Professional Documents
Culture Documents
Legal Aspects Strikes and Lockouts in India
Legal Aspects Strikes and Lockouts in India
Feb. 2014
Table of Contents
Summary: ..........................................................................
.............................................................. 1 Strikes and
lockouts: .........................................................................
.............................................. 1 Introduction and basic
issues.............................................................................
.......................... 1 Important
Laws: .............................................................................
............................................. 2 Industrial Disputes Act,
1947 ..............................................................................
.................... 2 Study and
Evaluation: .......................................................................
.......................................... 4
Definitions: ......................................................................
........................................................ 4 Legality of strikes or
lockouts: .........................................................................
....................... 5 Justification of a strike or a
lockout............................................................................
............. 7 Payment of wages and compensation for the loss to
business ................................................ 7 “Right to
strike” ...........................................................................
............................................... 9
Conclusion: .......................................................................
............................................................ 10
Bibliography: .....................................................................
........................................................... 10
Summary:
With a labour force of about 500 million, India is second only to China in this
respect. The study tries to evaluate the efficacy of Indian labour laws with
respect to strikes and lockouts. As per the labour bureau, GOI, the number of
strikes has dropped from 295 in 2002 to 237 in 2012. However, number of man-days
lost has increased from 9,664,537 to 11,690,606 (about 32473 years). The number of
workers affected due to or involved in strikes, lockouts, retrenchment and closure
stands more than 1 million (one in every 500), as of 2012. This seems to be a huge
of matter of concern, for a country like India which is trying to boost its
manufacturing and service sectors in coming years. With the help of a few cases, I
will present my study on some of the pertaining acts.
Important Laws:
Some of the important laws governing the cases of strikes and lockouts are as
follows: Industrial Disputes Act, 1947 • Section 2 states the definition of
“strike” as cessation of work by a body of persons employed in any industry acting
in combination or a concerted refusal, or a refusal, under; a common understanding
of any number of persons who are or have been so employed to continue to work or to
accept employment. It states the definition of “lockout” as temporary dosing 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. Sub-section (3) of
section 10: Where an industrial dispute has been referred to a Board,[Labor Court,
Tribunal or National Tribunal] under this section, the appropriate Government may
by order prohibit the continuance of any strike or lock-out in connection with such
dispute which may be in existence on the date of the reference. Sub-section (3A) of
section 10A: Where an industrial dispute has been referred to arbitration and the
appropriate government is satisfied that the persons making the reference represent
the majority of each party, the appropriate government may, within the time
referred to in sub-section (3) (one month), issue a notification in such manner as
maybe prescribed; and when any such notification is issued, the employers and
workmen who are not parties to the arbitration agreement but are concerned in the
dispute, shall be given an opportunity of presenting their case before the
arbitrator or arbitrators. Sub-section (4A) of section 10A: Where an industrial
dispute has been referred to arbitration and a notification has been issued under
sub-section (3A), the appropriate government may, by order, prohibit the
continuance of any strike or lock-out in connection with such dispute which maybe
in existence on the date of the reference. Section 22 states the clauses applicable
to prohibit employees and employers of public utility service companies (def. of
public utility service as per section 2) from going on strike and lockout.
According to sub-section (1) and (2) of section 22, No employee or employer of a
public utility service shall go on strike or declare lockout,
a) during the pendency of conciliation proceedings before a Board and seven days
after the b) during the pendency of proceedings before a Labor Court, Tribunal or
National Tribunal and
two months, after the conclusion of such proceedings;
• Section 25: No person shall knowingly expend or apply any money in direct
furtherance or
support of any illegal strike or lock-out.
• Section 26 states the penalty which shall be levied on anyone for going on
illegal strike or
declaring illegal lock out. The penalty can be imprisonment up to one month, and/or
a fine of rupees fifty, in case of a strike; and rupees one thousand, in case of a
lockout.
Page 3
Apart from these, the following acts also contains important laws governing cases
of strikes and lockouts, Trade Unions Act, 1926 Many other state government acts on
industrial disputes and unfair labour practices.
What should be the compensation for loss of wages for 814 employees who were
reinstated and 150 who were dismissed? Who should compensate for the loss of
business in case the strike is found to be legal?
The workmen appealed that the bank was trying to victimize the president, V.P.,
secretary and other higher authorities of the federation (union) with sole purpose
of teaching a lesson to its employees. On the other hand the bank appealed that the
strike itself was illegal, and hence the lockout is justified, along with the fact
that the dismissed 150 employees were guilty of “unpardonable violence,
intimidation and coercion”. The tribunal finally gave the judgment on 2nd Feb, 1952
in favor of the bank stating that, as proceeding of a previous case (1950) of
industrial dispute between the federation of employees and the bank was pending at
arbitration, the said strike was illegal as per section 23(b) and 24 of ID Act,
1947. The tribunal further stated that as per section 24, the said lockout of 150
employees hence, can’t be deemed as illegal as it was a consequence of an illegal
strike. The tribunal hence, gave a judgment that bank can refuse to reinstate the
said 150 employees, however on the basis of compassionate grounds, the bank was
asked to pay a compensation to the 150 employees for their dismissal. On further
appeal of the employees the matter was taken up to labour appellate tribunal, which
tried to answer the question that “Does a mere participation of an employee in an
illegal strike gives a right to the employer to dismiss him/her?”The appellate
tribunal said that the dismissal of 150 employees by the bank was illegal as per
section 33, of ID Act, 1947 which states that the employer cannot dismiss its
employees on charge of an illegal strike till the case is referred to and decided
by a tribunal. Hence, On 4th January, 1955, the appellate tribunal asked the bank
to immediately pay a compensation to 150 employees for their loss of wage and to
reinstate 136 of the 150 employees. 14 employees were denied of reinstatement on
grounds of violence and intimidation In 1958, the bank further made two civil
appeals against reinstatement of 126 employees of federation, and 10 employees of
union (U.P.) respectively, based on charges of trespassing, as the strike was a
“pen-down” strike and hence, the employees occupied their seat without doing any
work, and refused to vacate the office on the orders of the bank. The bank further
presented evidence of the witnesses (its reinstated employees) to violence and
intimidation of the said 136 employees. The 14 employees, whom the tribunal denied
reinstatement, too filed an appeal. The above case which started in July, 1951
continued till September, 1959 and was referred to the Supreme Court. However,
recently the department of labour under GoI has made the banking industry a “public
service utility” as per amendments in definition in section 2 of ID Act, 1947.
Hence, under the current law employees would be needed to give atleast 14 days
prior notice as per section 22, making a “lightening strike” completely unjustified
and illegal. Some of the learning I found through this case was that, i. The
definition of a strike must have a clearer stance regarding pen-down, stay-in, and
other different forms of strike. ii. The laws should have a clear mention about the
reinstatement and compensation policy of the employees participating in a strike
both illegal and legal. iii. According to section 24, a strike is illegal if there
is an ongoing case pending between the employer and its employees. But since such a
case might last for a long period, does it Jariwala Chintan, PGP, IIM-I Page 6
leave no choice for the employees, in the mean time, to protest other than going
for an appeal. iv. And the biggest question of all remains, how can one decide
whether a strike is justified or not, and what about the loss to the company if a
strike is found to be illegal. The answer to this and many other questions related
to strikes and lockouts are being sought through better labour laws and amendments
in coming times. Justification of a strike or a lockout: The bigger question has
always been that, what justifies an act of strike or lockout. What justifies the
period or duration of strike. Is there a need for “right to strike”, or should
strikes and lockouts be considered as a bane to industry. The law gives no
information in this regard. Although as per section 22 and 23, it is clear that
strikes and lockouts are not always illegal. Hence, given the condition every
employee and employer has a right to strike. But, as we have seen in many cases
strikes and lockouts can get way more violent than anticipated. In case if it gets
violent, should the violence be then weighed in while deciding the justification of
strikes? Section 33 and 33A of ID Act, 1947 answers this question somewhat, but not
completely. There needs to more amendments in ID Act to make the labour-industry
relations more formal and long lasting. In the case of 'Dabir (Et. S.K. Burman)
Pvt. Ltd., v Their Workmen, it was held that justification of strike depends upon
(a) the conduct of the employer also, the employee which includes provocation on
the part of employer by high, handed action and unsustainable reasons for the
strike on the part of workmen (b) the nature of the strike whether the peaceful of
violent and (c) whether the strike was resorted to after exhausting all the means
of redress. According to me, some of the conditions under which a strike or a
lockout is justified are: If the employer denies the right to employees for forming
a union. It should be launched only for economic demands of workmen like basic pay,
dearness allowance, bonus, provident fund, gratuity, leave and holidays etc., which
are the primary objects of a trade union. • The economic demands should be prima
facie reasonable. • The demands should not be raised frivolously or on ulterior
reasons. • If some demands are not referred to adjudication or arbitration by the
employers. A strike can be unjustified if the reasons for it are absolutely
perverse and unsustainable. • • Payment of wages and compensation for the loss to
business: The final topic I would like discuss, which might need some light in ID
Act, 1947 is that of compensation or payment of wages for the period of strike or
lockout. In thousands of cases of strikes, the courts have seen through years, the
decision of payment of wages has been based completely on the opinion of the judges
on the matter. There seems to be no written rule or law, which clearly specifies
anything related to this matter. In T. S. Kelawala vs. The bank of India, the
courts without even hearing whether the strike was legal or illegal and justified
or unjustified, gave the decision that under any condition, the employees are not
entitled to wages for the duration of strike. However, in cases like Crompton
greaves ltd. vs. its employees and Churakulam Tea Estate vs. its workmen, the
courts gave a decision in the favour of employees. General principles which are
followed while deciding payment of wages are:
Page 7
•
• •
• •
“Right to strike”
Right to strike is been recently in news as the Union Labour Minister Mallikarjun
Kharge gave a statement against strikes which was not received well by the unions
as well as a few political parties like CPI and others. The main issue is that,
should there be a “right to strike” empowered amongst every labour working in an
industry. The Industrial Disputes Act, 1947 gives this right, however under some
conditions of legality. In a country like India, which is dependent upon foreign
investments for a good share of future growth, it is necessary that the country who
seeks foreign investment must keep some safeguard in their respective industrial
laws so that there will be no misuse of right of strike. In India, right to protest
is a fundamental right under Article 19 of the Constitution of India. But right to
strike is not a fundamental right but a legal right. Unlike America, in India right
to strike is not expressly recognized by the law. The trade union Act, 1926 for the
first time gave the laborers a legal framework to form employee union; however it
provided limited right to strike by legalizing certain activities of a registered
trade union. In my opinion, the need for a “right to strike” depends upon the
efficacy of the current labour and industry relations laws, and its impact on the
employers and employees. Citing the current situation I think the laws should be
amended to bring a clearer picture, however, there is no immediate need for a
“right to strike”.
Page 9
Conclusion:
Strikes are a matter of protest and during a protest most laborers tend to forget
their responsibilities, their duties and legality of their action. This leads to
violence, trespassing, loss of customers, loss of wages, and many more issues which
are far more destructive than the strike itself. Hence, the Industrial Disputes Act
was made seeking a judgment on these crucial issues. However, as times have passed
the act of strike has evolved, and the laborers now understand the legal scenario
of striking. This has reduced the so called “lightening strikes”, but increased
instances such as pen-down strike, tool-down strike, sit-in strike, and go-slow
strikes. Seeing this and many more issues which have puzzled the courts on many
counts, such as payment of wages, justification of strikes, compensation for loss,
definition of various terms, etc., I feel a need for change in the labour laws. ID
Act, 1947 is one of the pioneers among the labour laws in India. However it has
been subsided on many times by State legislations and state laws like P.U.L.P. Act,
1970. This again creates an ambiguity regarding legality of strike in the minds of
unions while deciding to go on a strike. Hoping for amendments in regards to many
issues, I think strikes and lockouts are just one of the many industrial disputes
that are a bane to the employee-employer relations, and care should be taken while
deciding on such issues. “The most potent weapon in the hands of the oppressor is
the mind of the oppressed.” Steven Biko
Bibliography:
1. Industrial Disputes Act of 1947, Act no. 14 of 1947, 11th March, 1947 2. Trade
Unions Act of 1926, Act no. 16 of 1926, 25th March, 1926 3. Kaushik P.D., Bibek
Debroy, “Reforming the Labour Market”, Academic foundation, 1st
January, 2005, pg. 130-135 4. Padhi P.K., “Labour and Industrial laws”, PHI
learning pvt. Ltd., 24th December, 2011, pg. 83-84 5. Staff reporter, “Judiciary
has no right to ban strike”, The Hindu, Kolkata, 15th February, 2013 6. Shrivastava
Suresh C., “Strikes and lock-outs in India: law and policy”, Central India Law
Quarterly [vol. 4:1] 7. http://indiankanoon.org/doc/1763716/, “ Punjab National
Bank Ltd vs Employees Of The Bank on 10 April, 1953” 8. Vijendra Vikram Singh Paul,
“Right to strike under Industrial Dispute Act, 1947” legalserviceindia(online),
vikrampaul@legalserviceindia.com 9. Ashwin Hemant Raj, “SC's Right to Strike' curbs
fundamental right”, The Times of India, Bangalore, 12th September, 2003 10.
http://www.manupatrainternational.in/supremecourt/1950-1979/sc1967/s670227.htm
“Secretary, Madras Gymkhana Club Employees' Union Vs. Management of the Gymkhana
Club on 3 October, 1967” Jariwala Chintan, PGP, IIM-I Page 10