LABOUR LAW

HOME ASSIGNMENT
Problem 1: (Drafted by Arpit Sir)
Q.1 Decide/Identify the party/parties against whom you can file the case/appeal?
Ans. Cemon Industries, Ltd. Vadodara and others is the party against whom we can file and
appeal.

Q.2 Identify an appropriate authority where you have locus to represent this case with
relevant legal provisions against the abovementioned parties.
Ans 2. The appropriate authority in this case would be the High Court of Gujarat, as was
decided in Engineering Mazdoor Sabha Representing Workmen Employed Under The Hind
Cycles Limited and Another vs Hind Cycles Limited, Bombay, 1963 AIR 874 the Supreme
Court held that appeal under 10A of the Industrial Disputes Act, 1947 is not a tribunal under
the meaning of Article 136 and a writ of certiorari could be issued by the High Court using
their powers under Article 226 and not 227 as was held in the Bombay HC in Air
Corporations Employees' vs D.C. Vyas And Ors., AIR 1962 Bom 274. So, a writ petition to
the HC under Art. 226 would be the appropriate method to appeal against the judgement of
the arbitrator under Section 10A of the ID Act.

Q.3 Identify the issues involved in this case and frame issues with respect to present parties
decide by you?
Ans 3. Issues identified:
Issue 1- Whether the Strike was illegal under meaning of Section 24 of the ID Act and
unjustified considering the facts and circumstances in the present case?

Issue 2 - Whether the Employees are entitled to be paid during the strike if the strike was
legal and justified?

Issue 3 - Whether the Employer was entitled to receive compensation for loss of profits for
the duration of the strike?

Q.4 Arguments Advanced

Ans 4.1 Legal Provisions to support issues
Issue 1
  The strike was not illegal under the meaning of Section 24 of the ID Act.
Section 24 reads as follows : illegal strikes and lock- outs.-
(1) A strike or a lock- out shall be illegal if--
(i) it is commenced or declared in contravention of section 22 or section 23; or
(ii) it is continued in contravention of an order made under sub- section (3) of section
10 1 or sub- section (4A) of section 10A].
(2) Where a strike or lock- out in pursuance of an industrial dispute has already
commenced and is in existence at the time of the reference of the dispute to a Board, 1
an arbitrator, a] 2 Labour Court, Tribunal or National Tribunal], the continuance of
such strike or lock- out shall not be deemed to be illegal, provided that such strike or
lock- out was not at its commencement in contravention of the provisions of this Act
or the continuance thereof was not prohibited under sub- section (3) of section 10 1 or
sub- section (4A) of section 10A].
(3) A lock- out declared in consequence of an illegal strike or a strike declared in
consequence of an illegal lock- out shall not be deemed to be illegal.

None of these conditions are fulfilled in the present scenario. The notice was also given by
the CIWU in a timely manner and in accordance with the provisions of Section 22 of ID Act.

So, we can conclude that the strike was legal in nature.

In answering whether the strike was justified, in Syndicate Bank v. K. Umesh Nayak, AIR
1995 SC 319, the SC held that "while the legality of the strike is based on examining
whether there is a breach of the provisions of the Industrial Disputes Act, the question of
justifiability of strike has to be examined by taking into consideration factors such as service
conditions, nature of demands, the cause which led to the strike, urgency of the cause or the
demands of the workmen, reason for not resorting to the dispute resolving machinery under
the Act, etc."

So, taking in consideration the present facts we can conclude that it was justified as the
workers were not paid on time and denied their bonus, the strike was carried out to solve
these problems and not for any other reason. The nature of demands, the urgency and the fact
that they did resort to the dispute solving machinery under the Act all point to the fact that the
strike was justified.

Issue 2
Now that we have established that the strike was both legal and justified we can rely on the
judgement of the SC in Syndicate Bank v. K. Umesh Nayak, AIR 1995 SC 319, in that
judgement the SC held that "to be entitled to wages for the strike period, the strike has to be
both legal and justified.” The same was also mentioned in the judgement of Management Of
Churakulam Tea vs Workmen And Anr., AIR 1969 SC 998.
Since, in this case the strike was both justified and legal the workmen are entitled to receive
their salary for the duration of the strike.
Issue 3
In the case of Rohtas Industries Ltd. & Anr vs Rohtas Industries Staff Union and Ors., 1976
AIR 425, it was held “It is common case that the demands covered by the strike and wages
during the period of the strike constitute an industrial dispute within the sense of s. 2(k), of
the Act. Section 23, read with s. 24, it is agreed by both sides, make the strike in question
illegal. An 'illegal strike' is a creation of the Act. As we have pointed out earlier, the
compensation claimed and awarded is a direct reparation for the loss of profits of the
employer caused by the illegal strike. If so, it is contended by the respondents, the remedy for
the illegal strike and its fall- out has to be sought within the statute and not de hors it. If this
stand of the workers is right, the remedy indicated in s. 26 of the Act, viz., prosecution for
starting and continuing an illegal strike, is the designated statutory remedy. No other relief
outside the Act can be claimed on general principles of jurisprudence. The result is that the
relief of compensation by proceedings in arbitration is contrary to law and bad.”
So, if the strike is illegal the remedy is given under Section 26 of the ID Act, and no other
remedy can be claimed outside of the ID Act.
Since this strike wasn’t even illegal cleary the employer cannot claim compensation from the
employees as there is no legal injury in the first place. There might be actual damages but in
order to claim compensation there must be a legal injury as well. Thinking logically if an
employer isn’t entitled to compensation for an illegal strike, he clearly isn’t for a legal one.
Problem 2 (Drafted by Surbhi Ma’am)

Q. 1 Identify the issues involved in this case and frame issues with respect to it?

Ans. The issue involved in this case is that whether the Eshew business is as industry or not
for the purposes of the Industrial Disputes Act.

Q.2 Arguments Advance

Ans.
4.1 Legal Provision to support your issues
According to the definition given under section 2(j) of the Industrial disputes act, ‘industry’
is “Any business, trade, undertaking, manufacture or calling of employers; It also
specifically includes the following Any calling, service, employment, handicraft or industrial
occupation or avocation of workmen.”
The present case involves a business which does an charitable work and doesn’t involve in
any profit making activity. Therefore, the Eshcew business can be categorized as an
charitable industry (according to three categorization made in the case of Bombay Water
Supply Case) “Those that make no profit but hire the service of employees as in any other
business, but the goods/ services which are the output, are made available at a low or no cost
to the indigent poor”. Because Eshcew business don’t make any profit from these activities
of helping the distressed. However, they do hire volunteers and volunteers are given a
stipend, autonomous environment and liberal working hours. Also, they have managers or
coordinators that train, supervise, and check their work outcomes which show that the main
objective of the Eshew business is fulfilled by the cooperation between these volunteers
(employees) and the employers. Therefore, Eshew business is an Industry.
However, the amendment which was made in 1982 propounded a new definition of industry
and according to it, industry includes “‘any systematic activity carried on by cooperation
between an employer and his workmen (Whether such workmen are employed by such
employer directly or by or through any agency including a contractor) for the production,
supply or distribution of goods or services with a view to satisfy human wants or wishes (not
being wants or wishes which are merely spiritual or religious in nature)” but it doesn’t
include “institutions owned or managed by organizations wholly or substantially engaged in
any charitable, social or philanthropic service”. Therefore, after the amendment Eschew
business, being a charitable industry is not an industry for the purposes of section 2 (j) of
IDA act. But the amendment has not been come into force till date.

4.2 Case Laws to support your arguments

The question whether particular business is an industry or not under section 2 (j) of the
Industrial Disputes Act or not has been extensively dealt in the case of Bombay Water
Supplies case. In the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa, SC
has overruled many earlier judgments, and defined industry (a) Where (i) systematic activity,
(ii) organized by co-operation between employer and employee, (the direct and substantial
element is chimerical)(iii) for the production and/or distribution of goods and services
calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of
material things or services geared to celestial bliss e.g. making, on a large scale, prasad or
food), (b) Absence of profit motive or gainful objective is irrelevant, be the venture in the
public, . It is immaterial whether or not there is profit motive or whether or not there is
capital. If the organization is a trade or business it does not cease to be exempted from scope
of definition of industry.
The court in this case has divided charitable institutions in three categories
(a) Those that yield profit, but the profits are not siphoned off for altruistic purposes;
(b) Those that make no profit but hire the service of employees as in any other business, but
the goods/ services which are the output, are made available at a low or no cost to the
indigent poor; and
(c) Those that are oriented on a humane mission fulfilled by men who work, not because
they are paid wages, but because they share the passion for the cause and derive job
satisfaction.
The first two categories are industries, but not the third, on the assumption that they all
involve co-operation between employers and employees.
The present case pertains to the second category of the charitable institutions where though
there is no profit but the Eschew business has hired the volunteers and also pay them stipend.
Also, it’s mentioned that they have managers or coordinators to train, supervise, and check
the work outcomes of the volunteers. Therefore, there is contract of service and the work
done by the Eschew is done through the co-operation between employees and the employer.
Hence the Eschew business is an industry.