The Industrial Disputes

Act, 1947
Ms. Shreya
Assistant professor
School of Law, CHRIST (Deemed to be University)
Introduction- History

Employers’ and Workmen Disputes Act, 1860

Trade Disputes Act, 1929

Rule 81-A of the Defence of India Rules

The Industrial Disputes Act, 1947

Development of Industrial Law in India
Employers’ and Workmen Disputes Act, 1860
❑ The first enactment dealing with the settlement of industrial disputes
❑ This Act weighed much against the workers
Trade Disputes Act, 1929
❑ Contained special provisions regarding strikes in public utility services and general
strikes affecting the community as a whole.
❑ The main purpose of the Act, was to provide a conciliation machinery to bring about
peaceful settlement of industrial disputes
Rule 81-A of the Defence of India Rules
❑ Used under the stress of emergency caused by the Second World War
❑ Intended to provide speedy remedies for industrial disputes by referring them
compulsorily to conciliation or adjudication.
❑ Awards made legally binding on the parties
❑ Prohibited strikes or lock-outs during the pendency of conciliation or adjudication
proceedings and for two months thereafter
OBJECT AND SIGNIFICANCE OF THE ACT
► In the case of Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, AIR 1958 S.C.
353, the Supreme Court laid down the following objectives of the Act:
► (i) Promotion of measures of securing and preserving amity and good relations between the
employer and workmen.
► (ii) Investigation and settlement of industrial disputes between employers and employers,
employers and workmen, or workmen and workmen with a right of representation by a registered
trade union or federation of trade unions or an association of employers or a federation of
associations of employers.
► (iii) Prevention of illegal strikes and lock-outs.
► (iv) Relief to workmen in the matter of lay-off and retrenchment.
► (v) Promotion of collective bargaining.
► This Act extends to the whole of India. The Act was designed to provide a self-contained code to
compel the parties to resort to industrial arbitration for the resolution of existing or apprehended
disputes.
Definitions: Industry
Section 2(j) of Industrial Dispute Act, 1947
Section 2(j)
• “Industry” means any business, trade,
undertaking, manufacture or calling of
employers and includes any calling
service, employment, handicraft, or
industrial occupation or avocation of
workmen.
• An industry exists only when there is a
relationship between employers and
employees, the former is engaged in
business, trade, undertaking,
manufacture or calling of employers and
the latter is engaged in the calling,
service, employment, handicraft or
industrial occupation and avocation.
Bangalore Water Supply and Sewerage
Board v. A Rajiappa, AIR 1978 SC 548
► Facts
► A. Rajappa and other employees of Bangalore water supply & sewerage board were
fined by Bangalore water supply board for misconduct. The fine was too heavy and not
reasonable. A Rajappa & Others filled an application under sec 33(2) of the Industrial
Dispute Act 1947. They said that the fine which was imposed on them was a violation
of natural justice. In Defense board said, ” We are industry not u/s 2(j) of IDA 1947 &
therefore labour court has no jurisdiction to hear this case.
► The Labour Court overruled the objection raised by the board. The board filed two writ
petitions to Karnataka High Court which also dismissed the petition. Finally, the board
filed a petition to the Supreme Court of India under Article 136 of the Constitution.
Bangalore Water Supply and Sewerage Board v. A
Rajiappa, AIR 1978 SC 548

► Tests for determination of “industry” – TRIPLE TEST

Where there is (i) systematic activity,
(ii) organised by co-operation between employer and employee,
(iii) for the production and/or distribution of goods and services calculated to satisfy human
wants and wishes (not spiritual or religious but inclusive of material things or services geared to
celestial bliss e.g., making, on a large scale, prasad or food) prima facie, there is an “industry” in
that enterprise.
► Following points were emphasized in the judgement
• Absence of profit motive or gainful objective is irrelevant wherever the undertaking is
whether in the public, joint, private or other sector.
• The true focus is functional and the decisive test is the nature of the activity with special
emphasis on the employer-employee relations.
• If the organisation is a trade or business, it does not cease to be one because of philanthropy
animating the undertaking.
► Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be
magnified to over-stretch itself. Undertaking must suffer a contextual and associational shrinkage,
so also, service, calling and the like. This yields the inference that all organised activity possessing
the triple elements in 2(j) although not trade or business may still be “industry”, provided the
nature of the activity, viz., the employer-employee basis, bears resemblance to what we find in
trade or business. This takes into the fold of “industry”, undertaking, callings and services,
and adventures analogous to the carrying on of trade or business.
Criteria for determining dominant nature of
undertaking (Dominant Nature Test)

► Where a complex of activities, some of which qualify for an exemption, others not,
involve employees on the total undertaking some of whom are not workmen or some
departments are not productive of goods and services if isolated, even then the
predominant nature of the services and the integrated nature of the departments
will be true test, the whole undertaking will be "industry" although those who are not
Workmen by definition may not benefit by status.
Exceptions to the term “Industry”
► A restricted category of professions, clubs, co-operatives and even gurukuls and little
research labs, may qualify for exemption if in simple ventures, substantially and, going by the
dominant nature criterion substantively, no employees are entertained but in minimal
matters, marginal employees are hired without destroying the non-employee character of the
unit.
► If in pious or altruistic mission, many employ themselves, free or for a small honorarium or
like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering
to-run free legal services, clinics or doctors serving in their spare hours in a free medical
centre or ashramites working at the bidding of the holiness, divinity or like central
personality, and the services are supplied free or at nominal cost and-those who serve are not
engaged for remuneration or on the basis of ‘master and servant relationship’, then, the
institution is not an industry even if stray servants, manual or technical are hired.
► Notwithstanding with previous clause, sovereign functions strictly understood alone qualify
for exemption and not the welfare activities or economic adventures undertaken by the
Government or statutory bodies. Even in departments discharging sovereign functions, if there
are units which are industries and they are substantially severable, then they can be
considered to come within Section 2(j).
► Constitutional and competently enacted legislative provisions may well remove an undertaking
from the scope of the Act.
Whether Municipal corporation can be
regarded as an industry
► D.N. Banerjee v. P.R. Mukherjee (1953) (Budge Budge Municipality Case)
Facts
The Budge Municipality dismissed two of its employees, Mr. P.C. Mitra, a Head clerk
and Mr. P.N. Ghose a Sanitary Inspector on charges of negligence, insubordination
and indiscipline.
The Municipal Workers Union of which the dismissed employees were members
questioned the propriety of the dismissal and the matter was referred to the Industrial
Tribunal.
The Tribunal directed reinstatement and the award was challenged by the
Municipality in High Court on the ground that its duties being connected with the local
self-government it was not an industry and the dispute was not an industrial dispute
and therefore reference of the dispute to the tribunal was bad in law.
► Held by Supreme Court

► The Supreme Court observed that in the ordinary or non-technical sense industry or business
means an undertaking where capital and labour co-operate with each other for the
purpose of producing wealth in the shape of goods, tools etc. and for making profits. In the
opinion of the Court every aspect of activity in which the relationship of master and servant
or employer and employees exists or arises does not become an industry. It was further
observed that 'undertaking' in the first part and industrial occupation or avocation in the
second part of Section 2(j) obviously mean much more than what is ordinarily understood by
trade or business. The definition was apparently intended to include within its scope what
might not strictly be called a trade or business. Neither investment of capital nor
profit-making motive is essential to constitute an industry as they are generally, necessary in
a business. A public utility service such as railways, telephones, and the supply of power,
light or water to the public may be carried on by private companies or business corporations
and if these public utility services are carried on by local bodies like a Municipality they do
not cease to be an industry, for the reasons stated above Municipal Corporation was held to
be an industry.
Nagpur Corporation v. Its Employees AIR
1960 SC 675
► Issues involved:
1) The meaning of the term ‘analogous to the carrying on of a trade or business’ used in the
definition of ‘industry’ under Section 2(14) of Central Provinces and Berar Industrial
Disputes Settlement Act, 1947.
2) Whether all departments of Municipal Corporation are included within the meaning of
‘industry’.
Supreme Court held:
► A Municipal Corporation is an ‘industry’ but it cannot include sovereign functions of the
state. The primary and inalienable functions of the State delegated to Municipal Corporations
such as related to legislative power, administration of law and judicial power are categorically
excluded from the purview of the definition.
► The definition cannot be confined to trade or business or an activity analogous to trade or
business alone. If a service performed by an individual is an industry, it would continue to be
so if performed by the corporation. It is not necessary that the service must be trade in a
different garb.
► Investment of capital and profit-making motive are not essential in the modern
conception of industry.
► If a department discharges several functions some of which pertain to industry and other
non-industrial functions, the predominant function of the department shall be the
criterion for the purposes of this Act.
► The activity of Octroi Department of Municipality is not an industry – Abdul Sabir
Khan v. Municipal Council Bhandara (1970)
► Fire Brigade service maintained by Municipal Corporation is a ‘service’ and also an
‘undertaking’ and therefore, an industry under Section 2(j) of the IDA – Workmen of
Fire Brigade Section of Municipal Committee, Faridabad v. K.I Gosain (1970)
► Activity of Nagar Palika in any department except those dealing with levy of house tax
falls within the definition of industry – Permanand v. Nagar Palika, Dehradun & Ors.
(2004)
► All departments of the Municipality are not industry. Which department is an industry
can be determined by applying the tests laid down by the Supreme Court in the
abovementioned cases and that of Bangalore Water Supply Case.
Whether hospitals are industry

► State of Bombay v. Hospital Mazdoor Sabha AIR 1960 SC 610

► Facts:
► The Hospital Mazdoor Sabha was a registered Trade Union of the employees of
hospitals in the State of Bombay. The services of two of its members were terminated
by way of retrenchment by the Government and the Union claimed their reinstatement
through a writ petition. It was urged by the State that the writ application was
misconceived because hospitals did not constitute an industry. The group of hospitals
were run by the State for giving medical relief to citizens and impart medical education.
► The Supreme Court held the group of hospitals to be industry and observed as follows:

1. The State is carrying on an 'undertaking' within Section 2(j) when it runs a group of
hospitals for the purpose of giving medical relief to the citizens and for helping to impart
medical education.
2. An activity systematically or habitually undertaken for the production or distribution
of goods or for the rendering of material services to the community at large or a part of such
community with the help of employees is an undertaking.
3. It is the character of the activity in question which attracts the provisions of Section 2(j),
who conducts the activity and whether it is conducted for profit or not make a material
difference.
4. The conventional meaning attributed to the words, 'trade and business' has lost some of its
validity for the purposes of industrial adjudication...it would be erroneous to attach undue
importance to attributes associated with business or trade in the popular mind in days gone by.
► Management of Safdarjung Hospital v. Kuldip Singh AIR 1970 SC 1406 - Hospital
was held not to be industry because it was an entirely charitable institution carrying
on work of training, research and treatment.
► Dhanraj Giri Hospital v. Workmen AIR 1975 SC 2032- Hospital was not an
industry because it was not carrying on any economic activity in the nature of trade or
business. The main activity was imparting of training in nursing and the beds in the
hospital were meant for their practical training.
► Safdarjung Hospital and Dhanraj Giri Hospital cases overruled the Hospital Mazdoor
Sabha Case
Management of Hospitals, Orissa v. Their
Workmen (1971)
► Created a bifurcation between hospital run by government and other public, private
(charitable & commercial) hospitals
► Hospital run by government as part of its sovereign function is not an industry.
► Hospitals run by the State of Orissa are places where general public can be treated and
are run as departments of government
► The mere fact that payments are accepted in respect of some beds cannot lead to the
conclusion that hospitals are run as a business in a commercial way.
► Hospitals are primarily meant as free service by the government to the patients
without any profit motive.
► In view of the decision of the Supreme Court in Bangalore Water Supply v. A.
Rajappa, Safdarjung Hospital and Dhanraj Giri Hospital Cases have now been
overruled.
► Thus on an analysis of the entire case law up to Bangalore Water Supply case on the
subject it can be said that such hospitals as are run by the Government as part of its
sovereign functions with the sole object of rendering free service of the patients are
not industry. But all other hospitals, both public and private; whether charitable or
commercial would be industry if they fulfil the triple test laid down in Bangalore Water
Supply v. A. Rajappa.
Whether University and Educational Institutions are Industry

► University of Delhi v. Ram Nath AIR 1963 SC 1873

► Facts:

► The respondent Mr. Ram Nath was employed as a driver by the University College for
Women. Mr. Asgar Mashih was initially employed as driver by Delhi University but
was later on transferred to the University College for women in 1949. The University of
Delhi found that running the buses for transporting the female students of the women’s
college has resulted in loss. Therefore it decided to discontinue that facility and
consequently, the services of the above two drivers were terminated.
► The order of termination was challenged on the ground that the drivers were workmen
and the termination of their services amounted to retrenchment. They demanded
payment of retrenchment compensation under Section 25-F of the Act by filing
petitions before the Industrial Tribunal. The Tribunal decided the matter in favour of
the drivers and hence the University of Delhi challenged the validity of the award on
the ground that activity carried on by the University is not industry.

► It was held by the Supreme Court that the work of imparting education is more a
mission and a vocation than profession or trade or business and therefore
University is not an industry.
► Brahma Samaj Education Society v. West Bengal College Employees’ Association
1960 I LLJ 472 (Cal).
► A dispute arose between the society and non-teaching staff of the colleges. It was
pleaded that the society was purely an educational institution and not an industry
because there was no production of wealth with the co-operation of labour and capital
as is necessary to constitute an industry.
► The Calcutta High Court observed that our conception of industry has not been static
but has been changing with the passage of time. An undertaking which depends on the
intelligence or capacity of an individual does not become an industry simply because
it has a large establishment. There may be an educational institution to which pupils go
because of the excellence of the teachers; such institutions are not industry. On the
other hand, there may be an institution which is so organized that it is not
dependent upon the intellectual skill of any individual, but is an organization
where a number of individuals join together to render services which might even
have a profit motive. Many technical institutions are run on these lines. When
again we find these institutions also do business by manufacturing things or selling
things and thereby making a profit they certainly come under heading of "industry".
These being the tests, it is clear that it will be a question of evidence as to whether a
particular institution can be said to be an industry or not.
► University of Delhi v. Ram Nath case has been overruled by the Supreme Court in
Bangalore Water Supply case and in view of the triple test laid down in Bangalore
Water Supply case even a University would be an industry in a limited sense although
such of its employees as are not workmen within the meaning of Section 2(s) of the Act,
may not get the desired benefits to which a workman in an industry may be entitled to.
► Suresh Chandra Mathe v. Jiwaji University, Gwalior and others (1994 MP) : University
is an industry and clerk a workman
Is Government Department an industry?

► State of Rajasthan v. Ganeshi Lal 2008 I.L.L.J. 670 (S.C.)

► The Labour Court had held the Law Department of Government as an industry. This
view was upheld by the Single Judge and Division Bench of the High Court. It was
challenged by the State before the Supreme Court.
► It was held that the Law Department of Government could not be considered as an
industry. Labour Court and the High Court have not indicated as to how the Law
Department is an industry. They merely stated that in some cases certain departments
have been held to be covered by the expression industry in some decisions. It was also
pointed out that a decision is a precedent on its own facts. Courts should not place
reliance on decisions without discussing how the factual situation fits in with the fact
situation of the decision on which reliance is placed.
Whether Club is an industry

► Cricket Club of India v. Bombay Labour Union AIR 1969 SC 276

► The question was whether the Cricket Club of India, Bombay which was a member’s
club and not a proprietary club, although it was incorporated as a company under the
Companies Act was an industry or not. The club had a membership of about 4800 and
employed 397 employees.
► It was held that the club was a self-service institution and not an industry and it
was wrong to equate the catering facilities provided by the club to its members or their
guests (members paying for that), with a hotel. The catering facility also was in the
nature of self-service by the club to its members. This case has now been overruled.
Madras Gymkhana Club Employees' Union v.
Management AIR 1968 SC 554

► This was a member's club and not a proprietary club with a membership of about 1200.
Its object was to provide a venue for sports and games and facilities for recreation and
entertainment. It was running a catering department which provided food and
refreshments not only generally but also on special occasions.
► It was held that the club was a member's self-serving institution and not an
industry. No doubt the material needs or wants of a section of the community were
catered but that was not enough as it was not done as part of trade or business or as an
undertaking analogous to trade or business.
► This case has also been overruled. Now it is not necessary that the activity should be a
trade or business or analogous to trade or business.
► Clubs or self-service institutions or non-proprietary member's club will be industry
provided they fulfill the triple test laid down in Bangalore 'Water Supply v A. Rajappa.
► It may, therefore, be submitted that both Cricket Club of India and Madras
Gymkhana Club would now be an industry because they fulfil the triple test laid
down in Bangalore Water Supply case. Both are systematically organized with the
co-operation of employer and employee for the distribution of service to satisfy human
wishes.
Whether Agricultural Operation is an
industry:
► Hari Nagar Cane Farm v State of Bihar (1960): The carrying on of agricultural
operations by the company for the purposes of making profits, employing workmen
who contribute to the production of the agricultural commodities bringing profits to the
company was held to be an industry within the meaning of this clause.
► Thiru Arcoran Sugars Ltd, v. Industrial Tribunal Madras (1970): Where a Sugar Mill
owned a cane farm and used its produce for its own consumption and there was
evidence that the farm section of the mill was run only to feed the mill, it was held
that the agricultural activity being an integral part of industrial activity, the farm
section was an industry.
Whether Solicitor’s Firm or Lawyer’s Office are
industries:
► N.N.U.C. Employees v. Industrial Tribunal AIR 1962 SC 1080
► The question was whether a solicitor’s firm is an industry or not. It was held that a
solicitor’s firm carrying on work of an attorney is not an industry, although
specifically considered it is organized as an industrial concern. There are different
categories of servants employed by a firm, each category being assigned by separate
duties and functions. But the service rendered by a solicitor functioning either
individually or working together with parties is service which is essentially
individual; it depends upon the professional equipments, knowledge and efficiency
of the solicitor concerned. Subsidiary work which is purely incidental type and which
is intended to assist the solicitor in doing his job has no direct relation to the
professional service ultimately rendered by the solicitor. The work of his staff has
no direct or essential nexus or connection with the advice which it is the duty of the
solicitor to give to his client. There is, no doubt, a kind of cooperation between the
solicitor and his employees, but that cooperation has no direct or immediate relation to
the professional service which the solicitor renders to his client. This case has been
overruled again in Bangalore Water Supply case and now a solicitor’s firm employing
persons to help in catering to the needs of his client is an industry.
 Amended definition of ‘industry’ under the Industrial
Disputes (Amendment) Act, 1982 (not yet
implemented)
“Industry” means any systematic activity carried on by cooperation between an employer
and his workmen (Whether such workmen are employed by such employer directly or by or
through any agency, including a contractor) for the production, supply or distribution of
goods or services with a view to satisfy human wants or wishes (not being wants or wishes
that are merely spiritual or religious in nature), whether or not:
i. any capital has been invested for the purpose of carrying on such activity; or
ii. such activity is carried on with the motive to make any gain or profit and includes:
(a) Any activity of the Dock Labour Board established under Section 5A of the Dock
Workers (Regulations of Employment) Act, 1948, (9 of 1948);
(b) Any activity relating to the promotion of sales or business or both carried on by an
establishment, but does not include:
1. Any agricultural operation except where such agricultural operation is carried on in an
integrated manner with any other activity (being any such activity as is referred to in the
foregoing provisions of this clause) and such other activity is the predominant one.
Explanation: For the purpose of this sub-clause, “agricultural operation” does not include
any activity carried on in a plantation as defined in clause (f) of Section 2 of the Plantations
Labour Act, 1951; or
2. hospitals or dispensaries; or
3. educational, scientific, research to training institutions; or
4. Institutions owned or managed by organisations wholly or substantially engaged in any
charitable, social or philanthropic service; or
5. khadi or village industries; or
6. any activity of the Government relatable to the sovereign functions of the Government
including all the activities carried on by the departments of the Central Government dealing
with defence research atomic energy and space; or
7. any domestic service; or
8. any activity, being a profession practised by an individual or body of individuals, if the
number of persons employed by the individuals or body of individuals in relation to such
profession is less than ten; or
9. any activity, being an activity carried on by a co-operative society or a club or any other
like body of individuals, if the number of persons employed by the co-operative society,
club or other like body of individuals in relation to such activity is less than ten.
THE INDUSTRIAL RELATIONS CODE, 2020
► “Industry" means any systematic activity carried on by co-operation between an
employer and worker (whether such worker is employed by such employer directly or
by or through any agency, including a contractor) for the production, supply or
distribution of goods or services with a view to satisfy human wants or wishes (not
being wants or wishes which are merely spiritual or religious in nature), whether or
not,—
► (i) any capital has been invested for the purpose of carrying on such activity; or
► (ii) such activity is carried on with a motive to make any gain or profit but does not
include — (i) institutions owned or managed by organisations wholly or substantially
engaged in any charitable, social or philanthropic service; or (ii) any activity of the
appropriate Government relatable to the sovereign functions of the appropriate
Government including all the activities carried on by the departments of the Central
Government dealing with defence research, atomic energy and space; or (iii) any
domestic service; or (iv) any other activity as may be notified by the Central
Government;
 Section 2(k) Industrial Dispute

► (i) There should exist a dispute or difference;

► (ii) The dispute or difference should be between:
(a) employer and employer;
(b) employer and workmen; or
(c) workmen and workmen.
► (iii) The dispute or difference should be connected with
(a) the employment or non-employment, or
(b) terms of employment, or
(c) the conditions of labour of any person;
► (iv) The dispute should relate to an industry as defined in Section 2(j).
Existence of a dispute or difference
► The term “industrial dispute” connotes a real and substantial difference having
some element of persistency and continuity and likely, and if not adjusted, to
endanger the industrial peace of the undertaking or community.
► For a dispute to be an industrial dispute a demand must be made which is
subsequently rejected by the management.
► Workmen of Hindustan Lever Ltd. v. Hindustan Lever Ltd.: Whether a demand
to confirm employees in an ‘acting capacity’ in a grade is an industrial dispute. It was
held to be an industrial dispute.
► Sarva Shramik Sangh v. Indian Hume Pipe Company Limited: IDA, 1947 does
not limit the power of the industrial tribunal to grant relief only from the date of
raising of industrial dispute. The definition under section 2(k) does not contain such a
limitation. The tribunal has the power to grant relief from a date anterior to the date
of raising the industrial dispute.
► Delay in raising an industrial dispute does not serve as a bar to the reference of a
dispute. If a dispute is raised after a considerable delay which is not reasonably
explained, the tribunal would take that into account while dealing with the merits of
the dispute.
Employment, Non-Employment and
Condition of Labour
► Non-employment includes retrenchment as well as refusal to reinstate. The
use of the word non-employment raises the question whether an employee
who had been dismissed, removed, discharged or retrenched can be
reinstated by an order of the Industrial Tribunal. In Western India
Automobile Association v. Industrial Tribunal, it was held by the Supreme
Court that:
► Reinstatement is connected with non-employment and is, therefore, included
within the definition.
► The expression “condition of labour” is much wider in its scope and usually it
was reference to the amenities to be provided to the workmen and the
conditions under which they will be required to work. The matters like
safety, health and welfare of workers are also included within this
expression.
Jurisdiction of Civil Courts

► Chandrakant Tukaram Nigam & ors. v. Municipal Corporation of

Ahmedabad and another: The workmen of the Municipal Corporation had
challenged the order of dismissal from the service in civil courts. It was held
by the Supreme Court that the jurisdiction of Civil Courts was impliedly
barred in cases of legality and manner of dismissal or removal from service
as it constitutes an industrial dispute and therefore, subjected to the regime
established by IDA, 1947.
► Thirupattur Co-operative Sugar Mills Ltd. V. S. Sivalingam: Any dispute
other than the industrial dispute (dismissal, removal, retrenchment or
termination of service) may lie within the jurisdiction of a civil court.
Collective Dispute as Industrial Dispute

► Jadhav J.H. v. Forbes Gobak Ltd.: A dispute relating to a single workman

may also constitute an industrial dispute if espoused by a trade union or a
number of workers.
► 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 recognised trade union or that all or the majority of workmen of the
industrial establishment should be parties to it. An individual dispute becomes
an industrial dispute even when it is sponsored by an unregistered trade
union, however, it must not be the one unconnected with the employer or the
industry concerned. There must be a community of interest between the
aggrieved workman and those taking up the cause of the aggrieved workman.
Workmen of Indian Express Newspapers Ltd.
V. Management of Indian Express Newspapers

► 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 per cent of working journalists of Indian Express were members of the
union.
► It was held that the Delhi Union of Journalists could be said to have a
representative character of the working journalists of Indian Express and the
dispute amounted to an industrial dispute.
Lay-Off {Section 2(kkk)}

► “Lay-off” means the failure, refusal or inability of an employer to give

employment due to the following reasons, to a workman whose name appears
on the muster rolls of his industrial establishment and who has not been
retrenched:
► (a) shortage of coal, power or raw materials, or
► (b) accumulation of stocks, or
► (c) break-down of machinery, or
► (d) natural calamity, or
► (e) for any other connected reason.
► Explanation: Every workman whose name is borne on the muster rolls of the
industrial establishment and who presents himself for work at the establishment
at the time appointed for the purpose during normal working hours on any day
and is not given employment by the employer within two hours of his so
presenting himself shall be deemed to have been laid-off for that day
within the meaning of this clause.
► Provided that if the workman, instead of being given employment at the
commencement of any shift for any day is asked to present himself for the
purpose during this second half of the shift for the day and is given
employment, then, he shall be deemed to have been laid-off only for one-half of
that day.
► Provided further that if he is not given any such employment even after so
presenting himself, he shall not be deemed to have been laid-off for the
second half of the shift for the day and shall be entitled to full basic
wages and dearness allowance for that part of the day.
► lay-off is a temporary stoppage and within a reasonable period of time, the employer
expects that his business would continue and his employees who have been laid-off,
the contract of employment is not broken but is suspended for the time being
► M.A. Veirya v. C.P. Fernandez, 1956-I, L.L.J. 547 Bomb: it was observed that it is
not open to the employer, under the cloak of “lay-off”, to keep his employees in a state
of suspended animation and not to make up his mind whether the industry or business
would ultimately continue or there would be a permanent stoppage and thereby
deprive his employees of full wages. In other words, the lay-off should not be mala
fide in which case it will not be lay-off. Tribunal can adjudicate upon it and find out
whether the employer has deliberately and maliciously brought about a situation
where lay-off becomes necessary.
► Foundry v. Their Workmen, A.I.R. 1962 S.C. 1533: Apart from the question of mala
fide, the Tribunal cannot sit in judgement over the acts of management and
investigate whether a more prudent management could have avoided the situation
which led to lay-off
► Hope Textiles Ltd. v. State of MP, 1993 I LLJ 603): refusal or inability to give
employment must be due to (i) shortage of coal, power or raw materials, or (ii)
accumulation of stock, or (iii) break-down of machinery, (iv) natural calamity, or
(v) for any other connected reason. Financial stringency cannot constitute a
ground for lay-off.
► The right to lay-off cannot be claimed as an inherent right of the employer. This
right must be specifically provided for either by the contract of
employment or by the statute. In fact ‘lay-off’ is an obligation on the part of
the employer, i.e., in case of temporary stoppage of work, not to discharge the
workmen but to lay-off the workmen till the situation improves. Power to lay-off
must be found out from the terms of contract of service or the standing orders
governing the establishment.
 Section 2(l)- Lock-out

► “lock-out” means
1. the temporary closing of a place of employment, or
2. the suspension of work, or
3. The refusal by an employer to continue to employ any number of persons
employed by him
► The abovementioned acts of the employer should be motivated by coercion.
► In an industry
► It should be an industrial dispute
Difference between lay-off and lock-out

► (1) In lay-off, the employer refuses to give employment due to certain specified
reasons, but in lock-out, there is deliberate closure of the business and employer
locks out the workers not due to any such reasons.
► (2) In lay-off, the business continues, but in lock-out, the place of business is closed
down for the time being.
► (3) In a lock-out, there is no question of any wages or compensation being paid
unless the lock-out is held to be unjustified.
► (4) Lay-off is the result of trade reasons but lock-out is a weapon of collective
bargaining.
► (5) Lock-out is subject to certain restrictions and penalties but it is not so in case of
lay-off.
► However, both are of temporary nature and in both cases the contract of employment
is not terminated but remains in suspended animation.
► Kairbetta Estate Kotagiri v Raja Manickam AIR 1956 Mad 241: Lock out has
been described by the SC as the antithesis to strike.
► Indian Paper Pulp Co. Ltd. V Indian Paper Pulp Workers’ Union AIR 1949 FC
148: The question whether lock-out is justified would be an industrial dispute
and payment of wages would be an industrial dispute too.
 Section 2(oo): Retrenchment

1. “Retrenchment” means the termination by the employer of the service of a workman

2. The termination may be for any reason whatsoever
3. But the termination should not be as a measure of punishment by way of disciplinary
action
► The following are not retrenchment: Exceptions
1. voluntary retirement of the workman; or
2. retirement of the workman or reaching the age of superannuation if the contract of
employment between the employer and the workman concerned contains a stipulation
in that behalf; or
3. termination of the service of the workman as a result of the non-renewal of the
contract of employment between the employer and the workman concerned on its
expiry or of such contract being terminated under a stipulation in that behalf contained
therein.
4. termination of the service of workman on the ground of continued ill-health.
Reorganisation as Retrenchment

► Parry & Co. Ltd. v. P.C. Pal, (1970) II L.L.J. 429

► The Supreme Court observed that the management has a right to determine the volume
of its labour force consistent with its business or anticipated business and its
organisation. If for instance a scheme of reorganisation of the business of the employer
results in surplusage of employees, no employer is expected to carry the burden of such
economic dead weight and retrenchment has to be accepted as inevitable, however,
unfortunate it be.
► The fact that the implementation of a reorganisation scheme adopted by an employer for
reasons of economy and convenience would lead to the discharge of some of the
employees, will have no material bearing on the question as to whether the
reorganisation has been adopted by the employer bona fide or not. The retrenchment
should be bona fide and there should be no victimisation or unfair labour practice on the
part of the employer
D.C. & G. Mills v. Shambhu Nath
► The respondent was working as a motion-setter in the organisation. Due to some
reorganisation in the establishment, the post of motion-setter was abolished. Thereafter,
the respondent would have been retrenched but in terms of a settlement between the
employer and the employee, no one was retrenched. The employee agreed to work on
any other post without loss of wage. He was offered an alternative post wherein he
proved to be unfit for the job even after the extension of the period of probation.
Thereafter, he was offered another job which he did not accept and asked the
management to give him another chance. His request was not accepted by the
management and his name was struck off from the muster roll.
► It was held that striking off his name from the muster roll would amount to
retrenchment.
 Seasonal Work

► Morinda Co-op. Sugar Mills Ltd. V. Ram Kishan & Others

► Workmen were employed during the crushing season only and consequent to
the closure of the season, they ceased to work. It was held that such
cessation of work would not amount to retrenchment since it was only
seasonal work.
► Disengagement of workers of seasonal factories after season is not a
retrenchment.
 Expiry of Contract Period

► Managing Director, Karnataka Handloom Development Corporation Ltd. V.

Sri Mahadev Laxman Raval
► Respondent was appointed for a fixed period as an expert weaver to train
weavers. His services were discontinued after the expiry of the contract
period.
► The Supreme Court held that his appointment was purely contractual and it
did not amount to retrenchment.
 Loss of Confidence

► Kamlesh Kumar v. Presiding Officer Central government Industrial Tribunal No.

1 & Others
► Whether the termination on grounds of loss of confidence amounted to retrenchment.
► It would be covered under termination as a disciplinary action and would not amount to
retrenchment.
Termination of service of a probationer

► M. Venugopal v. LIC of India

► Termination of service of a probationer cannot be said to be a retrenchment
as per IDA as his confirmation was dependent upon minimum prescribed
criteria and the employee failed to satisfy the same.
Punjab Land Development Corporation Ltd.
V. Presiding Officer, Labour Court(1990 II LLJ
SC 70)
► The question was whether retrenchment under the Act meant termination of services of
the workmen as ‘surplus labour’ for any reason or it meant termination of service for
any reason whatsoever otherwise than punishment inflicted by way of disciplinary
action and those expressly excluded by the definition.
► The SC clarified that the expression “retrenchment” does not mean only termination by
the employer of service of surplus labour for any reason whatsoever. The expression
“retrenchment” is not to be understood in the narrow, natural and contextual
meaning but is to be understood in its wider literal meaning to mean termination
of service of workman for any reason whatsoever.
Anand Behari v. RSRTC, AIR 1991 SC
1003
► The services of bus conductors, were terminated on the ground of weak eye
sight which was below the standard requirement. Supreme Court held that
the termination is due to continued ill- health which has to be construed
relatively in its context, and that must have a bearing on the normal
discharge of their duties. Ill-health means disease, physical defect, infirmity
or unsoundness of mind.
 Section 2(cc): Closure

► “Closure” means the permanent closing down of a place of employment or

part thereof.
 Retrenchment v Closure
Retrenchment
► A tool in the hands of employers to
generally avoid surplusage.
► Affects only some workmen who
are retrenched
► Trade and business continues
Closure
► Closure of business generally aims
to prevent further financial drain
or losses to employer who cannot
the business any more.
► Affects all workmen.
► Business is discontinued
 Lock-Out v. Retrenchment

Lock-Out Retrenchment
► Temporary ► Permanent
► Relationship of employer-employee ► Relationship of employer-employee
suspended is severed
► Is done with a motive to coerce the ► The intention is to dispense with
workmen surplus labour
► Happens in response to strike i.e. ► Industrial Dispute does not exist
during an industrial dispute
 Lock-Out v. Closure

Lock-Out Closure
► Temporary ► Permanent

► A weapon of coercion in the hands ► Generally for trade reasons

of the employer

► May or may not happen during any

► During an industrial dispute industrial dispute
TRUE TEST OF DIFFERENCE BETWEEN
LOCK-OUT & CLOSURE
► General Labour Union (Red Flag), Bombay v. B.V.Chavan & Others (1985) I
LLJ 82 (SC)
► In order to determine whether the employer has imposed a lock-out or closed the
establishment it is not necessary that the closure has to be irrevocable, final and
permanent and the lock-out is temporary or for a brief period.
► True test would be on the basis of evidence whether the closure was a device or
pretence to terminate the services of the workmen or whether it was bona fide and
for reasons beyond the control of the employer.
► Duration of closure may be a significant factor to determine the intention and bona fides
of the employer at the time of closure but it is not decisive of the matter.
 STRIKE – SECTION 2(q)

► “Strike” means:
► 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.
► Mere cessation of work does not amount to a strike unless it is shown that
cessation of work was a concerted action for the enforcement of an industrial
demand.
► Duration of cessation of work is immaterial.
► Mere absence from work is not enough, there should be a concerted refusal to
work to constitute a strike.
 Kinds of Strike

1. General Strike - workman in pursuance of a common cause stay away from

work. A token strike is also a general strike.
2. Stay-in, sit-down, pen-down or tool-down strike - In all such cases, the
workmen after taking their seats, refuse to do work. Even when asked to leave
the premises, they refuse to do so .
3. Go-slow - Go-slow does not amount to strike, but it is a serious case of
misconduct. It is a deliberate delaying of production by workmen pretending to
be engaged in the factory, and is one of the most pernicious practices that
discontented and disgruntled workmen sometimes resort to. Thus, while
delaying production and thereby reducing the output, the workmen claim to
have remained employed and entitled to full wages. Apart from this, ‘go-slow’ is
likely to be much more harmful than total cessation of work by the strike.
4. Sympathetic strike: Cessation of work in the support of the demands of
workmen belonging to other employer is called a sympathetic strike. This is an
unjustifiable invasion of the right of employer who is not at all involved in the
dispute. The management can take disciplinary action for the absence of workmen.
However, in Ramalingam v. Indian Metallurgical Corporation, Madras, 1964-I L.L.J.
81, it was held that such cessation of work will not amount to a strike since there is
no intention to use the strike against the management.
5. Hunger strike: Some workers may resort to fast on or near the place of work or
residence of the employer. If it is peaceful and does not result in cessation of work,
it will not constitute a strike. But if due to such an act, even those present for work,
could not be given work, it will amount to a strike.
6. Work-to-rule: employees strictly adhere to rules while performing their duties
resulting in delay. Since there is no cessation of work, it does not constitute a
strike.
Constitutional Validity of Right to Strike

► All India Bank Employees vs National Industrial Tribunal 1962 SCR (3) 269
► The right guaranteed by Art. 19(1)(c) of the Constitution does not carry with
it a concomitant right that unions formed for protecting the interests of labour
shall achieve their object such that any interference to such achievement by
any law would be unconstitutional unless it could be justified,under Art.
19(4) as being in the interests of Public order or morality. The right under
Art. 19(1)(c) extends only to the formation of an association or union and
insofar as the activities of the association or union are concerned or as regards
the steps which the union might take to achieve, its object, they are subject to
such laws as, may be framed.
► Mineral Miners’ Union v. Kudremukh Iron Ore Co. Ltd. ILR 1988 KAR 2878
► The consequential hardship to go on strike, due to the delay in the action of the
authorities under the Act, was held to be unfortunate, by the Supreme Court;
but such a delay would not vest a right in the workmen to ignore the
mandatory requirements of the law. The remedy of workmen lies elsewhere.
As the Act now stands, it is not possible to entertain the plea put forth by the
learned Counsel for the workmen
► Baldev Singh Gandhi v. State of Rajasthan, AIR 2002 SC 1124
► Even a very liberal interpretation of Article 19(1) (c) cannot lead to the
conclusion that the trade unions have a guaranteed right to an effective
collective bargaining or to strike, either as part of collective bargaining or
otherwise. The right to strike or the right to declare a lockout may be controlled
or restricted by appropriate industrial legislation.
 Public Utility Service
• According to the definition of Graham Roper, “Public Utility refers to any undertaking that
meets the needs or conveniences of a considerable section of the public and that places the
undertaking in a position, justifying the imposition of control in return for monopolistic or
special privileges.”
• Public Utility services includes those goods and services which are indispensable part of human
life and without them, it would be a great hardship for human to survive.
• The Public utility services are mostly local in character and are regulated by the local government.
• These public utilities are organized as monopolies by the government as they provide basic
necessities, so any deficit in the quality of their product and services would lead to big social
problems.
• There is significantly lower risk in public utilities as there is no fear of change in demand and
preferences of the customers. The demand and supply of the goods and services go hand in hand.
 Section 2(n): Public Utility Service

► “Public Utility Service” means:

► (i) any railway service or any transport service for the carriage of passengers or goods by air;
► (ia) any service in, or in connection with the working of, any major port or dock;
► (ii) any section of an industrial establishment, on the working of which the safety of the
establishment or the workman employed therein depends;
► (iii) any postal, telegraph or telephone service;
► (iv) any industry which supplies power, light or water to the public;
► (v) any system of public conservancy or sanitation;
► (vi) any industry specified in the First Schedule which the appropriate Government may, if
satisfied that public emergency or public interest so requires, by notification in the Official
Gazette, declare to be a public utility service for the purposes of this Act, for such period as
may be specified in the notification:
► Provided that the period so specified shall not, in the first instance, exceed six months but
may, by a like notification, be extended from time to time, by any period not exceeding six
months at any one time, if in the opinion of the appropriate Government public emergency or
public interest requires such extension. [Section 2(n)]
► Management of Safdar Jung Hospital v Kuldip Singh AIR 1970 SC 1407
► The declaration of any service as a public utility service by the appropriate
government as per Schedule I presupposes the existence of industry. Hence,
service in hospitals and dispensaries can be declared to be a public utility
service only if they satisfy the test of industry.
► Exceptional Cases – May go on strike after following the procedure under
Section 22.
 UNFAIR LABOUR PRACTICES

► Section 2(ra): “unfair labour practice” means any of the practices specified
in the Fifth Schedule
► A new Schedule V has been added to by Industrial Disputes (Amendment) Act
1982 which defines unfair labour practices.
► Section 25-T: Prohibition of Unfair Labour Practices: No employer or
workman or a Trade Union, whether registered under the Trade Union Act,
1926 or not, shall commit any unfair labour practice.
► Section 25-U: Penalty for committing Unfair Labour Practices: Any person
who commits unfair labour practice shall be punishable with imprisonment for
a term which may extend to 6 months or with a fine which may extend to one
thousand rupees or with both.
 THE FIFTH SCHEDULE
UNFAIR LABOUR PRACTICES
► I. ON THE PART OF EMPLOYERS AND TRADE UNIONS OF EMPLOYERS
1. To interfere with, restrain from, or coerce, workmen in the exercise of their
right to organise, form, join or assist a trade union or to engage in concerted
activities for the purposes of collective bargaining or other mutual aid or
protection, that is to say—
(a) Threatening workmenith discharge or dismissal, if they join a trade union
(b) Threatening a lock-out or closure, if a trade union is organised;
(c) Granting wage increases to workmen at crucial periods of trade union
organisation, with a view to undermining the efforts of the trade union
organisation.
 2. To dominate, interfere with or contribute support, financial or otherwise, to
any trade union, that is to say—
(a) an employer taking an active interest in organising a trade union of his workmen;
and
(b) an employer showing partiality or granting favour to one of several trade unions
attempting to organise his workmen or to its members, where such a trade union is
not a recognised trade union.

3. To establish employer-sponsored trade unions of workmen.

4. To encourage or discourage membership in any trade union by discriminating

against any workman, that is to say—
(a) discharging or punishing a workman, because he urged other workmen to join or
organise a trade union;
(b) discharging or dismissing a workman for taking part in any 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 higher posts on account of their trade union
activities;
(e) giving unmerited promotions to certain workmen with a view to creating discord
amongst 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 victimisation;
(b) not in good faith, but in the colourable exercise of the employer‟s rights;
(c) by falsely implicating a workman in a criminal case on false evidence or on
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 in the conduct of
domestic enquiry or with undue haste;
(g) for misconduct of a minor or technical character, without having any regard
to the nature of the particular misconduct or the past record or service of the
workman, thereby leading to a 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 mala fide from one place to another, under the
guise of following management policy.
8. To insist upon individual workmen, who are on a legal strike to sign a good
conduct bond, as a pre-condition 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 years, with the object of depriving them of the status and privileges of
permanent workmen.

11.To discharge or discriminate against any workman for filing charges or testifying
against an 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 recognised trade unions.

16. Proposing or continuing a lock-out deemed to be illegal under this Act.

► II.ON THE PART OF WORKMEN AND TRADE UNION OF WORKMEN

► 1. To advise or actively support or instigate any strike deemed to be illegal

under this Act.
► 2. To coerce workmen in the exercise of their right to self-organisation 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 recognised union to refuse to bargain collectively in good faith with
the employer.
4. To indulge in coercive activities against certification of a bargaining
representative.

5. To stage, encourage or instigate such forms of coercive actions as wilful “go

slow”, squatting on the work premises after working hours or “gherao” of any
of the members of the managerial or 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

the industry.

8. To indulge in acts of force or violence or to hold out threats of intimidation

against any workman with a view to prevent him from attending work.
 Constitutional Interpretations
► Any unfair labour practice within its very concept must have some elements of
arbitrariness and unreasonableness and if unfair labour practice is established the same
would bring about a violation of the guarantee under Article 14 of the Constitution.
Therefore, it is axiomatic that anyone who alleges unfair labour practice must plead it
specifically and such allegations must be established properly before any forum can
pronounce on the same.
► It is difficult to define and lay down an exhaustive test of unfair labour practices, but it
may be said that any practice which violates the DPSP contained in Article 43 of the
Constitution and such other Articles as deals with decent wages and living conditions
for workmen amount to unfair labour practices.
► Article 43 of the Constitution of India: The State shall endeavour to secure, by
suitable legislation or economic organisation or in any other way, to all workers,
agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a
decent standard of life and full enjoyment of leisure and social and cultural
opportunities and, in particular, the State shall endeavour to promote cottage industries
on an individual or co-operative basis in rural areas
Case Laws

► Eveready Flash Light Company v. Labour Court Bareilly

► Facts:
► The company appointed a workman on a daily rate basis on 18th January 1958 after
trying him for four days. On 12th April 1958, he was appointed on probation for 6
months which could be further extended by the company on its discretion. He was
elected as a member of the trade union on 9th September 1958. On 10th September he
was served a notice that in spite of warnings, he has not shown any signs of
improvement in his work. The warning was repeated on 11th October and on 21st
November his service was terminated.
► The trade union raised an industrial dispute and the Labour Court found no justification
as to why he was kept on probation after he had been tried and the court held that it was
deliberately done to delay making him a permanent employee. The company filed a
petition to the Allahabad High Court.
► The Court held:

► “A condition of employment which is designed to invest the employer with

arbitrary power to keep the workman at his mercy as regards his chance of
being made permanent and to eventually lead to depriving him of such chance
would amount to unfair labour practice.”
► It is not necessary that there must be numerous transactions before the
employer could be branded guilty of unfair labour practice and he could be
held liable for such practice even in respect of one contract of employment
only.
L. H. Factories and Oil Mills, Pilibhit v.
State of U.P.
► Some of the workers were promoted to the rank of driver cum assistant fitter. The other
ten workers who were senior in service and also better qualified but were not so
promoted raised an industrial dispute alleging discrimination in the matter of
promotion. They alleged that they were victimised for their trade union activities.
► The Labour Court held that the promotions were given to prefer one trade union over
the other and not on merit.
► The company filed a writ to the Allahabad High Court. The court held that the
promotions were made to please one trade union and strengthen it against the rival
union to which the disputing workmen were the members. Any systematic attempt by
the employer to use his powers of management to disrupt the trade union of his
employees amounts of unfair trade practice. Unjust dismissal, unmerited
promotion, partiality towards one set of workers regardless of merits are some
examples of unfair labour practices.
Bengal Bhatdee Coal Co. v. Singh

► Facts:
► Thirteen workmen during the strike obstructed other workers who were willing to work
from doing their work by sitting down between the tramlines. The company served
charge sheets on them After the domestic enquiry the workmen were dismissed.
► The Supreme Court held that looking at the nature of offence committed by these
workmen it cannot be said that the punishment inflicted was grossly out of proportion
or was unconscionable. Therefore, the action taken by the company did not amount
to victimization. Although the relation between the company and the union to which
these workmen belonged was not good but this fact on its own be no evidence to
prove victimization. If it was so it would mean that the active workers of the union
with whom the employers do not have good terms would have a carte blanche to
commit any misconduct and get away with it on ground that relations between them
were not happy.
Hind Construction and Engineering
Company
► It was a custom followed in the company, that whenever a holiday fell on a Sunday, the
next day was declared a holiday. In 1961, 1st January fell on a Sunday but the company
did not declare 2nd January as holiday. Eleven permanent employees refused to work on
that day. They were suspended, charge-sheeted and dismissed after a domestic enquiry.
The union raised an industrial dispute.
► In a Special Leave to Appeal the case was considered by the Supreme Court wherein it
was observed that- “where the punishment is shockingly disproportionate regard
being had to the particular conduct and the past record or is such that no
reasonable employer would ever impose it in like circumstances, the Tribunal may
treat the imposition of such punishment as showing victimization or unfair labour
practice.” In the present case, the punishment was such that no reasonable employer
would have imposed it in like circumstances unless it served some other purpose. For
the act of misconduct lesser punishment like warning, fine or treating as leave without
pay would have sufficed.