Labour Law- I

Important Answers

- Durga Girish

Industrial Disputes

 Introduction

For industrial progress and prosperity, the maintenance of peaceful

relations between labor and capital is of the first importance. Industrial
dispute means a loss, both to the employers and the employees even when
the latter scores a victory. It is also harmful to the community in general.

Therefore, every effort is made in advanced countries to maintain

industrial peace. “The employer-worker relationship”, according to the
Planning Commission, “has to be conceived of as a partnership in a
constructive endeavor to promote the satisfaction of the economic needs
of the community in the best possible manner.”

Although modern industry began to grow in India in about the middle of

the last century, there was no industrial unrest. The First World War had
made the workers conscious of their rights, and they were prepared to
fight for them, if necessary.

During the second war, the Defence of India Rules was enforced to check
strikes and disputes. According to them, the Government armed itself
with power to prohibit strikes and lock-outs and to refer to it any disputes
for conciliation or adjudication, and to enforce the awards.

Industrial unrest became very serious during the years immediately after World
War II and to a lesser extent in recent years. During the last few years, there has
been appreciable improvement in industrial relations.

Industrial disputes act, 1947 is the Act that regulates the labor laws as it
concerns all the workmen or all the people employed on the Indian mainland. It
came into force on 1 April 1947.
The capitalists or the employer and the workers always had a difference of
opinion and thus, it leads to lots of conflicts among and within both of these
groups. So, these issues were brought to the attention of the government and so
they decided to pass this act. This act was formed with the main objective of
bringing peace and harmony in industrial disputes between parties and
peacefully solving their issues. 

 Meaning of Industrial Dispute

An industrial dispute is a conflict or a difference in opinion between

management and workers regarding employment. It is a disagreement
between an employer and employee representative i.e. trade union. The
issue of disagreement is usually paid or other working conditions. During
an industrial dispute, both parties try to pressurize each other to agree to
their terms and conditions. The industrial unrest manifests itself as
strikes, lock-outs, picketing, gheraos, and indiscipline on the part of
workers. The causes of this unrest are either specific organizational
problems such as insufficient pay, lack of benefit and assistance schemes,
or the causes may be wider socio-economic problems such as poverty and
unemployment, etc.

 Definition of Industrial Dispute 

The definition of Industrial disputes is as follows –

According to Section 2(k) of the Industrial Disputes Act, 1947 “industrial
dispute” is defined as, “Any disputes or differences 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 labor,
of any person”.

The definition identifies three parties to disputes. They are:

1. Employer
2. Employees
3. Workmen.
Workmen Industrial dispute is disagreement and difference between two
disputants, namely, labor and management. This disagreement or difference
could be on any matter concerning them individually or collectively. It must be
connected with employment or non-employment or with the conditions of labor.
It should also be noted that the subject- matter of an industrial dispute must be
specific, i.e., which affects the relationship between employers and workers.

It is self-evident that industrial disputes and industrial unrest are symptoms of a

lack of co-operative spirit and harmonious relations in industry. It is agreed that
the manifestation of these symptoms causes stoppage of work or disruption of
production and all consequential evils. The continued and prolonged industrial
unrest also has serious consequences for the employees and also for the
economy at large.

From the point of view of the employer, an industrial dispute resulting in a

stoppage of work means a stoppage of production. This increases the average
cost of production since fixed expenses continue to be incurred and also leads to
a fall in sales and the rate of turnover, leading to a fall in profits. The employer
may also be liable to compensate his customers with whom he may have
contracted for regular supply.
Apart from the immediate economic effects, loss of prestige and credit,
alienation of the labor force, and other non-economic, psychological, and social
consequences may also arise. Loss due to destruction of property, personal
injury, and physical intimidation or inconvenience also arises. For the
employee, an industrial dispute entails the loss of income.
The regular income by way of wages and allowance ceases, and great hardship
may be caused to the worker and his family, many times resulting in
deprivation, malnutrition, even starvation or near-starvation. The ability of trade
unions to provide for the needs of striking workers, particularly in India, is very
limited. Employees also suffer from personal injury and the psychological and
physical consequences of forced idleness.
The threat of loss of employment in case of failure to settle the dispute
advantageously or the threat of reprisal action by employers also exists. Don’t
you think that the psychological effects can be more dangerous than the
physical consequences? Prolonged stoppages of work have also an adverse
effect on national productivity, national income. They cause wastage of national
resources. Class hatred may be generated resulting in political unrest and
disrupting amicable social relations or community attitudes.
 Concept of Industrial Dispute

In a narrow sense, industrial dispute means conflict between parties in

industrial establishments. Dictionary meaning of ‘dispute’ is
‘disagreement’, ‘mutual antagonism as of ideas, interests, etc.’ So, the
industrial dispute is disagreement/mutual antagonism as of ideas,
interests, etc. between parties in the industry. In an industrial setting,
parties are invariably workers and management.

In the process of working, workers express their need, expectation, desire

for fulfillment, and satisfaction. They want more money i.e., attractive
wages, allowances, a monetary incentive which the management may not
be agreeable to pay. Workers demand better fringe benefits, health
benefits but management may provide less than that of their requirement.

They want recognition, status, power, advancement, higher quality of

work-life but management may be reluctant to give. Under such a
situation, a state of disagreement/mutual antagonism between workers
and management develops which gives birth to industrial conflict.

So, the industrial dispute is a general concept, and this conflict gets the
shape of an industrial dispute in a specific dimensional situation. There is
no difference between ‘industrial conflict’ and ‘industrial dispute’,
variation lies only in scope and coverage.

 Scope and Object  of The Industrial Disputes Act, 1947

This is an Act made for the examination and settlement of industrial

disputes, and for different purposes too. This Act centers around any
industry carried on by or under the authority of the Central Government,
or by a railway organization, or concerning any such controlled industry
as might be indicated for this benefit by the Central Government. 
 Main features of the Act 

This Act furnishes us with specific guidelines and guidelines in regards to

the works committee for both the businesses and all the workmen to
advance measures for good working relations and comprehension among
the workmen and the businesses later on and to end that, it additionally
vows to resolve any material difference in views of opinion regarding
such issues.

 When An Individual Dispute Becomes An Industrial Dispute

Before insertion of Section 2-A of the Act, an individual dispute could
not per se be an industrial dispute, but it could become one if taken up by
the Trade Union or several workmen. The Supreme Court and the
majority of Industrial Tribunals held that a dispute raised by a dismissed
employee would not be treated as an industrial dispute unless it is
supported by a trade union or by a body or Section of a workman.

For an individual dispute to be declared as an Industrial Dispute, the

following conditions are to be satisfied:

1. A body of workmen (trade Union) or a considerable number of

workmen are found to have made common cause with the
individual workman;
2. That the dispute (individual dispute) was taken up or sponsored by
the workmen as a body (trade union) or by a considerable Section
of them before the date of reference.

Bombay Union of Journalists vs. The Hindu: A person working in

‘The Hindu, Madras’ was terminated for claiming as a full-time
employee. The Bombay Union of Journalists raised the dispute. It
was found that there were ten employees of which seven on the
administrative side and only three on the journalism side. Of these
three, only two were members of the union. Therefore, the
Supreme Court held that the Bombay Union of Journalists is not
competent to raise this dispute. Even if it had been raised, it could
not have become an industrial dispute.

Workmen of Indian Express Newspapers Ltd. vs. Management

Indian Express Newspaper: A dispute relating to two workmen of
Indian Express Newspapers Ltd, was espoused by the Delhi Union
 of Journalists which was an outside union. About 25 percent of the
working journalists of the Indian Express were members of that
union. But there was no union of the journalists of the Indian
Express. It was held that the Delhi Union of Journalists could be
said to have a representative character Qua the working journalists
employed Indian Express and the dispute was thus transformed into
an industrial dispute.

Thus, an individual dispute to fall within the definition of industrial

dispute, it must be sponsored by the Trade Union of the workmen
or if there is no trade union, it must be sponsored by the majority of
the workmen or it must comply with the requirements of Section 2-
A of the Industrial Disputes Act, 1947.

Section 2-A provides that “where an employer discharges,

dismisses, retrenches or otherwise terminated the services of any
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.”
 Any workman may make an application directly to the labour court
or Industrial Tribunal for adjudication of such dispute after the
expiry of 3 months when an application was made before the
conciliation officer. This has been done to prevent inordinate delay.
 The said application however should be made within 3 years of the
date of dismissal, discharge, retrenchment, or termination of
service.
 The court shall proceed to hear the matter as if it was referred to it
U/S 10 of the ID Act.

Section 2A does not declare all individual disputes to be industrial

disputes. It is only when a dispute is connected with a discharged,
dismissed retrenched, or terminated workman that it shall be
treated as an industrial dispute. If the dispute or difference is
connected with some other matter for example payment of bonus/
gratuity etc. then it would have to satisfy the test laid down in
judicial decisions. Thus, only a collective dispute could constitute
an industrial dispute but a collective dispute does not mean that the
dispute should either be sponsored by a recognized union or that all
or majority of the workmen of an industrial establishment should
be parties to it. (The state of Bihar vs. Kripa Shankar Jaiswal)
A dispute is an industrial dispute even where it is sponsored by a union that is
not registered but the Trade Union must not be unconnected with the employer
or the industry concerned. (Express Newspapers (Private) Ltd. Vs. First Labour
Court, West Bengal & Others)
Where an individual dispute is espoused by a union the question of the
employee being a member of the union when the cause arose is immaterial.
Those taking up the cause of the aggrieved workman must be in the same
employment i.e., there must be a community of interest when the act
complained against happened and not when the dispute was referred to.

 Section 2 (k) compared with Section 2-A

An individual dispute even though not sponsored by other
workmen or espoused by the union would be deemed to be an
industrial dispute if it covers any of the matters mentioned in
Section 2-A. So far as the subject matter of the dispute is
concerned 2-A does not bring about any change. The provisions of
Section 2(K) alone determine that question.

The only change introduced by Section 2-A is that before its

introduction, a dispute even though was an industrial dispute from
the perspective of subjects referred to in Section 2 (k) would not
have become an industrial dispute if it were only an individual
dispute and it was not taken up either by the union or by a
substantial body of workmen. But after the introduction of Section
2-A, such a dispute would be an industrial dispute in respect of
those matters specified in that section even though it is not
sponsored by a union or a considerable number of workmen.
Section 2-A can be treated as an explanation to Section 2 (k).
 Appropriate Government

Appropriate Government under [Sec. 2(a)]:

 Appropriate Government means the Central Government with any

industrial dispute concerning any industry carried on by or under the
authority of the Central Government, any industry carried on by a
Railway Company, any controlled industry specified by the Central
Government, The Unit Trust of India. Corporations under the Central
Statutes, Banking company, an Insurance company. Mines. Oil field,
Cantonment board, Major ports, etc. With any other industrial dispute, the
appropriate Government is the State Government.

Various powers are given to the appropriate government under the

Industrial Disputes Act, 1947.

The Industrial Disputes Act has made provisions for the investigation and
settlement of industrial disputes and certain other purposes. It provides
for the special machinery of conciliation officers, work committees, the
court of inquiry, Labour Courts, Industrial Tribunals, and National
Tribunals, defining their powers, functions, and duties and also the
procedure to be followed by them. It also enumerates the contingencies
when a strike or lockout can be lawfully resorted to when unlawful,
conditions for laying off retrenching discharging, or dismissing a
workman.

As per the provisions of the Industrial Disputes Act, 1947, when

conciliation fails to bring an amicable settlement of the dispute, the
conciliation officer has to submit a failure report to the appropriate
Government with his view for reference. The appropriate Government,
after proper examination of the failure report, refers it either to the
Labour Court or to the Industrial Tribunal for promoting a settlement of
the dispute. Under Sec 10 of the Industrial Disputes Act 1947, the
appropriate Government enjoys discretionary power to refer an industrial
dispute to the court or tribunal. The law prescribes five major provisions
for reference to a dispute. 

 By the first proviso, the appropriate Government has been granted the
liberty to refer to a Labour Court if the matter comes under Schedule-II. 
 Secondly, the Government has been granted further power of referring
the dispute to the Labour Court even if it comes under Schedule-Ill of the
 Act, provided the dispute relates to less than 100 workers. Usually, the
matters under Schedule-Ill falls under the jurisdiction of the Tribunal. 
 Thirdly, where the dispute relates to public utility services and a strike
notice under Sec 22 has been given; if the appropriate Government after
examination, thinks fit, can refer the dispute, to the court.
 Fourthly, where the parties to an industrial dispute apply in the prescribed
manner either jointly or separately to the appropriate Government for a
reference of a dispute to the Board, Court, then the Government can refer
the same to the Board, Court or Tribunal. 
 Fifthly, where the strike or lock-out is in existence at the time of
reference of the dispute to Labour Court or Tribunal, the appropriate
Government may by order prohibit the continuance of any strike or lock-
out in that industry.
 Besides this, if any industrial dispute exists or is apprehended, the
employer and the workmen can agree and submit it to the appropriate
Government for reference of the dispute to the arbitrator. In this case, the
appropriate Government has to refer the same to the arbitrator (s) chosen
by them (the worker and management).

From the above explanation, we can conclude that the appropriate

government has to play a very important role in solving industrial
disputes. The appropriate Government under the Industrial Disputes Act,
1947 enjoys a wide power for reference of disputes to Boards, Courts, or
Tribunals.
 Provision Relating to the Closure of an Undertaking

 A business who expects to shut down his undertaking of an industrial

establishment will, in an endorsed way apply for earlier consent at any
rate 90 days before the date on which the planned conclusion is to get
powerful, to the suitable government, expressing obviously the aim of
conclusion and the purposes behind the proposed conclusion of the
undertaking and will likewise be served all the while on the workmen of
the establishment in a recommended way. (nothing in this subsection
applies to undertaking taking every necessary step of building streets,
channels, dams, bridges, structures, and other development work. 
 An application for the consent of conclusion of the undertaking is given
to the suitable government by the business, the government makes a
legitimate inquiry and the sensible opportunity to be heard by the
business, representatives/workmen and every one of the people keen on
the conclusion may, the sensibility and legitimacy of their point is viewed
as remembering the interests of the overall population is remembered in
addition to all other important variables, the award or refusal is given to
the business dependent on the entirety of this by the proper government. 
 At the point when an application has been submitted to the proper
government within 90 days, and the suitable government doesn’t give the
letter of award or refusal inside 60 days, it is regarded to be allowed after
the termination of 60 days. 
 The last request of the government allowing or denying the conclusion of
the undertaking is conclusive and will tie the entirety of the parties and it
will stay in power for a whole year. 
 The gave government may likewise survey the award or refusal offer,
given its movement or an application, put together by the workman or
allude to a tribunal or mediation. 
 At the point when the use of conclusion had not been made by the
business inside the period determined, at that point, the authorization
would be rejected by the fitting government and on the off chance that
despite everything they go on with the conclusion, at that point the
conclusion would be viewed as illicit, however, all the workmen will be
given all advantages under the law until further notice in power as though
the undertaking hadn’t shut. 
 Despite anything contained in the previous arrangements of this Section,
the suitable government may, on the off chance that it is fulfilled that
inferable from such uncommon conditions as a mishap in the undertaking
or passing of the business or the like it is essential so to do, the
arrangements of this Section will not matter in connection to such
undertaking for such period as might be determined in the request. 
Closure:

 The Industrial Disputes Act, 1947, originally does not contain the
provisions relating to the closure of industry. The provisions relating to
the law of closure were inserted in the year 1957 because of the Supreme
Court judgment in case Hariprasad Shivshankar Shukla v/s. A.D.
Diwelkar, AIR 1957 S.C 121
 Subsequently, over years the law relating to closure has undergone a
series of amendments from time to time and thus was consolidated to the
present position in the year 1982.
 According to Section 2(cc) of the Industrial Disputes Act, Closure of an
industry means the permanent closing down of a place of employment or
part thereof.
 Section 2(cc) of the Industrial Disputes Act was inserted by the Industrial
Disputes (Amendment) Act of 1982, (w.e.f. 21-8-1984)

Provisions of Closure of an undertaking under Section 25 (O):

  Subsection (1): An employer who intends to close down an undertaking

of an industrial establishment to which this Chapter applies shall, in the
prescribed manner, apply, for prior permission at least ninety days before
the date on which the intended closure is to become effective, to the
appropriate government, stating clearly the reasons for the intended
closure of the undertaking and a copy of such application shall also be
served simultaneously on the representatives of the workmen in the
prescribed manner:  PROVIDED that nothing in this sub-section shall
apply to an undertaking set up for the construction of buildings, bridges,
roads, canals, dams or for other construction work.
 Subsection (2): Where an application for permission has been made
under subsection (l), the appropriate government, after making such
inquiry as it thinks fit and after giving a reasonable opportunity of being
heard to the employer, the workmen, and the persons interested in such
closure may, having regards to the genuineness and adequacy of the
reasons stated by the employer, the interests of the general public and all
other relevant factors, by order. and for reasons to be recorded in writing,
grant or refuse to grant such permission and a copy of such order shall be
communicated to the employer and the workmen.
 Subsection (3): Where an application has been made under sub-section
(1) and the appropriate government does not communicate the order
granting or refusing to grant permission to the employer within sixty days
 from the date on which such application is made, the permission applied
for shall be deemed to have been granted on the expiration of the said
period of sixty days.
 Subsection (4): An order of the appropriate Government granting or
refusing to grant permission shall, subject to the provisions of sub-section
(5), be final and binding on all the parties and shall remain in force for
one year from the date of such order.
 Subsection (5): The appropriate Government may, either on its motion or
the application made by the employer or any workman, review its order
granting or refusing to grant permission under sub-section (2) or refer the
matter to a Tribunal for adjudication: PROVIDED that where a reference
has been made to a Tribunal under this sub-section, it shall pass an award
within thirty days from the date of such reference.
 Subsection (6): Where no application for permission under sub-section
(l) is made within the period specified therein, or where the permission
for closure has been refused, the closure of the undertaking shall be
deemed to be illegal from the date of closure and the workmen shall be
entitled to all the benefits under any law for the time being in force as if
the undertaking had not been closed down.
 Subsection (7): Notwithstanding anything contained in the foregoing
provisions of this section, the appropriate Government may, if it is
satisfied that owing to such exceptional circumstances as an accident in
the undertaking or death of the employer or the like it is necessary so to
do, by order, direct that the provisions of sub-section (1) shall not apply
concerning such undertaking for such period as may be specified in the
order.
 Subsection (8): Where an undertaking is permitted to be closed down
under sub-section (2) or where permission for closure is deemed to be
granted under sub-section (3), every workman who is employed in that
undertaking immediately before the date of application for permission
under this section, shall be entitled to receive compensation which shall
be equivalent to fifteen days’ average pay for every completed year of
continuous service or any part thereof over six months.

Undertakings Covered Under Section 25(O):

 Those in which 100 or more workmen were employed on an average per

working day for the preceding 12 months;
 Those which satisfy the definition of “an industrial establishment”
contained in Section 25(L).
Procedure for Closure of an Undertaking:

 The procedure for the closure of an undertaking is specified

in Subsection (1) of Section 25 (o)the Industrial Disputes Act, 1947.
 An employer who intends to close down an undertaking of an industrial
establishment shall apply, for prior permission in the prescribed
manner at least ninety days before the date on which the intended
closure is to become effective, to the appropriate government.
 The notice should state clearly the reasons for the intended closure of
the undertaking.
 The notice must seek prior permission from the appropriate government
for the intended closure.
 A copy of such application to the appropriate government shall also be
served simultaneously to the representatives of the workmen in
the prescribed manner.

Undertakings Excluded From Obtaining Prior Permission Before Closure:

 The exceptions are mentioned in Section 25 (o) Subsections (1) and (7) of
the Industrial Disputes Act, 1947.
 As per Subsection (1) of Section 25(o) the provisions of Section 25(o) do
not apply to an undertaking set up for the construction of buildings,
bridges, roads, canals, dams, or other construction work (infrastructure
projects).
 As per Subsection (7) of Section 25(o), the appropriate government may
if it is satisfied that owing to such exceptional circumstances as an
accident in the undertaking or death of the employer or the like it is
necessary so to do, by the order can allow closure of establishment
without approval notice.

Grant and Refusal of Permission:

 The grant or refusal of permission for closure of an undertaking is

discussed in Subsection (2) of Section 25 (o) the Industrial Disputes Act,
1947.
 When an employer makes an application to the appropriate government
for closure under the sub-section (l) of Section 25(o), the appropriate
government conducts the necessary inquiry.
 A reasonable opportunity is given to the employer, the workmen, and
persons interested in such closure of being heard. The appropriate
government also verifies the genuineness and adequacy of the reasons
stated by the employer. The interests of the general public and all other
relevant factors are also considered.
  If the appropriate government is satisfied that the reasons for the intended
closure of the undertakings are not  – (i) adequate and sufficient; or (ii)
such closure is prejudicial to the public interest, direct the employer not
to close such undertaking.
 An order of the appropriate Government granting or refusing to grant
permission is final and binding on all the parties and remains in force for
one year from the date of such order.

When is Permission deemed to be Granted?

 The concept of deemed permission is discussed in Subsection (3) of

Section 25 (o) the Industrial Disputes Act, 1947.
 When an application has been made by an employer for permission for
the closure of the undertaking under sub-section (1) and the appropriate
government does not communicate the order granting or refusing the
permission of the closure of the undertaking to the employer within sixty
days from the date on which such application is made, Then the
permission applied is deemed to have been granted on the expiration of
the said period of sixty days.

Appeal:

 The provision for an appeal by the employer or any workman against the
refusal or grant to the permission of the closure of an undertaking is
discussed in Subsection (5) of Section 25 (o) the Industrial Disputes Act,
1947.
 The appeal should be made within 30 days from the date of an order
of the refusal to the permission of the closure of an undertaking.
 The industrial tribunal within 30 days from the filing of appeal should
affirm the order of the appropriate government or set aside it.
 The award by the tribunal is bound on all parties.
 The validity of the order of refusal for closure is for one year.

Illegal Closure:

 The topic of illegal closure is discussed in Subsection (6) of Section 25

(o) the Industrial Disputes Act, 1947.
 If an application for permission for the closure of the undertaking under
sub-section (l) is not made at least ninety days before the date on which
the intended closure is to become effective, to the appropriate
government. then the closure is illegal Or
 The permission for closure has been refused, by the appropriate
government then the closure of the undertaking is deemed to be illegal
 from the date of closure and the workmen are entitled to all the benefits
under any law for the time being in force as if the undertaking had not
been closed down

Closure Compensation to Workmen:

 The method of compensation to workmen after the closure of an

undertaking is discussed in Subsection (8) of Section 25 (o) the Industrial
Disputes Act, 1947.
 When an undertaking is approved or permitted or deemed to be permitted
to be closed down, every workman in the undertaking who has been in
continuous service for not less than one year immediately before the date
of application for the permission is entitled to notice and compensation as
specified in Section 25 (N) as if the said workman had been retrenched
under that section.
 The compensation shall be equivalent to fifteen days’ average pay for
every completed year of continuous service or any part thereof over six
months.

Provisions for Restarting of Closed Down Undertaking, S. 25(P):

 If the appropriate government is of opinion in respect of any undertaking

of an industrial establishment to which Chapter V applies and which
closed down before the commencement of the Industrial Disputes
(Amendment) Act, 1976 (32 of 1976),
 Clause (a): that such undertaking was closed down otherwise than on
account of unavoidable circumstances beyond the control of the
employer;
 Clause (b): that there are possibilities of restarting the undertaking;
 Clause (c): that is necessary for the rehabilitation of the workmen
employed in such undertaking before its closure or for the maintenance of
supplies and services essential to the life of the community to restart the
undertaking or both; and
 Clause (d): that the restarting of the undertaking will not result in
hardship to the employer concerning the undertaking,
 it may, after allowing such employer and workmen, direct, by order
published in the Official Gazette, that the undertaking shall be restarted
within such time (not being less than one month from the date of the
order ) as may be specified in the order.
Restarting of Closed Down Undertaking:

 The appropriate government has the power to order restarting of the

closed down undertaking of an industrial establishment to which Chapter
VB applies, and which were closed down before the commencement of
the Amendment Act, 1976.
 It is to be noted that after 1976, the appropriate government has no power
to restart the legally closed down undertakings.
 The closed down of the undertaking must be on account of unavoidable
circumstances beyond the control of the employer. There is a possibility
of restarting the closed-down undertaking. Restarting the closed
undertaking is essential for well being of the workmen and society as a
whole and after restarting there is no hardship to the employer.
 Before giving the order of restarting of the undertaking, the appropriate
government is bound to allow the employer and employee, and only
thereafter, it satisfied, it may direct, by an order published in the Official
Gazette, that the undertaking shall be restarted within the time (not less
than one month from the date of the order) as may be specified in the
order.

Provisions for Penalty for Lay-Off and Retrenchment Without Permission S

25(Q):

 Any employer, who contravenes the provisions of section 25-M or

section 25-N shall be punishable with imprisonment for a term which
may extend to one month, or with fine which may extend to one thousand
rupees, or with both.

Provisions for Penalty for Closure of Undertaking Without Permission S 25(R):

 Subsection (1): Any employer, who closes down any undertaking

without complying with the provisions of sub-section (1) of section 25-O
shall be punishable with imprisonment for a term which may extend to
six months, or with a fine which may extend to five thousand rupees, or
with both.
 Subsection (2): Any employer, who contravenes [an order refusing to
grant permission to close down an undertaking under sub-section (2) of
section 25-O or a direction given under section 25P], shall be punishable
with imprisonment for a term which may extend to one year, or with fine
which may extend to five thousand rupees, or with both, and where the
contravention is a continuing one, with a further fine which may extend
to two thousand rupees for every day during which the contravention
continues after the conviction.
Certain provisions of Chapter V-A to apply to an industrial establishment to
which this Chapter applies S. 25 (S)

 The provisions of sections 25B, 25D, 25FF, 25G, 25H, and 25J in
Chapter V-A shall, so far as may be, apply also concerning an industrial
establishment to which the provisions of this Chapter apply.
 Provisions relating to Award

Section 16: The award of a Labour Court or Tribunal or National

Tribunal shall be in writing and shall be signed by its presiding officer.
[Sec 16(2)].

Section 17: Publication of report and award

Each report of a board or court together with any moment of difference

recorded therewith, every mediation grant and each grant of a working
court, council, or national council will be distributed in a manner by
which the suitable government thinks fit, inside a time of 30 days from
the day of its receipt by the proper government. 

Section 17-A: Commencement of award – Enforceability of award

An honor (counting the assertion grant) will get enforceable on the expiry
of the 30 days from the date of its distribution under Section 17 given
that: 

  if the reasonable Government is the conclusion, regardless of any place

the honor has been given by a Labor Court or council concerning an
industrial question to which it is a party; or 
  if the Central Government is of opinion, regardless of any place the
reward has been given by a National court, that it’ll be inexpedient on
open grounds contacting national economy or social equity to offer
impact without limit or any piece of the reward, the appropriate
Government, or because the case could likewise be, the Central
Government could, by notice in the Official Gazette, pronounce that the
reward will not be enforceable upon the termination of the previously
mentioned time of thirty days. 

 Production of award

Where any announcement has been made concerning a reward, the

appropriate Government or the Central Government could, inside ninety
days from the date of production of the honor in Section 17, make a
request dismissing or altering the honor, and will, on the primary possible
possibility, lay the honor related to a copy of the request previously the
get-together of the State, if the request has been made by a state
government, or before Parliament if the request has been made by the
Central Government. 
 Every arbitration award and every award of a Labour Court, Tribunal, or
National Tribunal shall, within 30 days from the date of its receipt by the
appropriate Government, be published in such manner as the appropriate
Government thinks fit. [Sec 17(1)].

 The award published shall be final and shall not be called in question by
any Court in any manner whatsoever. [Sec 17 (2)].

 An award (including an arbitration award) shall become enforceable on

the expiry of thirty days from the date of its publication [Sec 17A (1)].

 where the award has been given by a National Tribunal, that it will be
inexpedient (not advisable or not practicable) on public grounds affecting
the national economy or social justice to give effect to the whole or any
part of the award, the appropriate Government, or as the case may be, the
Central Government may, by notification in the Official Gazette, declare
that the award shall not become enforceable on the expiry of the said
period of thirty days. [Sec 17A (1) (b)].

 The appropriate Government or the Central Government may, within 90

days from the date of publication of the award under section 17, make an
order rejecting or modifying the award, to the legislature of the state or
parliament [Sec 17A (2) ]. And if no pursuance has been made, the order
becomes enforceable after the expiry of 90 days. [Sec 17A (3)].

 Any award as rejected or modified laid before legislature of state or

parliament shall become enforceable on the expiry of 15 days from the
date on which is so laid. [Sec 17A (3)].

 Award declared becomes enforceable on the specified date if mentioned,

if no date mentioned award becomes enforceable according to the above
rules.
Section 17B: Payment of full wages to workman pending proceedings in
higher courts

Where in any case, a Labour Court, Tribunal or National Tribunal by its

award directs reinstatement of any workman and the employer prefers
any proceedings against such award in a High Court or the Supreme
Court, the employer shall be liable to pay such workman, during the
period of pendency of such proceedings in the High Court or the Supreme
Court, full wages last drawn by him, inclusive of any maintenance
allowance admissible to him under any rule if the workman had not been
employed in any establishment during such period and an affidavit by
such workman had been filed to that effect in such Court:

Provided that where it is proved to the satisfaction of the High Court or

the Supreme Court that such workman had been employed and had been
receiving adequate remuneration during any such period or part thereof,
the Court shall order that no wages shall be payable under this section for
such period or part, as the case may be.

Section 18: Persons on whom settlements and grants are

authoritative 

 People bound by a settlement 

A settlement landed at by understanding between the business and
the laborer generally than in course assuagement continuing will tie
on the parties to the understanding. 

 Reasonableness of settlement 
A discretion award has become enforceable will tie on the parties
who alluded the question to assertion. 

 The intensity of the Tribunal to include other vital and

legitimate parties 
All the pertinent parties to the industrial question and the various
parties are likewise added who are significant to the case and on
the off chance that they don’t have an appropriate case, they won’t
be recorded. 
  The obligation of beneficiaries and successors and so forth 
At the point when the party in the above case is a business, his
beneficiaries, successors, or allocates in regard of the establishment
to which the question relates. 

 Restricting the nature of the award 

The intervention award will be enforceable and will tie on those
parties to the understanding whose case was alluded to assertion. 

 Persons employed on the date of dispute and persons who

subsequently become employed
All people making out of laborers who were utilized in the
establishment at the very latest the day of the case are altogether
alluded to. 

Section 19: Period of Activity of settlements and awards 

 A settlement shall come into operation on such date as is agreed upon by

the parties to the dispute, and if no date is agreed upon, on the date on
which the memorandum of the settlement is signed by the parties to the
dispute.

 An award shall remain in operation for one year from the date on which
the award becomes enforceable under section 17A: Provided that the
appropriate Government may reduce the said period and fix such period
as it thinks fit :

 the appropriate Government may, before the expiry of the said period,
extend the period of operation by any period not exceeding one year at a
time as it thinks fit, so however, that the total period of operation of any
award does not exceed three years from the date on which it came into
operation.

Eg: if the court orders the employer to reinstate the workman in case of
unreasonable removal or discharge, the employer is bind over for one
year or in some cases, the period specified by the courts.

Time of Activity of awards 

A settlement will come into activity on such date as is settled upon by the
parties to the question, and if no date is settled upon, on the date on which
the update of the settlement is marked by the parties to the contest. 

Audit of Activity of award 

An award will, subject to the arrangements of this Section, stay inactivity

for a time of one year from the date on which the award gets enforceable,
given the reasonable government may diminish the said period. 

Res Judicata and Section 19(6) 

An award will be inactivity for 1 year from the date on which the award
gets enforceable, subject to the arrangements of this Section. Be that as it
may, despite the activity time frame, the award will be proceeding to tie
for more than 2 months from the date the individual party has pulled out
of their goal to end the award.

End of the award 

No notice given by the above Section will have an impact except if it is

given by the party speaking to most of the people bound by the
settlement or award or all things considered.
  Role of Arbitration in resolving Industrial Dispute

With the advancing industrial development, there has been a parallel increase in
the disputes between employers and employees for the furtherance of each of
their interests. Evidence shows that such disputes have resulted in hampering of
economic development of the country. Therefore, it becomes the responsibility
of the state to interfere in such matters and ensure that the dispute of some does
not produce grave consequences for the society at large. With the increase in
globalization, the role of the state has become very crucial. With increasing
complexities, the state may not necessarily be able to deal with all the matter so
that a proper conclusion can be reached.

Industrial Disputes are of two kinds: interest disputes and rights disputes. The
former category of disputes is related to the determination of the wage rate,
salary levels, and working conditions of employment whereas the latter
category deals with the determination, interpretation, or application of the
already existing standards. Such kinds of disputes are popularly known as
grievance disputes. In these disputes, it is claimed that the workers have not
been dealt with following the rules or contracts, laws, and regulations or
collective agreements that govern individual employment. Such grievances may
be regarding retrenchment, dismissal, payment of wages, working time,
overtime, demotion, promotion, transfer, seniority, job classification, work
rules, and fulfillment of obligation relating to safety and health laid down in
agreement.

In such cases where the parties have to come to a solution that establishes a
win-win situation for both parties. The state intervention doesn't need to be able
to bring about this objective. The best alternative to this situation can be brought
about through conciliation or arbitration.

Conciliation

Conciliation refers to the reconciliation of the interests or differences of the two

parties. It is a process through which each of the parties first appoints their
representatives. These representatives are brought before a third party. The
mutual discussion takes place between the representatives of workers and
employers so that they can be persuaded to come to a common solution. An
alternative name for this process is known as mediation. The third-party can be
an individual or a group of people. Functions of this mediator include-

1. Remove the differences between the two parties.

2. Persuading the two parties to think in a manner that is based on an
approach of giving and take i.e. a problem-solving approach
3. Persuade both the parties to necessarily reach a solution and refrain
from imposing his viewpoint
4. Change his approach depending on the need in each case and
depending upon other factors.

Conciliation under the Industrial Disputes Act

Under the Industrial Disputes Act, 1947, conciliation consists of the following
machinery

1. Conciliation Officer – Section 4 of the Industrial Dispute Act, 1947

deals with the appointment of such person as a conciliation officer, as
the government may deem fit. The powers of such conciliation officers
are the same as that of a civil court. It is expected out of him to give a
judgment within 14 days of commencement of conciliation
proceedings. The judgment given by such a person shall be binding on
both parties. The functions of Conciliation officer consists of:

 Hold Conciliation proceedings to settle with the two parties;

 Investigate into the matter and bring about a settlement;
 Send a report and memorandum of settlement to the appropriate
government;
 In cases where no settlement could be reached then send a report and
memorandum of settlement to the government stating the steps taken
by him or her;
 Refrain from forcing a settlement
In cases where the conciliation process in progress, the Industrial Disputes Act,
prohibits strikes and lockouts.

2. Board of Conciliation- In cases where the conciliation officer fails to

resolve the disputes between the two parties concerned, the appropriate
government, under Section 5 of the Industrial Disputes Act may set up
a Board of Conciliation for such purposes. Unlike the conciliation
officer, this board is not permanent in its existence. It is created for ad
hoc purposes and consists of a chairman and either two or four
members nominated on an equal basis by both parties. The power of
this body is the same as that of the Conciliation officer i.e. of a civil
court but it admits only those matters that are recommended by the
government. The duration in which the board is required to give its
judgment is within two months from the date on which the matter is
referred it.

In the Indian matrix, settlement of disputes by the Board of Conciliation is done

very rarely whereas the settling of disputes by a Conciliation officer is more
prevalent and also flexible.

Arbitration

Voluntary reference of disputes to arbitration. [sec. 10 (a)]: 

An arbitrator is appointed by the Government. Whether the dispute is
before Labour Court, or Industrial Tribunal, or National Tribunal, the
parties can go to arbitration by written agreement. The arbitrators
investigate the dispute matters and give arbitration awards (final decision
or settlement or decree) as for referring to an industrial dispute. If an
industrial dispute exists or is apprehended and the employer and the
workman agree to refer the dispute to arbitration, they may refer the
dispute to arbitration. But such reference shall be made before the dispute
has been referred under Sec. 19 to a Labour Court or Tribunal or National
Tribunal by a written agreement. The arbitrator may be appointed singly
or more than one in number. The arbitrator or arbitrators shall investigate
the dispute and submit to the appropriate Government the arbitration
award signed by the arbitrator or all the arbitrators, as the case may be.
 Arbitration is in some terms similar to Conciliation. In this method of
dispute resolution also, the unresolved dispute is referred by the parties to
a dispute to a third party who stands to be neutral and is commonly
known as the arbitrator. This method is different from conciliation
because the judgment is given by the third party in the former whereas
parties themselves agree in the latter category.

Unlike judges, the arbitrators do not enjoy judicial powers. The function
of an arbitrator is to listen to the viewpoints of both parties and then
deliver his judgment. The decision is sent to the government who
publishes it. The judgment becomes enforceable and binding on both
parties.

Arbitration is of two kinds:

1. Voluntary Arbitration – It includes those situations where the two

parties to a dispute mutually agree to refer their matter to a third party.
One drawback of this method of arbitration is that the judgment would
not necessarily become binding on both parties. In India, there are a lot
of factors that work against the successful working of voluntary
arbitration such as legal obstacles, limited availability of trained
arbitrators, scarcity in the amount of confidence in the eyes of the
general public, complicated procedure, lack of appellate procedure in
case of non-satisfaction of the award, absence of recognized unions
which could bind the workers. According to Section 10-A of the
Industrial Disputes Act, 1947, in cases where the conciliation process
fails, then it is advised that the parties opt for voluntary arbitration.
2. Compulsory Arbitration – In cases where the government instructs the
two parties to opt for the process of arbitration. The judgment
produced by the arbitrator is binding on both parties.

The disputes which are resolved by way of arbitration have certain advantages
such as it ensures the two parties have faith in each other, the process is
informal and flexible and nature, arbitration provides justice at minimum cost
and time, lastly, mutual consent leads to the building of trust and healthy
relations between the two parties.
Arbitration Agreements

 If the parties to a dispute agree that the dispute is to be referred to an arbitrator,
they can make a written agreement for it. The parties need to enter into an
arbitration agreement in the prescribed form. The name of the arbitrator to
whom the matter will be referred should be specified and a copy of such an
agreement must be sent to the appropriate government which shall then be
published in an official gazette. Reference to more than one arbitrator can also
be made. In such a case each arbitrator needs to act on an individual basis.

Moreover, to refer a dispute to the arbitrator the dispute in question must be an

industrial one otherwise, the reference would cease to be competent. In cases
where the dispute is referred to an arbitrator, under Section 10-A, it cannot be
further referred to a tribunal or a court for adjudication.

Section 11 states that the arbitrator can proceed with the arbitration process with
his procedure as he may think fit provided that such procedure is not against the
principles of natural justice. The industrial dispute referred to as an arbitrator
can be investigated and adjudicated as per the arbitration agreement and should
be published by the government.

The arbitration referred to under Section 10 shall not be affected by any of the
provisions of the Arbitration Act, 1940.

As far as the judicial review of an award of an arbitrator is concerned, the

Supreme Court has held that an arbitrator’s award cannot be against the
provisions laid down by the legislation, and if not then it would be rendered
illegal. In Engineering Mazdoor Sabha v. Hind Cycles Ltd[1] the Supreme
Court has held that a writ can lie against an arbitrator under Article 226 of the
Indian Constitution.

Binding Value of an Arbitration Award

According to Section 18 of the Industrial Disputes Act, 1947, the arbitration

award becomes binding once it is enforceable on those parties who refer the
disputes to the Arbitrator. An arbitration award whose notification has been
issued under Section 10-A shall be binding on the parties to dispute. A
settlement within the meaning of section 18(3) is binding on both the parties
and continues to remain in force unless the same is altered by another
settlement.
CASE LAWS :

 Indian Bank Vs Management of Indian Bank, 1985

• It was observed that where privilege given to an office-bearer of a trade union

in the form of duty relief was withdrawn by the management which was granted
to the privileged.

• It cannot be said that an industrial dispute has arisen thereby and the legal
status of the duty relief is only that of a concession and not a matter relating to
conditions of service.

• In this case it was held that where the concession provided is withdrawn, the
beneficiary cannot complain that a condition of service is affected and the
management is not entitled to do so without raising an industrial dispute and
having the matter adjudicated by the authority

 Guest Keen William (Private) Ltd. Vs Sterling (P.J) and others

• It was held by the Supreme Court that the delay in raising industrial dispute
does not serve as a bar to the reference of a dispute.

• If the dispute is raised after a considerable delay which is not reasonably

explained, the Tribunal would take that account while dealing with the merit of
the dispute.

 Bombay Union of Journalists vs. The Hindu 1961

• A person working in ‘The Hindu, Madras’ was terminated for claiming as a

full-time employee.
• The Bombay Union of Journalists raised the dispute. It was found that there
were ten employees of which seven on the administrative side and only three on
the journalism side.

• Of these three, only two were members of the union. Therefore, the Supreme
Court held that the Bombay Union of Journalists is not competent to raise this
dispute. Even if it had been raised, it could not have become an industrial
dispute.

 Workmen of Indian Express Newspapers Ltd. vs. Management

Indian Express Newspapers AIR 1970, SC 737

• A dispute relating to two workmen of Indian Express Newspapers Ltd, was

espoused by the Delhi Union of Journalists which was an outside union.

• About 25 percent of the working journalists of the Indian Express were

members of that union. But there was no union of the journalists of the Indian
Express.

• It was held that the Delhi Union of Journalists could be said to have a
representative character qua the working journalists employed Indian Express
and the dispute was thus transformed into an industrial dispute.

Thus, an individual dispute to fall within the definition of industrial dispute, it

must be sponsored by the Trade Union of the workmen or if there is no trade
union, it must be sponsored by the majority of the workmen or it must comply
with the requirements of Section 2-A of the Industrial Disputes Act, 1947.

 In a landmark case of Workmen of Dimakuchi Tea Estate v. The

Management of Dimakuchi Tea Estate, SC identified two tests to
determine whether a dispute was industrial or individual.

• SC held that an individual dispute could be transformed into an

industrial dispute if
 1. It was sponsored by a trade union or
2. If it was sponsored by a significant number of workers

1.→To make an individual dispute into an industrial dispute, it must be

taken up by a union of employees of the establishment and, where no
such union exists, it can be married by any union of workers employed in
similar trade.

2.→Concerning the second condition, if an individual dispute between

workers is dealt with by a considerable number of workers of the same
establishment, it becomes an industrial dispute. The court admitted that
the term” number appreciable” does not mean a majority of the workers

 Conclusion:
Thus, this was the Industrial Disputes Act which was passed by the
government of India in 1947. This Act ensures peace and harmony among
all the industrial establishments, and if any conflict arises, the provisions
in the Industrial Disputes Act helps in solving the issue in a systematic
manner in which all the parties are satisfied and every decision made is
fair and just.