing for any matter, provision for which is
required in the rules of a trade union; or
f)
If the cancellation is to be effected on account of clause (ii) above, the Registrar shall
give to the trade union not less than two months previous notice in writing, specifying
the ground on which it is proposed to withdraw or cancel the certificate.
Appeal
If the registration of a trade union is refused or if a certificate of registration is
withdrawn or cancelled, any person aggrieved or the trade union may appeal to the
court. The appeal must be filed within sixty days of the date on which the Registrar
passed the order against which the appeal is made.
Where the head office of a trade union is situated within the limits of a presidency
town, the appeal lies to the High Court. This means there is only one right of appeal
against the decision of the Registrar refusing registration of a trade union. There is no
provision for a second appeal.
Where the head office is situated in any other area, the appeal lies to such court, not
inferior to the court of an additional or assistant judge of a principal civil court of
original jurisdiction, as the appropriate government may appoint in this behalf for that
area. In the event of the dismissal of an appeal by any such court, the person
aggrieved shall have a right of appeal to the High Court. The High Court shall, for the
purpose of such appeal, have all the powers of an appellate court. This means that a
trade union having its head office in areas other than presidency towns has two rights
of appeal, i.e., first, to the local court exercising original jurisdiction and then to the
High Court against the decision of the local court.
33
Conceptual Framework of
Employment Relations
The appellate court may dismiss the appeal, or pass an order directing the Registrar to
register the union and to issue a certificate of registration, or set aside the order for
withdrawal or cancellation of the certificate, as the case may be. The Registrar shall
comply with such order of the court.
For the purpose of an appeal, an appellate court shall follow the same procedure and
have the same powers as it follows and has when trying a suit under the Code of Civil
Procedure, 1908. It may direct by whom the costs of the appeal shall be paid and such
costs shall be recovered as if they had been awarded in a suit under the said code.
Notices
All communications and notices to a registered trade union may be addressed to its
registered office. Notice of any change in the address of the head office shall be given
within 14 days of such change to the Registrar in writing, and the changed address
shall be recorded in the register.
ii)
iii) It has the power to acquire and hold both movable and immovable property.
iv) It has the power to contract.
v)
General Fund
The general funds of a registered trade union shall not be spent on any objects other
than the following:
34
a)
b)
The payment of expenses for the administration of the trade union, including the
audit of the accounts of the general funds of the trade union;
c)
The prosecution or defence in any legal proceeding to which the trade union or
any member thereof is a party, when such prosecution or defence is undertaken
for the purpose of securing or protecting any rights of the trade union;
d)
The conduct of trade disputes on behalf of the trade union or any member
thereof;
e)
f)
g)
h)
i)
j)
k)
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
If the union funds are spent on any objects other than those specified, the expenditure
will be unlawful and ultra vires the Act. The union can be restrained by injunction
from applying its funds for any such object.
Political Fund
A registered trade union may constitute a separate fund for political purposes from
which payments may be made for the promotion of the civic and political interests of
its members. This fund may be utilised only in furtherance of the following objects:
a)
b)
c)
d)
(e) The holding of political meetings of any kind, or the distribution of political
literature of any kind.
Expenditure for political purposes is in no case permitted out of the general funds. Not
only this, even interest on investments of the political fund will have to be credited to
the political fund.
The conditions for the creation of political fund are:
i)
The fund can be created only from contributions separately levied for or made to
that fund.
ii)
iii) A member who does not contribute to the said fund must not be excluded from
any benefits of the trade union, or placed under any disability or disadvantage,
directly or indirectly, as compared with other members of the trade union, except
in relation to the control or management of the political fund.
iv) Contribution to the political fund must not be made a condition for admission to
the trade union.
Conceptual Framework of
Employment Relations
A registered trade union shall not be liable in any suit or other legal proceeding in any
civil court for any tortuous act done in contemplation or furtherance of a trade dispute
by an agent of the trade union, if it is proved that such person acted without the
knowledge of, or contrary to the express instruction given by, the executive of the
trade union.
An agreement between the members of a registered trade union shall not be void or
voidable merely by reason of the fact that any of the objects of the agreement are in
restraint of trade.
ii)
Not less than one-half of the total number of office-bearers of every registered
trade union shall be persons actually engaged or employed in an industry with
which the trade union is connected. The appropriate government may, however,
by special or general order, exempt a trade union from the application of this
provision.
b)
Not less than one-half of the total number of the office-bearers of every
registered trade union in an unorganised sector shall be persons actually engaged
or employed in an industry with which the trade union is connected.
c)
All office-bearers of a registered trade union except not more than one-third of
the total number of the office-bearers or five, whichever is less, shall be persons
actually engaged or employed in the establishment or industry with which the
trade union is connected.
d)
Rights of Unions
Any registered trade union may, with the consent of not less than two-thirds of the
total number and subject to certain conditions, change its name.
Any two or more registered trade unions may amalgamate with or without the
dissolution or division of the funds of such trade unions, or either or any of them,
provided that
36
i)
The votes of at least half of the members of each or every such trade union
entitled to vote are recorded; and
ii)
In the case of a change of name, the secretary and seven members of the union must
give a notice in writing to the Registrar; in the case of an amalgamation, the secretary
and seven members of each and every union which is a party to such amalgamation
must give notice to the Registrar. If the Registrar is satisfied that the change of name
is in order, and that the new name does not resemble that of any other existing trade
union, he will register the change of name in his register. The change of name or the
amalgamation has effect from the date of registration.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
When a registered trade union is dissolved, notice of the dissolution signed by seven
members and by the secretary of the trade union shall, within 14 days of the
dissolution, be sent to the Registrar. It shall be registered by him if he is satisfied that
the dissolution has been effected in accordance with the rules of the trade union.
Dissolution shall have effect from the date of such registration.
Returns
There shall be sent annually to the registrar, on or before such date as may be
prescribed, a general statement, audited in the prescribed manner, of all receipts and
expenditure of every registered trade union during the year ending 31st December
preceding such prescribed date, and of the assets and liabilities of the trade union
existing on 31st December. The statement shall be prepared in such form and shall
comprise such particulars as may be prescribed.
Together with the general statement, there shall be sent to the Registrar a statement
showing all changes of office-bearers made by the trade union during the year to
which the general statement refers, together also with a copy of the rules of the trade
union corrected up to the date of the dispatch thereof to the Registrar.
A copy of every alteration in the rules of a registered trade union shall be sent to the
Registrar within 15 days of the alteration.
The Act provides for offences and penalties.
3.6
b)
c)
d)
e)
37
Conceptual Framework of
Employment Relations
Applicability
The Act extends to the whole of India. It applies to every industrial establishment
wherein 100 or more workmen are employed, or were employed on any day of the
preceding twelve months. Once the Act becomes applicable to an industrial
establishment, it does not cease to apply by reason of a fall in the number of workmen
in that establishment below 100. In 1961, the Act was amended to empower the
appropriate government to extend its scope to industrial establishments employing less
than 100 persons after giving them not less than two months notice of its intention to
do so. The appropriate government can also exempt any establishment or classes of
establishments from all or any of the provisions of the Act.
The industrial establishments covered by the Act include railways, factories, mines,
quarries, oilfields, tramways, motor omnibus services, docks, wharves, jetties, inland
steam vessels, plantations, workshops and civil construction and maintenance works.
The amended Act of 1963 inter alia provides for the applicability of Model Standing
Orders framed by the appropriate government to all industrial establishments covered
by the Act until the standing orders framed by individual establishments are certified.
The Act is applicable to all workmen employed in any industrial establishment to do
any skilled or unskilled, manual, supervisory, technical or clerical work. Even
apprentices are covered. But persons employed mainly in a managerial or
administrative capacity and drawing wages exceeding rupees 1,600 per month are not
covered.
Definitions
Appropriate Government: Appropriate Government means in respect of industrial
establishments under the control of the Central Government or a Railway
Administration or in a major port, mine or oilfield, the Central Government, and in all
other cases the State Government.
Certifying Officer: Certifying Officer means a Labour Commissioner, or a
Regional Labour Commissioner, and includes any other officer appointed by the
appropriate government, by a notification in the Official Gazette, to perform all or any
of the functions of a certifying officer under the Act.
ii)
v)
Conditions of, procedure in applying for, and the authority which may grant
leave and holidays;
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
viii) Termination of employment, and the notice thereof to be given by employer and
workmen;
ix) Suspension or dismissal for misconduct and acts or omissions which constitute
misconduct;
x)
Appeal
An aggrieved party may appeal to the appellate authority within thirty days from the
date on which the copies of the standing orders were sent to the parties by the
certifying officer. The order of the appellate authority shall be final.
The Act empowers the appellate authority to do only two things, namely:
i)
Confirm the standing orders in the form certified by the certifying officer, or
ii)
Confirm the standing orders after amending them by making the necessary
modifications or additions.
The certified standing orders become enforceable on the expiry of 30 days from the
date on which the authenticated copies of the same are sent to the parties by the
certifying officer. If an appeal has been filed, it shall come into operation on the expiry
of 7 days from the date on which copies of the order of the appellate authority are sent
to the parties.
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Conceptual Framework of
Employment Relations
The text of the standing orders as finally certified under this Act shall be prominently
posted by the employer in English and in a language understood by a majority of his
workmen on special boards to be maintained for that purpose at or near the entrance
through which the majority of the workmen enter the industrial establishment, and in
all departments thereof where the workmen are employed.
receiving evidence,
ii)
administering oaths,
Acts of Misconduct
The following acts or omissions on the part of a workman shall amount to
misconduct:
40
i)
ii)
iii)
iv)
v)
vi)
habitual absence without leave, or absence without leave for more than ten
consecutive days or overstaying the sanctioned leave without sufficient grounds
or proper or satisfactory explanation;
vii)
viii)
ix)
collection without the permission of the manager of any money within the
premises of the establishment except as sanctioned by any law for the time
being in force;
x)
xi)
xii)
xiii)
xiv)
habitual breach of any rules or instructions for the maintenance and running of
any department, or the maintenance of the cleanliness of any portion of the
establishment;
xv)
habitual commission of any act or omission for which a fine may be imposed
under the Payment of Wages Act, 1936;
xvi)
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
xx)
xxi)
Obligations of Employers
i)
Submit draft standing orders with the required information to the Certifying
Officer for certification within the time limit mentioned in the Act.
ii)
Act in conformity with the certified standing orders in the day-to-day dealings
with the workmen.
iii) Modify certified standing orders only with the approval of the Certifying Officer.
iv) Post prominently the text of the certified standing orders near the entrance and
also in all departments where workmen are employed.
41
Conceptual Framework of
Employment Relations
v)
Obligations of Workmen
1)
Work in conformity with the certified standing orders or model standing orders as
the case may be.
2)
Miscellaneous
If any question arises as to the application or interpretation of a standing order
certified under this Act, any employer or workman or a trade union or other
representative body of the workmen may refer the question to any one of the labour
courts constituted under the Industrial Disputes Act, 1947. The decision of the labour
court shall be final and binding on the parties.
There is no provision under the Act for appointment of inspectors for the enforcement
of the provisions of the Act.
3.7
The Industrial Disputes Bill was introduced in the Central Legislative Assembly on
8th October 1946. The Bill was passed by the Assembly in March 1947 and became
law with effect from 1st April 1947. The Act contains 40 sections, which have been
grouped in 9 chapters.
42
a)
To ensure social justice to both employers and employees and advance the
progress of industry by bringing about harmony and a cordial relationship
between the parties.
b)
To settle disputes arising between capital and labour by peaceful methods and
through the machinery of conciliation, arbitration and, if necessary, by
approaching the tribunals constituted under the Act. If disputes are not settled,
there would be strikes or lockouts which would entail dislocation of work,
essential to the life of the community.
c)
To promote measures for securing and preserving amity and good relations
between the employer and workmen.
d)
e)
f)
g)
Definitions
The following are some of the important definitions:
Appropriate Government: It means:
a)
b)
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
Any railway service or any transport service for the carriage of passengers or
goods by road, water or air;
ii)
vi) Any industry specified in the First Schedule which the appropriate
government may, if satisfied that public emergency or public interest so requires,
by notification in the Official Gazette, declare to be a public utility service for a
specified period not exceeding six months in the first instance. The appropriate
government, if necessary, may extend it from time to time.
Industry: It means any business, trade, undertaking, manufacture or calling of
employers and includes any calling, service, employment, handicraft or industrial
occupation or avocation of workmen.
The definition is both exhaustive and inclusive and is very comprehensive in scope. It
is in two parts. One part of it defines industry from the standpoint of the employer; the
other from the standpoint of the employee.
The Supreme Court by a judgement of far reaching importance gave a wide
implication to the meaning of industry. It laid down a triple test to decide the
applicability of the I.D. Act to them. The triple test is: (i) systematic activity;
(ii) cooperation between employers and employees; (iii) production and/or distribution
of goods and services calculated to satisfy human wants and wishes. If these tests are
satisfied prima facie, there is an industry. As a consequence, schools, colleges,
universities, hospitals, solicitors offices, gymkhana, clubs, institutes, charitable
projects were held to be industry.
Industrial Dispute: 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.
The definition is in three parts. The first part refers to the factum of a real and
substantial dispute, the second part to the parties to the dispute, and the third to the
subject matter of the dispute.
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Conceptual Framework of
Employment Relations
It is a settled law that before any dispute between an employer and his workmen can
be said to be industrial dispute under the Act, it must be sponsored by a substantial
number of workmen. In other words, it is only a collective dispute that can constitute
an industrial dispute. The person regarding whom the dispute is raised must be one in
whose employment, non-employment, terms of employment or conditions of labour,
the parties to the dispute have a direct or substantial interest.
Where any employer discharges, dismisses, retrenches or otherwise terminates the
services of an individual workman, any dispute or difference between that workman
and his employer connected with, or arising out of, such discharge, dismissal,
retrenchment or termination shall be deemed to be an industrial dispute
notwithstanding that no other workman nor any union of workmen is a party to the dispute.
An individual workman whose services are terminated can now raise an industrial
dispute and take his case to the conciliation machinery or approach the Government
for a reference of the dispute to adjudication. The object is to give an individual
dispute relating to discharge, dismissal, retrenchment or otherwise termination, the
status of an industrial dispute.
Wages: Wages means all remuneration capable of being expressed in terms of
money, which would, if the terms of employment, expressed or implied, were fulfilled,
be payable to a workman in respect of his employment, or of work done in such
employment, and includes:
i)
such allowances (including dearness allowance) as the workman is for the time
being entitled to;
ii)
c)
Who is subject to the Army Act, 1950 (46 of 1950), or the Air Force Act, 1950
(45 of 1950), or the Navy (Discipline) Act, 1934 (34 of 1934); or
ii)
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
ii)
iii) Discharge or dismissal of workmen, including retirement of, or grant of relief to,
workmen wrongfully dismissed;
iv) Withdrawal of any customary concession or privilege;
v)
vi) All matters other than those specified in the Third Schedule.
45
Conceptual Framework of
Employment Relations
A labour court shall consist of one person only with necessary judicial qualifications,
and will be appointed by the appropriate government.
Industrial Tribunals: The appropriate government may, by a notification in the
Official Gazette, constitute one or more industrial tribunals to adjudicate industrial
disputes relating to any matter, whether specified in the Second Schedule or in the
Third Schedule.
The Third Schedule provides for the adjudication of the following matters:
i)
ii)
Notice of Change
Before effecting any change in the conditions of service relating to wages, contribution
to provident fund, hours of work and rest intervals, compensatory and other
allowances, leave with wages and holidays, introduction of new rules of discipline,
withdrawal of any customary concession or privilege as given in the Fourth Schedule,
the employer should give 21 days notice to the workmen likely to be affected by the
proposed changes. No such notice is required if the change is effected in pursuance of
any settlement or award. But the appropriate government may exempt certain
industries from giving such notice, if it is of the opinion that such a change may affect
the employers prejudicially or may cause serious repercussions on the industry
concerned or that the public interest so requires.
Reference of Disputes
If an industrial dispute exists or is apprehended, the government may, by order in
writing:
46
a)
b)
Refer any matter connected with or relevant to the dispute to a court of inquiry;
c)
d)
The Central Government may refer the dispute to the national tribunal if it
involves any question to national importance.
If a workman dies during the pendency of the proceedings, his legal heirs have the
right to continue the proceedings.
Voluntary Reference of Disputes to Arbitration: Section 10-A provides for the
voluntary arbitration of industrial disputes. Where any industrial dispute exists or is
apprehended and the employer and the workmen agree to refer it to arbitration, they
may, at any time before the dispute has been referred to a labour court or tribunal, by
a written agreement, refer it for arbitration to such person or persons as may be
specified in the arbitration agreement. When an arbitration agreement provides for a
reference of the dispute to an even number of arbitrators, the agreement shall provide
for the appointment of another person as umpire. If the arbitrators are equally divided
in their opinion, the award of the umpire shall prevail and shall be deemed to be the
arbitration award. A copy of the arbitration agreement shall be forwarded to the
appropriate government and the conciliation officer. The appropriate government shall
publish the agreement in the Official Gazette within one month from the date of its
receipt.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
ii)
The reference should be made before the dispute has been referred under Section
10 to a labour court, an industrial tribunal or national tribunal; and
iii) The names of the person or persons to act as arbitrator or arbitrators must be
specified in the arbitration agreement. Such persons may be presiding officers of
labour courts, tribunals or national tribunals.
2)
He must investigate the dispute and all matters affecting the merits and the right
settlement thereof, and try to induce the parties to come to a fair and amicable
settlement.
3)
Where a settlement of the dispute or any of the matters therein is arrived at, he
must send a report to the government, together with a memorandum of settlement
signed by the parties.
4)
5)
He must send the report of the settlement or non-settlement of the dispute, as the
case may be, within 14 days of the commencement of the conciliation
proceedings or within such shorter period as may be fixed by the Government.
47
Conceptual Framework of
Employment Relations
If, after considering the report where no settlement is reached, the appropriate
government is satisfied that the case should be referred to a board or a tribunal, it may
make such reference. If no reference is made, it must record and communicate to the
parties concerned the reasons why the reference has not been made.
Duties of Board of Conciliation: The duties of the board of conciliation are similar to
those of conciliation officers. The time limit for the submission of its report is two
months. It may, however, be extended from time to time for further period not
exceeding two months in the aggregate or for such period as may be agreed upon in
writing by all the parties to the dispute.
Duties of Court of Inquiry: It is the duty of the court to inquire into the matters
referred to it and report thereon to the appropriate government within six months from
the commencement of its inquiry.
Duties of Courts and Tribunals: When an industrial dispute has been referred to a
labour court, tribunal, or national tribunal for adjudication, it shall hold its
proceedings expeditiously and submit its award to the appropriate government as soon
as practicable on the conclusion of the adjudication.
48
Under this Section, for the first time, power has been given to a tribunal to satisfy
itself whether misconduct is proved. This is particularly so regarding even the findings
arrived at by an employer in an enquiry properly held. The tribunal has also been
given the power, for the first time, to interfere with the punishment imposed by an
employer. When such wide powers have been conferred on tribunals, the legislature
obviously felt that some restrictions have to be imposed regarding what matters could
be taken into account. Such restrictions are found in the proviso. The proviso only
emphasises that the tribunal has to satisfy itself one way or the other regarding
misconduct, punishment and relief to be granted to workmen only on the basis of the
materials on record before it.
Section 11-A does not cover retrenchment or retirement cases, because it clearly
indicates that it is for discharge and dismissal cases only.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
b)
To be valid, an agreement under the second category should be in writing and signed
by the parties thereto, and copies should be sent to an officer authorised for this
purpose by the appropriate government and the conciliation officer. Thus, every
settlement is an agreement, though every agreement is not a settlement.
A settlement arrived at in the course of conciliation proceedings or as an award of a
tribunal will be binding on:
i)
ii)
All other parties summoned to appear in the proceedings as parties to the dispute
unless they were so summoned without proper cause;
iii) Where a party is an employer, his heirs, successors or assignees in respect of the
establishment to which the dispute relates;
iv) Where a party is composed of workmen, all persons who were employed in the
establishment or part of the establishment, as the case may be, to which the
disputes relates on the date of the dispute and all persons who subsequently
become employed in that establishment or part of the establishment.
A settlement arrived at in the course of conciliation proceedings is binding for a period
agreed upon by the parties. If no such period is agreed upon, the settlement will
remain in force for a period of six months from the date on which the parties to the
dispute sign the memorandum of settlement. It will continue to be binding until the
expiry of two months from the date on which one of the parties gives notice in writing
to the other of its intention to terminate the settlement. There is nothing in the Act to
prohibit a private settlement between the parties even during the course of
adjudication proceedings.
Plurality of workmen;
ii)
49
Conceptual Framework of
Employment Relations
ii)
When adjudication is going on before a labour court or tribunal and two months
thereafter;
ii)
The strike must not take place for 14 days after the notice has been given;
iii) The strike must not take place after six weeks following the notice;
iv) The strike must not take place before the day, if any, specified in the strike
notice;
v)
The strike must not take place during conciliation proceedings before a
conciliation officer and seven days after the conclusion of such proceedings.
Some provisions are applicable only to public utility services while certain other
provisions 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
lockout without notice or prescribed period. But in industrial establishments other than
public utility services, there can be strike or lockout without notice. During the
pendency of any conciliation proceedings before a conciliation officer, strike or
lockout can be resorted to. While dealing with the public utility services, there can be
no strike or lockout if any conciliation proceedings are pending before a conciliation
officer.
The employers right to lockout is subjected to the same restrictions as the workmens
right to strike. The same rules apply with the same additional restrictions for public
utilities. However, a strike is not illegal when it is declared because of an illegal
lockout. Justifiability and legality are two different or distinct concepts. A strike may
be legal but it may be unjustified or an unjustified strike may be legal. A strike may be
both legal and justified. But a strike which is illegal cannot be justified. Both cannot
co-exist in law.
In industrial undertakings where lay-off provisions apply, only those workmen will be
entitled to lay-off compensation whose names are borne on the muster rolls of the
establishment and who are not badli or casual workers and who have completed one
year of continuous service with the employer concerned.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
ii)
If he does not present himself for work at the establishment at the appointed time
during working hours at least once a day;
iii) If such lay-off is due to a strike or slowing down of production on the part of the
workmen in another part of the establishment.
Retrenchment: Section 2(oo) defines retrenchment as the termination by the
employer of the service of a workman for any reason whatsoever otherwise than as a
punishment inflicted by way of disciplinary action. Voluntary retirement,
superannuation, termination of employment on grounds of ill health, do not amount to
retrenchment.
All retrenchment will result in termination of service but all termination of service will
not amount to retrenchment.
No workman who has been employed for one year can be retrenched until:
i)
He has been given one months notice in writing, indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been
paid, in lieu of such notice, wages for the period of the notice;
ii)
The workman has been paid compensation equivalent of fifteen days average
pay for every completed year of service or any part thereof in excess of six
months; and
51
Conceptual Framework of
Employment Relations
The service of the workman has not been interrupted by such transfer;
ii)
The terms and conditions of service after the transfer are not less favourable to
the workman than those before the transfer.
iii) The new employer, under the terms of such transfer, is legally liable to pay
retrenchment compensation to the workman on the basis that the service has
been continuous and uninterrupted by the transfer.
Closure: Closure has been defined as the permanent closing down of a place of
employment or part thereof.
An employer intending to close down an undertaking shall be required to give sixty
days prior notice to the appropriate government stating clearly the reasons for the
closure. But it shall not apply to:
i)
An undertaking in which less than fifty workmen are employed or were employed
on an average per working day in the preceding 12 months;
ii)
If an undertaking is closed down, every workman, who has been in continuous service
for not less than one year in that undertaking, shall be entitled to notice and
compensation as if the workman had been retrenched. But where the undertaking has
been closed down on account of unavoidable circumstance or circumstances beyond
the control of the employer, the compensation payable shall not exceed the average
pay for three months.
The Act was amended in March 1976, imposing some restrictions on the employers
right of lay-off, entrenchment, and closure. These special provisions shall apply to all
industrial establishments (except seasonal) in which not less than 100 workmen were
employed on an average per working day for the preceding 12 months.
The workman has been given three months notice in writing, indicating the
reasons for retrenchment and period of notice has expired, or the workman has
been paid, in lieu of such notice, wages for the period of the notice: provided
that no such notice shall be necessary if the retrenchment is under agreement,
which specifies a date for the termination of service;
ii)
The workman has been paid, at the time of retrenchment, compensation which
shall be equivalent to 15 days average pay for every completed year of
continuous service or any part thereof in excess of six months; and
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
iii) Notice in the prescribed manner is served on the appropriate government or such
authority as may be specified by the appropriate government by a notification in
the Official Gazette, and the permission of such government or authority is
obtained.
The appropriate government or authority may, after making such inquiry, grant or
refuse, for reasons to be recorded in writing, the permission for the retrenchment. If it
does not communicate the permission or the refusal to grant the permission to the
employer within three months of the date of service of the notice, it shall be deemed to
have granted permission for such retrenchment on the expiration of the said period of
three months. If the permission for the retrenchment is refused, such retrenchment
shall be deemed to be illegal.
Closure: An employer who intends to close down an undertaking or an industrial
establishment shall serve, for previous approval, at least ninety days before the date
on which the intended closure is to become effective, a notice, in the prescribed
manner, on the appropriate government, stating clearly the reasons for the intended
closure of the undertaking. However, it shall not apply to an undertaking set up for the
construction of buildings, bridges, roads, dams, canals, or for other construction
work.
If the appropriate government is satisfied that the reasons for the intended closure of
the undertaking are not adequate and sufficient or that the closure is prejudicial to the
public interest, it may direct the employer not to close down such undertaking. If the
appropriate government does not communicate the permission or the refusal to grant
the permission to the employer within a period of two months from the date on which
the application is made, the permission applied for shall be deemed to have been
granted on the expiration of the said period of two months. If the permission for
closure is refused, the closure of the undertaking shall be deemed to be illegal. There
is also a provision for restarting an undertaking closed down otherwise than for
unavoidable circumstances beyond the control of the employer. In the case of such
closure, every workman who has put up one year of continuous service shall be
entitled to notice and compensation as if the said workman had been retrenched.
Chapter VC in the Act prohibits the commission of unfair labour practices by the
employer or workmen or a trade union. These unfair labour practices have been listed
in the fifth schedule appended to the Act.
Penalties
The Act provides for penalties for illegal strikes and lockouts, for instigation to
participate in an illegal strike, for giving financial aid for illegal strikes and lockouts,
for breach of settlements and awards, for disclosing confidential information, and
penalty for closure without notice.
53
Conceptual Framework of
Employment Relations
Miscellaneous
Offence by Companies: Where a person committing an offence under this Act is a
company, or another body corporate, or an association of persons (whether
incorporated or not), every director, manager, secretary, agent or other officer or
person concerned with the management thereof shall, unless he proves that the offence
was committed without his knowledge or consent, be deemed to be guilty of such
offence.
Pendency of Proceedings: During the pendency of any conciliation proceeding before
a conciliation officer or a board or any proceeding before an arbitrator or a labour
court or tribunal or national tribunal in respect of an industrial dispute, no employer
shall:
a)
In regard to any matter connected with the dispute, alter, to the prejudice of
workmen concerned in such dispute, the conditions of service applicable to them
immediately before the commencement of such proceeding; or
b)
For any misconduct connected with the dispute, discharge or punish, whether by
dismissal or otherwise, any workman concerned in such dispute, save with the
express permission in writing of the authority before which the proceeding is
pending.
During the pendency of any such proceeding in respect of an industrial dispute, the
employer may, in accordance with the standing orders applicable to a workman
concerned in such dispute (or, where there are no such standing orders, in accordance
with the terms of the contract, whether express or implied, between him and the
workman):
a)
Alter, in regard to any matter not connected with the dispute, discharge or
punish, whether by dismissal or otherwise, that workman; provided that no such
workman shall be discharged or dismissed unless he has been paid wages for one
month and an application has been made by the employer to the authority before
which the proceeding is pending for approval of the action taken by the
employer.
b)
For any misconduct not connected with the dispute, discharge or punish, whether
by dismissal or otherwise, that workman; provided that no such workman shall
be discharged or dismissed unless he has been paid wages for one month and an
application has been made by the employer to the authority before which the
proceeding is pending for approval of the action taken by the employer.
b)
54
make rules providing for the distribution of such protected workmen among various
trade unions, if any, connected with the establishment and the manner in which the
workmen may be chosen and recognised as protected workmen.
Power to transfer certain proceedings: The government may, by an order in writing
withdraw any proceeding before any labour court or tribunal or national tribunal and
transfer it to any other authority.
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
Recovery of money due from an employer: Where any money is due to a workman
from an employer under a settlement or an award or otherwise, the workman may
make an application to the government for recovery of the dues within a period not
exceeding three months. If the government is satisfied that the money is due, it shall
issue a certificate to the collector, who shall recover the amount as if it were arrears of
land revenue.
Representation of parties: A workman or an employer, who is a party to an
industrial dispute, may be represented in any proceedings under the Act by an officer
of a registered trade union or by an officer of the association of employers
respectively. But no party to an industrial dispute is entitled to be represented by a
legal practitioner in conciliation proceedings. However, a party to a dispute may be
represented by a legal practitioner in proceedings before a court or tribunal with the
consent of the other party and with the permission of the adjudicator.
Power to exempt: The appropriate government is vested with the power to exempt
any industrial establishment or undertaking, carried on by a department of that
government, from all or any of the provisions of the Act. Before the appropriate
government grants exemption it has to be satisfied that adequate provision exist for
the investigation and settlement of industrial disputes in respect of workmen employed
in such establishment or undertakings.
Protection of action taken under the Act: No suit, prosecution or legal proceeding
shall lie against any person for anything which is done, or intended to be done, in good
faith in pursuance of this Act or any rules made there under.
Power to make rules: The appropriate government may, subject to the condition of
previous publication, make rules for the purpose of giving effect to the provisions of
this Act.
Obligations of Employers
1)
Constitute Works Committees and provide all facilities for their proper working.
2)
Implement all agreements, settlements and awards, and produce all documents
and render other assistance for conciliating and adjudicating disputes.
3)
4)
Pay lay-off, retrenchment and closure compensation as required under the Act.
5)
Avoid any change in service and employment conditions without giving 21 days
notice.
6)
7)
Obligations of Workers
1)
2)
Conceptual Framework of
Employment Relations
3)
Cooperate with all authorities set up under the Act in resolving disputes
amicably and expeditiously.
4)
Refrain from committing unfair labour practices specified under the Act.
3.8
CASE
For twenty years the textile workers of a company were represented by a single union.
But after a thirteen week strike, the relationship between the parties became strained.
Subsequently, a new union began organising employees and after acquiring majority
status, it requested the management to start negotiating with it on certain demands of
the workmen. The company refused to recognise the union and also to negotiate with it.
The union filed an application in the court alleging unfair labour practice on the part
of the chief executive of the company. According to it, the chief executive urged some
of the members of the union to withdraw from the same. Further it was pointed out
that on different occasions he told the union members that the unions only weapon
was a strike, and that the last strike had nearly ruined the employees and the company.
He also warned that the company was still not financially secure and that a strike
might result in the closure of the company. He also denounced the union and its top
officials concerned as corrupt and strike prone. Further he added that the textile
workers age and lack of education would make it difficult for them to find alternative
jobs.
In case of hearing, the company agreed with the statements made by it but defended
them on the ground that they were pre-requisites for smooth running of the company.
Discussion Question:
If you were a judge, how would you decide the case?
3.9
SUMMARY
It is gratifying to note that apart from the fundamental rights, our Constitution
embodies within itself, in Part IV, Directive Principles of State Policy. The functions
and duties of the States as contained in the directive principles have given rise to the
concept of social justice. The old idea of laissez faire has given place to a new idea of
welfare state. The philosophy of social, economic and political justice have been given
a place of pride in our Constitution, as well as in the aims and objectives of ILO. The
development and growth of industrial law presents a close analogy to the development
and growth of constitutional law. A series of labour enactments covering labour
welfare and social security were enacted for protecting and promoting the overall
welfare of different categories of working class. The Central and some State
Governments have enacted laws on industrial relations. The three enactments by the
Central Government in the field of industrial relations are: (a) the Trade Unions Act
which provides for registration of trade unions; (b) the Industrial Employment
(Standing Orders) Act which makes provision for certification of standing orders; and
(c) the Industrial Disputes Act which lays down a machinery for the prevention and
settlement of industrial disputes.
3.10
56
SELF-ASSESSMENT QUESTIONS
1)
What are the consequences of labour being included in the concurrent list of the
Indian Constitution?
2)
What are the fundamental rights and directive principles under the Indian
Constitution?
3)
What is the procedure for registration of a trade union under the Trade Unions
Act?
4)
On what objects general and political funds are spent under the Trade Unions
Act?
5)
What is the procedure for certification of standing orders under the Industrial
Employment (Standing Orders) Act?
6)
What are the omissions and commissions on the part of a workman which
amount to misconduct?
7)
What are the provisions regarding strikes and lockouts under the Industrial
Disputes Act?
8)
What are the provisions under the Industrial Disputes Act for settlement of
industrial disputes?
3.11
Constitutional and
Legal Framework of
Industrial Relations:
Conventions, ID Act,
Trade Union Act
FURTHER READINGS
Agarwal, S.L., Labour Relations Law in India, Macmillan Company of India Ltd.,
New Delhi, 1978.
Indian Law Institute, Labour Law and Labour Relations Cases and Materials, N.M.
Tripathi Pvt. Ltd, Bombay, 1987.
Mallick, P.L., Industrial Law, Eastern Book Company, Lucknow, 1989.
57