NMIMS, BANGALORE

PGDM 2019-21

Legal Framework of Industrial Relations -

Unfair Labour Practises

Under the guidance of Prof. Dr. Deepak Sharma

Name Roll No. SAP No.

Mitali Jadhav A026 80203190071

Saurabh Pratap Singh B040 80203190169

INTRODUCTION TO UNFAIR LABOUR PRACTISES
In modern industrial society, industrial relations are one of the most critical problem in Human
resource management. Industrial advancement is not possible without coordination of both the
employees and employers in industrial setup. It has been clearly understood that industrial relations
don’t emerge in vacuum. In fact, according to Industrial Act 1947 industrial relation is a relation
between employer employees, employees and employers and employees and trade unions.
Healthy IR are essential ingredients to progress for any economy. Major significance is described
below:
1)Continuous Production– One of the major benefits of IR is that it ensures continuation in production
activities of an establishment. The resources are fully utilized resulting in maximum possible output.
The benefits are shared by other connected industries too. Flow of income is uninterrupted in
scenarios of healthy Industrial Relations.
2)Reduction in Conflicts: Good industrial relations became a source for reduction in conflicts the
industry. Although IR are characterized by both conflicts and co-operations so a good industrial help
in reducing the conflicts. Lockouts, strikes, gherao, go-slow tactics are some of the indicators of
industrial chaos prevailing in an organization.
3)Other benefits may include high morale, mental revolution and reduced wastage in relation to
healthy IR.
Thus, it is clearly established that good industrial relations are stepping stone of higher production
with minimum costs resulting in higher profits. It is linked to increasing the efficiency of employees
in the establishment. As a result, new critical projects are introduced which will ensure welfare of the
workman and promote social justice at workplace. The twin objective of social justice & national
development can only be accomplished if there exist harmonious relationship between employee and
employer.
Unfair labour practice usually creates an environment which tends to disturb the delicate balance
between the relationship of employer and employee. It leads to following:
a) Mental pressure on the part of employee and employer.
b) Wage structure being fixed inadequately so as to take away right of workers
c) Unhealthy working environment for the employees.
d) Unlawful retrenchment, lock-outs & dismissals on the part of management while unlawful strikes
on the part of the workers.
e) Supervisors and other managers generally lack human relations skills under poor IR practices.
f) Welfare facilities for the employees being inadequate.
g) Leads to gain sharing disputes.

Unfair labour practise lead to bad industrial relations in an industrial setup. The organisation
where industrial are strained, a lot of problem arises. The atmosphere of such organisations is
surcharged with unrest leading to strikes or lock-outs. Production goes to a high cost and it
adversely affects the efficiency. The situation is further affected by absenteeism among the
workers, high rate of labour turns over etc.

Page 2 of 11
Effects of unfair labour practises to different stakeholders is summarised below:

• Wages reduction , Death or serious physical injuries , Excessive count of

employers.
Workers • Economic losses, Bitterness relationship , Negative impact on career.

• Reduction in production, Reduced Profit, Negative impact on organisation

Employers
• Machines and equipments being damaged, Fixed expenses burden.

• Revenue loss in terms of tax(reduced recovery of sales tax. income tax, etc.)
Government
• Chaos in society, Blamegame by different political and state parties,Anarchy

• Increased price of goods , Scarcity of goods, Quality of goods being

deterioated.
Consumers

• Negative impact on International Trade, Barrier in Economic Development of

Other nation, Situation of unpredictability in the country.
Stakeholders

Finally, to conclude, we can ascertain that all the stakeholders of the society are affected because
of the unfair labour practices in an industrial setup. It is of utmost importance that harmony is
established between employee and employer in order to develop and maintain peace in industrial
establishment.

Therefore, we need to adopt strict actions in relations to unfair labour practices prevalent in the
establishment. The role of union is highly critical to create such an environment.

Page 3 of 11
UNFAIR LABOUR PRACTISES

According to Sec.2 (ra) of the Industrial Disputes Act, 1947, unfair labour practices refer to “any of
the practices specified in the Fifth Schedule to the Industrial Disputes Act, 1947.
According to Section 25T of the Industrial Disputes Act, 1947 no employer or workman or a trade
union, whether registered under the Trade Unions Act, 1926 or not, shall commit any unfair labour
practice.
Fifth Schedule to the Industrial Disputes Act, 1947 provides a list as to what constitutes an unfair
labour practice:
1.Unfair labour practices on the part of employers and trade union of employers

1. To interfere with, restrain from or coerce workmen in the exercise of their rights to organize from,
join or assist a trade union, or to engage in concerted activities for the purposes of collective
bargaining or other mutual aid or protection, i.e.
a) Threatening workmen with discharge or dismissal if they join a trade union
b) Threatening a lock out or closure if a trade union is organized.
c) Granting wage increase to workmen at crucial periods of the union organisation, with a view
to undermining the efforts of the trade union organization
2. To dominate, interfere with or contribute, support, financially or otherwise to any trade union,
that is to say: -
a) An employer taking an active interest in organizing a trade union of his workmen and
b) An employer showing partiality or granting favor to one of several trade unions
attempting to organize his workmen or to its members where such a trade union is not a
recognized trade union.
3. To establish employer sponsored trade unions of workmen.
4. To encourage or discourage membership in any trade unions by discriminating against workman,
Page 4 of 11
that is to say:
a) Discharging or punishing a workman, because he urged other workmen to join or organize a
trade union.
b) Discharging or dismissing a workman for taking part in strike (not being a strike which is
deemed to be an illegal strike under this act)
c) Changing seniority rating of workmen because of trade union activities
d) Refusing to promote workmen to hire posts on account of their trade union activities
e) Giving unmerited promotions to certain workmen with a view to creating discord between
other workmen or to undermine the strength of their trade union
f) Discharging office bearers or active members of the trade union on account of their trade
union activities

5. To discharge or dismiss workmen

a. By way of victimization
b. Not in good faith but in the colorable exercise of the employer’s right
c. By falsely implicating a workman in a criminal case on false evidence or concocted
evidence
d. For patently false reasons
e. On untrue or trumped up allegations of absence without leave
f. In utter disregard of the principles of natural justice.
g. For misconduct of minor or technical character, without having any regard to the
nature of the particular misconduct or the past record of service of the workman,
thereby leading to disproportionate punishment.
6. To abolish the work of a regular nature being done by workmen and to give such work to
contractors as a measure of breaking a strike.
7. To transfer a workman malafide from one place to another under the guise of following
management policy.
8. To insist upon individual workman who are on a legal strike to sign a conduct bond as a
precondition to allowing them to resume work
9. To show favouritism or partiality to one set of workers regardless of merit.
10. To employ workmen as ‘badlis’, casuals or temporaries and to continue them as such for the
years with the object of depriving them of the status and privileges of permanent workmen.
11. To discharge or discriminate against any workmen for filing charges or testifying against
employer in any enquiry or proceeding relating to any industrial dispute.
12. To recruit workmen during a strike which is not an illegal strike.
13. Failure to implement award, settlement or agreement.
14. To indulge in acts of force or violence.
15. To refuse to bargain collectively, in good faith with the recognized trade unions.
16. Proposing or continuing a lock out deemed to be illegal under this act.

Page 5 of 11
2.Unfair labour practices on the part of workmen and trade unions of workmen

1. To advise or actively support or instigate any strike deemed to be illegal under the Industrial
Disputes Act, 1947.
2. To coerce workmen in the exercise of their right to self-organization or to join a trade union or
refrain from joining any trade union, that is to say
a) For a trade union or its members to picketing in such a manner that non striking workmen are
physically debarred from entering the work places
b) To indulge in acts of force or violence or to hold out threats of intimidation in connection with a
strike against non-striking workmen or against managerial staff.
3. For a recognized union to refuse to bargain collectively in good faith with the employer.
4.To indulge in coercive activities against certification of bargaining representative.
5.To stage, encourage or instigate such forms of coercive actions and wilful ‘go slow’, squatting on
the work premises after working hours or ‘gherao’ of any of the members of the managerial or the
other staff.
6.To stage demonstrations at the residences of the employers or the managerial staff members.
7. To incite or indulge in wilful damage to employer’s property connected with industry.
8.To indulge in the acts of force or violence or to hold out threats of intimidation against any workman
with a view to prevent him from attending work.

Punishment for committing unfair labour practice

According to Section 25U of the Industrial Disputes Act, 1947, any person who commits any unfair
labour practice will be punishable with imprisonment for a term which may extend to six months or
with fine which may extend to one thousand rupees or with both.

Page 6 of 11
Judicial framework: CASE LAWS

Case 1: Reserve Bank of India and Ors vs H.D.Singh

1) Appellant Mr Khalid (a Tikka Mazdoor) presented himself daily and was employed only for
4 days in the year 1974, available for 154 days in 1975 & 105 days in the year 1976.
2) He was not informed when he accepted the job that his name would be strike off from the
muster rolls if he passed matriculate exam. He pleaded mala fides. In his argument he clearly
stated that people who had matriculated after selection had been still retained their offers and
he was discriminated on same grounds.
3) Since the dispute was not sponsored by any trade union and it was not an industrial dispute,
the respondent argued that the reference was bad.
4) The tribunal court gave verdict that action of respondent RBI Kanpur of not giving regular
appointment to appellant is legal and proper & his name could be stuck off from the list.
Appellant went against this award to Supreme Court.
5) Supreme Court held that striking off the name of a workman from muster rolls by the employer
equals to “termination of service” and this is retrenchment in accordance of section 2(oo) and
Section 25-F is applicable in this case law.
6) SC referred to list of unfair labour practices which is clearly defined in Section 2(ra). Item 10
reads "To employ workmen as 'badlis', casuals or temporaries and to continue them as
such for years, with the object of depriving them of the status and privileges of
permanent workmen." Supreme Court has no option but to observe that the bank, has
indulged in methods amounting to unfair labour practice.
7) SC quashed the order of Industrial Tribunal and hold that the striking off the name of the
appellant from list is retrenchment under section 2(oo) is violation of section 25-F. The
respondent bank was direct to enlist appellant as regular employee and reinstate him & pay
him his back wages.

Case 2 : Eveready Flashlight Co. v/s Labour Court

1) Eveready Flashlight appointed a workman on a daily rate basis on - 18th Jan, 1958 after
observing -him for 4 days. On 12th April, workman was designated on probation period of 6
months. It was at company’s discretion to further extend the probation period.
2) On September 9, he was elected as working committee member of the union on September 9.
The management served him with a warning notice on 10th September that in spite of repeated
warnings he had shown no improvement at work. On the 11th October, he was reissued warning
and finally on 21st Nov 1958 his service was finally terminated.
3) An industrial dispute was raised by the Union. The Labour Court in his hearing found no
justification for putting the workman on probation after he had been tried and this was just to
delay in making him a permanent employee.
4) It was observed that "a condition of employment which is designed to invest the employer with
arbitrary power to keep the workmen at his mercy as regards his chance of being made
permanent, and to eventually lead to deprive him of such chance would amount to unfair labour
practice".
5) It was further held that it isn’t necessary to have numerous transactions before the employer
could be declared guilty of unfair labour practice & that he could be found guilty of any such
practice in respect of 1 contract of employment only.
Page 7 of 11
Case 3: TITAGHUR PAPER MILLS CO LTD v/s RAM NARESH KUMAR

1) The management dismissed a workman (who was the vice-president of the workmen’s union)
found guilty of gross negligence in the performance of his duties and disobedience of orders
after a regular enquiry. The dispute was referred to the tribunal for adjudication.
2) The tribunal found that the domestic enquiry conducted by the management was regular and
proper, and that the workman was guilty of misconduct punishable with dismissal.
3) However, it was of the view that the employer was bound to give to the workman a reminder
about his duties as was the usual practice, and that there was room for suspicion that the
employer wanted to get rid of him; because he was an eye-sore on account of his union
activities. Accordingly, the tribunal held that this was a case of victimization and ordered
reinstatement of the workman.
4) Supreme Court held that it is not covered by any of the four grounds laid down in Indian Iron
and Steel Company Ltd. vs Their Workmen (1958) on which a tribunal can interfere with the
order of dismissal by the management.
5) It was clearly established that there was dereliction of duty, and that the management had full
right of dismissal in accordance to provision of standing order. Proper enquiry was carried out
and the explanation of the workman was found to be childish.
6) SC establish that management is not responsible to remind the workman of his failing does.
Even if management sometimes does so, this cannot be a case of victimization.

Case 4: STATE OF RAJASHTAN VS DEEPA RAM

1) The respondent Deepa Ram was engaged as labourer on daily wages by Merta City Sub
Division of the Government of Rajasthan.
2) He filed a writ petition .A learned single judged of the High Court held that the appellant was
motivated for discontinuing the engagement of the respondent as a daily wager with a view to
see that he did not complete the period of engagement of 240 days which have resulted in
conferring certain benefits under ID Act 1947 .
3) It was also observed that during this period such works were allocated to contractual employers.
The termination of employment of the respondent amounted to an unfair labour practice.
4) The writ petition was allowed and the respondent was directed to be reinstated.
5) This is contained in a list of unfair labour practices as defined in Section 2(ra). Item 6 reads
“To abolish the work of a regular nature being done by workmen, and to give such work
to contractors"

Page 8 of 11
Case 5: Haryana State Electronics Development Corporation Ltd. v. Mamni
1) The respondent Mamni was appointed initially for a period of 89 days in the post of Junior
technician on ad hoc basis.
2) The post was temporary and her services were liable to be terminated without assigning any
reason or notice.
3) However, it was noticed that she used to be appointed after a gap of one or two days upon
competition of each term.
4) Such an action on part of appellant cannot be said to be Bonafede. This was found to be
infringing to the provisions of section 25-F of industrial dispute act.
5) The court held that the services of the respondent had been terminated on a regular basis and
she had been reappointed after a gap of one or two days.
6) Such a course of action was adopted by appellant with a view to defeat the object of the Act
Case 6: Mrs. Chitra Srivastava vs Govt. Of Nct Of Delhi
1) Petitioner Mrs Chitra Srivastava who is Hamdard Wakf Laboratories as Secretary to the Head,
Human Resource Development at the Head Office, had challenged in the writ petition order
transferring her to Bhopal. Petitioner, who was working at the Head Office in Delhi, contended
that her transfer hundreds of miles away, was a mala fide one. She was mother of two children
with a sick husband, who has undergone neurosurgery.
2) Petitioner contended that she was being made a scapegoat simply to show that the transfer of
Arifa Nauman was not a solitary case but a routine one by transferring her also.
3) It was urged that Mrs. Arifa Nauman was being victimized on account of trade union activities
of her husband, who was Secretary of Workers' Union of respondent. Petitioner in the writ
petition had questioned her transfer as a mala fide one and being contrary to the standing
orders.
4) Respondents had raised preliminary objection to the maintainability of the writ petition
contending that an alternative efficacious remedy under the Industrial Disputes Act was
available, which the petitioner had failed to avail.
5) Mr. Gupta, learned Counsel for the petitioner, had contended that the Tribunal did not have
any power to grant stay of the transfer order and the order affected her livelihood and
fundamental rights.
6) Respondent on the other hand, had contended that the transfer was not emanating from any
malice, rather the respondent had only accommodated the petitioner by transferring her to
Aurangabad, since her job was rendered surplus otherwise and she was liable to be retrenched.
7) The Bench reached the conclusion that transfer of a workman made mala fide under the guise
of following management policy is an unfair labour practice in respect of which an industrial
dispute could be raised.
8) Fifth Schedule of the Act specifies the various trade practices. S. No. 7 of the said Schedule
is as under: “To transfer a workman mala fide from one place to another under the guise
of following management policy”

Page 9 of 11
Discussion of Judicial Framework and Case Laws

The Supreme Court is the apex court in India who is responsible for maintaining industrial peace in
the establishment. Along with the various jurisdiction bodies such as High Court, Labour court and
Tribunal court, it has laid great emphasis on maintaining industrial peace by giving various
judgement. The cases are dealt on individual capacity and necessary references are taken for similar
judgments, whenever required.
Case 1: Supreme Court clearly recognised striking name of out roll is a case of retrenchment which
is an unfair trade practise. Supreme emphasised the workmen cannot be deprived of privileges of
permanent workmen and due compensation. The court ordered the necessary to put appellant as
regular employee and focussed on reinstatement of worker to his original working conditions and pay
him his back wages. This was done in view so as to ensure that the worker is duly compensated in
accordance with the provisions of Industrial Act 1947.
Case 2: If a workman cannot become permanent unless and until the employer issues a formal order,
the result would be that an employer could keep every employee as temporary. The finding of the
case is that the employer deprived the workmen of his permanent status. It is award is very fair because
it has directed the reinstatement of the workman it has not allowed him any wages for the interim
period when he did not work for the company. Therefore, the petition fails and is dismissed with cost
as it is in line with item 5a in the fifth schedule ID ACT 1947.
Case 3:The Supreme Court referred to Indian Iron & Steel Co .Ltd., VS their workmen case and held
that the scope of authority and power of an industrial tribunal in the interference of dismissal matter
of workmen by management. It was clearly established that powers of industrial in this instance were
not unlimited & that the tribunal didn’t act as a court of appeal and substituted its own verdict for
management. The tribunal held that it was suspicious that management wanted to get rid of employee.
While considering the nature of dereliction of duty it cannot be possibly stated that the management
had any intention in the failure of workman to perform his duties.

Case 4 and Case 5: Supreme Court emphatically stated that the various employers indulged in
suspending workers and hire contractual employees so to keep deprived its employers’ certain benefit
with regards to provision of ID Act. This is an unfair labour practise destroys the very doctrine of ID
Act. This practise might develop an unhealthy IR climate.
Case 6: Supreme Court held that transfer of workman under the disguise of management policy is a
case of unfair labour practise. This can be raised as an industrial dispute in the court of law.

Through the above case results it has clearly known that the Supreme Court always tries to achieve
the following through its various judgments on various cases laws:
1) By mutual understanding, it tries to safeguard the interest of labour & management.
2) Avoid industrial conflict or strike by providing necessary judgement.
3) Enhance the economic & working conditions of workers in the industrial establishments.
4) Reduction in number of layoffs, lockout, strikes & gheraos.
5) Providing improved living, reasonable wages and working conditions to the workers.

Page 10 of 11
Conclusion:

One of the principal objectives of ID act is to encourage collective bargaining. The provisions of ID
Act clearly believed in voluntary settlement and conciliation methodologies to settle an industrial
dispute. It aims to reduce the number of retrenchments, strike, lock-outs and layoffs which help in
creating healthy industrial relations.
For healthy IR, it is clearly stressed to maintain harmonious relationship between employee and
employers. It is the responsibility of either shareholders to ensure social justice to both employers and
employers.
As a student of Industrial Relations, we suggest following steps to revamp Industrial relations
1) Both employers & employees should develop constructive beliefs towards each other’s
2) Policies & procedure to be followed should be clearly defined by the management and
especially to the leader of trade union.
3) Management should motivate right kind of union leadership in the organization.
4) Personnel manager should not indulge in activities so as to gain workers ‘loyalty to both the
organization.
5) Promote a system of dialogue and communication in the establishment. Good communication
helps to avoid employee confusion and unnecessary stress.
6) Employers should provide healthy working conditions to its employees.
7) Focus on importance of employee recognition.
8) Environment of good faith bargaining both by the employer and union should be cultivated.
9) Grievances of employee should be handled in a timely manner. Efforts should be to made to
amicably resolve the grievances.
10) Management & unions should work on a common shared goal.

References:
1)https://indiankanoon.org/doc/1901476/#:~:text=The%20action%20of%20the%20Reserve%20Bank%20of
%20India%2C%20Kanpur%2C%20in,Reserve%20Bank%20of%20India%2C%20Kanpur.

2) https://www.casemine.com/judgement/in/5609ac1ae4b014971140e098

3) https://indiankanoon.org/doc/1219350/

4) https://www.casemine.com/judgement/in/56ea9114607dba382a079352
5) https://indiankanoon.org/doc/198666342/
6) https://indiankanoon.org/doc/1049779/
7) https://www.lawyerservices.in/Chitra-Srivastava-Versus-Govt-of-NCT-of-Delhi-and-Others-
2006-07-07
8)https://www.advocatekhoj.com/library/bareacts/industrial/schedule5.php?Title=Industrial%20Dis
putes%20Act,%201947&STitle=Unfair%20Labour%20Practices
9) https://encyclonetcultuland.blogspot.com/2017/02/causes-effects-of-poor-industrial.html

Page 11 of 11